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China = Egypt?

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There has been some discussion recently on China and comparisons betweens it's sophisticated dictatorship and the falling of the crony capitalism in Egypt. Here is the article that started the debate:


China won't take the Cairo route

John Garnaut

The Sydney Morning Herald

February 15, 2011


Despite Beijing's efforts to prevent it, there is not a thoughtful person in China who has not been asking these past few days how their country compares with Egypt.


The parallels include fast economic growth accompanied by widening inequalities, systematic corruption and a crisis of injustice.


The distinction that matters, which makes a Chinese people's uprising a practical impossibility, is that the Chinese Communist Party is a more professional and well-resourced dictatorship.


Five years ago China's Ministry of State Security directly employed 10,000 people in intelligence collection and analysis. Since then their numbers have more than tripled and their focus has swung from international to domestic security.


The Communist Party has also strengthened its organisational structures to keep itself unified and embedded in every facet of organised life - its "united front" activities to co-opt private enterprise, religious groups and the Chinese diaspora, and its propaganda systems to keep pace with technology. Last year the Propaganda Department boasted of deleting 350 million items of "harmful" information, and that was only up until November.


The party controls the largest and most sophisticated apparatus for securing the regime that the world has ever seen. That is why it is not about to be swept aside. But it is also its greatest weakness.


It is reasonably well understood that the increase in state power is under attack from Chinese lawyers, journalists, economists and civil society actors of the liberal right. Professor Yu Jianrong is an eloquent exponent of how tightening political control is generating greater discontent in what becomes a self-generating spiral.


The economist Xu Xiaonian warns that China risks being trapped in a stage of crony capitalism, where no official can find the energy to give up a system that so readily transforms their unfettered political power into cash.


What is ignored outside China is how the system is also under attack from the opposite direction.

The joke lurking at the core of all the hype about a "Beijing consensus" supposedly encroaching across the planet is that there is no consensus even in Beijing. Whereas the right wants to redress corruption and inequality by reining in the state and bolstering the market, the left wants to realise the same objectives by reining in the market and bolstering the state.


For 30 years the Communist Party has forged ideological unity around Deng Xiaoping's "two hands" formula of a market-based economy and uncompromising political control. When the contradictions inherent in this approach flared in 1989, Deng's solution was to defer any resolution and make the tensions worse. He massacred the students, rebuilt the party's security apparatus and then opened the market economy further.


The nepotism and corruption enjoyed by Deng's children may have been exceptional in 1989 but these days they are the norm for those born into the communist aristocracy. Whether you are in private equity, a sprawling state-owned enterprise or a village enterprise, the end game is the same: connect the right party official (or relative) with the market and turn public money into private gold.


Left and right agree that the Deng consensus is crumbling under the weight of inequality and corruption. But they cannot agree on whether to dismantle the ''open market'' or ''political control'' side of his legacy.


President Hu Jintao has squandered eight years in mortal combat with his predecessor. Powerful princelings have dealt themselves out of the debate by their kleptocratic hypocrisy. The country has reached gridlock. The party is entering a period of realignment and it is not clear what the new direction will be.


It is no coincidence that the only two obviously popular members of the Politburo are those who have come closest to challenging the Deng consensus. Much may depend on how the Mao-singing Chongqing party boss, Bo Xilai, and the democracy-talking Premier, Wen Jiabao, reach an accommodation.


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There is a great disparity in China and nepotism rules the day but will this last or is discontent brewing?


I found the following posting from another forum I belong to interesting in this debate and highlight the malivestment that we often talk about on GEI:





Re: China=Egypt


This article really hits the nail on the head. Heading back to my wife's hometown during Chinese New Year (Xiangtan, Hunan Province, so called 3rd tier city) I learned a lot about the direction the country is headed and it's not going to end well unless the party loosens its grip.


Since the the World Financial Crisis of 2008 the government has been pouring money into infrastructure projects to keep China's growth on track. However these projects are run by local government departments in collusion with property developers which has led to some crazy misallocation of capital. There is a Hunan province athletics meeting coming up so they built a 60,000 seater stadium and huge swimming pool/gym just like the birds nest and watercube in Beijing, the local interest in such events being nil. Every government office building has been demolished and moved over to a 'new city' across the river full of gleaming highrises and many 5 star 'ghost' hotels where only government officals stay. Some whole streets have been randomly rebuilt 3 times in the past 10 years! Meanwhile just outside the city limits, in the countryside, life hasn't changed much over the last decade - yes people are no longer starving but they still have no right to access services like schools or hospitals or buy property in the city due to the 'Hukou' syste, rubbish is still piled up in the streets in lieu of any collection system and there is still no proper system of land ownership, so it can be confiscated at any time. Back in the city these 'officials' with their monthly salaries of just Y2000 - 4000 cruise around the city in their European Sports Cars and £100,000 Landrovers (the Volkswagen Santanas or ubiquitous Audis are now poor man's cars!) Hong Kong backed shopping centres with luxury shops like Chow Sang Sang jewellery are doing a roaring trade in the city centre. House prices in the city are approaching those of my hometown in the UK - at least 20 times 'official' average income (bubble anyone?). It seems like everyone is on the take, as long as you have a position of responsibility: Policemen, Doctor, even Teacher - you will have some grey income. However those without 'connections' i.e. the majority of people in Hunan anyway don't have a hope in hell of enriching themselves in such a system. It's only a matter of time before the masses, and the western 'China Miricale' economists realise that China's growth is based on the biggest misallocation of resources, corruption by an uncheked ruling party that the world has ever seen. Not to mention the stupid internet/educational censorship to keep everyone ignorant.....rrant over! Oh well at least the extra money floating around is good for Hong Kong right?


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...and I thought Japan concreting over the riverbanks was bad... :lol:


I lived for 3 years in Nagasaki and had a wonderful time living and working in Japan. I never witnessed the inequalities spoken about in China. As a teacher, I noticed that Japanese 'group think' included looking after the social welfare of all in the community. Having said that, I noticed it took a long time to build a small bridge in my rural area which I chalked up to a work programme.


I would say that Japan is pretty good at spreading the wealth around.

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China Blocks Coverage of Protests to Squelch Egypt-Style Revolt

By Bloomberg News - Feb 20, 2011


China blocked phone messages and Web sites to stamp out any movement toward pro-democracy revolts that have toppled two leaders in the Middle East and sparked bloody crackdowns in Libya and Bahrain.


Internet messages circulated over the weekend urged people to gather in 13 major cities to demand food, jobs, housing and justice in a “Jasmine Revolution.” Today, phone messages using the phrase in Chinese, 茉莉花革命, would not transmit on China Mobile Ltd.’s network in Beijing. Sina Corp.’s microblogging service, China’s most-popular, returned no related content when a search for the Chinese word for “Libya” was entered. Similar results were seen on the microblogging services of Tencent Holdings Ltd. and NetEase.com Inc.


The restrictions highlight concern among Chinese leaders that some of the conditions that sparked protests in the Middle East exist in their own country. China, ruled for six decades by an authoritarian Leninist government, also grapples with a large gap between rich and poor and high unemployment among university graduates.


“China is the only major economy in Asia that really hasn’t had a political change for many, many years,” William Belchere, global chief economist at Mirae Asset Securities, said in a Bloomberg Television interview in Hong Kong today. “You are getting some catalysts for these things. It’s always been food prices or people’s living standards not keeping up.”


Protests took place yesterday in cities including Beijing, Shanghai and Guangzhou, with foreign television coverage showing police clashing with small numbers of demonstrators and several protesters struggling as they were bundled away into custody.


/more: http://www.bloomberg.com/news/2011-02-21/c...yle-revolt.html

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