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http://googleblog.blogspot.com/2010/01/new-approach-to-china.html

Google declared that they’re going to try and negotiate with the CCP to uncensor their google.cn site. As most people are saying, the CCP will most likely not agree to this, which makes a lot of sense. If the CCP softens their hard line stance against Google, Bing is sure to follow, and then Yahoo! will jump on board, and close behind them Baidu will shout for equal treatment. Before long, the People’s Daily will be posting articles about how they should be uncensored as well. It’s not gonna happen.

But I’m actually very impressed with Google’s decision. I mean they are a corporation that is responsible to their shareholders. Doing business in China is profitable, whether or not censorship is taking place. Once Google announced this, their share price dropped like 1.5%. This isn’t so much Google going up against the CCP, but Google going up against their shareholders or, in broader terms, the ideology of their shareholders v. their profit.

I’m sure there are some pretty liberal folk who hold Google stock and sold it when they heard of the decision. I mean they might have cheered in their hearts, but they’re not willing to support human rights at the risk of their investment. Very few people would do this. Ideology is something abstract while money is something substantial. You can’t buy tacos with a belief, but you can with $1.10 at Taqueria Guadalajara in San Leandro.

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Retaliation

The Cycle Continues

Later hundreds of Han Chinese marched through the streets of Urumqi smashing shops and stalls belonging to Uighurs.

The BBC’s Quentin Sommerville, in Urumqi, says some of the protesters were shouting “down with Uighurs” as they rampaged through the streets armed with homemade weapons.

Police attempted to block access to the bazaar and other Uighur districts of the city and fired tear gas as the Han Chinese confronted groups of Uighurs.

The Han Chinese said they were angry at the failure of security forces to protect their community on Sunday.

One protester, clutching a metal bar, told the AFP news agency: “The Uighurs came to our area to smash things, now we are going to their area to beat them.”

Scores Killed in China Protests – BBC News

Order partially restored in violence-plagued Urumqi, situation still tense – People’s Daily

The Urumqi Mass Incident – EastSouthWestNorth Blog

Quick summary:

1a. Rumors spread through the internet that Uighur factory workers raped Han women in Guangdong – Xinhua

2a. Riots took place between Han and Uighur factory workers – EastSouthWestNorth Blog

3a. Uighurs in Urumqi protest and are violently repressed by the police

OR

1b. Outsiders sneak into China

2b. Outsiders organize and lead the protests

3b. Uighurs in Urumqi violently riot and peace was restored by the police


Whatever the case may be, China needs to realize that dealing with diversity requires more than having those many nationalities show up on TV and do their native dances. The racial tensions in China are rising and they need to be dealt with in an economic, political, as well as culturally transformative manner.

Now I’ll say that most Nationalities in China have been ‘Han-washed’. The Manchu in China are like the Norwegian-Americans in the United States. They’re absorbed into mainstream culture and have intermarried with the dominant cultures of their respective nations. On the other end of the spectrum, there are the Tibetans and Uighurs in China with their African-American counterparts in the US. First of all, these peoples have not assimilated culturally into the mainstream. Uighurs don’t eat pork, they’re Muslim, they look different, and speak a different language. Blacks listen to rap music, speak in a manner different than white America, and make up a good number of prisoners on death row. Of course, there are those who have assimilated. Some Uighurs in China have risen up to become politicians and speak out against rebellious Uighurs as traitors. Obama is black (at least half of him is) and he is the president of the US. But those who have risen to power must assimilate first. 2pac would never have become president, nor would Hasan Mahsum have been able to rise up the ranks of the CCP.

Now let’s talk about Rodney King real quick.  Back in 1992, I was in third grade when the riots broke out in LA. We had a talk about this in our class where our teacher told us it was wrong to use violence. One of the black kids in my class disagreed and said that since the white cop beat the black man first, the blacks should be able to fight back. It’s a pretty simple logic that goes back to the Omaha Race Riots, Native American clan warfare, Nordic saga feuds, and Hammurabi’s ‘Eye for an Eye’. But even then, I had this gut feeling that there was something wrong with it. I mean if I got beat up by one of those Mexicans in the ESL class next door and I responded by gathering my kinsmen to go kick some asses, what’s to stop them from getting back at us? And us from responding? And what’s to keep this cycle of violence from continuing forever?

And that’s what’s happening in China. Han Chinese thought some Uighurs raped some Han Chinese so they got mad (since obvious, only Han men can rape Han women), so they struck back by killing a couple Uighurs. Now the Uighurs are rioting and are beating up Han (since obviously, only Uighur men can kill Uighur men for rape). Now, my side comments might seem sarcastic, but it’s a widely accepted truth. When a whole bunch of white people are killed by a whole bunch of other white people, it’s considered a bad thing. When a bunch of Indonesians kill a bunch of Timorese, it’s ethnic cleansing. That’s a whole different level of killing.

There are several solutions to this problem. The Han Chinese can breed out or violently wipe out all dissenting ethnicities. The CCP can grant independence to regions where certain ethnicities demand it. Or, China can move towards developing a political and economic program which would ease ethnic tensions in their country and promote cultural tolerance of different people.

The third proposal is the one that most people would vote for, but it’s also by far the most difficult. I believe people are instinctually racist and that most people prefer their own kind. English majors hang out with English majors, FOBs hang out with other FOBs, and Uighurs hang out with Uighurs. There are exceptions to the rule, but this is usually the case. There can be no ‘harmonious society’ when people refuse to assimilate. The best one can hope for is a ‘tolerable-coexistence with some intermixing society’. But hey, even that is better than ‘suppressed racial tensions and sudden outbursts of ethnic violence society’ that currently exists in China today.

It’s pretty difficult to tell whether or not such protests would be successful or not. For example, back in 1989, there were a lot of successful non-violent and violent revolutions that took place. The Fall of the Berlin War, the Velvet Revolution, and Solidarity were all pretty successful in creating democratic governments in Eastern Europe. Then, there was the Tiananmen Massacre which has led to… well… what we have right now in the PRC. A little later, there were the Color Revolutions that led to the creation of mostly democratic states in Georgia (the country, not the state) and a few others. Of course, there was also that massive failure in Myanmar where the monks didn’t really force that much change.

Protests are sometimes useful, but most of the time, they’re just around long enough for the media to exploit for ratings. If the majority of the people in a country, not just the urban or educated elite, support the revolution, it’ll probably have a higher chance of success. Like in East Germany, I would guess that there was a decent amount of support and knowledge about plans for reunification. In China back in ’89 on the other hand, the peasants in Ningxia had no idea what democracy was, let alone what the students were doing in Beijing.

I don’t know too much about Iran, but it really doesn’t seem like the faction that is supporting reform is large enough yet. At least I haven’t heard much about the peasants and the poor joining in on the protests. Marx was right when he was talking about the prerequisites for communist revolutions, except it can be expanded to revolutions in general. Development increases the chance that a political revolution would be successful. If the people are poor and starving, they can be easily riled up to protest, but at the same time it is easy to buy them off with some food or redistribution of some land. Those who have satisfied their basic needs can be riled up to protest as well, but if they are given economic mobility and consumer goods are available for purchase, they can be distracted from the revolution as they seem to fulfill their consumption needs.

Now once you got that TV and motorbike, the marginal benefit of consuming more decreases. Getting that first TV gives you much more benefit in comparison to having to trek over to a Best Buy to watch on one of those display TVs. On the other hand, a bigger TV might make you happier, but less and less as your TV gets bigger and bigger. The people can no longer be as easily bought off with economic reforms. They’re going to want a cleaner environment, a safer place for their kids, and other public goods. They’re going to demand this from the government. Kaboom. We got a civil society forming. The civil society expands from demanding services from the government and goes into immaterial things. Human rights, democracy, freedom, liberty, and so on and so on.

I’m not saying that the poor won’t want ideas like freedom and equality, but they usually have more important things on their minds. They want freedom so that they can sell their goods on the market at a fair price. They want human rights to protect their land from wealthy men and armed thugs. They want democracy so they can choose a leader that they have connections with so that they can get help. They want these ‘ideas’ to achieve material gains, not just for the sake of having these rights’. That’s why most communists are students or comfortable intellectuals. The poor inner city youth would prefer a sweet ride and a couple hos in the back.

6-4

Another anniversary date has come and gone (at least in China). The media frenzy in the west with its coverage of human rights in China will slowly fade away and become forgotten for another year.  The thousands of protesters in Hong Kong will go back to working, eating, fucking, and sleeping, their candlelight commemoration of the massacre brought up only in casual conversations and uploaded pictures on the MSN Spaces. Tiananmen Square will become just another place for tourists to visit, to pose in front of the martyrs and gawk at Mao’s decaying body.

Peace be with those who died and those who suffered. It is important to remember what happened this day, at least for one day a year. To expect more would be unrealistic. To want less would be cruel. Let us harbour no hatred in our hearts, nor should we forgive those who do not ask for forgiveness. And then, tomorrow will be another day.

I’ve read a couple of Orville Schell’s books and some other collected works that he edited, like ‘The China Reader’, so I was really excited when I heard he was being interviewed on NPR. For the most part, I like NPR. ‘This American Life’ is a pretty awesome, ‘Prairie Home Companion’ has made me a fan of bluegrass music, and ‘Forum’ usually has interesting guests being interviewed. At the same time, I find myself cringing every time there is a show about China. Right before the Olympics, there was a ton of specials about all this poverty and human rights abuses with a little vague note tacked on at the end about some random positive aspect about China, usually from the point of view of a migrant worker or peasant. Now that June 4th is coming around the corner again, I guess it’s time for some more noise to come up about China and human rights.

First, I have to note that I’m much more ‘pro China’ when I’m in America and very ‘anti China’ when I’m in China. The reason is obvious of course: when I’m in the United States or China, I am much more aware of the assholes that inhabit that geographic area than when I am far away. For example, when I think of China today, I drool at the thought of eating Nan Chou Rou, I think of playing frisbee in the parking lot with my friends, and I reminisce about all those nice folk I met on the trains as I traveled around the country. When I was in China, I dreamed of carne asada super burritos, going for a nice long run with my friends at the shoreline, and those long road trips down to San Diego to visit my sister. It can’t be helped, so please excuse me as I sound uncharacteristically like a Panda Hugger.

What prompted me to write his blog entry after many months MIA is this guy who called in to the show asking about boycotting Chinese goods. He went on to rant about human rights abuses, wanting to boycott Chinese products and how that would impact China, how China would retaliate if that happened, and how much he hated Chinese goods because they all break really easily even though he can’t find shoes or iPhones that aren’t made in China. He was incoherent and forgot what he was talking about half-way through, but I can’t help but respond.

That caller just reminded me of the nationalistic students I had to deal with who would stand up in class and shout anti-Japanese slogans in class, despite the fact that their ‘English’ name is actually a Japanese anime character with orange hair. What I don’t understand is how people can hate a ‘country’. I mean, a country is an idea that is made into existence by the people who live within those borders.

So what would happen if there was a successful boycott of Chinese goods? Well, the working class people in America would be hurt the most. The poor depend on cheaper products from China and they work at retail stores that sell mostly Chinese-made goods. So all the so-called ‘liberals’ who want to boycott Chinese goods should also say that poor people are poor because they’re lazy just to stay ideologically consistent. How would China retaliate? The guy on the radio thought China would sell off all of America’s debt. Why would they do that? They bought those government bonds as a form of investment. Abandoning all their investment, as well as the political leverage, would be suicide. Sure, Chinese nationalists would throw rocks at McDonalds and boycott Buiks, but let’s face it, American boycott of Chinese goods is damaging enough to the United States as it is.

But as Mr. Schell stated, a boycott is unrealistic and would probably never happen. People maximize their utility in life. If hurting China is a big part of their utility function, then sure, they’ll boycott Chinese goods. But how many people actually care? Even people who go to Free Tibet protests are usually only part-time China haters, just like those kids who boycotted Carrefour were back in that French supermarket to buy toilet paper a week later.

Politics… so dirty… I’ll try to refrain myself from writing about such subjects in the future, but this time, I just couldn’t help myself.

So I was listening to NPR as usual and they were interviewing this guy, I think he was some kind of Democrat politician, who was talking about the bailout plan. He said that government spending is more effective in stimulating the economy than tax cuts since parts of those tax cuts would be saved.

The biggest problem that I have with Democrat politicians (and actually most politicians in general) is that they ignore the basic fact that savings is what drives the economy. If you looked at the savings rate for countries, there is a direct parallel between the savings rate and the growth rate. People in Thailand, Singapore, South Korea, and post-reform PRC had really high savings rate  of around 30-40% and they experienced very high growth rates. Then you looked over at sub-Saharan Africa and their savings rate was somewhere around 15% and they all had very low growth rates.

The argument that was made by Keynes is that when people save money, they’re not spending. When people are not spending, revenue for firms go down. When revenue goes down, firms hire less people, which leads to less jobs, and less income for the people. As a result, when people save money, they  actually hurt themselves because their income decreases. Thus the term ‘Paradox of Thrift’ was coined.

Note: This is not just a liberal term. Bush, right after 9/11, told people to go shopping based on the idea that savings is bad. Even when Republican politicians propose tax cuts, they do so not to promote savings, but to promote higher consumption.

So what happens when people save money? Do they just stick it under their mattress and forget about it? Probably not, except in the case of Japan in the 90s when people were ‘hoarding’ (not saving) money due to poor confidence in t he banking system.

Instead, savings goes into financial institutions, bonds, financial assets, and stuff like that, but for simplicity sake, lets just look at banks. People put money in the banks. What happens to that money? Do banks really just sit on all that cash and not lend it out as a bunch of people were saying before? Well, during the time when people were saying there was a ‘credit crunch’, interest rates were actually decreasing, which means that banks were trying to loan money out. If a bunch of people were demanding credit and were unable to get it, the interest rate should have increased. Which it didn’t (and just to dispose of another myth, while the Federal Reserve can influence the interest rate by printing or destroying money, it doesn’t exert control over it).

So people put money into banks. The banks do not just sit on it since the way that banks make money is by loaning it out. If people are pulling out of the stock market (which is why it tanked so much in the past few months), then they have to put it somewhere. Lets assume that they’re putting it into their savings account just for continuity sake. Now the banks are overflowing with money and they want to loan it out. Who do they loan it out to? Well obviously to people that they think would be able to pay it back. Now this is not always the case, which is what led to a few bank collapses, but the majority of the banks in America are still solvent, which means that most of the loans made were good.

So who borrows money? Well, sometimes its by people who want to buy a new yacht, but usually, its businesses that want to invest so that they can increase production and efficiency in the future. Higher investments means higher productivity. On the micro level, this can be seen as an outward shift in supply, which leads to lower prices and higher quantity. Multiply that supply-demand chart by 300 million and you got increased production due to higher capital to labor level and as a result are able to reach a higher income level (Solow growth model). Everybody is richer, everyone has more, and everyone is materially better off. Now those people who are seeking spiritual enlightenment are left wanting, but everyone else should be happier.

At least this is what the people who say that the Paradox of Thrift is all screwed up. Next time, I’ll counter the argument that the Paradox of Thrift is totally wrong and that spending AND saving can both lead to growth.