There is no such thing as "Asian values," just pre-development ones

Really cool column by Patti Waldmeir on Asia (despite the weird lack of noun-verb agreement).  She is FT's Shanghai bureau chief.

Gist (well captured in title): "China's young workforce warm (sic) to west's work-life balance." [Online version of title cuts "workforce," so agreement works there.  Picky me, I know.]

Starts with recollection of asking founder of BYD battery/carmaker what he did in his free time.  He scoffed at the notion that such a thing existed, and then lectured her on why China would surpass the West because its people had no such conception.

True for the "rise"-initiating generation, but not true to the kids who follow:

But that was three years ago, and three years is a long time in China. Since then, the younger generation of Chinese workers have (sic) begun to discover the joys of sloth. Leisure - which has had a bad rap on the mainland - is making a comeback.

Why? Overwork, plus increasingly long commutes.

Upshot:  according to the head of GM in China, the post-80s generation is increasingly into the the whole life-work balance, creating all manner of HR challenges (none of them new to GM, please).

A headhunter says more and more of his applicants want to work at places that respect the weekend: "These overseas trends are coming into China now."

Of course, if you're trying to build up domestic consumption, you need to encourage this mindset.  Plus, in an economy that seeks to prioritize innovation, all work and no play make Jin a dull boy.

But the larger point, just explored in a great Master Narrative proposed by a Wikistrat analyst in our ongoing "China Hits the Great Wall" simulation, is that China may well confound us by getting to the point of wealth and then disappointing all the "realists" out there who imagine the country's only path to be maximizing "national power" (whatever that is). Especially when you factor in the rapid demographic aging, we are more likely to get a China that goes straight to a Nordic socialist-heavy, more admirable lifestyle package than mindlessly replicating the Kaiserian Germany push toward great-power war (crazy talk, I know, for a pol-mil analyst who wants to be taken "seriously" by Washington).

But there you have it: far faster than it appeared in Japan, we see the work-life balance monster rear its relaxed head.

WPR's The New Rules: India's Pastoral Ideal an Obstacle to Globalized Future

When most people think of revolutions, they imagine the overthrow of political orders. By contrast, most of what we see today in globalization’s continued expansion is not violent political revolution, but rather unsettling socio-economic revolution. Yes, when existing political orders cannot process that change -- and the angry populism that typically accompanies it -- they can most definitely fall. This is what we have seen in the Arab Spring to date. But more often this populism leads to political paralysis in countries both democratic and authoritarian. A case in point is the recent controversy in India over Prime Minister Manmohan Singh’s plan, since scrapped, to allow multinational retail chains like Wal-Mart, Carrefour and Tesco to mount joint ventures with local firms in direct retail sales operations. The public uproar showed that at times, globalization is simply too much change, too fast..

Read the entire column at World Politics Review.

Mr. Dalit Comes to Class

FT story on new Bollywood film depicting "untouchables" and the discrimination they suffer. The film is already banned in three Indian states out of fear of inciting social unrest.

Ask yourself, what period of US history does this remind you of?

Fair dynamic comparison, although here the pushback comes more from dalit politicians and those in favor of their rights.  Why? Film focuses on quota system for dalits/untouchables set up at time of independence. Upper castes say film makes them look bad, but dalits say film denigrates positive impact of quota system - aka, India's version of affirmative action. 

What I remember from visiting India: it seemed like the taller you were and lighter your skin, the more likely you were more powerful and thus from a higher class.  Conversely, lower caste people seemed shorter (poorer diet) and darker.  So when I mixed with elites, I looked them in the eye, but when I moved among ordinary people, I felt like a frickin' giant. The dichotomy rather stunned me.

If you mention that observation, you tend to get a strong response from Indians who find any comparison to racism in the West to be completely offbase. I'm not sure what you call it, but it strikes me as a deep legacy of discrimination based on birth (meaning you can't change who you are no matter what, which smacks of that "one drop of blood" logic) and thus is reasonably compared to racism elsewhere in the world, despite its "sophisticated" and multivariate application.

Point of post: rising India, like rising China, is racing through a lot of history and "phases" that US went through a much more leisurely pace.  That's incredibly hard but facinating to watch.

Blurb on film only hints at controversy (from Rotten Tomatoes), but understand that Prabhakar has a special space for dalits in his school and that Kumar, who is in love with Prabhakar's daughter, is himself a dalit. This is classic Bollywood (father-daughter conflict over undesirable match) with the twist that here the father is the perceived liberal:

Aarakshan is the story of Prabhakar Anand (Amitabh Bachchan), the legendary idealistic principal of a college that he has single-handedly turned into the state's best. It is the story of his loyal disciple, Deepak Kumar (Saif Ali Khan) who will do anything for his Sir. Of Deepak's love for Prabhakar's daughter, Poorbi (Deepika Padukone), of his friendship with Sushant (Prateik). It is the story of their love, their lively friendship, their zest for life, and of their dreams for the future. Centered on one of the most controversial issues of recent years, with the Supreme Court's order on reservation, the story suddenly becomes a rollercoaster ride of high drama, conflict, and rebellion, which tests their love and friendship for one another, and their loyalty to Prabhakar Anand.

Film is already in US, probably because Bachchan is the Cary Grant of Indian cinema. Done about 300k, so art-house limited.

Be interested if anyone has seen it and can provide impressions.

Chinese labor: the only way "up"

Economist story posted today.

The reality of moving on up:

WITH more than 1m workers, Foxconn may be China’s largest private employer. The secretive electronics giant is renowned for taking designs from Western firms, such as Apple, and using cheap labour to crank them out in huge quantities. But its fantastically successful business model seems to have run its course.

At a closed retreat in late July, Terry Gou, the chief executive of the Taiwanese-owned company (which is also known as Hon Hai), unveiled a plan to hire 1m robots by 2013. In a public statement, Foxconn talked about moving its human workers “higher up the value chain” and into sexy fields such as research. But at least some will surely lose their jobs.

FT said earlier (8/2) that workers' pay is expected to rise 20-30% a year!  It rose 30-40% last year.  That makes robots look a lot better. So did the worker suicides and labor unrest that set those pay raises in motion last year.

But here's the trickier point the Economist makes:  Foxconn isn't known for handling complex technology; it's known for throwing labor efficiently at assembly tasks, so plenty of risk there too.

All this is to say, as China ages demographically and seeks to move up that value chain, it'll get magnificently harder to make sufficient numbers of jobs appear every year.

There is no "miracle" in catching up to the West.  It's been done repeatedly by Asian economies.  The miracle comes in staying on top - much less vaulting ahead.

Yes, China will have a bigger aggregrate economy than the US at some point.  With four times the people this is only natural and desirable. But China will be saddled with a massive welfare state eventually, and this story explains some of the reasons why.  

Remember that:  This is not a new form of capitalism here - nor an improved one.  It's a recognized model for catching up that doesn't really have a clue about what to do once that's achieved - the damaged environment being hidden problem #1.

The rest is hype.

Chart of the Day: Good governments come with good income

WSJ story on academic study.  Gist of story is that China cannot really move into high-income without dramatically improving its government, but the converse logic also holds:  we shouldn't expect too much from governments until their society's per-capita income level gets up there.  Yes, there are exceptions in each (rich-enough Russia, rich-enough emirates), but the basic pattern is clear enough.

Why the lag?  It takes a demanding citizenry to get good governments, and citizens get more demanding, the more money they have.  It's really that simple.

At the end of the day, all things being equal, there's no question that democracies outperform autocracies. But the "all things being equal" part doesn't include the catch-up phase, like the one China is going through now. 

When does that "catch-up" end and the democratization kick in?  The people decide that, usually between $5,000-$10,000 per capita income.

Note that the numbers above are PPP, so high.  China measured less relativistically sits at about $4400.

WPR's The New Rules: Strategic Balancing vs. Global Development

The World Bank's 2011 World Development Report is out, and this year's version highlights the interplay between "conflict, security, and development." That's a welcome theme to someone who's spent the last decade describing how globalization's spreading connectivity and rules have rendered certain regions stable, while their absence has condemned others to perpetual strife. But although the growing international awareness of these crosscutting issues is long overdue, the report ultimately disappoints by focusing only on the available tools with which great powers might collaborate on these stubborn problems, while ignoring the motivations that prevent them from doing so. 

Read the entire column at World Politics Review.

Amidst the ugly piracy and the just plain bad censorship, there is the sheer good of numbers

FT full-page "analysis" and Economist story.

FT is about rise of microblog sites in China and how the government throws ever more censors at the problem. As always, it's a strange mix of shaping and monitoring public opinion on the government's part, but what always impresses me is the sheer amount of expression going on.

Naturally, the piece leads with the latest example of a netizen mob gone wild over some official's nastiness -- or more specifically, some high official's son's nastiness (the infamous son of Li Gang, who, after hitting a student with his car while drunk, drove off shouting from his car window, "Make a report if you dare, my dad is Li Gang!").  Well, the report was made and Li Gang paid the price.  "My dad is Li Gang" became the Chinese web equivalent of "I'm Spactacus!" symbolizing everything that the public finds wrong about official abuse. 

But as the piece makes clear, the evolution of China's web defies traditional Western expectations.  More and more Chinese log on, and more and more government effort is launched to keep track of it all.  Instead of some glorious montage scene where everybody expresses their clear desire for free elections and then we cut to the movie's uplifting climax, we see a lot of virulent nationalism being expressed.  And instead of hapless government censors throwing up their hands at the insane flow of words, the Party is getting fairly sophisticated at managing the whole mess, even publishing its annual list of Li-Gang-like events.  So, for now, the web just seems like another place where the Party is subtly polling the public, cracking down only in the those rare instances where somebody truly steps out of line.  

We in the West are disappointed with this, but I don't think we should be.  Expecting China to morph into the U.S. overnight is wrong, but so is assuming that the line between Party control and public expression isn't moving, because it is.  It's just that the public is happy enough, for now, exploring a lot of personal and mundane, simply entertaining stuff, not being all that different from anybody else in the West.

And when the political is expressed, it's often frighteningly out of control and over the top -- immature.  That too is not all that different from the West, if you go back to an equivalent time in our political evolution.

And that's the trick.  Rapid modernization can speed up all sorts of evolutions, but a rapid modernization of the political system is something entirely different.  Those sorts of rules, when they change abruptly, can be very destabilizing, and the more you let the connectivity revolutionize everything else in the economy and society, the more you, the leadership and even the public, should fear commensurate possibilities of change in the political sphere. 

We can assume that everything would work out to our liking if the Party just let it all hang out at once, but we'd likely be wrong.  People need time to get used to all that change, and we consistently underestimate the amount of time traveling that the average 50-something Chinese has undergone over the past three decades. We took a couple centuries to travel similar political ground, and we forget the journey, so we say, "All right already, you've had the web now for a while, so why doesn't everything resemble our way of life?"

I say, be patient and give them time to get used to the all the economic and social change before moving on to the political.  And then expect that journey to likewise be entirely Chinese, understanding that how they kept things together over time has never been our way, because our way was to escape all that back home, run here, and build something entirely different. 

Over time, the Party commands less and less of the public's attention, and for this thing to evolve in a more free direction, that's all we need. 

The Economist story makes this point.  Not only is the government's main channel, CCTV, losing viewers to less controlled provincial stations, it's really losing the young to Internet video, most of which is pirated immediately from the West.  Interesting example of a show I know and love: "Prison Break" is huge in China and its star, Wentworth Miller is not only mobbed everywhere he goes in China, he's the frickin' face of GM on TV commercials!

The show has never been aired on any Chinese TV network.

Now, the temptation is to read meaning into Wentworth's original TV subject matter, but go easy on that.  Point is, the young get used to choosing on their own and, over time, that changes things.

So, go easy on the pessimism, I say.  We expect too much out of the original, time-traveling generations here.  Xi Jinping (China's next president and in his late 50s), for example, still remembers vividly being thrown in jail as a kid as a political prisoner on his dad's behalf during the Cultural Revolution.  He's China's leader for the next decade, and his "Sixties' were a bit different from the Boomers.  

Conservatives in the West keep saying, Nixon went to China 40 years ago and look how the Party still rules! They say that because that's all they want to see.  But we need to go back and read our history here.  The Cultural Revolution was a "long national nightmare" that trumps our Vietnam and Watergate by . . .  more than just a bit.  It was a national insanity and the bite it took out of the national psyche was closer to our Civil War than anything we've experienced since

So rather than expecting that much more time traveling by the 50-something crowd, think of this more in terms of post-Cultural Revolution generations.  The first truly post-CR leadership generation comes online in 2022 and China hits the half-century-mark post Deng's reforms another decade after that.  Realistically, this is always where I've been positing this sort of political change -- when the bulk of China's population has had all its formative experiences post the Cultural Revolution, or when their definition of normal truly normalizes, and their willingness to start some of the political time-traveling builds to the point of acting on those impulses. 

For now and for a while, China's population will remain mostly filled up by people for whom all the change to date is more than enough for them.  We can be disappointed in that most human of realities, or we can just be happy for them and all the changes they've been able to enjoy in their collective lives to date.

WPR's The New Rules: The Two Chinas' Long Road to Common Ground

The Nobel Committee's decision to award jailed Chinese democracy activist Liu Xiaobo the 2010 Peace Prize came just days before China's Communist Party elite anointed political princeling Xi Jinping as President Hu Jintao's clear successor, highlighting the two Chinas that now seem to be passing one another like ships in the night. One China is propelled from below by a coastal workforce that is increasingly self-confident in its skills and accomplishments and growing income. The other, larger China is managed from above by political leaders who increasingly worry over the nation's social stability as they grow more self-defensive in their ruling style. 

Read the entire column at World Politics Review.

Going on BBC World Service's "World Have Your Say" radio broadcast today at 1pm EST

Subject is Nobel Peace Prize being awarded to Liu Xiaobo and the West's growing fear of China in general.

Go here to listen live.

The podcast can later be found here.

WPR's The New Rules: Building Real States to Empower the Bottom Billion

America's top African diplomat recently signaled Washington's desire to establish more official contacts with the autonomous region of Somaliland, which sits within the internationally recognized borders of the failed state known as Somalia. Meanwhile, both our Agency for International Development and the Pentagon's recently established Africa Command worry about Sudan's upcoming vote on formally splitting the country in two. For a country that has sworn off nation-building, it's interesting to see just how hard it is for America to remain on the sidelines while globalization remaps so much of the developing world.

Read the entire column at World Politics Review.

Explaining China's growing reliance on national flagship companies

NYT story by Michael Wines notes World Bank data saying the China's state sector, after years of declining share of the national economy, is starting to edge back up:

During its decades of rapid growth, China thrived by allowing once-suppressed private entrepreneurs to prosper, often at the expense of the old, inefficient state sector of the economy.

Now, whether in the coal-rich regions of Shanxi Province, the steel mills of the northern industrial heartland, or the airlines flying overhead, it is often China’s state-run companies that are on the march.

As the Chinese government has grown richer — and more worried about sustaining its high-octane growth — it has pumped public money into companies that it expects to upgrade the industrial base and employ more people. The beneficiaries are state-owned interests that many analysts had assumed would gradually wither away in the face of private-sector competition.

New data from the World Bank show that the proportion of industrial production by companies controlled by the Chinese state edged up last year, checking a slow but seemingly inevitable eclipse. Moreover, investment by state-controlled companies skyrocketed, driven by hundreds of billions of dollars of government spending and state bank lending to combat the global financial crisis.

Besides the obvious explanation of the huge stimulus package, I would cite three other key trends:

1) the push to jump-start industrial development of the second-tier cities;

2) Beijing's fears about access to raw materials means it's pushing national companies to lock-in a lot of assets while it has the bank account to do so; and 

3) the shift to trying to rely more on domestic demand has incentivized Beijing to champion national flagship companies (however "red" their affiliation) at home so as to be able to dominate expanding market spaces.

These are all great temptations and normal strategies for this point in China's developmental trajectory.  Will they overcome the general trend toward more reliance on markets?  Perhaps for a while but then these strategies will contribute to an overall stagnation of growth simply because they favor the inefficient over the more efficient.

But here the thing to remember:  most development paths consist of two steps forward and one step back. Linear projections are always wrong.

Chart of the Day: Year(s) of the (energy) pig

Pretty easy to hit high growth numbers if you're tossing everything into the boiler.  This is extensive growth defined:  anything that burns is considered fuel.

CCP opens complaint line

FT and WSJ stories on new online bulletin board where ordinary Chinese can leave messages to senior party leaders--at some personal risk, of course.

A good sign, of course, but mostly a defensive one:

 . . . the internet has diluted the state media's traditional information monopoly.  Corruption, abuse of power and the other ills of one-party rule are now being revealed online every day.

So yeah, an exercise in PR, but one that reveals the party's largely reactive mode and demonstrates their fear of popular unrest--and that alone represents a certain responsiveness to the public.

Chart of the day: India needs spectacular growth no less than China

WSJ front-pager.

Point to remember:  India needs to score in that magic 8 percent ranger to continue cranking enough new jobs--just like China.

In the West, I think we just don't appreciation what a grind that it for them, since we haven't been in that phase of growth for decades now (having matured).  But this is a huge deal for the planet:  between China and India we're talking about a billion and a half poor people that the West doesn't need to worry about--by and large.  They may be poor, but things are improving and there's no great unrest.  Absent the government efforts to make that fabulous growth happen, we could easily end up owning that aggregate problem on some level (aid or worse).

Something to remember as we contemplate our duty in helping run this world:  a huge chunk of responsibility has been taken off our plate by India's and China's rise, and all we have to do is shape their trajectory for the betterment of the world.

And these are good problems/challenges to have--as in, they beat the hell out of the alternative, especially since India and China joining the global economy gave it its critical mass over the pass couple of decades.

So I say, always err on the side of letting them have their way while they're pursuing this unbelievable collective good for the planet.  Push where we can, but always keep in mind what a win their twin rise represents for our international liberal trade order-cum-globalization.

A good measure of social stress in China--and rising expectations

Great reporting piece in the NYT.

The guts:

Forget the calls by many Chinese patients for more honest, better-qualified doctors. What this city’s 27 public hospitals really needed, officials decided last month, was police officers.

And not just at the entrance, but as deputy administrators. The goal: to keep disgruntled patients and their relatives from attacking the doctors.

The decision was quickly reversed after Chinese health experts assailed it, arguing that the police were public servants, not doctors’ personal bodyguards.

But officials in this northeastern industrial hub of nearly eight million people had a point. Chinese hospitals are dangerous places to work. In 2006, the last year the Health Ministry published statistics on hospital violence, attacks by patients or their relatives injured more than 5,500 medical workers.

“I think the police should have a permanent base here,” said a neurosurgeon at Shengjing Hospital. “I always feel this element of danger.”

In June alone, a doctor was stabbed to death in Shandong Province by the son of a patient who had died of liver cancer. Three doctors were severely burned in Shanxi Province when a patient set fire to a hospital office. A pediatrician in Fujian Province was also injured after leaping out a fifth-floor window to escape angry relatives of a newborn who had died under his care.

Over the past year, families of deceased patients have forced doctors to don mourning clothes as a sign of atonement for poor care, and organized protests to bar hospital entrances. Four years ago, 2,000 people rioted at a hospital after reports that a 3-year-old was refused treatment because his grandfather could not pay $82 in upfront fees. The child died.

Such episodes are to some extent standard fare in China, where protests over myriad issues have been on the rise. Officials at all levels of government are on guard against unrest that could spiral and threaten the Communist Party’s power.

Doctors and nurses say the strains in the relations between them and patients’ relatives are often the result of unrealistic expectations by poor families who, having traveled far and exhausted their savings on care, expect medical miracles.

But the violence also reflects much wider discontent with China’s public health care system. Although the government, under Communist leadership, once offered rudimentary health care at nominal prices, it pulled back in the 1990s, leaving hospitals largely to fend for themselves in the new market economy.

By 2000, the World Health Organization ranked China’s health system as one of the world’s most inequitable, 188th among 191 nations. Nearly two of every five sick people went untreated. Only one in 10 had health insurance.

Over the past seven years, the state has intervened anew, with notable results. It has narrowed if not eliminated the gap in public health care spending with other developing nations of similar income levels, health experts say, pouring tens of billions of dollars into government insurance plans and hospital construction.

The World Bank estimates that more than three in four Chinese are now insured, although coverage is often basic. And far more people are getting care: the World Bank says hospital admissions in rural counties have doubled in five years.

“That is a steep, steep increase,” said Jack Langenbrunner, human development coordinator at the World Bank’s Beijing office. “We haven’t seen that in any other country.”

Still, across much of China, the quality of care remains low. Almost half the nation’s doctors have no better than a high school degree, according to the Organization for Economic Cooperation and Development. Many village doctors did not make it past junior high school.

Primary care is scarce, so public hospitals — notorious for excessive fees — are typically patients’ first stop in cities, even for minor ailments. One survey estimated that a fifth of hospital patients suffer from no more than a cold or flu. Chinese health experts estimate that a third to a half of patients are hospitalized for no good reason.

Once admitted, patients are at risk of needless surgery; for instance, one of every two Chinese newborns is delivered by Caesarean sections, a rate three times higher than health experts recommend.

Patients appear to be even more likely to get useless prescriptions . . ..

There are plenty of such Marxian dynamics on the road of rapid development--when rising expectations outstrip the ability of the state to respond.

And when that state is non-democratic, the public tends to go to extremes to express its displeasure.

A defining indication of Old Core evolution: women PhDs outnumber males

image here

WAPO story on new report that says, for the first time in history, the number of PhDs being granted to women outnumber those of men.

I've made this citation in the past:  when women outnumber men in big industries (like the law or medicine), then your economy has truly reached the apex of mature development.

My mom was pregnant ten times in the first twenty years or so of marriage with my dad.  When the babies stopped, she went on to three sequential careers in county social services, then the law, and finally (and still at 85) as an author.  Now, her long life gives her that amazing productivity (on both scales) and that surprising balance (two decades of cranking babies and four decades of work), so she's an avatar of what comes next (and this is a great point that George Friedman makes in "The Next 100 Years"): women go from maybe 50-70% of their adult lives being consumed by children-making and rearing--in the blink of an historical eye--to a fantastically lower child burden (like maybe as little as 10% of their possible working life since they have 1-2 kids and work for so long into their later years).  Just releasing all that potential is a social revolution in and of itself, and American-style globalization has an amazing ability to trigger that development.  

Any smart economist will tell you that the "miracle" of any nation's rapid rise ALWAYS involves turning the women onto labor opportunities outside the home.  That process is the most comprehensive nugget of a social revolution tale that you can locate in modernization/industrialization/globalization.

And when you reach the far-side accomplishment like the one cited here, you know you've basically completed the journey in terms of making opportunity balanced by gender.

I keep having to tell my kids that women lived very different and subordinate lives from about 10,000BC until around the time of my childhood (early 1960s) and then everything changed!  That alone makes this the most amazing time in human history, and thus, the best time in human history to be someone who tracks systemic change and thinks systematically about the future.

As a side note, that's why I find watching "Mad Men" so fascinating, because it captures all this in the before and edge-of-transformation sense.

And that's also why I'm a happy guy with two sons and four daughters.  I've always said that there is nothing in this life (save lifting heavy objects and fighting) that I'd rather do with guys than with women.

To sum up:  the journey from the Gap to the Core is one of demographic aging and feminization of leading service industries (like law, education, medicine).

Chart of the Day: China goes inland for cheaper labor

WSJ story on how Hon Hai, the "world's biggest contract manufacturer of electronics," is heading inland in search of cheaper labor.  The shift, as detailed in the chart, will be profound.  Big investment bets being placed in major inland cities.  The dream is a natural one, insource inland to prevent too much job flight to neighbors and help the country "retain its role as the world's factory floor for decades."  Hon Hai chairman Terry Gou dismisses the notion that competing neighbors will ever be able to displace China.

Besides the geographic shift inland to capture labor costs estimated to be 2/3rds of those along the coast, there is a philosophical shift: this time around Hon Hai has no ambition to create and run entire factory towns within which the company is responsible for housing, healthcare, etc.

Democracy slowly gaining ground in Iraq

WSJ op-ed that argues democratic habits are taking hold in the Iraqi parliament, despite the gridlock on the new government.

A reasonably optimistic take that shows it'll take many years before we know how much Iraq gained versus how much both Iraq and the US sacrificed--and how much impact Iraqi democracy has on the wider region.

As usual, Austin Bay (one of the two co-authors) impresses with his ability to peer pas the conventional pessimism.

A second Daily Star op-ed by Safa A. Hussein, an Iraqi government official with some real history, focuses on the dog that isn't barking:

Iraq is undergoing swift and deep social, political and economic change. There is competition over the distribution or re-distribution of power among political entities: a struggle between the pre-2003 and post-2003 power-holders, and competition among diverse post-2003 parties themselves. There are fears of losing power or of the abuse of power by others, and concern over the distribution of power and wealth among the central government, the Kurdistan region and the provinces, the disposition of disputed areas with the Kurds and relations with neighboring countries.

These struggles are often colored by sectarian and ethnic divides, and further complicated by politics of fear driven by Iraq’s political history of oppression, making compromise more difficult. The good thing, however, is that so far the political parties are referring to the Constitution and courts in their disputes, not resorting to violence.

Given these complexities, there is no quick fix.

Again, we have a surfeit of experts willing to admit defeat, but too few willing to spot the progress--like four fre elections in a row in a region that barely knows of such things.

China: Will fail, but too big to let fail

image here

Guardian op-ed by way of WPR's Media Roundup.  Fascinating piece.

Very sensible run down to start off:

There is no question that China's growth has been anything short of exceptional. However, that success may have run its course. China will have to rise again in order to rebalance growth while reducing inequality and environmental degradation. The plight of 1.6 billion people depends on it, and the entire world economy. The global community should do all it can to help China succeed.

Like Japan, South Korea, and others before, China has deployed a hybrid mix of state and market-led forces to globalise its economy over the past 30 years. Like its East Asian predecessors the Chinese miracle has been built on exports to the west. The results have been unprecedented, with a growth rate of approximately 10% that has lifted 566 million people over the $1.08 "extreme poverty" threshold set by the World Bank.

Yet the Chinese model is not sustainable in the long run. It has created severe inequalities and environmental degradation and has contributed to the global imbalances that were at the root of the financial crisis. There is an across the board consensus that China needs to diversify demand toward its domestic market.

Yilmaz Akyuz, chief economist of the South Centre, estimates that close to 60% of China's imports are used in the export sector and only 15% of imports are for domestic consumption. 

All sensibly rendered, especially noting the non-uniquenes of the China model.

But here's where Chinese incrementalism cannot be condemned:

The west can't have its cake and eat it too. The west can't tell China to increase domestic demand and rebalance its economy through domestic consumption (without increasing carbon dioxide emissions), and at the same time shun China's incremental approach to to monetary policy, strikes and wage increases, policies for financial stability, and green industrial innovation. China should be enabled to succeed. A country of 1.6 billion people that is now one of the only rudders working in the global economy is too big to fail.

So an argument for focusing on direction over degree--as in, is China slowly moving in the right direction?  And not obsessing too much over speed.

Why?  Simply put, no one wants to own the problem of a ship-wrecked Chinese economy.

Excellent, intelligent piece.

The narrowing definition of success in China

Newsweek blurb noting how China's top schools increasingly draw overwhelmingly from the urban elite.

Insider estimates on Tsinghua and Peking U (the MIT and Harvard of China's universities, respectively) say that only about 1% of the students hail from rural areas, which is amazing considering that close to half of the population live there.  That kind of set-up means somebody like me (hailing from Boscobel, population 2,200 and decidedly rural) never gets into a Harvard (where some local snobs asked me, upon my arrival, how long I'd been in the country).  

This doesn't mean rural kids don't get into universities, just that they're overwhelming restricted to the lesser schools.  In the past, standardized tests meant a certain portion of rural kids got into top universities, but today a lot of other attributes are considered--like foreign language skills, which favor the urban elites.

Bottom line:  the party elite will increasingly grow out of touch with the common man if this educational trend continues.