Posted on 10/05/2021 4:53:04 PM PDT by bitt
Six months ago, few Americans had heard of Evergrande. Now many worry this Chinese property developer’s downfall will start an economically devastating chain reaction.
They’re right about the chain reaction part, but I don’t think it will “devastate” anyone outside China (unless they have business there). Nonetheless, this episode exposes some other China issues worth discussing.
A few months ago in Xi’s Big Mistake, I said Beijing risked killing the entrepreneurial activity that had spurred the country’s rapid growth. As we learn more, this is looking less like a mistake and more like a mistakenly-conceived plan.
It’s hard to be sure because Chinese plans unfold so slowly. Leaders like Xi also don’t panic when their plans encounter difficulty. They patiently wait to get back on track, maybe nudging events along here and there. As long as society is stable and the regime not threatened, they just let it unfold. This opacity makes understanding China from the outside difficult.
My views on China and Russia are rooted in the teaching and mentorship of Andrew Marshall. He was spectacularly right about both while the rest of the political/economic establishment, the CIA, and the State Department were not just wrong, but incredibly wrong.
Andrew Marshall (his biography is called The Last Warrior) was a legend in military circles. He served at the premier Defense Department think tank from 1976 up until a few years ago. He was reappointed by eight presidents of both parties. His impact on US defense planning and thinking cannot be overstated. For whatever reason, in the mid 2000s, he began to have longer discussions with me and eventually took me under his wing. I had a great deal of access to his thinking, especially after he resigned.
Let’s rewind to the 1970s. Paul Samuelson, Nobel laureate and textbook writer (if you took Econ 101 in that era you likely used his text), had this chart from 1961 and similar ones in each succeeding edition.
Samuelson predicted that the GNP of the USSR would surpass that of the US by 1984 or in the worst case 1997. He would move the dates back in each edition and sometime in the late ‘80s the chart simply disappeared, as it had become embarrassing. It wasn’t just Samuelson; this was accepted thinking in many academic and government circles.
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Interesting. Thank you
In the late 70s my finance professor claimed that Saudi Arabia would own all the companies on the NY stock exchange. WRONG!
“... this is looking less like a mistake and more like a mistakenly-conceived plan. It’s hard to be sure because Chinese plans unfold so slowly.”
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Especially to people, like the author and his lofty deep state buddy, who never bothered to learn Chinese and learn how things actually work in China. Xi’s plan is doing exactly what it was designed to so - bring the Chinese people back to the total CCP authoritarian rule that Mao instituted. Mao is still a huge cultural and political force ; his shrines are everywhere.
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