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Fredkc
17th August 2010, 16:38
A surprising article for several reasons. First of all, that it was published at all.
Secondly that he could capture so well the spirit of what the US was intended to be, and yet so misjudge what we currently are ("Rule of law", my ass).


China must reform or die

JOHN GARNAUT
August 12, 2010

The Sydney Morning Herald (http://www.smh.com.au/world/china-must-reform-or-die-20100811-11zxd.html)

A Chinese two-star general has warned his conservative Communist Party masters and firebrand People's Liberation Army colleagues that China must either embrace US-style democracy or accept Soviet-style collapse.

As officers of similar rank rattle their sabres against US aircraft carriers in the Yellow and South China seas, General Liu Yazhou says China's rise depends on adopting America's system of government rather than challenging its dominance off China's eastern coast.

''If a system fails to let its citizens breathe freely and release their creativity to the maximum extent, and fails to place those who best represent the system and its people into leadership positions, it is certain to perish,'' writes General Liu Yazhou in Hong Kong's Phoenix magazine, which is widely available on news stands and on the internet throughout China.

The fact of General Liu's article suggests China's political and ideological struggles are more lively than commonly thought, ahead of a rotation of leaders in the Central Military Commission and then the Politburo in 2012.

''The secret of US success is neither Wall Street nor Silicon Valley, but its long-surviving rule of law and the system behind it,'' he says. ''The American system is said to be 'designed by genius and for the operation of the stupid'.

''A bad system makes a good person behave badly while a good system makes a bad person behave well. Democracy is the most urgent thing, without it there can be no sustainable rise.''

General Liu was promoted recently from deputy political commissar of the PLA Air Force to political commissar of the National Defence University. His father was a senior military officer and his father-in-law was Li Xiannian, one of Chinese communism's ''Eight Immortals'' - and a one-time president of China.

While many of China's ''princelings'' have exploited their revolutionary names to amass wealth and power, General Liu has exploited his pedigree to provide protection to push his contrarian and reformist views.

But General Liu's latest writings are extraordinary by any standards. His article urges China to shift its strategic focus from the country's developed coastal areas, including Hong Kong and Taiwan - ''the renminbi belt'' - towards resource-rich Central Asia.

But he argues that China will never have strategic reach by relying on wealth alone. ''A nation that is mindful only of the power of money is a backward and stupid nation,'' he writes. ''What we could believe in is the power of the truth.

''The truth is knowledge and knowledge is power.''

But such national power can only come with political transformation. ''In the coming 10 years, a transformation from power politics to democracy will inevitably take place,'' he says.

General Liu inverts the lesson that Chinese politicians have traditionally drawn from the collapse of the Soviet Union - that it was caused by too much political reform - by arguing that reform arrived too late.

Since 2008 the Communist Party has steadily tightened the political screws to stifle dissent.

Many Chinese are concerned that reforms have been blocked by powerful military, security, corporate and family groups that benefit from the status quo.

General Liu was famously outspoken until he stopped publishing his essays about five years ago.

It is unclear how his latest article appeared and whether he has backing within the system.

Last year Hong Kong's Open magazine published a leaked report of one of General Liu's internal speeches which raised the taboo topic of how some generals refused to lead troops into Tiananmen Square in 1989.

General Liu returned to the subject of Tiananmen in his Phoenix article, saying ''a nationwide riot'' was caused by the incompatibility of traditional power structures with reform.


The fact he hasn't been published for 10 years makes me wonder, "why now?" a li'l bit. Bringing up Tiananmen Square, in China, is the political "Third Rail" you simply don't touch. That he has touched on two 'forbidden subjects' in one article is worthy of note.

Fred

Luke
17th August 2010, 21:10
General Liu returned to the subject of Tiananmen in his Phoenix article, saying ''a nationwide riot'' was caused by the incompatibility of traditional power structures with reform.
[/INDENT]

The fact he hasn't been published for 10 years makes me wonder, "why now?" a li'l bit. Bringing up Tiananmen Square, in China, is the political "Third Rail" you simply don't touch. That he has touched on two 'forbidden subjects' in one article is worthy of note.

Fred

Hmm. In the West Tiananmen is portrayed as some kind of democratic revolt, while it was rather a call for "communism with human face" (but there were groups involved that wanted re-instating of mao-style regime back too). Note that so called "democratic" protest in Soviet block (like Polish "Solidarnosc") were same - democracy as in full shops and less corruption NOT free market and personal choices.
General is using T-square in purely western context, that alone makes me wonder about this article being PR stunt.
Remember- China is a muscle of corporate world, just as Soviet Union and satellites were before that. Without govt forced labour costs below what any other country can offer, China is not an attractive place- with bureaucracy and bribes and all that stuff that is millenia old tradition there. Right now Thailand and Vietnam start looking better in that matter, and some companies evacuate from China. This is serious problem and Chinese leaders would do anything to stop this movement and resulting job loss. Worst case scenario- they will keep factories open producing goods for which there is no need/export opportunities, just to keep employment numbers low.
Same trick is used to keep production growth numbers, that look so impressive in statistics, just remember, Soviet union also had "strong economy" in one point in history.
Without western concerns investing there and providing much needed money influx, China is unable to feed itself, and now there are more and more problems with drinking water supplies, not to mention with environment completely degraded by pillaging resources for production sectors, with millions of workers walled-in in closed "communities" with curfews and armed guards.
And current Chinese leadership knows what will happen when they stop being world muscle. Lathe operators do make fine soldiers but not software engineers, among other things.
IMO, democracy there is as feasible as in Russia under Stalin: they can make pretty show for press, make some "potiomkin villages (http://en.wikipedia.org/wiki/Potemkin_village)" and ignorant westerners would buy it. What stays "under the hood" is quite another matter.
Further reading
Gated, Locked Migrant Areas Impact Chinese Economy (http://dailyreckoning.com/gated-locked-migrant-areas-impact-chinese-economy/)
Another Milestone for the Chinese Economy (http://dailyreckoning.com/another-milestone-for-the-chinese-economy/)

Studeo
17th August 2010, 21:20
China Is Winning The Economic War


During the ‘cold war,’ a term used to describe the tension between communist and capitalist countries that lasted from 1947 to 1991, one of the fears was a military conflict between Russia or China and the U.S.
It didn’t happen. The potential of a military war instead morphed into an economic war.
The U.S. was winning hands down for a long time, but not so much anymore. It used to be that the U.S. was number one in pretty much everything: education, technology, standard of living, economic and military strength, admired world leadership. It was leading the rest of the world into the future with the demonstrative power of democracy and free markets, new technological breakthroughs in automation, computers, communications, energy, medicine, space travel, to name a few.
In recent years, a number of countries have surpassed the U.S. in specific areas, including consumer incomes, standard of living, and health care. The true economic powerhouse, however, has been China. Some of the statistics, and the speed with which they have changed, have been startling.
Over the last ten years China’s economy has surged past those of Canada, Spain, Brazil, Italy, France, and Germany, and is expected to pass Japan this year, to become the second largest economy in the world, behind the U.S.
Whether it’s manufacturing efficiency, high-speed rail-line technology, nuclear power plant construction, clean air energy technology, education, China is making impressive global inroads, even in areas where the U.S. still has significant dominance. Much of it has to do with China’s massive population, about which the U.S. can do nothing.
For instance, while U.S. Internet companies dominate global headlines, China now has the world’s largest internet market as measured by the number of users. Yet internet use has only penetrated 22% of the population versus 75% in the U.S. Meanwhile, U.S. Internet giants like Google, Yahoo, eBay, Amazon, Facebook and Expedia are experiencing problems trying to transport their dominance into the Chinese market. Part of it is obstacles placed in their way by China’s government, in support of China’s state-controlled corporations. The result is Chinese internet companies like Tencent, and Baidu, cannot help but become world leaders.
Here’s a statistic of more importance. U.S. universities will graduate 150,000 engineering students this year, while Chinese universities will graduate more than 500,000. I’ve had people tell me that’s an unfair comparison since China’s population is larger by approximately the same ratio. But that’s not the issue. The issue is the degree to which China has moved higher education to the top of its priorities, and the fact that 500,000 new engineers a year will probably come up with more high-tech innovations than 150,000 can.
China’s great leap forward has been going through the same phases the early U.S. experienced as it worked toward becoming the world’s dominant economy.
When we criticize China for the treatment of its underpaid and overworked labor force we sometimes forget that in the early years the U.S. also exploited its workers, even utilizing child labor in 14 hour days in garment, textile, and shoe factories, coal mines and crop fields, which gave the country its initial low-cost jump start economically.
It appears China is beginning to exit that phase and enter the next, of treating its workers better. In the past year Chinese workers have been allowed to form unions and strike for higher wages and shorter hours at various auto and electronics plants.
The west would probably like to think that is due to the pressure put on China to improve human rights. However, China has never shown any inclination to bow to pressure in any area. The fact is that the next phase of China’s economic development must be, as it was in the U.S., to develop a strong domestic economy. To do so it needs to have a more prosperous population of consumers, rather than depending on low cost exports to other countries.
Meanwhile, it can be said that China is eating America’s lunch, never taking its eyes off the goal, while we squabble among ourselves, paying no attention.
That’s unfortunate. As Sam Houston said in the U.S. Senate in 1850, “A nation divided against itself cannot stand.”
Yet, for the last 15 years the U.S. has divided itself in increasingly bitter time and energy-consuming political arguments: the morals of President Clinton, whether or not war should be waged to remove Saddam Hussein from power in Iraq, whether the country’s current problems are due to the depth of the economic hole dug during the last administration, or ineptness of the current administration in pulling the economy out of the hole.
Meanwhile, China has kept its eye on the goal. It not only is making great economic strides, but on the financial side has become the world’s largest creditor nation, even as the U.S. has become the world’s largest debtor nation, with China holding much of its debt.
The U.S. needs to interrupt its angry divisiveness and name-calling long enough to recognize the portent of what is going on. Unfortunately, in this particularly acrimonious mid-term election year, that is not going to happen.

Source: http://blogs.forbes.com/greatspeculations/2010/08/13/china-is-winning-the-economic-war/?boxes=Homepagechannels

BMJ
18th August 2010, 00:18
Your right Studeo,
In fact the "economic war" is what sent communist Russia to the wall. In the 1980's the USA pushed hard to develop more weapons systems than every before and as you would expect Russia had to try to out do the USA at every turn, e.g. for every B-1 there was TU-160.
At the end of the day about 1989 Russia was broke the USA won the economic war.

Now tptb are scared out of their mind about China, because firstly they do not subscribe to the NWO club & secondly China will become the ultimate super power without peer in every respect.
With their aggressive attitude towards Taiwan and involvement in the Korean war in the 1950's, if history is any indication we could expect some engagement between the USA down the track. Hopefully not, but there it is.

Luke
18th August 2010, 06:22
Your right Studeo,
In fact the "economic war" is what sent communist Russia to the wall. In the 1980's the USA pushed hard to develop more weapons systems than every before and as you would expect Russia had to try to out do the USA at every turn, e.g. for every B-1 there was TU-160.
At the end of the day about 1989 Russia was broke the USA won the economic war.

Now tptb are scared out of their mind about China, because firstly they do not subscribe to the NWO club & secondly China will become the ultimate super power without peer in every respect.
With their aggressive attitude towards Taiwan and involvement in the Korean war in the 1950's, if history is any indication we could expect some engagement between the USA down the track. Hopefully not, but there it is.
I'll bite.
Do you really think "China" is not a part of NWO? It's it muscle dammit.
There is no SINGLE government on earth that is not part of controll structure.
Soviet Union was driven up the wall BY CHINESE.
In 70's Russia and Satelite countries taken awful amount of debt to prop up their economies, which were exporting raw products to west, but the China opened up, offering much cheaper slave labour (surprise?). By 1981 soviet block was on a way towards default, which happened in 1989-1990.My country finished paying up debt from 70's a year ago. Afghanistan was an attempt to lay hands on raw materials AND strategic move against China, but it failed. Notice how it "coincided" with Japanese regress and beginning of their "lost" two decades.

The "countries" are part of global economic system from 1944 (Bretton Woods agreement). Sure there are factions, but they move within same power structure. If you believe that there are good governments, then you better stop watching TV. If you look at global structure pyramid, governments are somewhere middle the height. There is no single leader that is not a puppet or useful idiot. There is no single opposition leader that is not a puppet OR useful idiot. Neither have any impact on what is going on whatsoever.

TPTB cant be scared of China as China is their brainchild, it fulfils many necessary functions, last of witch would be sacrificial pyre in near future. For now it is a muscle for corporate world, but it's carefully controlled by means of food, water, energy and raw materials. The second export opportunities end, China is dead as dodo.
Superpower? Don't make me laugh. Giant on clay legs more likely. Just as Russia or USA for that matter. Power is in quite another place.

sjkted
18th August 2010, 08:03
The problem with China is that their main industry is based on making things cheaper than anything else. They have little domestic economy to speak of -- look at where they were 10-15 years ago before everything was made in China. Just because they are getting big, doesn't mean they have the capability to lead a world economy. In order to lead, there must be freedom. Property rights and individual rights must be respected. People need to become and have the ability to become affluent, and they need to explore their ambitions. What made Amerika great when it once was, was the few guys who started up a business in their garage or basement and a bit of seed money. If you look at all of the great new products/services we have seen, most of them come from this model. The new, great innovations that move the world don't come from the behemoth companies -- they come from a few guys in a garage who are taking a risk to change the world. China is light years away from having any real entrepreneurial environment. And, it's not just the difference in laws from a socialist to capitalist-type system, it's also cultural. Americans know that their rights are given to them by God -- they are unalienable rights -- not just something the government decided to give them to spur economic growth. This is the heart of the economic system, and it's absolutely ludicrous to think that China or India could ever lead without massive cultural changes.

--sjkted

Luke
18th August 2010, 08:16
The problem with China is that their main industry is based on making things cheaper than anything else. They have little domestic economy to speak of -- look at where they were 10-15 years ago before everything was made in China. Just because they are getting big, doesn't mean they have the capability to lead a world economy.[...]This is the heart of the economic system, and it's absolutely ludicrous to think that China or India could ever lead without massive cultural changes.

--sjkted
Precisely.
The real power is always within individuals pursuing their selfish goals, that also happen to benefit others.
Every centrally planned economy is doomed to fail, because it cannot afford mistakes individual can make. When 10 people fail, eleventh will make a breakthrough, you just cannot beat that.
No council, board, comitee have knowledge to make informed decisions on a scale of bigger city, not to mention country.
Planned economies of any sort are leading people on Road to serfdom (http://mises.org/books/TRTS/).

http://www.youtube.com/watch?v=q6lSR62wmSo
(this also apply to ludicrous "plans" like Venus project (http://projectavalon.net/forum4/showthread.php?t=3311) or other "war economy" schemes" (http://projectavalon.net/forum4/showthread.php?2101-Easiest-Way-to-Make-a-HEALTHY-Economy!&p=30637&viewfull=1#post30637))

Luke
19th August 2010, 12:44
Good article, tackles China AND the global scale:
Ghost Money (http://www.zerohedge.com/article/guest-post-ghost-money)


China could have become more like India, or Taiwan, or South Korea. Instead, the Party has gone as far as it possibly could in the opposite direction, in the direction of denying Chinese people basic human rights like free speech and free assembly. Instead, it seemed better to them to lend the money Chinese people should have been spending on the pursuit of their own happiness to a bunch of deadbeats in the West who were never going to pay it back, just so they and their children and grandchildren could avoid the inconveniences associated with things like elections and strikes and writs of habeas corpus. The result of the Party’s actions is that the country is woefully unready for the economic and societal transformation it must now make.