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Guest Post: Is 2011 The Present Era's 1979?

Tyler Durden's picture




 

Submitted by Charles Hugh Smith from Of Two Minds

Is 2011 the Present Era's 1979?

The Soviet Union seemed permanently powerful in 1979. Ten years later it collapsed. Is 2011 this era's 1979?

I was watching a Chinese language TV news program the other night and saw this story
: (in subtitles; I don't know Mandarin) Mistakenly-released report reveals embarrassing extent of Chinese corruption: (The Australian)

MORE than 10,000 corrupt Chinese officials collectively took $120 billion out of the country in a 15-year spree of embezzlement, bribes and defections, with some of the money ending up in Australia.

The revelations, laid bare in a report by the People's Bank of China that was never intended to be released to the public, shine an embarrassing spotlight on Chinese corruption; a problem seen by some as an Achilles' heel for the world's second-largest economy.

The report appears to have been mistakenly uploaded to an official website after winning a prize for the quality of its research.

Official corruption remains a source of disgust and frustration to the Chinese population at large.

The pervasiveness of money laundering outlined in the report offers a damning indictment of the government's wars on corruption in the run-up to the Communist Party's 90th anniversary on July 1.

A handful of prominent cases, including one that involved the Ministry of Railways, have rattled China since the beginning of the year - but just as destabilising is the constant, low-level corruption that blights the lives of ordinary Chinese.

This week at least eight new websites came online to offer increasingly infuriated Chinese the chance to vent their anger - from “gifts” to doctors to perform operations correctly to the rigging of trials.

The report, which was compiled by the central bank's money-laundering analysts and called “The routes that our country's corrupt officials transfer assets abroad”, described eight main conduits for moving money out of China.

Methods ranged from the “high-risk” option of a suitcases full of cash and a dash to the border, to convoluted networks of foreign intermediaries.

Senior managers from listed companies or state-owned enterprises, it said, would disguise the illegal transfers beneath legitimate remittances, cloaking the process with forged contracts and other documents that were destroyed.

The report won first place in the China Society for Finance and Banking's annual awards for financial research and, despite the warnings that it was for internal central bank consumption only, was put online as the winner of the prize.

It was removed from the People's Bank website moments after domestic media spotted it and began publishing its findings.

So the PBOC estimated about 16,000 to 18,000 individuals have fled the country with ill-gotten funds over a 15-year period. The real question was posed by Beijing-based blogger (and one of my favorite reads) Maoxian: JUST IMAGINE HOW HIGH THE REAL NUMBERS ARE :-).

The Chinese TV news offered specifics not found in the Western media accounts. For example, the report cited one official from a poor Western province who had embezzled 100 million yuan in government funds. That is $15 million, a hefty sum in America, Australia or Europe but a fantastic fortune in China, where the per capita income is still a developing-world $7,600 (in purchasing power parity--in nominal currency, it is much lower).

On a per capita basis, China is between Ecuador and Algeria.

The key point in this report, in my view, is that these 16,000 officials did not escape with the system's run-of-the-mill bribes: they embezzled funds at the highest levels of local and central government.

Since I have Chinese sources (not just Westerners living in China who don't work deep inside the local government and thus have limited knowledge about how things actually work in China), then I can state that this embezzlement is merely the tip of an iceberg, most of which is standard-issue bribes and "gray money" collected by local officialdom as standard business practice.

In other words, embezzling $15 million in government funds is criminal, but skimming unlimited sums of bribes and "gray money" is simply normal life. As the Claude Rains character memorably says in the classic film Casablanca, "I am just a poor corrupt official." This line might be spoken by hundreds of thousands of lower-rank officials in China.

If $120 billion was embezzled by a relative handful of top officials, then ten times that amount has been skimmed in the course of normal business by lesser officials who have literally done nothing wrong within the current system.

So skimming $500,000 and transferring it to an account overseas by one means or another is "normal" and indeed expected. Having an overseas account and house and a green card or equivalent escape from China is an important "marker" of status in China. In other words, only the poor have no way out of China when the inevitable happens and the next revolution overthrows the current Status Quo.

If nobody considers this a risk, then why do the Elites all have overseas accounts and resident status outside China? We might rephrase this question several ways: what are they afraid of? If they trusted the current Status Quo to be permanent, then why make sure their families have green cards and homes in Canada, Australia, Thailand, etc.? What does this reality say about China and its leadership's expectations?

Another revolution in China is impossible, you say? Please step this way into the time machine and return to 1979. The year is usually remembered for the Iranian Revolution, and many commentators are comparing the current "Arab Spring" revolts to the systemic changes unleashed in 1979.

More interesting is the case of the Soviet Union in 1979, which appeared to all eyes as a permanent, stable political entity. The U.S.S.R. invaded Afghanistan on December 24, 1979, but that only seems noteworthy looking back from the present. At the time, there was still concern in the West that the U.S.S.R. would launch a blitzkrieg attack to conquer Western Europe.

While this might seem like a ludicrous worry now, in 1979 it was considered a very real danger, as described in the bestseller of that year, The Third World War, August 1985.

As I have recently noted here, the stability of a sand pile appears permanent until a random grain of sand sets off a cascade of collapse. Systemic instability is revealed at some unpredictable point, and what appeared permanent and unchangeable collapses in a heap.

One-party systems lack the mechanisms for adaptation, and thus they are exquisitely ripe for revolution and implosion. Democracies and republics tend to have periods of low-amplitude instability (witness Greece right now) that enable the system to adapt and experiment ("fail fast, fail small" being the preferred process of adaptation).

One-party systems, from the Liberal Democratic Party in Japan to the Communist Party in the U.S.S.R. and China, suppress the information and processes intrinsic to dissent, and thus build up intrinsically unstable systems.

As I noted in Why The Wheels Are Falling Off China's Boom , there are no mechanisms within China's machinery of governance to control the local government's constant, low-intensity corruption and abuses of power. That is typical of one-party states: limited by rigidity at the top, instability is squeezed into areas that are considered "safe": the mosques in Arab nations, and home mortgages in the U.S., for example.

Systemic instability is like water in a closed system: it cannot be compressed into nothing. As pressure builds, it will find the weakest section of the system and explode outward.

We all know hundreds of billions of dollars are taken out of the U.S. by Financial Elites using legal and quasi-legal tax avoidance schemes prepared by Panzer divisions of tax attorneys and greased by lobbyists and their bought-and-paid-for lackeys in Congress. Eventually, The citizenry of the U.S. could choose to form a new third party and evict the armies of corruption (Republican Corps and Democratic Corps). As unlikely as that option appears at the moment, it remains a legal option open to the citizenry.

Perhaps the apparent stability and permanance of the Communist, Republican and Democratic Parties is just that: apparent. Inherently unstable systems sre good at masking pressure beneath the surface. These invisible fault lines will snap and unleash the forces of change when few expect it.

Both China and the U.S. may be quite different countries by 2021. It's worth recalling that nobody saw the 1989 implosion of the Soviet Union a mere ten years before in 1979, so it is not surprising no one sees the implosion of the Status Quo in China and the U.S. ten years hence.

 

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Sat, 06/18/2011 - 17:42 | 1381097 mynhair
mynhair's picture

Resurrect Mao!

Oh, we did.

Sun, 06/19/2011 - 15:09 | 1382849 mkkby
mkkby's picture

Who says nobody saw the fall of the Soviet Union in 1979?  Many did.  There were articles in major US newspapers outlining how bad things were -- over stated military capability and technical obsolescence of their tanks,  planes and missles.  Not to mention not-so-well hidden major environmental disasters and nuclear accidents.  Many of us knew the Soviet Union was largely a false bogey man, kept around to scare the sheeple and keep up the military spending.

Back then the media wasn't totally captured by politicians in 5 mega corporations.  There was some diversity of opinion and an interest in making a name for yourself by outing the governemt lies.

Sat, 06/18/2011 - 17:52 | 1381118 mick_richfield
mick_richfield's picture

This is not 1979.

This is August, 1914.

 

Sat, 06/18/2011 - 17:52 | 1381129 Sudden Debt
Sudden Debt's picture

Why would the Chinese revolt?

Because all the wealth is concentrated to 0,2% of the  population?

Because 70% of a factory workers wages go to food and housing?

 

Sun, 06/19/2011 - 09:59 | 1382305 kumquatsunite
kumquatsunite's picture

Great perspective in this article. The only aspect left unmentioned is the demographic pressure, which is where the roots of the problem are. China's gigantic problem is the unrelenting population increase. Even at one child, the continued evisceration of the necessary natural resources for human existence are so polluted that generations would need to pass before any restoration could take place, even if China "did all the right things."

Therefore, the "revolt" may not be "revolt" as we've seen before in China. The "revolt" may be focused outward upon the world via the war for natural resources. The comments on Chinese in Canada, Australia, and elsewhere...especially Africa...lead to this conclusion. China has bulwarks throughout the world; America is reachable from many of them, especially Canada. China on the west coast...where Washington State has been ceded to the Chinese already (a recent scandal involved the trading of food stamps among the Chinese immigrants for fifty cents on the dollar cash). While we often wish to "project" our own national traits upon foreigners (after all, aren't they all just like us?!), this is one of the dumbest aspects of contemporary America society whereby in order to foist the third world floatsam upon Americans under the guise of "take this pill of self-genocide and swallow it", the reality is that Americans are quite unique in having had an equitable society until recently. However that equitableness has been effectively destroyed by the deliberate destruction of the ties that bind; America's success could not be destroyed if  America were a nation of agreed upon values; the destruction of those values required the importation of enough third worlders that Americans would feel lost and adrift in their own land. Recently I picked up a book and was flipping through it; the book entitled Citizen USA was supposed to be a compilation of immigrant stories and to allow the reader that sense of noblesse oblige that Americans in our recent frenzy of "giving back" have so come to love (ah yes, the new American fashion is to claim that ones "position" in life requires "giving back"). Of course, the reality that this "giving back" has corrupted America (import corrupt third worlders, ya get corruption, duh!) seems lost amidst this glow of "giving". One need only look at the foreclosure rate among Hollywood stars to see that the "giving" is a flim flam of political correctness and part of the house of crap, er, cards that the bubble economy blew. 

Of course, in the book (the liberals have no shame or sense of borders...as in National borders...) there are a number of profiles of mexicans who swam the river to get here, but since we are not really a country anymore...since the liberals believe that we are just part of the whole global world, the ignoring of our borders and our laws, is irrelevant to the book and not to be, peskily, brought out as an indicator of what is wrong with this country. For even as we are told that we are a nation of immigrants, which is whole wrong for an immigrant is only the first generation, we are nonetheless importing more than three and one-half million a year, as we have been importing for the last decade and a half. 

America cannot stand with such numbers of corrupt people who live with scamming and stealing (even if such stealing be legal: food stamps, free medical, housing subsidies, et al). Judge Judy is an interesting show to watch to see just how eviscerated from our society any sense of morality in ones own responsibility and self-support we have become. There is no shame or hanging of the head as those appearing before Judge Judy roll off their list of government benefits received (and not rolled off. It's quite obvious that many of these people don't tell the truth about all those benefits, especially the one where they are receiving disability for a child and their receiving disability for Caring for their Own child. If corruption, as this article states, leads to collapse, we can thank the liberals for the immigration that will destroy and for the lack of morality, that lead to that "final solution" for the United States. Unfortunately, there are an awful lot of headstones that were created because until recently, we thought our job Was to save this country for future generations of Americans, not cede it to the overpopulations from the third world.

Sat, 06/18/2011 - 18:02 | 1381146 gwar5
gwar5's picture

China will do public executions of public corruption to make examples when they've had enough.

I'm still intrigued by the Japanese business men that were caught with $130 billion in bonds by the Italians on a train to SUI a couple of years ago. WTF?  I don't buy the wobbly story they were somehow 'forgeries'.

Sat, 06/18/2011 - 18:01 | 1381155 mick_richfield
mick_richfield's picture

There are wars being fought that are not ... part of the daylight world.

Sat, 06/18/2011 - 19:04 | 1381266 Caviar Emptor
Caviar Emptor's picture

I was caught at a major international border with $250 billion in Reagan bonds hidden in a beach bag. It was winter so the customs police were suspicious and demanded to look inside. I was granted diplomatic immunity and dinner on me at the top local restaurant with the head of customs and his family. 

Sat, 06/18/2011 - 17:59 | 1381147 GeneMarchbanks
GeneMarchbanks's picture

It's 2011. These types of articles need to stop. They are the result of "analysts" who simply lack patience and an original idea so they give us this nonsense instead. Meanwhile back in actuality all is flux. Even China, as "controlled" as it seems.

Sat, 06/18/2011 - 18:04 | 1381152 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

China is a giant smoldering pile of excrement. It will be like the collapse of the Soviet Union. Within a few weeks before the Soviet Union collapsed is when the western world found out. It seems that countries like China implode during the late summer to fall period. Look for trouble around August to October.

Sat, 06/18/2011 - 21:03 | 1381481 duo
duo's picture

It's a cultural thing. 

1. Is it right or wrong, who cares?

2. Will I get caught, maybe.

3. Will I do time?  No, my cousin the judge will get me off.

Multiply Bill Clinton by 1,000,000,000 and you have China today.

Sun, 06/19/2011 - 10:25 | 1382344 Tsukato
Tsukato's picture

you hit it on the head. I'm living in Chongqing, but have been all over this country, and know many party members and rich folks. Whereas in the US, corruption is only at the top of society, here it is pretty equal opportunity. I know the seething anger of the masses here, They believe any rich person became that way by dubious methods, And, they are 100% correct.  However, unlike the US, there is no such thing as shamelessness, and 99% of Chinese are nothing but eating, sleeping piles of consuming shit, ie. the worthless eaters. It is so completely alien to everything you grew up considering good and decent. They are the world's most dispicable people in my opinion, and in their own. The world may hate the chinese, but not nearly as much as the chinese.

On a brighter note: its an easy place to make wads of cash. Just ditch any sort of humanity and kindness at the HK border. It definately would be nothing but a liability.

Cheers :)

PS- Dont forget the PLA. They aren't gonna allow the party to end, and they are the most corrupt institution in the country. The Party at least have some sharp, well meaning folks running their economy at top levels.

Sat, 06/18/2011 - 18:05 | 1381156 bigwavedave
bigwavedave's picture

"so it is not surprising no one sees the implosion of the Status Quo in China and the U.S. ten years hence."

i guess this guy doesnt read ZH that much.

Sat, 06/18/2011 - 18:11 | 1381164 texpat
texpat's picture

I'd expect better from Hugh-Smith.

Take a look at page 75 of this document. The Soviets will need 150 million tons of oil in 1985. To paraphrase: they will be fucked, since they'll need foreign currency to import, and their system will fall apart.

http://bilderberg2011.com/wp-content/uploads/2010/12/bilderberg-meetings...

It all blew up in 1989 or so.

Sat, 06/18/2011 - 18:14 | 1381172 dick cheneys ghost
dick cheneys ghost's picture

People in Africa are complaining of Cheap Chinese Imports.....now thats funny.......

And if asked, Most people cannot name one chinese brand

 

The fall will be fun to watch........


Sat, 06/18/2011 - 19:44 | 1381318 ebworthen
ebworthen's picture

"And if asked, Most people cannot name one chinese brand"

WalMart

Sun, 06/19/2011 - 13:13 | 1382647 TheMerryPrankster
TheMerryPrankster's picture

"And if asked, Most people cannot name one chinese brand"

Black & Decker

General Motors

RubberMaid

Apple

most fortune 500 are Chinese brands now days.

 

You want to play stump the band? Try to name American Brands. Even Boeing has some components made in China.

The termites own the forest.

 

Sat, 06/18/2011 - 20:58 | 1381458 Rusty Shorts
Sat, 06/18/2011 - 18:30 | 1381200 Caviar Emptor
Caviar Emptor's picture

China did not have a global, 4-decade long Cold War, Arms Race and Space Race to finance unlike the USSR in 1979 (and the US). Today, the US has ongoing massive military expenditures and missions abroad which it must finance. China does not. It can focus more resources internally. Also, China has a key trading partner: the US which USSR didn't have

Sat, 06/18/2011 - 18:59 | 1381259 Dollar Bill Hiccup
Dollar Bill Hiccup's picture

Those are good points.

However, the USD is now weaponized. It is the bearer of inflation and the breaker of pegs. China is in a tight squeeze between narrow export margins which will be gone if the RMB revalues and commodity inflation which the FED is not causing, since the FED is not directing the PBoC to peg to the USD. The RMB peg and the appetite for growth in China and the BRIS are causing inflation. Diplomacy at its finest. Lie and shoot at the same time.

Transnational Corporations are staring at the Chinese market like a doberman staring at a steak. This does nothing for the US middle class and working class unless they want to work in factories exporting to the new Chinese Market which is still imaginary. The Chinese do not earn enough to buy meaningful quantities from American workers. Someday they probably will.At that point, American workers will be happy to have a job.

If a common complaint against western democracies in general and the US in particular is that they are not very good at longer term planning and tend to be very short sighted, a careful investigation of the labor market in the US and Transnational Profits may be a good indicator that the strategies in place are not short sighted. The Chinese have 5 year plans and plan for 20 years. The US Transnational depletion of the US labor market and the destruction of an entitled middle class has been unfolding over the last 30 years and has another 20 to go.

In the intermediate term if the US cannot reinvent a labor market then you will see trade tariffs within the next 5 years. Goodbye Walmart. It would be nice to say goodbye WalStreet too, but the undead are harder to kill. As that happens, PMs will be your best friend and global instability will be extreme.

 

Sat, 06/18/2011 - 19:20 | 1381287 Caviar Emptor
Caviar Emptor's picture

All great points, @Dollar

However China is not taking the weaponization of the USD and it's inflationary warhead lying down. This week, it finalized it's 11th Yuan-based swap agreement with yet another resource-rich nation, Khazakstan. Trade between these nations is now dollar-independent. They've learned at the foot of the master about exporting inflation. In the resource dept, the US is sitting on a few time bombs of it's own: Saudi and a number of other increasingly tenuous medieval, oil-rich autocracies. Just yesterday, it was reported that a protest and mini-revolt is underway by Saudi women: astonishingly Saudi is the last country on the planet that does not allow women the right to drive (!). 

As far as trade wars between China and the US: lots of it is just politicians on both sides playing to the peanut gallery. Chimerica was set up to benefit both and the fate of each country has been irrevocably tied ever since. The US needs to export inflation to carry on endless money printing, China needs to keep it's giant labor force fed, clothed and housed. If the deal is upended Both economies will implode. And they know it. 

Sat, 06/18/2011 - 19:23 | 1381290 bigwavedave
bigwavedave's picture

"If the deal is upended Both economies will implode. And they know it. "

But according to the author of the post. No one can imagine that happening.  

Sat, 06/18/2011 - 19:27 | 1381298 Caviar Emptor
Caviar Emptor's picture

Well I disagree. Chimerica was set up by the leadership of both countries. It's been a gravy train for very powerful, connected people. It solved each country's near-fatal problems in the early 1970s. They can't disconnect or the same problems simply return only worse: inflationary spiral in the US and social instability in China. 

Sat, 06/18/2011 - 19:34 | 1381302 mick_richfield
mick_richfield's picture

No one can imagine that happening.

I don't know, Princess.  I can imagine a lot.

Sun, 06/19/2011 - 15:41 | 1382891 Dollar Bill Hiccup
Dollar Bill Hiccup's picture

Populist unrest may spoil the best laid symbiosis of mice and men. The masters of Chimerica know that balance is in their mutual self interest.  The people in many instances are already seeing the economy implode. Unrest in China is growing. How long does the time machine stand still in the US? 62 years to clear foreclosures in New York State at the current rate. Eventually time will win ...

Sun, 06/19/2011 - 10:15 | 1382337 kumquatsunite
kumquatsunite's picture

Actually, China is in the space race and putting massive funds into it; as to the Cold War...China is generally unreported on by our media, after all, the liberal media and their warm and fuzzy approach to the world (whereby all people are just like us and only want the next "new new" thing). AS to the military expenditures, surely you jest, or are you just completely ignorant? China has created the greatest, most massive military force the world has ever seen. We are in countdown to its deployment. And when it deploys as it will do with ferocious intent, the natural resources of the United States will be the prime candidate for appropriation, by any means necessary. Most of the people of the world don't want to share, have no intention of sharing, and are singularly brutal in their desire to eliminate you. If you are not Chinese, well let's just say there is no affirmative action policy in China; they take in no immigrants to corrupt and destroy their own way of life, and they care only about ensuring the continuation of China. Here in America, we've...apparently and without consent...decided that all that we have should be "shared" with the world. Give foreign kids our children's slots in our colleges (educate "them" after all, that noblesse oblige feeling is just so much fun, give "them" our medical care after all who cares if the costs of our medical care are beyond control; give them our fresh water after all sending kazillions of bottles of pure water from the US to China that draws down our aquifers to levels that are not renewable only means that your children and their children will lead brutal lives of scrambled existence.

Sat, 06/18/2011 - 18:30 | 1381201 Mark Noonan
Mark Noonan's picture

Collapse is inevitible in China as it is in any system based upon immorality.  That is the crucial tihng to remember - while all human systems, being run by humans, will have immorality in them, it is only those systems which are inherently wrong in morality which are doomed to failure.  China's immorality is obvious - a closed oligarchy representing no one but themselves runs China for personal pleasure and profit.  This leads to things like the inhuman "one child" policy as well as the massive official corruption we can see. For us here in America, it is not quite that cut-and-dried; the fundamentals of America (Declaration of Independence and Constitution) are strictly moral things, an immoral, quasi-constitutional layer has been placed over it - and if this layer continues to dominate, then we will collapse, too...but if by some means we are able to restore the Declaration and Constitution to their proper place, we'll be fine.  Whether that comes from some sort of successful revolution or the take-over of one of the two major parties by revolutionary forces remains to be seen (while I know a lot of ZH devotees have many gripes about the TEA Party, a careful review of it shows it to be real, and poised to take over the GOP, crushing the Ruling Class elements within it).

Bottom line, though, is that if you're not basing your action upon right conduct, you'll never get anywhere in the long run.  Immoral things can appear at times - and for a short time - to be quite successful (Nazi Germany, Stalin's Russia, now China), but they all fall apart in the end, because what is wrong cannot survive.

Sat, 06/18/2011 - 19:14 | 1381282 bigwavedave
bigwavedave's picture

Braise Cod!

Sat, 06/18/2011 - 19:17 | 1381288 IdioTsincracY
IdioTsincracY's picture

Holy shit!

...while I know a lot of ZH devotees have many gripes about the TEA Party, a careful review of it shows it to be real, and poised to take over the GOP, crushing the Ruling Class elements within it

Sun, 06/19/2011 - 03:16 | 1382009 kumquatsunite
kumquatsunite's picture

Yikes! Revolutionary thoughts my friend! You infer that there is justice; that there is righteousness in honorable deeds; that there is...very simply...a rigth and a wrong which shall always right itself...now that is the most unbelievable item heard amidst the flashing of personal bits for paparazzi, the rotation of women from man to man as though a silent sex dance occurs. And most of all you are inferring, nay, you are stating that as human beings we have a (gasp!) moral code. dare we think; must we consider, honextly the thought simply blows one out of the water for a day or two...imagine...a world without sexual violence towards women and children...or where women were paid equitably...or where divorce was once again, a disgrace.

Sat, 06/18/2011 - 19:56 | 1381330 Jasper M
Jasper M's picture

". . . no one sees the implosion of the Status Quo in China and the U.S. ten years hence."

(SPUTTER!) "NO ONE"?! Good gracious, man, this board alone is aLIVE with people who saw that, even predicted it, in print, YEars ago!

Sat, 06/18/2011 - 20:41 | 1381423 navy62802
navy62802's picture

Seems that the Chinese have precisely the same problem with corrupt officials that we have here in the United States.

Sat, 06/18/2011 - 20:49 | 1381442 Rusty Shorts
Rusty Shorts's picture

1979 was a whole lot gooder than 2011.

Sat, 06/18/2011 - 21:10 | 1381488 duo
duo's picture

We had Kool and the Gang, and Earth, Wind, and Fire back then.

Sat, 06/18/2011 - 22:05 | 1381626 Lord Koos
Lord Koos's picture

I don't think so... I was having way more fun in 1979.

Sat, 06/18/2011 - 22:33 | 1381682 lolmao500
lolmao500's picture

The main problem is corruption. Too many government employees expect a bribe to do their jobs. But this is compounded by the abuse of residency permits. China, like most communist countries, imposes a form of serfdom on its citizens, forcing everyone to carry an internal passport, which includes the name of the town or city you are officially from. This is the only place where you can legally do a lot of things. You can move to other parts of the country, but if you cannot afford the large bribe to get your official residence changed, you are living illegally in your new home. You have no access to things like schools for your kids, or the ability to start a legal business. There are expensive private schools for these illegals, and local officials will take bribes to help you with starting a new business, but you are always an official outsider.  In Zengcheng, like many cities in southern China, where all this rapid economic growth has attracted a lot of new people looking for jobs, of the half million people in the city do not have legal residence. The constant demands for more bribes from police and civil servants, who deliberately exploit the illegal residents, creates a growing anger. This is particularly true in southern China, where the economic boom has been most intense and sustained. But the corruption is found throughout China, even in the rural areas most of the economic migrants in Zengcheng came from. This is the kind of unrest the national government fears might escalate to large scale rebellion. This pattern has occurred many times in Chinese history, and the rulers of China re very well aware of this history.

Sun, 06/19/2011 - 00:37 | 1381876 Problem Is
Problem Is's picture

Amateurs...

"MORE than 10,000 corrupt Chinese officials collectively took $120 billion out of the country in a 15-year spree of embezzlement, bribes and defections..."

Chinese better learn to steal not just pilfer...

Wall Street has stolen 100 times that from the Amerikan tax payer...

Sun, 06/19/2011 - 02:54 | 1381996 dolly madison
dolly madison's picture

I won't be at all surprised if there are revolutions nearly everywhere in the next 10 years.  I think what we are going through now is an awakening.  Because of the internet so much news of the corruption gets spread so far and wide.  It is bound to change the world.

Sun, 06/19/2011 - 04:32 | 1382059 richard in norway
richard in norway's picture

most people use the internet to follow celebrity gossip, the revolution will not be viral. 

Sun, 06/19/2011 - 13:22 | 1382663 TheMerryPrankster
TheMerryPrankster's picture

A troubling sign might be when the CIA begins targeting celebs for assination, like they did MLK, JFK, RFK and many more midlevel leaders of political/social movements. There is a reason that the culture of america has been decimated and the under culture is leaderless.

When celebs begin to espouse opinions and amass social and political power they will be targeted. Twitter is not a tool for revolution, it is a way to track your location real time. Facebook isn't a great way to connect with friends and family, it is a great way to build an electronic database of the watched and their social connections, it is the electronic Stasi, the KGB and the CIA rolled into one and the clueless stand in a que to climb onboard and proffer their most private information for free, for the priviledge of ease and hipness.

The revolution is over at least, round one, and its pretty clear who won that round. Question is are they merely clutching sand?

Sun, 06/19/2011 - 18:57 | 1383170 Lord Koos
Lord Koos's picture

No real resistance can be planned on the public internet, however with encryption and anonymous web browsing a lot could be done...

Sun, 06/19/2011 - 22:59 | 1383691 moonstears
moonstears's picture

Don't forget that web sedative for the male, free online porn!

Sun, 06/19/2011 - 04:10 | 1382047 Rynak
Rynak's picture

Agree mostly with the article.

What i however disagree with, is the naive glorification of representative democracy and multi-party systems.

As i hinted recently again, it doesn't matter what one calls something. What matters is what it effectively is, so what it does.

What is the difference between a controlled press, and a "free" press? Well, if it is mostly controlled by a powerful minority - and if it can effectively put alternative information into submission (typically requires monopoly-like powers, or cartels, or backing by law, etc). So, it doesn't matter if the press is "declared" free - what matters is if it IS free. Is western press by now mostly synchronized and playing along with what megacorps, megabanks and govs want? Is it capable of overshadowing any alternative information, towards the masses? Yes? Well, sorry, but then the west has no free press anymore. Sure, in theory it has a fancy "free"-stamp, and in theory anyone can put out other information, and yes in theory the entire population could access it if it could only find it, if it could only know about its existance, if only.... do i need to continue?

Next up, parties..... if a dictatorship created multiple parties, which all have similiar policies, all act similiar and all are controlled by the same elite.... then does the number of parties matter? If a supposed democracy creates multiple parties, of which all the majors have similiar policies, act similiar and are controlled by the same elite, then does the amount of parties matter? Does a choice matter, if all options are identical?

What? You say but in theory one could create an alternative, if people are just pissed enough? Uh, well, a dictatorship can do that too. It could organize an "internal" voluntary revolution.... basically a gov-swap.... if the state does it out of own choice, then there is no need for an actual rebellion. You say you mean it being done by people themselves? Uh yeah, well if the gov lets them, there is no problem anyways, and if the gov doesn't want to let them do it, you need revolution anyways..... what was the difference again? The oh so varied party pool, where parties actually are on different evolutionary paths? Uh, yeah.... that would be different, allright.... but calling something a democracy doesn't make it so.

Sun, 06/19/2011 - 09:18 | 1382250 Azannoth
Azannoth's picture

Well look how long it took the Middle Easterners to wake up, they had dictatorships for 50+ years and only now are getting mad about it, the West is not even aware of it's dictators yet

A Revolution only happens when people are running on empty stomachs not before

No1 makes a revolution bases on ideology, very few people are willing to die for nothing

Revolutions are pretty much exclusively started by the lowest levels of society, by the poorest who have nothing left to loose,

theres not enough people like that in Europe maybe in 20-30 years will this reach a tipping point

So I am not holding my breath waiting for a revolution, I am saving for a critical mass of capital and than I am getting the fuck out of Europe

Sun, 06/19/2011 - 10:47 | 1382367 YHC-FTSE
YHC-FTSE's picture

The article is a pretty accurate description of Chinese provinces 15-17 years ago, and I see not much has changed since I worked there on behalf of european joint ventures. I was young then and I judged them harshly by my standards, but over the intervening years I have seen similar behaviour everywhere around the world.

 

You will often hear the Chinese say this when there is a difference between perception and propaganda: China is a big country. So it is. There is a vast gulf between how officials operate in different provinces. In one, any corruption will be dealt with a bullet to the head, in another it's the custom. The amounts of cash being stolen may be higher, but it's the same old story I witnessed more than a decade ago.

 

I don't know if this has changed with the rise in their standards of living, but the ordinary people there have even less tolerance for corrupt officials than anywhere else. I was walking out of a "Friendship store" (Do they still have those?) near Dalian when I saw a small mob attack a man in uniform with hammers and knives. He was dead in seconds and the crowd quickly dispersed leaving a bloody mess in the mud. My interpreter shrugged at my shocked expression and said that he was probably a bad official who stole money. That's why these embezzlers and corruptors have to leave China once they commit a crime. If the officials don't get them, the mob will. 

 

Things change. Of course America and China (Or anywhere else for that matter) won't be the same in a decade. 

Sun, 06/19/2011 - 10:57 | 1382387 zippy_uk
zippy_uk's picture

So what if China reforms and stabilizes and moves forward by using a higher Yuan to raise living standards through out its country ? Does that mean the revolutions get exported to the west which is bankrupt already ? What if they turn out to be more civilized (amongst themselvse) and smarter than we are, and we are a bunch of barbarians who would canabilise one another for a few quid ? I am afraid the history book says "YES"

Sun, 06/19/2011 - 15:20 | 1382869 levelworm
levelworm's picture

My dear friend, it seems that you do not comprehend the political system of People's Republic of China very well. That report was never "released unintentionally", on the contrary, it was delibrately released. This move is merely a warning from the Politburo to the "middle-officials", and the result can never be a "Beijing's Spring" (as this is released under the agreement of the Politburo). I would rather say that a purification disguised as the second Culture Revolution is closer to the future.

And BTW, the Muslim Brotherhood is heavily involved in the so-called Arabic Spring, and the result may not be as exciting as it looks like.

Sun, 06/19/2011 - 20:03 | 1383303 CEOoftheSOFA
CEOoftheSOFA's picture

The Soviet Union was not all powerful in 1979 if you talked to people who worked there for several years like I did.  In 1976 I concluded that it was just a matter of time before the USSR collapsed.  I was only surprised at how long it took.  Our intelligence community knew the USSR was barely holding it together, but their reports must have been silenced because the defense industry won't make enough dough without a formidable enemy.   

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