Guest Post: Some Things You Should Know About China

Tyler Durden's picture

Submitted by Charles Hugh Smith from Of Two Minds

Some Things You Should Know About China

If all you know about China comes from PBoC and Central Government reports and analysts' financial statements, then you know very little about China or how it actually works.

I know it's tough to think about anything but the fast-melting ice cream cone that is Europe, but there are some things you should know about China. All the reassurances you've been reading about China's "soft landing" and its "they know what they're doing" central government are probably false. Here's why: very little in China is as it seems on the surface, or as it's presented to the Big Noses (Westerners). There are three reasons for this.

Before I explain, let me stipulate that I am not passing judgment on what's "good" or "bad" about China, or any other nation. Each country functions in its own peculiar way, and there are always productive and counterproductive elements to each nation's way of doing things. But it is important not to gloss over reality and accept illusion as truth.

1. Old cultures are far more opaque than young cultures. All sorts of traditions and foibles get embedded into the culture as time progresses, and these features manifest themselves in the economy, finance and the machinery of governance.

What this means is that it takes a lot of time to truly understand the inner workings of old cultures and their economies. Sure, you can get a report from the central bank, or buy a villa there, and make some superficial acquaintances. All these things will foster your hubris that you "really know" how the country works.

You don't, and you won't, until you've married into a family there, lived there for years, if not decades, and actually done business there, on the ground, with your own capital and contacts. If all you know about China comes from PBoC and Central Government reports and analysts' financial statements, then you know very little about China or how it actually works.

Quite frankly, you'd be better off going to the zoo with the proverbial dartboard and having the chimpanzees toss some darts at it; those prognostications will be equally valid, and you'll be outside in the fresh air (unless you're actually in China) instead of some glitzy dining room gorging yourself on yet another wasteful banquet.

The same is true of Italy, France, Greece, and many other old countries. The attitudes, governance and actual mechanics of the economy are not transparent in any of these old cultures. Take the television tax in France. If you don't know about it, and how it's evaded and grudgingly paid, then what do you know about how things actually work in France?

I once received an email from British reader who was outraged by my comments on black-market labor in France. He had a house in Brittany, and he knew the people, and there was no black market labor there. It took me a while to stop laughing, for this is the typical "visitor who thinks he's a real resident" syndrome which you find everywhere.

We all want to be insiders, of course, and we all want to be accepted by the locals. And so we construct a thin veneer of working knowledge and delude ourselves that we've "gone native" by defending our adopted land vigorously, lauding its ancient culture, and so on.

The new arrival falls in love, and their romance lasts from a few months to a few years. Eventually the way things actually work becomes evident, and start grinding away at the love affair. After a long time, the outsider-resident become cynical, or even bitter; what a bloody unholy mess this place is, beneath the phony surface sold to tourists. The 20-year resident listens with a wry smile to the newcomer gush over the ancient ways and glorious food, etc., but keeps his mouth shut. Why spoil romance? Reality will do so soon enough.

This is how you can live in, say, Japan, for twenty years, and be accepted--as a gaijin. Until you die or leave. In other words, you will never be accepted in the way you might hope. You will be accepted as part of the landscape, but you will never become Japanese. Being accepted is the sort of thing we expect as Americans, because America is a young country and being here and liking American sports, or reviling certain teams even if you are disinterested in the sport, is enough: hey, you're an American now.

Which brings us to point 2:

2. Immigrant nations require a certain level of functional transparency; if they lack this requisite level of transparency in how things actually work, then they quickly become two-tier societies and economies filled with the resentment of second-class citizens.

This is why old cultures have so much trouble with immigration, and why America is one of the more transparent places to live and work in the world. In the dynamic parts of the American landscape and economy, say Silicon Valley and similar hotbeds, then we've got places to go, things to do, people to see and wealth to create, and we don't have time or interest in explaining arcane cultural rules to a huge spectrum of people with a non-native grasp of English. So we keep things fairly transparent. Having a lot of tangled cultural anacronysms that have to be hidden lest "people get the wrong idea" (i.e. discover the truth) just gums things up and wastes time and money.

So we don't have much of that. Nobody cares where you're from, or what caste you are, or anything like that. As long as you do your work without being a real pain in the rear-end, are pleasant to your neighbors and workmates, keep your pitbull chained, etc., then you are good to go. Many if not most of the people you interact with also know English as a second language, and since that's burden enough for all of us, we dispense with all the insider stuff. America is on most levels a WYSIWYG culture: what you see is what you get.

Places like China and Japan are on the opposite end of the spectrum: they are not immigrant cultures. Very few nations have a culture that is adapted not to tradition and an opaque mindset but to getting on with immigrants from everywhere. This is one reason people want to come to America; they lose their baggage here and can be themselves, because nobody cares, we're busy with other things, and it doesn't take 15 years to figure out how things actually work here. If it did, the whole thing would grind to a halt and that would be really annoying.

In other words: I've got another meeting, so let's cut to the chase and get this done, OK? Talk to legal, talk to accounting, get it signed and do what you agreed to do. If you can't or don't, you're out and we're not interested in complicated nuances and back-door sub rosa stuff. Those are time-sinks and we're in a hurry here.

3. China, and other Asian cultures, are built around "face". This requires a public facade, to maintain face and cloak the private, back-door reality. In general, Asian people do not like criticizing their country, as this is experienced as a loss of face.

I cover this in my longish essay from 2005, China: An Interim Report: Its Economy, Ecology and Future.

Here's how "face" works. If you marry a "local" in China, Japan, Thailand, etc., then they will eventually, obliquely and with reluctance, tell you some of the unsavory details of how life actually works. Maybe. If they do, they will not like it if you repeat these "we lose face" realities to other Big Noses. You will have to do so in private, in a hushed voice.

As a result, there are always two doors in Asia: the front door, carefully arranged to present a face-enhancing image to the outside world, and the back door, where everything important actually takes place.

A typical front door in China is the banquet with the glad-handing mayor. The back door is for his mistress, the cash "commissions" from various deals and the cover-up of the face-damaging deaths in the local factory. Bad business, that; we lost face. Go take care of it with cash, threats, promises or whatever is required to bury it and restore face.

This is how you get top-ranked American officials who travel the world constantly, flitting from meeting to meeting, "getting down to business in heart-to-heart talks" (cynical guffaw), staying a night or two in a fancy resort or hotel, and then being whisked away to another country. (That's the burden of Empire; you have to fly a lot. On the plus side, you soon accumulate a list of amusing cocktail-party stories of quaint locals, strange foods and night-time visits to embassies in quasi-dangerous places.) If you live in D.C., you know lots of people like this. If you can brag about your multiple visits to Afghanistan, you might even be one.

But this sort of tourist-slash-water-carrier-for-the-Empire doesn't really know anything about the countries he or she lands in for "power lunches." They don't know the lingo, the geography, the history, the culture or what passes through the back door.

This is also how we get superficial opinions passed off as analysis. There is an amazing amount of claptrap written about China in the Western media, seemingly most of it by people who have never been there or visitors who have no contacts others than PR flacks, denizens of Shanghai bars or official handlers.

Take, for example, the constantly repeated idea that "China can easily keep its workforce busy on big infrastructure projects." That is repeated as if it was an undeniable truth.

Have any of the people repeating this as fact ever actually watched a building project under construction in China? Things are pretty efficient there, despite all those photos you've seen of thousands of peasants planting trees in the desert, etc. The number of people required to toss up a highrise is remarkably small. Given the workforce of hundreds of millions, even a thousand-kilometer rail line doesn't take that many workers.

Then there's the reality that all the low-hanging fruit of useful infrastructure has already been built. Now it's the really marginal stuff, classic malinvestment.

Then there's the reality that nothing gets maintained in China. A lot of new stuff gets built but nothing that's already built gets maintained. So all sorts of things start falling apart and stop working. The basic idea is that when it starts looking bad then we'll tear it down and build something new. That is a mindset built on limitless resources and money, neither of which is actually limitless.

The other opinion presented as fact is that China is transitioning from a "capital investment" economy to a consumer economy. The fact is that only 35% of the official economy is consumer-driven. But the other fact is that everybody who can afford anything in China already has it.

When I was there in 2000, there was already a glut of TVs. Our friend's amah already owns a car, and she isn't paid much even by Chinese standards. It sits in a garage, rarely taken out, because she doesn't really need a car; it's simply a status symbol. Everyone with enough money to do so has already bought a car.

As for real estate: Our friends' friends already owned three rental flats each five years ago. No-nothing Westerners mindlessly talk about the 700 million peasants who need housing, but this just reveals their bottomless ignorance. Chinese families were offered their own flats for a dirt-cheap price decades ago by the central government. Most families have owned their own flat (not the land, that's 100% government-owned) for years before the bubble.

The 700 million low-wage people in China might like a $200,000 flat, but they can't afford one. They're living on $13 a month in rural villages, or making a few hundred dollars a month in a factory or other low-wage position. Claiming that there is an endless demand for costly housing in China is like saying the demand for more McMansions is endless in the U.S. because 20 million poor people south of the border want a luxury home.

The reality is that everyone who could afford a flat in China already owns one, or two or three. Those who don't own one cannot buy one, not this year or next year or in ten years. Their income is 1/40th the cost of the flat, and the price of the flat dropping in half doesn't meaningfully change the equation.

Chinese consumers with money have already bought everything they could possibly want, and purchased Coach bags for their boss's wife (you can forget the promotion if you don't pony up a legitimate Coach bag for the Missus, or perhaps Number One mistress; be sure to include the receipt and official Coach bag to show it's legit).

Those without this kind of income have seen their purchasing power decimated by high inflation in essentials like food. To save face, the government issues statistics that "prove" inflation is dropping. This is as reliable as the bogus unemployment number in the U.S., you know, the one that keeps dropping because the government stops counting millions of people in the workforce, not because the number of people with real jobs is rising.

The only sources who actually know what's going on in China are in local government. Another fantasy Westerners lap up is that the central government actually knows what's going on, and even more laughable, knows how to "fix" everything. If you don't even know what's happening, how can you fix the problem?

Westerners also don't understand "corruption." They think in terms of bribes that could be suppressed by some new rules. That is beyond laughable, for corruption isn't bribes, it's the warp and woof of how things work in China. They don't understand that pirated goods are crushed by bulldozers for a show of face; nothing changes behind the facade presented for show.

There is a lot of anger and resentment in China, especially among young people. This will not go away because some new railway is built, or a new mall opens.

Occasionally a glimpse of the back door makes it into the mainstream media. Here are some recent examples worth reading:

Swimming Naked in China With the Chinese government tightening credit, the massive leakage from the formal banking sector into the ‘shadow system’ ultimately risks sinking the country’s financial system.

Why We Should All Be Very Skeptical on China

And most importantly: Top of Chinese wealthy's wish list? To leave China

"Among the 20,000 Chinese with at least 100 million yuan ($15 million) in individual investment assets, 27 percent have already emigrated and 47 percent are considering it, according to a report by China Merchants Bank and U.S. consultants Bain & Co. published in April."

The Western resident of Beijing (married to a Chinese woman, with two children) who posted this on his blog added, "Everyone with money has a escape plan."

Here's a simple question for China bulls and all those writing about how infrastructure projects, an omniscient central government and rampant consumerism are going to keep China's growth engine humming for years to come: if the future's so bright, then why does everyone with money have a bug-out plan, two passports and a house in Vancouver, New York or Los Angeles?

If you can't answer that, then you need better sources.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Imminent Crucible's picture

Sorry, kito. Chanos has already won that bet, and Rogers has lost.

But keep singing that happy song to yourself, if it makes you feel better while your money drains away.

moskov's picture

Chanos won?


Has Chanos been sitting in his cave for over years about selling his doom stroies? And he didn't foresee US has been downgraded at the first time in its history.

qussl3's picture

Pretty sure Chanos made mint on his shorts.

That said, Chanos winning =/= China losing.

Why are we so binary?

China will grow for years yet, the real problems will come when this generation retires.

If you think the baby boomer retirements are screwing the US, the one child policy fallout will dwarf that.

Still years to go tho.

floor's picture

American? You better wake up, or maybe you should read the article again and again untill you grasp it.

Let them eat iPads's picture

I'm betting against the fraudulent, totalitarian shithole.

Belteshazzar's picture

China lacks food security. when TSHTF they arent going to be able to eat those ipods and PCs

Septicus Maximus's picture

China will be lucky to be able to feed itself in five years time.  When investment from abroad dries up, China will revert to its old form: an ossified, unweildy, excitable basket case wracked by poverty and seething malcontent.  Good luck profiting from that. 

chinaguy's picture

This is one the the best articles about China I've seen on this site - read it 2X.

One thing I will stress, that Smith does not, is there is not a SINGLE piece of data that comes out of China that is true.....also, if you just blow into Shanghai & have a couple of business meetings and sign a contract and fly out again - your project will fail. Period.  - BTW I have nearly 30 years on the ground in China.

moskov's picture

Then why you bother doing business in China?


chinaguy's picture

because I made millions of dollars there and I like the food and the people.

At least in China you always know who's on the otherside of the table from you. In the West you can't tell who's trying to screw you & who's not. In China, it's safe to assume everyone is trying to screw you. 

moneymutt's picture

a friend of mine that had spent a lot of time in China said you could have a family business that had been doing business with another family for three generations and both families would still try to screw eachother at any moment of opportunity, no trust, ever.

But he also thinks China is a hive menatility and is working better for worker bees than financial sector captured US.

moskov's picture

why does everyone with money have a bug-out plan, two passports and a house in Vancouver, New York or Los Angeles?


First of all, all these wealthy Chinese only wants another passport because they are fearful about their wealth may be nationalised one day or they only want their children to be educated better and rebuild their business in China, BUT, these are the same Chinese also like Jewish Americans and they know China(Israel) is the ultimate creator of their wealth and most of their business are and will still be operated in China simply because they Chinese only trust the Chinese while they are dealing with serious business with. When more and more Chinese becoming the World citizens, eventually Beijing will become the capital of monopoly power that drags all the overseas capital owned by the Chinese and inflence the politics from the rest of the world.  Just like how Anglo-Americans did while they spreading their seeds across Europe, North America and Australia.



chinaguy's picture

"Chinese only trust the Chinese"

Wrong, if you ain't family. One Chinese only trusts another Chinese as far as he can throw him.

But yes, all of the wealthy Chinese I know (many) see the shit is going to hit the fan and want an exit strategy.

If that legislation "buy a $500K house in American & get a green card" ever gets passed, hundreds of thousands of Chinese will buy property here.

moskov's picture

Yes. only if these green-carded Chinese can maintain their steady income in the US like the 1% and they won't be considering a bug-out plan as if US in the next 2 years would have hitted the fan (Otherwise it's pretty pathetic that US will introduce such desperate legislation "buy a $500K house in American & get a green card, they would have to pay lots of income tax, healthcare insurance....) . Because most of the capital portfolio is based on their business, factory based in China. And what you are assuming these so-called Chinese who can't speak proper English have a long-termed vision about what they are investing on and not the corrupted government officials who commited some kind of fraud or crime then fleed to the US for some kind of political protection. On the other hand, more and more Chinese overseas students have fleed back to China for setting up their business and technology firms. So Yeah, China has plenty of population to run about a efficient economy. Because the industral base is there, and it won't fleed somewhere else soon.

qussl3's picture

Try not to be married to your opinion.

Yes, the US has screwed the pooch, but in its current state there is little chance of fragmentation and large scale civil unrest. Disobedience - yes, but revolutionary unrest - no.

China on the other hand has to deal with seperatist sentiments from a multitude of sources, together with historical adversaries along its borders whom which it depends on for energy. Not to mention another pesky neighbour down south whose water China intends to reappropriate.

China does not currently have the ability to secure the resources required to maintain social stability through military force, it must do so through economic means.

In that pursuit it currently depends on convertability of both the dollar and eur, hence its desperation to supplant the dollar reserve and acquire gold.

It's play for gold is interesting as it is an open admission that its trading partners are unlikely to transition to a yuan reserve on a reasonable timeframe.

Given such constraints, should the US pursue economic war against China by exporting inflation to them, there is little the Chinese can respond with UNLESS they dramtically rebalance the labor capital contract.

China is in a strong position, but the US stronger still - provided it acts in its interests and removes corporate influence over policy (hah).

moskov's picture

Yes, the US has screwed the pooch, but in its current state there is little chance of fragmentation and large scale civil unrest. Disobedience - yes, but revolutionary unrest - no.

I don't believe that. There's no hard evidence for any empires in the past few decades will be immune from the revolutionary unrest if the shit does hit the fan. class warfare checked, race warfare checked, border warfare checked, wealth gap checked, military aggression checked, Hyperinflation checked, Fail Welfare system checked, Shrink of Liberty aka TSA checked.... You only need a warmonger like Hitler from the top to push the button at last. Unless American people have been so brainshed and overweight and they could not fight for justice anymore. 

China on the other hand has to deal with seperatist sentiments from a multitude of sources, together with historical adversaries along its borders whom which it depends on for energy. Not to mention another pesky neighbour down south whose water China intends to reappropriate.

I think I would be more concerned about Homeland Terrorism, Fast and Furious, False Flags more as the lunatics in Washington literally breeding a thousand of offshore conspirists for a totally destruction of US constitution and freedom and turning US into a China-style state with censoring info, big brother grid and even birth control......And you have Mexicans surpassed the white population in the United States for unbelivable corruption and drug wars beyond China's level.

China does not currently have the ability to secure the resources required to maintain social stability through military force, it must do so through economic means.

In that pursuit it currently depends on convertability of both the dollar and eur, hence its desperation to supplant the dollar reserve and acquire gold.

It's play for gold is interesting as it is an open admission that its trading partners are unlikely to transition to a yuan reserve on a reasonable timeframe.

Given such constraints, should the US pursue economic war against China by exporting inflation to them, there is little the Chinese can respond with UNLESS they dramtically rebalance the labor capital contract.

It's simple. USSR thought in the same way just like what you did above. China has no ultimate interest in bregging themselves 24/7 like the US or USSR did. It's the walk the walk does matter.


Syrin's picture

I'm willing to be that some of that anger in China stems from havin g400 million more men than women.   That's some serious blue balls.

Pituary Retard's picture

That's the ultimate sausage party.

smiler03's picture

It's also complete rubbish according to the CIA factbook: 

at birth: 1.133 male(s)/female under 15 years: 1.17 male(s)/female 15-64 years: 1.06 male(s)/female 65 years and over: 0.93 male(s)/female total population: 1.06 male(s)/female (2011 est.)

Arthur Borges's picture

Syrin, there is a gender gap but you're saying that the national population is 900 mln males to 400 mln females, likz 9:4 ???


j.tennquist's picture

I've been to China on business on a couple of ocassions.   Outside the port cities and the handful of inland megaplex cities, China is extremely rural.  Just ten miles out of most cities and you are in farmland.  And I don't mean some rural road with an old sign; I'm talking dirt road with no name, farms with no electricity, often no running water.   Chinese officials don't want you to see this side of China because the people who live in rural China (which is most of China) are extremely poor.  

Ironically, the disparity of wealth is so immense as to be almost unbelievable, and this is in communist China.  Something's got to give - when the poor outnumber the rich by 1,000,000 to 1, it's uber-scary.

Arthur Borges's picture

Folks everywhere like to look their best for visitors. They know they're a developing country and don't want to make their country look bad in front of foreigners, so sure, local elected village officials get uncomfortable about anybody taking photos that will make the whole country look bad.

Yep, the wealth gap is a biggie. Central Government is working on the new national health insurance scheme and cheaper education, plus other issues like minimum wage, which is at the discretion of provincial governments only but there's a long haul ahead.

Not sure what the poor:rich ratio is in the West, but yes, as just stated, China is not exemplary here.


El Viejo's picture

The have-nots always want what the haves have and sometimes the have-nots are not so patient. Those $13 a day workers may get that $200,000 apartment if it is still standing.

daxtonbrown's picture

I worked for a year in Hong Kong in 1990, just enough time to learn that nothing is as it seems. Apparently nothing has changed.

dalkrin's picture

Relevent and gripping book I read that offers some insight into a Chinese mentality:  Factory Girls

Thousands of rural people scrambling into the city, in this case Dongguan.  Living in cramped dorms, all but indentured to the company.

What a splash of cold water to make me appreciate American labor laws and customs.

I prefer to study the older dynasties, before the economy took front and center. 

In short, I am happy to invest some small cash in the China story, but I would be wary of even visiting.

chinaguy's picture

Nah, go for a visit, violent crime again foreigners is rare & the food is excellent.

qussl3's picture

Much of the west went through their own periods of "company men" and the company store.

Perhaps China will get to where the west is, or not.


BigJim's picture

You think if it weren't for "American labor laws and customs" you'd be working in Chinese conditions? Or maybe if they introduced the same labor laws and customs they'd all magically have Western-quality workplaces?

Get a grip. They're in the condition they are now because they're poor, and if they had to meet "American labor laws and customs" they'd wind up even poorer.

Debtless's picture

Extensive research has found only 1 in 1000 chinese women to be considered very good looking. But the rare ones who are, are absolutely ravishing beyond compare.  

- Yellow Fever Institute 2008

topcallingtroll's picture

There is no fever like yellow fever!

Asian chics rock! They still believe in serving their men.

However vietnamese chics tan olive green. I think it is a cool color though.

Fukushima Sam's picture

Best pussy I ever had was Vietnamese. Tight, cute, and tasted like fresh fruit.

williambanzai7's picture

There is something known as the "gift culture." Gift giving has always been part of the culture. However, this quaint cultural more has now mutated into a huge chunk of the underground economy.

I am told by a very reliable source that more than half of the Chinese luxury goods market, most of which takes place via purchases outside of China, constitutes "gifts" primarily for business associates, political honchos, mistresses, karaoke hostesses and the like. It is not unheard of to buy things like luxury automobiles etc as gifts.

There is also a huge loan sharking business since the Chinese banks don't want to finance this kind of consumer activity.

I could go on but you get the idea. It is all driven by the flood of funny money.

AR's picture

Very GOOD, and worthwhile commentary.  Here are a few other potential books on China for those willing to spend a few hours reading.  also, most of these books are recently published (within the last 2-5 years):

Managing the Dragon by Jack Perkowski.  Fun reading, interesting, and gives an insiders viewpoint of starting a company in China, and obstacles (cultural and otherwise).

The PARTY by Richard McGregor.  This book discusses Politics, and the structure of China's political system.

Etiquette Guide to China by Boye DeMente.  Good book that discusses the importance of "face" which CHS refers to above.

Understanding CHINA by John Bryan Starr.  Another decent read that covers a multiple of topics from politics, economy, and some historical perspective.

Finally, all of these books are cursory reads, though good for someone wanting a broad perspective and overview. Charles is indeed very correct when he states that there are two doors in doing business in China.  One above the table top, the other deep, deep under the table.  For example, "Red Envelopes" are very much a common place custom all throughout China.  And, the majority of analysts who write and cover China, truly know very little how business is conducted, and/or how decisions are made.  Good luck everyone.

Shizzmoney's picture


All the reassurances you've been reading about China's "soft landing" and its "they know what they're doing" central government are probably false

Agreed.  See: Louisiana after Hurricane Katrina.

I root for the proletariat Chinese to start civil disobedience towards their govt every single day.  Even if it would cost me my job (99% of our shit made in China, obv), the lulz of all these corporations' faces on what to do next, even though they sold their souls for slave labor despite not factoring in the externalities, would be GLORIOUS.

Mark123's picture

China = gambling, corruption and ostentatious consumerism.


In other words, as the Western world degenerates we begin to appreciate the marvelous Chinese model.

oddjob's picture

Charles Hugh Smith quoting Bain&Co, the company run by Israelis. Yikes.

Steroid's picture

The author should discuss this with the "International Man". 

Grand Supercycle's picture

DOW chart reveals very overextended price action and another Wile E Coyote scenario...

reader2010's picture

Very few understand China is a disease to the world.

TSA gropee's picture

So is thinking like yours.

Stud Duck's picture

My working relationship with Chinese buyers has been enlighting to say the least.

Don't trust them for a minute, they are more concerned about screwing you than looseing face.

They are no better than our decitful politicians and bankers, but at least they do have real money for US commodties.

Thye pay cash they buy the product, they want credit, they walk! NO EXCEPTIONS!

My comment to them is" your momma may have carried you for 9 months, we are not going to carry you for a day" usually gets the message across.

Arthur Borges's picture

If you don't invest in social capital, i.e. in building personal relationships, you are sure to be treated like a disposable commodity.

If you don't know how to "stroke ego", i.e. go just a little bit out of your way to make the next fellow look good in front of other people, you are worthy of little better than contempt and ridicule.

Funny how it pays to be nice to others in societies far afield from China too.

Kreditanstalt's picture

I'm a twenty-year guy myself: 20 years married to a local in Taiwan.  I loved it! 

Writer forgot to mention that these ways of doing things there also provide more FREEDOM than one can find in Western nations.  Freedom to sell on the sidewalk without harrassment because the cops are ineffective.  Freedom to drive without license plates because you're in the countryside an the cops are few, far between and ineffective.  Freedom from government regulation because you can get your deal done with a simple handshake and turnover of the necessary money/gifts/largesse.

Or would you rather have our surveillance state here, our grasping yet effective tax net, a zillion arcane regulations obstacling every project and micro-managing interference in your private affairs and even in what you do in your house, property and garden?

Would you rather have a large, overbearing, nanny-state government with hands in every pocket and eyes in every deal?

In fact, because of the lack of this, things are in some ways more straightforward (dare I say transparent?!)  in China!


sdavis's picture

Taiwan and China are not the same. 

TSA gropee's picture

12 trips to China, 2 to Taiwan, I'd have to agree.

bill1102inf's picture

Farmers are poor because they can not afford an Ipad???? LMAO

The trend is your friend's picture

The only thing China really does well is know how to control their citizens.  Any outcries from individuals and they do not hesitate to shoot them, any attempt to organize agianst the ruling class and they will be wiped out. This is what they do well.  The rest not so much.  The landing will be "hard" becuase they don't know how to handle the mess they are in.   A real estate bubble, fraud in chinese small caps, trillions in US debt with the US consumer ready to file for bankruptcy etc etc.......

SilverRhino's picture

Really good article.

kaiten's picture

You dont need to write such a long article about the difference between US and the rest, it can be summed up in just one sentence: US is a market place, euroasian countries are societies. No one cares in market place about your origin, caste, religion etc, the most important is to be profitable. The problem is that when the economy stops growing, there´s not too much what holds people together (in market place) and then the country disintegrates. US leaders know this very well, that´s why they are so much obsessed with growth. Without growth there´s no market place, i.e. USA.