Of course. I guess our view are not that different then. A good trial balloon needs some sanction (often a tcit one would be most effective), otherwise it is just a personal opinion of an official or otherwise important figure. And I do not really believe that important people in the PRC speak, especially about international affairs without some kind of sanction or belief that they will not get into trouble.

I also believe that there is far more space for genuinely dissenting opinions and, another aspect (not the trial ballon) of strategic comminication: the public sharing of policy dilemma’s. Sometimes embedded in trial balloons of course but also sometimes normal human communication.

To return to the good Mr Zhao (I doubt he had been as good as the Jiang/Zhu couple in managing the economy after Deng had his epiphany in the South) let’s see how his former associate Wen responds to this book once it has settled down a bit. Any comment or response would be interesting, but I do not expect any. Anyway, you convinced me I should get it…

Thanks for the thoughtful response. No, I’m not related to Zhao Ziyang, but Bao Pu gave a talk in Hong Kong recently and I had the chance to ask him about the book.

The idea that the Central People’s Government has control, let alone absolute control, over the economy is from the 1970s. More than half of all foreign trade – both imports and exports – are fully controlled by foreign-invested enterprises that aren’t even on the Central Committee’s mailing list. Financial institutions are so far out of the reach of the regulatory authorities that it makes headlines if the CPG tries to “guide” lending.

State Council level (and above) officials frequently float trial balloons in the media. The key to understanding what’s an important signal and what isn’t is more in the reaction than in the original message. When Mao’s (early 1960s) editorials were printed in Renmin Ribao, and nowhere else, we knew he was sidelined. When every paper in the country reprinted Deng Xiaoping’s every comment, we knew he was The Man.

Zhao Xiaochuan floated a balloon, and the international financial community went nuts.

Just as many dissidents would qualify for sainthood as would congressmen. But, China’s dissidents are enjoying one of the most open periods that country has ever seen. It started with faxes, then cell phones, text messages, email and now twitter. Newspapers? That’s so 20th century!

As for The Tiananmen Papers (great stuff!), it is pretty well established among neutral professional analysts that they are authentic, if not complete. Zhao’s book will have to await more analysis, but in my professional opinion, it rings true. Sure, there are some slants, but not enough to call the entire thing into question. Let’s consider both to be works of history, until reliable sources prove otherwise.

Apologies if I misread your comments.

Welcome! you have been reading my mail. And this is how history develops: trial and error. No one ever learns.

So let’s hope that all those engineers and factories will do the right thing and not turn their plowshares into swords (incidentally there was a great programme in the US in the 1950s called Plowshare that aimed at peaceful use of nuclear explosions, for instance to extract shale oil from shale deposits in the Rocky Mountains (the heat would melt the shale and the explosion create a huge chamber). For some reason not even the USSR tried something as clever as that but at least the US did the preparatory work.

I am pretty sure that somewhere in China there are young scientists who returned home (not too many job offerings in the US these days) with things as weird as this plowshares projects.

But I guess that you expected China to become an economic threat, working hard while the hedonistic Americans are partying. Well, if that happens, it is at least in line with historic patters.

First, I thought many of the comments that irritated you appear to be made by “Indian Investor”, a regular on this blog but apparently not an Anglo Saxon (neither am I). I thought it was interesting that the anthropomorhism that one my old Asian Studies professor tried to ban from papers and dissertations, as well as the equally proscribed Orientalism seem to be rampant on this blog and particularly in responses from people like Indian Investor. But, pse be generous, “China” is a convenient shorthand and we all know what it means.

Second, as to my remark about China as a wannabe monolith, that was serious. China (I mean the PRC here, not the Republic of China) and I think that it does not need much adstruction: the Chinese government is very keen on showing unity and does not facilitate a great diversity of (respected) views. So it tries to look monolithic (whether it is or not is beside the point). Occasionally there is attention for apparently divergent views from non-dissidents (I m not so sure about the dissidents, that is not my expertise but I suspect that not all of them are as saintly as some people seem to believe) and that usually has a meaning. But it is not a wise bureaucrat in the PRC who goes out and talks to the press without having obtained clearance. Actually, that was something the GMs of this world do/did too.

I am not quite sure about your question of spending the last three decades analyzing China’s politics. Not really, but I tried occasionally (and hard) , from the late 1960s. A rather frustrating effort I should say. the USSR was a lot easier. The most surprising (and a delight for collectors of historic curiosa) was of course the cultural revolution. A pity for China but great politics. Never seen anything like it. Is that what you mean or is this inappropriate?

And let me explain my sense of humor, because my remark that included the word “fabrication” was meant to be ironic (I apologize for my exceedingly bad taste if Zhao was a relative of yours). Books based on some kind of inside story in China and not endorsed officially (too many to list here, but the Tienanmen papers are probably still at the top of my list) are invariably considered “western fabrications”. I have no idea (lack the resources) as to the veracity of Mr Zhou’s speakings. So for the time being, until it has been stamped “genuine” by Beijing, let’s consider this as a work of fiction. I have not read it but if it is like the Tienanmen papers, it may contain quite a bit that is of interest and contains genuine material.

Your apparently know one of the editors and that may have helped you to form your own opinion. I have not had that pleasure. You are truly lucky.

I don’t think I made any comment about India or Indian investors, did I? Frankly, I don’t really care about that sort of thing. It is the mindset that bothers me. And, I find it most common among Anglo Saxon financial markets people.

As for China encouraging a Kingdom of Heaven / GM kind of thing, I really don’t know what that is supposed to mean. Clarification, please.

Zhao’s book: Did you spend the last three decades analyzing China’s politics? And, did you just this month discuss the origins of Zhao’s book with one of the three editors?
I have, and I don’t think you have.

So why did you make up this sad “fabrication” story?

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atomic,

The problem with China’s manufacturing-for-export is that the products are, at least to a significant degree, unsuitable for the Chinese market. Ever try to download iTunes to your iPod with a 56k fixed line connection? And, to pay for it in cash?

Regarding your opinion that the benchmark interest rates are simply responding to the increase in public borrowing to offset private borrowing, doesn’t that defeat the point, which is to lower private borrowing costs so consumers and businesses can obtain better financing/refinancing terms?

Yes, China’s economy has and will contract severely due to ongoing demand contraction in the US. But the factories and production lines that all those American and Western engineers helped build and design in China remain. So will the knowledge. While MBAs, bankers and marketeers in California and NYC lived it up with their $250k+ salaries, innumerable science and technology graduates from America’s excellent universities spend an unprecedented amount of time abroad in
China transferring important knowledge to a geopolitical competitor. Huawei is now starting to undercut the American tech giants in emerging markets, and this is just the beginning.

From a cold war perspective, all of this is almost absurd. The Soviets went to great lengths to steal advanced technology from the west; if only they had thought of saying “hey, we’re destitute and poor, let us build your stuff for you!” they could have had all those American engineers practically working for them.

For amusement, check out this page:
http://micro.magnet.fsu.edu/creatures/pages/russians.html

(Digital Equipment imprinted on a cold war-era chip: “When you care enough to steal the very best” — in Russian)

Not so. Speculators may push prices up or down, but the long-term average depends on a small group of state-owned oil companies, and the state of total demand in the industrial world (shrinking but stabilizing). The Age of the Seven Sisters is long gone, and the governments of the semi-periphery now control the flow of oil. They’ll keep prices reasonably high — not so high as to damage importers, but high enough to finance internal industrialization. This is a fundamental change from the 19th and early 20th centuries. It’s a good thing, too — their economies need the cash, and the industrial world needs incentives to invest in green energy. Everyone wins, noone loses, except maybe the contractors for the US military-industrial complex, who have run out of countries to invade.

“China ?

This kind of simplistic thinking is what annoys me the most about the Anglo-Saxon view of the world”

Since when do Indian Investors have typically Anglo Saxon views?

Seriously, this also something that the PRC seems to encourage. There always this peculiar mixture of Kingdom of Heaven and General Motors. A wannabe monolith perhaps?

As to the western book ascribed to Zhao’s : this fabrication can only be part of a crude Anglo Saxon plot…