September 22, 2012

The Problem With China

Written by British expat and 16-year China resident Mark Kitto, You'll never be Chinese... why I'm leaving the country I loved is one of the most insightful, honest essays on the problems facing China I have read in a long time.

On the pent-up economic problems in China:

Everything the Party does to fix things in the short term only makes matters worse in the long term by setting off property prices again. Take the recent cut in interest rates, which was done to boost domestic consumption, which won’t boost itself until the Party sorts out the healthcare system, which it hasn’t the money for because it has been invested in American debt, which it can’t sell without hurting the dollar, which would raise the value of the yuan and harm exports, which will shut factories and put people out of work and threaten social stability.

On the decline of community and civic culture:

Traditional family culture, thanks to 60 years of self-serving socialism followed by another 30 of the “one child policy,” has become a “me” culture. Except where there is economic benefit to be had, communities do not act together... In the small rural village where we live I am not asked about my health or that of my family, I am asked how much money our small business is making, how much our car cost, our dog.

On the implications of Chinese racism and exceptionalism:

Leadership requires empathy, an ability to put yourself in your subordinate’s shoes. It also requires decisiveness and a willingness to accept responsibility. Believing themselves to be unique, the Chinese find it almost impossible to empathise. Controlled by people with conflicting interests, China’s government struggles to be decisive in domestic issues, let alone foreign ones....

On the education:

The domestic Chinese lower education system does not educate. It is a test centre. The curriculum is designed to teach children how to pass them.... Schools do not produce well-rounded, sociable, self-reliant young people with inquiring minds. They produce winners and losers. Winners go on to college or university to take “business studies.” Losers go back to the farm or the local factory their parents were hoping they could escape.

Kitto also points out that the biggest property bubble on the planet (in China) seems to be caused by the unreliability of Chinese banks and stock markets, and the inability of Chinese to invest overseas due to the restrictions on yuan exchange, leaving property as the only place to park savings. My wife points out that Chinese have always liked to buy land; at any rate, Chinese property is a bubble of gigantic proportions and the government does not seem to have any way to deflate it.

Kitto seems to share the view that, without more inspired leadership, a terrible cliff is on the horizon for China.

Worth a read.

(Also, here is a contrary opinion by an American expat.)

Posted by David at September 22, 2012 02:40 PM
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