Friday, June 18, 2010

One Eye on China: The Black Box

In an earlier post titled One Eye on China: Are the Wheels Wobbling, I described some observations that comparisons of the economy of China with any other economy is nearly impossible. The primary obstacle is that the government controls most major banks and major industries. Their economic data is not widely distributed or even made public. Suspicion surrounds any released data, since China will not show anything but a favorable light on itself.

Posted on the Big Picture today is a real interesting article written by Peter T Treadway, PhD, Historical Analytics LLC, titled China the Black Box. Inquiring minds will find more depth for their understanding of the thinking of China's leaders and it's growing consumer society. Here is a taste of his article...

At the same time they are groping with less than adequate statistics, the global bears may be underrating the some things that cannot be modeled: The singular desire of China’s citizens to work hard and their obsession with improving their material lot. And, to use the terminology of Martin Jacques in his marvelous book When China Rules the World, the fact that China is a unique civilization state which in my opinion gives it tremendous advantages at this stage of its economic development.

Excepting the Tibetans and the Uyghurs, absent are the racial, religious, regional, caste and language differences that complicate economic decision making and upset public order in countries such as India (although the Indians might argue their diversity is a source of strength.) China, contrary to the views of some skeptics, is not about to disintegrate. Han China, so its own mythology teaches, has a five thousand year history as a civilization. Periods of order have been punctuated by periods of disorder. China is just emerging from a two hundred year period of disorder. A relapse to disorder will not be tolerated by its populace or its rulers.

Confucianism, Legalism, Daoism, Buddhism and Communism have each inserted themselves into the Chinese DNA over the centuries, each building on its predecessors. The intellectual giants who shaped the West, be they Aristotle, Adam Smith or Thomas Jefferson, don’t figure at all in this process. No Chinese emperor, and there have been emperors for thousands of years, would have sided with Google.