China's Greatest Fear: Dead and Buried Like the Soviet Union (Closed)

Discussion in 'Strategic Defense' started by AndrewS, Mar 14, 2016.

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  1. AndrewS
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    AndrewS Junior Member
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    An interesting article from the National Interest on China's views of the USSR

    http://nationalinterest.org/blog/chinas-greatest-fear-dead-buried-the-soviet-union-15477

    But here's my view.


    Starting in the 1970s, the studies show that the Soviet economy became less productive and efficient as each year went on, so people were actually getting poorer each day. I attribute this to a combination of corruption and the lack of a competitive marketplace for most goods or services. It didn't help that the USSR was also a petrostate heavily dependent on oil, gas and other commodities.

    At the same time, the Soviet economy was trying to match the arms expenditures of the US+Europe+China+Japan, who had a combined economy some 4 to 5 times larger than the USSR. This was a huge burden for the Soviets, and remember that even at its peak, the Soviet economy still faced a US economy that was twice the size.

    Hence perestroika and glasnost, because the Soviet economy needed to become more productive and also needed better relations with the US+Europe+China+Japan so they could reduce that excessive arms spending.

    But that also unleashed regional nationalism that had previously been suppressed in the individual SSRs (provinces/states) within the Soviet Union.

    However, Moscow was unable to manage this, because non-Russians actually were a majority and outnumbered ethnic Russians in the Soviet Union.

    Plus the structure of the SSRs was fundamentally unfair, because the ethnic Russian SSR had almost 50% of the population and therefore votes, which means all the much smaller non-Russians SSRs actually had very little influence within the USSR decision making process. This resulted in huge income differences between the richest and poorest SSRs, partly because of the lack of transport infrastructure which was compounded by ethnic/linguistic/cultural differences. Think of how this affects Quebec within Canada or the Flemish versus French in Belgium or the Yugoslavian experience.

    So when the USSR couldn't subsidise Eastern Europe or the Russian SSR support the non-Russian SSRs, nor the Russians impose their will by force because they knew they were outnumbered, is it a surprise that the USSR and the Eastern Bloc disintegrated?


    So what lessons does this hold for China?


    China has the world's largest and most competitive markets for most categories of goods and services, and its economy is based on industry rather than natural resources. Furthermore China has exceptionally high levels of private R&D spending for a developing country. Indeed this is firmly at developed world spending levels, and note that this is still trending upwards.

    And remember that Japan was previously noted for wasteful/excessive infrastructure spending along with an inefficient domestic economy. Yet Japan did move up the technology value chain because it did create world class companies in various industries, so Japan has become a wealthy hi-tech country.

    However, this still leaves corruption as the biggest problem for China.

    On balance, I think this still means that the Chinese economy is unlikely to follow the path of the USSR economy which actually became less efficient every year.

    And over the past 20+ years, China has been and is devoting a far smaller share of its economy to military expenditure than does the USA, and is focused on internal economic development rather than affairs overseas.

    So there is little chance of the Chinese economy being bankrupted by current levels of military spending.

    In terms of governance, China deliberately splits up provinces which become too populous and therefore influential. See the examples of Sichuan and Guangdong which were divided into two after they reached 10% of the overall Chinese population/vote. So no province has undue influence in overall decision-making and therefore doesn't generate permanent resentment from the others.

    In terms of ethnicity, over 91% of the population identifies as a single Han Chinese ethnicity which means China is intrinsically cohesive. It also means every ethnic minority person is outnumbered 11-to-1, which means the dominant majority can afford to indulge the minorities with privileges, but also impose their will by force if necessary.

    Whilst China has had a single written language for millenia, in the past 60 years China has also imposed a single spoken form of the language. That builds cohesiveness and I would point to the European example of how a supra-national EU (successor to the Roman Empire?) has to contend with domestic arguments where all the parties are speaking past each other in different languages.

    There are also very large wealth differences between the rich coast and the poor interior in China, but they're not as bad as what we saw with the USSR. Plus we've seen a huge infrastructure binge in the past years to build a comprehensive transport infrastructure across all of China - comprising roads, rails, inland ports, airports etc. That has helped solidify the creation of a unified single market and is already helping to equalise incomes inside China by connecting the rich coast with the poorer interior

    So when I look at the situation, China is so much more cohesive than the USSR, but still suffers from the corruption issue. And historically, corruption and a lack of progress has been the downfall of previous Chinese dynasties. The lack of progress issue should be addressed by China's increasing expenditures on hi-technology R&D, but how does one solve the corruption issue, unless there is local accountability, presumably from an educated and middle-class citizenry?

    It's the age old Chinese question of "the emperor is far and the mountains are high."
     
  2. PanAsian
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    PanAsian Senior Member

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    Thereby Xi Jinping's anti-corruption campaign which is also a "centralization" campaign because a serious side effect of corruption is first dishonesty and disunity in agendas among the elite then disarray in national actions, which are already naturally prone due to the PRC's large population. This is merely a temporary fix.

    The permanent fix appears to be a continuing campaign to develop the judicial system which predates Xi Jinping as president even if the judicial system still lags behind needs and remains relatively crude even after the latest changes.

    The PRC appears to also be applying the same strategy from development of indigenous industries to the development of indigenous civil society and NGO's by putting a leash on foreign directed or heavily foreign influenced intellectuals and NGO's.

    Haven't heard anything in recent years about local level government democracy that was previously being experimented with and reportedly expanded by the PRC central government. If that is still going on it could also be a systemic tool against corruption.
     
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  3. solarz
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    solarz Senior Member

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    I remember reading World War Z, and in there the author turned the post-Z China into a "United Federation of China".

    I couldn't help but laugh at how little Max Brooks understands about China. This was obviously based on the "Russian Federation".

    One of the most ridiculous mistakes Western analysts like to make is to compare the USSR/Russia to China. They probably see large country + communist and think that's good enough for comparison.

    China is NOTHING like the USSR or Russia. Never has been, and never will be. Even the Chinese version of communism was wildly different from the Russian version. Anyone who tries to predict China's development using Russia/USSR as a model obviously don't know squat about China.
     
    #3 solarz, Mar 14, 2016
    Last edited: Mar 14, 2016
  4. plawolf
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    plawolf Senior Member

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    Over-spending on the military? Political paralysis? Those have never been a problem for modern China.

    That kind of elementary screw up tells us all we need to know what the depth of knowledge and intellectual capacity we are dealing with here.

    This is just another typical ideologically pontification piece looking for pretext and excuses to say what the author really wants to say - bad mouth and belittle China while planting the thought of 'China collapse' in the mind of its readers.

    Beijing did pay great attention to devote vast intellectual resources into examining the reasons for the collapse of the USSR - in 1989!

    The fall of the USSR was a massive factor in China pushing through deep and painful reforms that are still ongoing today.

    But because of those reforms, China has changed so much as in the past 25 years that the comparisons to the USSR is simply nonsensical today.

    This article is a quarter of a century late!
     
  5. Hendrik_2000
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    Hendrik_2000 Senior Member

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    The western prescription against corruption is "free press and democracy".
    But I believe that is treating the symptoms rather than the cause of corruption

    If you follow this prescription, it will be the beginning of the end of CCP rule in China. Some people even recommended "independent judicial system" But what happened if the government keep loosing case in the court and Who will guarantee that the suit will only be limited to corruption and economy policy case

    First it start with corruption and economic shenanigan than it will branch into preserve of government of social policy than for sure it will reach political area.

    It will open Pandora box with serious consequence
    of political chaos and splitting up of China Because the wolf is at the gate and they will use every opening to destabilized and scuttle China development.Democracy will work in benign environment and over long period of time. As well as having the tradition of individual right and obligation

    I don't believe comparison to Chinese dynasty is justified . Because unlike the dynasty the power is limited to 2 term and selection is based on meritocracy instead of hereditary. The Chinese dynasty fell because the succeeding emperor are lazy and self gratify, selfish with no regard to the country.

    Having said that It is true the monopoly of power tend to ossified and breed complacency and resistance to change. The beauty of democracy is that the losing party tend to regenerate itself by replacing the leader of the party and change their policy to attract voter.

    But corruption is the manifest of bankrupt moral and lack of supervision of the state.We see this in food scandal and how Chinese women now put a price(an apartment) on the love And other example. How are we dealing with this?

    The unbridled materialism is cancer at the Chinese society . Having destroy traditional Chinese value and norm, The CCP replaced it with unnatural Communist value that is against human nature. Now that communism is out of vogue the unbridled materialism with its attendant of corruption and lack of moral-ism is getting the grip.

    Singapore model provide part of the answer by having independent anti corruption agency that really have the teeth to prosecute and confiscate the ill gain. And expelled the corrupt official after they are punished.
    At the same time they reward honest official by giving them market price salary.
    But Singapore is small country and not real good model for China. Though it wouldn't hurt to learn . As of today there are 40000 Chinese official. who go to Singapore and learn the trade to speak.

    But the larger question of moral is harder to address. It is the failure of Chinese cultural institution be it media, film, theater, school,writer to impart the good moral of working toward common good and society.

    Because again most of those institution again are so commercial.

    Hopefully China still has time to address those deficiency
     
    #5 Hendrik_2000, Mar 14, 2016
    Last edited: Mar 14, 2016
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  6. solarz
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    solarz Senior Member

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    The purpose of a liberal democracy is to guard against tyranny. It has never been a recipe for economic success, and corruption, in so far as it doesn't lead to tyranny, is not affected by democracy or vice versa.

    China is an authoritarian state, but the Chinese government readily responds to criticism and popular sentiments. Xi may be using his anti-corruption drive to topple rival political factions, but he is only able to do that because his actions are popular and thus cement his position. It's been 3 years since Xi launched his campagin, and not even western media have called it a failure. Most people in China agree that it has been effective in reducing overt displays of corruption, at the very least. In this case, perception goes a long way.
     
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  7. plawolf
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    plawolf Senior Member

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    I would be very careful about getting into judging values and morals. That is best left to the people to decide for themselves. Part of the problem for China was caused precisely by the state trying to impose what it saw as "good values and morals" on the people while crushing "bad ones" during the Cultural Revolution.

    While morals are good, morals doesn't pay for food, education or healthcare.

    If asked to choose between a moral preacher who spends all his time telling others how they should live their lives or a morally bankrupt genius who builds a billion dollar hi-tech empire that employ thousands of people, the flawed genius wins as far as I'm concerned in terms of which one of them is better for the economy and country.

    Laws does help to promote good morals by actively punishing behaviour that is criminal, but for anything else, its actually down to society and people to make everyday choices themselves.

    As for corruption, well I think the problem and threat that represents is far graver than even the west realises.

    Morally bankrupt people will always try and dream up new ways to game the system for an unfair advantage, and corruption is one of the tools they will try and use if possible. It is a cancer for which there is no cure. The only remedy is eternal vigilance and adaptability and flexibility.

    Corruption was a serious problem for China, but say what you will, corrupt Chinese officials still generally actually got things done provided they got their palms greased. It increased costs and reduced efficiency, but the unspoken golden rule was that you don't screw with the national interest. Officials who forgot that rule tended to get caught and removed pretty quickly even long before President Xi's recent anti-corruption drives.

    The western media loves to hype about Chinese corruption, but in my view, the legalised corruption of the west is a far more insidious and serious problem, especially given the sheer number and increasingly fragrant and damaging examples where special interests contribute vast funds to the political campaign coffers of high ranking public officials, who then do all they can to advance the interests of those special interests, even at the expense of the public good, and no one could do a damn thing about that, because you have to almost go out of your way to get caught for corruption in the west these days.

    This is actually an area where China's principles based legal system works better than the rules based one predominating the west.

    With a rules based system, if you can find a loophole, or better, engineer one, any misdeeds you do using those loopholes can never be punished.

    With a principles based one, even if you found a loophole, a judge could easily say that while you did not violate the letter of the law you most assuredly violated the spirit of it and find you guilty nonetheless.

    The same thing that has happened to democracy is also in play with the media. You have special interests either outright owning top media companies, or using advertising money as leverage to apply pressure on editorial staff and writers.

    In recent years, we even have the latest innovation of 'native content', where special interests openly pay journalists to write glorified adverts for their product/position which are disguised as genuine original content.

    Anyone who points to XYZ as the holy grail of anti-corruption is simply highlighting XYZ as the first thing those seeking unfair advantages will try to pervert.

    As I said, vigilance and adaptability is crucial in countering the ever changing face of corruption. To that end, in my view, the most important shift in mentality that the world needs to make about tackling corruption (and also bad governance) is the assigning of personal responsibility to officials, and especially those responsible for overseeing officials.

    Its not good everyone shrugging and saying, "well it wasn't my fault", and no one getting held responsible for calamities.

    In such instances, I think the burden should be reversed, where it's not down to the prosecution to prove that someone did something wrong, but down to those who's job was supposed to make sure things worked properly to prove beyond a shadow of a doubt that they did everything reasonably possible to prevent the disaster from happening.

    The goal is to make public officials just as, if not more motivated than the people looking to pervert and corrupt.
     
  8. PanAsian
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    PanAsian Senior Member

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    Speaking of which, similar distribution of personal responsibility also needs to be applied to employees, including management, of companies which commit acts doing severe damage.
     
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  9. suby68
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    suby68 New Member
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    In its economic preformance China has in today not even come close to the former Soviet Union on a per capita level. Around 1970 the income gap between an average Russian and an average American was far less than what it is today between an average Chinese and an American.

    Another important point is national debt: Compare the entire Chinese debt with that of the Soviet Union in 1980: Is it 100 or 500 times larger? Actually the Soviet Union didn't have a debt but financial reserves.

    In the end any dictator can deliver some economic growth for some decades, see a Mussolini, Franco or a Park in South Korea. Why has not even one half-developed country still such a dictator in charge? Think about that and you know why the Chinese system as it is today will not last.
     
  10. weig2000
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    weig2000 Junior Member

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    Old Russia and USSR were much more developed and industrialized than China of the same time. China was one of the poorest country in the world; it was basically an agrarian society with over 90% of its population illiterate in 1949 when the PRC was founded. On a per capita basis, China was also rather poor, particularly compared to the USSR/Russia. Economically, USSR reached its peak in the '70s because of the high oil price. For China to be fully developed, it's difficult to follow the model of the western countries due to their earlier industrialization and colonization. It's also difficult for China to become a wealthy or even middle-income country following the example of some resource-rich countries in Middle East, Latin America or indeed USSR - and these countries eventually have become stagnant or fallen into "middle-income trap" as the best scenario.

    What makes most sense for China to develop is the East Asia model, i.e., focusing on industrialization and human capital improvement, through a combination of strong central authority and market economy. This model also bootstraps itself through export to the global market, with corresponding domestic reforms. This is largely what China has done in the last thirty-plus years. And it has been quite successful, to say the least.

    Don't underestimate the difficulty of industrialization and modernization, which is what really underpinned the developed countries. If you look at the world over a hundred years ago and the world today, the list of countries that were/are really developed has not changed much. The only few new entrants there are a few East Asian countries/economies, with only Japan being a large country.

    For China, the nation with billion plus population to achieve where it is today is actually extremely difficult and a miracle. The per capita income improvement has been nothing but extraordinary, but I'll give it that compared to its corresponding economic growth and certainly compared to fellow East Asian countries such as Singapore or South Korea at similar stage of development, the per capita improvement definitely is not as fast.

    The primary reason is because China is a much, much larger country with a much, much larger population, and it invests a much larger share of its economic output in industrialization and infrastructure. China today has by far the world's largest industrial output, and it has the broadest industrial base in the world and competes in every industry sector identified by UN, even though China may not be the most advanced in many sectors at present. It's almost like a national religion, whether it's because paranoid or ambition or simply pride. From an economic comparative advantage standpoint, this may not be the most efficient, at least in short to medium term. China also invests so much in infrastructure, it's infrastructure is world class, whether compared to developing or developed countries. Infrastructure, as we all know, is a low return business, in short or medium term. But its importance to a China of continental size with 1.4 billion population can not be overstated - its benefits are long term, more diffused and goes beyond just economy.

    The investment in broad industrialization and infrastructure lays the strong foundation for China's future, as much progress as it has made so far. They are also cause for "concern" among some people.

    I understand "debt" is currently the "new hope" among those who wish China collapses. But comparing debts in today's China and the former USSR is just ridiculous. Debt and asset are really a market economy thing. In the former USSR and indeed PRC before the '80s, there was no concept of debt beyond the external national debts. There were no bond markets, not even bank loans. There were not even commercial banks in China before the '90s. There was only People's Bank of China, which served as the central bank (if such a concept existed then) and it functioned really as the government's cashier. So there were no internal debts then.

    I would agree debt growth is a concern in today's China and the government would need to rein the growth sooner or later. But pinning their hope on debt crippling or collapsing China's economy is simply misunderstanding the nature of debts in China.

    As it stands now, China's external debts relative to its assets, e.g. foreign currency reserves, are quite small. There is no potential payment crisis; in any case China as the world's largest exporter generates $600 billion current account surplus a year. Its nominal debts are largely internal; the government's debts are quite low (40% GDP) and consumer debts are even lower and very healthy (20% GDP).

    The majority of the debts therefore are corporate and commercial debts. Among them, the majority of them are attributed to the state-own enterprises (SOE), to which they owe to the state banks. It's a concern, to be sure. But in a very bottom-line sense, it's a right-pocket vs left-pocket thing. Also, one main reason that the corporate debts are higher is because overall China relies much less on equity financing (just compare the total stock market capitalization and total corporate debts as shares of respective GDP in China and the US), and more on bonds and bank loans. Additionally, some of the debts should really be financed by long-term corporate or government bonds, instead of bank loans. For example, Railway Corp of China has accumulated very large debt (3-4 trillion yuan) due to the large investments in railways and high-speed rail in the last few years, they could be financed by low-interest, long-term treasury bonds as national debt.

    To characterize today's Chinese leadership as dictator is completely off the mark. It's authoritarian government that is development-focused and largely merit-based. National development is evolutionary, both in economy and governance. China has evolved its economy tremendously and its governance and political leadership have adapted well in the last several decades. Its effectiveness and performance have been proven far much successful than the vast majority of countries, both developing and developed. China still has a long way to go, and its economy and governance will continue to evolve. Judging by its past records and its ability to adapt, the evolving Chinese system will last and continue to be successful, contrary to naysayers.
     
    #10 weig2000, Dec 17, 2016
    Last edited: Dec 17, 2016
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