Friday, November 25, 2022

A Gathering Storm

News out of China:
"China’s Communist party remains committed to its “zero-Covid” strategy that aims to isolate every case and eliminate the virus entirely. The government ordered an effective lockdown of several districts of Zhengzhou, with residents of the city centre not allowed to leave unless they have a negative Covid test and permission from authorities. The restrictions, which will last five days, affect more than six million people – about half the city’s population."  

                              The Guardian, Wed. November 23, 2022

Growing protests in China.

It may end up amounting to nothing. Some festering problems go away. Other problems deteriorate below the surface, as described in the famous lines from Ernest Hemingway: 

"How did you go bankrupt?"
"Gradually, then suddenly."


It is that way when snow accumulates deeper on a steep mountainside before an avalanche. It was that way with the stock market climbing higher and higher until Black Monday in 1987. I saw it with internet stocks leading up to March of 2000. I saw it with mortgage bonds before 2008. The president of my employer said we would keep dancing to the happy music of easy profits from making bad mortgages until the music stopped. Citigroup nearly destroyed itself and the country with it.

The Chinese government policy of zero tolerance for COVID built up frustration that erupted in protests in Guangzhou, the center of the manufacturing region of China. Foxconn employees, who assemble the Apple I-phone, are protesting their salaries and working conditions, and those protests overlap with the discontent with COVID shutdowns. This week residents broke out of their homes on mass, ignoring the COVID lockdowns. 

Click: 15 seconds

The discontent spread to Beijing, where signs were put up on an overpass. This is a big deal in China. It isn't done. Perpetrators face long prison sentences for this. One banner read: "
Go on strike. Remove dictator and national traitor Xi Jinping."


Headline: "China's COVID cases hit record as dissent grows over tough restrictions"
 Another banner read:

Say no to COVID test, yes to food. No to lockdown, yes to freedom. No to lies, yes to dignity. No to great leader, yes to vote. Don't be a slave, be a citizen.

At the cost of civic unrest, China's COVID lockdown policy was working to keep infection rates low. But now COVID is breaking loose. China, on the far lower right in this chart, is the outlier, with rapid spread underway.

If protests fizzle out, and they might, then it will be another false alarm in a fragile situation. Problems can fester for centuries; societies live with them. Or not. There could be serious consequences from these protests for the U.S. Disruption in China's manufacturing region around the Pearl River Delta will mean supply chain problems for us, making inflation worse, forcing the Fed to tighten further, and hastening and deepening a recession. 

If protests grow and their focus moves to Chinese leadership, then they have a crisis of governance. Americans who cheer a defeat of "Chinese communism" may come to regret the government that replaces this one. New governments have a mandate of change, to redress festering grievances. Covid lockdowns are only one of them. There is the Taiwan matter, the matter of settling the score after the Japanese occupation in WW2, the matter of the century of humiliation by Western powers, the matter of India in Kashmir. China may want to express its greatness militarily. Chinese citizens, filled with the elixir of pride and freedom, may insist on it

The spirit of revolution is closer to the surface in China than it is in the U.S. It helps explain why China surveils its citizens and suppresses dissent as closely as it does. China's government fears its citizens more than does ours. China has a lockdown, zero-tolerance mentality on both political dissent and COVID.

Bottling up problems works--until it doesn't. This may become our problem soon.


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7 comments:

Curt said...

Chinese citizens travel the world, so they are aware of how "free" people live. Chinese citizens also have access to media, so they are aware of world events.

The Chinese citizens have tasted "capitalism", and "freedom", and I don't think that they'll ever be satisfied being indentured servants and slaves of the State anymore. They want to be free.

Eastern Europe removed the communists from power, and I expect that the Chinese will remove the communists from power in the next 5 to 10 years. There may be a brief civil war in China, but in the end, the "people" will win, and the communist bureaucrats will be vanquished.

Isn't it ironic that while the rest of the world evolves towards freedom and capitalism, the progressives in America are attempting to install a failed communist system? America may require a civil war in order to vanquish its communists.

Mike said...

Ah, yes – the old Yellow Peril. It’s like déjà vu all over again.

Anonymous said...

Is that a gun in his pocket, or is Curt just having civil war fantasies again?

David Landis said...

I've been dealing with mainland China, Hong Kong, and Taiwan daily since 1986. I lived and worked in Hong Kong from 1989-1991 working with production facilities in both mainland and Hong Kong. In 1991 I returned to Oregon and started my company arranging contract manufacturing for American and European importers.

As an aside, I'm married to a Hong Kong woman and have relatives and friends in all 3 countries (yes, Taiwan is a country from my point of view).

I do like to gently correct those who refer to mainland China as a "communist country". It is far more capitalist than communist. Perhaps it's more accurate to refer to China as a "capitalist police state". Clearly, property rights are limited and whatever the CCP says goes.

But my company has worked with dozens of privately owned mainland China companies that are grinding away trying to be profitable, same as companies here. In over 31 years of dealing with too many Chinese companies to count, I have yet to work with one owned by the State.

As far as Curt's comment goes regarding progressives, I think he might be getting a little too much Fox in his diet.

Mike said...

Curt's comment probably shouldn’t be taken too lightly, since it parrots the Republican playbook. First, they establish that something is inherently evil – communism, gay sex or whatever. Then they allege that Democrats are promoting it. That, in turn, incites their True Believers, sometimes to violence.

Under Trump, white supremacy and xenophobia became normalized. Now Trumplicans are threatening to do the same for political violence. Talk of civil war has proliferated online among far-right groups too stupid to realize there’s nothing civil about it. If they get busted for trying it, House Republicans would probably call them political prisoners and add that to their list of things to investigate.

Michael Trigoboff said...

China’s military continues to grow. Meanwhile, our navy is going to shrink over the next 10 years unless we do something drastic about it.

Our military supplies (Stingers, Javelins, etc) are being depleted because we are supplying them to Ukraine, and we don’t have the industrial capacity to replenish them.

Most of the advanced computer chips in the world are manufactured by TSMC in Taiwan. It would be strategically catastrophic to allow China to control advanced chip manufacturing.

We lose many of the war games about Taiwan that our military leaders conduct. We need to wake up to the growing strategic threat from China.

Curt said...

Progressives already tried to start a civil war when their military arm Antifa rioted, burned, and killed for more than 100 days in Portland in 2020, and for about 60 days in Seattle. They are just lucky that they didn't bring their violent protests into residential neighborhoods, where the citizens would have fought back. Kate Brown and Ted Wheeler allowed them to riot without consequence.

Regarding David Landis' comment, there's a Chinese billionaire named Jack Ma who started Alibaba. He's currently in Chinese detention for bad-mouthing the Chinese government. Whether the Chinese government owns everything monetarily is irrelevant. They control everybody there by the nuts. China is not free like America is. Further, I don't have cable, and I don't watch FOX, but I do read the Seattle Times and the Portland Oregonian.