If you saw a hungry, angry, trapped bear would you (A) poke it in the nose? Or (B) try to tranquilize and contain it?
My party of choice’s leader, Nancy Pelosi, picked option A last week. Her excursion to Taiwan was a reckless slap in the face for an angry, unstable, prideful, nuclear panda. It was a dumb move. And it came just at the moment when we could have used China’s financial woes as leverage to curb their expansionism and human rights violations. ‘Cause, honey, China’s trying to claw its way out of a financial collapse that terrifies them and that could cut the world’s economy to the bone.
My book “I Spy China, Irreverent Insights from an Ex-Expat,” is mostly filled with amusing anecdotes about living in the messed up yet strangely charming PRC. But a couple of problems I observed while living in China were simply too grossly obvious to ignore. For one thing, as I roamed around the nation I saw miles and miles of these enormous half-built apartment skyscrapers. “Why aren’t any of these finished?” I would ask anyone and everyone who could or would speak English.
Nobody could or would tell me.
Then I heard that Chinese friends regularly put their hard-earned savings into purchasing apartments in places where there wasn’t even a foundation, or a target completion date or anything. Seemingly rational people were investing thousands in a whiff of an idea. It was bizarre. So I did some research.
It turns out that because the Chinese citizens don’t trust the government owned Chinese banks, and because they are mostly cut off from the stock market and other non-communist banking opportunities, they started investing in real estate. For a long time real estate investments gave them good interest rates because everyone had faith in this market and completed properties sold for a lot. But then real estate became un-real estate. The biggest real estate developers stopped using their money to actually build anything. Instead they started to invest in the next project down the road and the one after that causing a ridiculously over-funded Ponzi scheme. To add to the problem, the government owned banks took citizens’ savings accounts and risked that money on real estate developments too. (In legit land, banks are supposed to only use a small portion of savings accounts for risky business and to keep most of the cash in reserve for-you know-savings.) It’s all been a pyramid scheme , and one whose top has finally tipped.
(And don’t even get me started on how the government owns/leases the land these properties are sitting on. It’s Byzantine and it’s in my book.)
So here are these poor folks who have been in severe lockdown because of COVID for two years who now need their savings to live or properties to live in or sell. But they’re getting nothing but promises in return. People are protesting in the streets, especially in Henan province. In a flashback to Tiananmen Square, government tanks are rolling out to shut the protests down. If you haven’t heard about or seen any of this on the news, it may be because YouTube is demonetizing and blurring video of of this coverage by many reporters.
Look, I get it. You just don’t want to think about one more disaster in 2022. But you have to be aware of this. The Chinese government is terrified about billions in default and you should be worried about how it will affect the global economy and you yourself.
(I’m not sure how we protect ourselves. I’m trying to disinvest in any company doing business in China, but I’m not sure how to change my stock portfolio, 401 K and so on. Comment below if you have any tips for others.)
Now put yourself in the place of the Chinese government. What could calm the Chinese people down? How about deflecting anger with a little patriotism? How about rallying people to fight back against the US imperialists who are trying to rip away their historic sphere of influence by interfering with Taiwan? Yeah, that would be a nice diversion! And a little war is always good for economic growth, too!
Public humiliation is the worst thing you can do to Chinese people. Nancy’s move was a slap in the face at just the moment they need one to vilify the west. Her blatant misunderstanding of the term, “saving face,” could worsen economic negotiations and even get a lot of people killed. And it won’t win us any power against the country’s abuses.
Instead we should be engaging in covert talks to help them restructure their disastrous debt – with the proviso that they quick locking up Muslims and quit trying to gobble up Africa and all that evil stuff we hate. (Or at least, the evil stuff we pay lip service to condemning while our big corporations keep taking advantage of China’s cheap, dirty production and secret slavery.) Money problems and China’s weak economic position now should be our leverage, not grandstanding.
Or we could, you know, wave the flag around and just watch the the whole damn world economy get ripped to pieces.
I promise more pleasant thoughts and less serious stuff in my book at Amazon.com