Thursday, 20 July 2017


Do you remember, a couple of years ago, or so, China?

In the media, the country loomed big, ready to overtake the West and become the new great superpower.

As everybody, I got curious, and took a bit of time to look a bit - a tiny bit -  at it, and what I saw was... pretty much, a lot of stuff we have already seen in other "up-and-coming" countries.

A disastrous future demographics (like Japan in the '90s and beyond - but almost all developed nations are in the same pinch).

A school system that does little to improve creativity (... Japan, again).

Cosy relationships between state-owned banks and enterprises (again, Italy in the '80s and, if you replace "state" with "keiretsu", Japan in the '90s - or Korea today, if you use "Chaebol").

As the 2008 great financial clusterfuck imperilled the country's export, a state mandated real estate bubble and burst in the making (Japan in the '90s, again? Whops!).

A widespread, almost systemic corruption in the civil service (OK, I used to think that at least that was decent, in Japan, before Fukushima and reading about the revolving doors between regulator agencies and the industry - still, I am Italian, and I know Italian civil service to not be much better than the Chinese, and to be one of the things weighing down my country).

No transparency whatsoever, at any level of the government (like... you know, Japan, Italy, Turkey).

A rule of law that is just a moniker for "what the government wants this month" - which, really, prompts wealthy Chinese to stash as much as they can around the world, in case they have to run in a hurry.

Is this the country that holds the keys to the future?

Hardly so.

China is big, the structural advantages due to its size are notable, and so it may expect some more years - even decades - of [decelerating] growth.

But, in the end, it is simply another authoritarian culture.

They often manage well, until they exhaust the limits of their starting advantages (abundance of low-wage menial workers and untapped natural resources, in this case) and they get stuck in a "middle income trap".

At that point, the raising costs of the unspoken -  yet, very binding! - social contract at their base - people accepts to be meek subjects, and get economic vantages in exchange, often in the form of lowly productive jobs in the state sector - cannot be counterbalanced by an expanding economy, and social unrest is destined to appear, in one form or the other.  

Given its sheer size, a "middle income" China could have an economy twice as big as the U.S. , but it would still be a social laggard with little to no "soft power" projection.

However, there is one more, major factor to consider - the long Chinese tradition of the "Mandate of Heaven".

This fascinating bit of the Chinese culture is simply the theory that, when a government is toppled by a revolution, it was because it had become corrupt and had lost the favour of the Gods.

It doesn't change much, in terms of Real Politik, but it is telling that the Chinese culture has historically recognized an implicit right of rebellion - every revolution that wins is a righteous one (a concept that neighbouring Japan, for example, rejected pretty strongly).

The PCC has profited of some thirty years of continuous economic growth - however, the space before the country starts rattling against the bars of its own "middle income trap" is inexorably disappearing, and continuous growth is among the components of the modern "social pact" that has kept the party in power.

Xi Jinping, and its successors, are bound to find increasingly difficult to deliver such growth, unless they manage to produce real structural changes in their country - a task that seems to elude the talents of Mr. Xi, beyond much vaunted proclamations of objectives that are often undermined by a rigidly centralist approach.

On the whole, it is entirely possible that China is nearing a peak, and that in a near future it will enter its own version of Japan's "lost decades".

Then, one may also  add the 30 million of "forced bachelors" produced by the "once child policy" (a situation that could generate the kind of generational anger that the west hasn't seen since the survivor of WWI decided that their governments were bunches of bastards) to the equation, stir gently and wait for the real fun to begin.  

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