Chinese GDP (Purchasing Power Parity) may surpass the US this year (at around 16 trillion USD). Purchasing power parity adjusts GDP based on costs in a country – for example if average costs in China are half those in the US then their PPP should be around double of their nominal – which is almost true. China’s nominal GDP stands around 9 or 10 trillion this year. The first quarter the US economy grew a very tiny 0.1%, which is very tiny compared to a approximately 9% growth rate happening in China. It will really be interesting to see what the world is like when the Chinese economy becomes the largest – and how that will affect the balance of power around the world.
Recently a group of Japanese activists landed on the disputed island and raised Japanese flags, which started at least 12 protests in major cities across China. One need only high school history knowledge to know why any perceived provocations by the Japanese against China may trigger a full out war – Go back to pre-WWII when Japan invaded, enslaved, and raped millions while attempting to take over half of the world. Chinese have not forgotten those facts, and are still hearing stories from great grandparents that may bring the old hatred up.
Unfortunately the protests held resulted in destroyed Japanese automobiles, the ceased sale of Japanese products in some electronic chains, and the ransacking of Japanese restaurants. Both the PRC and ROC have become united over this incident since both believe that the island belongs to the Chinese people. Why Japan won’t budge on this island is a matter of curiosity, since historically speaking the island was under the domain of China – it was annexed by Japan in 1895.
Luoyang China is in Henan 河南 province (see image below)
I recently visited the city and would like to recount what I remember of it before the memories are lost forever. I arrived by train, originating from Shanghai and making a switch in Zhengzhou, the province’s capital. The city I arrived in was understandably drastically different than the ancient capital of the Eastern Han Dynasty during the time Jesus was presumably living in Nazareth (25 AD). Fortunately it did have a large treasure trove of stone carvings from 493 AD and later, which were found in a place called the Longmen Grottoes 龙门石窟. Longmen actually means dragon gate, because there was a gate where if fish jumped over they would supposedly turn into dragons. There were thousands of stone carvings of Buddha there, but most of the carvings were desecrated by thieves who stole either the hands or heads of the statues. Sometimes there are carved circles where statues used to be, meaning the thieves stole the entire carving! I’ve attached a gallery of photos I took while in Luoyang.
The city itself is like any large city you will find in China, there are shopping malls packed full of stores including American shops where goods cost twice as much as they do in America! Lee jeans cost more than $100 in their mall, while a Chinese equivalent would cost $10. The cars in the city were a mix and match of German, American, and Chinese, and Japanese models. This is unlike Japan where the roads are topped with 90% Japanese made models or Korea where the roads are topped with 99% Korean models. Having lived in China for awhile over ten years ago, it looks like the most common car has evolved from the Volkswagen Santana to the Volkswagen Lavida and Chevy Cruse!
Pollution is a problem in Luoyang, unfortunately each day I was there there was also smog overhead. My return flight was even cancelled due to what they called ‘fog’ and I ended up taking a slow train back to Shanghai which took over 12 hours. My recommendation to any traveler is to book fast trains to and back from Luoyang if planning a visit instead of risking a flight cancellation. Also bring plenty of clothes because Luoyang was colder than Vermont, I know having been to both places in the same week. Also, go ahead and take the taxi in Luoyang – the starting fare is just 6 yuan, worth a bit less than one USD. Shanghai’s starting fares are now starting at 14 yuan and charge 3 yuan per kilometer. Luoyang only charges .6 yuan per kilometer.
In Luoyang soup is king of all foods. Eating hot soup in a freezing environment is always enjoyable, one thing I had in Luoyang that I hadn’t had before was donkey soup.
Anyways, I hope someone finds this post useful. There weren’t any Lao Wai that I saw in Luoyang save two at the Longmen Grottos, so if you go there don’t be surprised if people stare at you. It is one of the relatively untouched cities and there are certainly lots of opportunities for enterprising foreigners.
Google is now deciding whether or not to stay in China, according to Google’s official blog. According to Google, “In mid-December, we detected a highly sophisticated and targeted attack on our corporate infrastructure originating from China that resulted in the theft of intellectual property from Google.” More can be found on the offical blog post, such as who these attacks were targeting etc.
In any case, this move is sure to cause headaches for the millions of expats living in China using Google technology such as Google docs, maps, etc. The reason for this is that from at least my experience Google USA is blocked, most likely so that users cannot use the image search. Of course there are ways around this, such as using a proxy, but that is a headache and puts users at risk of their information being recorded.
Today China took a strong stand against the tire tariffs enacted on Friday. The tariffs do not come as a surprise, as I mentioned in late August of these impending moves aimed at protecting the US economy in particular that of the tire industry. China, the United State’s largest supplier of manufactured goods, has reacted with the following words:
“Not only does it violate WTO rules, it contravenes commitments the United States government made at the G20 financial summit, and is an abuse of special safeguard provisions that sends the wrong signal to the world.”
Regardless of whether or not the move goes in violation of the WTO agreement, it would be wise to move cautiously in measures that can be seen as protectionist. A well known consequence of tariffs enacted first by the US congress had a domino effect on global trade and resulted in a deeper recession, according to standard economic theory. However, the US climbed out of the depression during WWII not in small part due to the millions of jobs that went along with being a war country. Jobs creating ammunition, tanks, aircraft parts, and food for the Allied countries eliminated the unemployment rate. Noticed on the chart below how a 22% unemployment rate shrinks to less than 2% towards the middle-end of the war.
China has its own protectionist measures already in place, such as the government controlled value of its currency versus the dollar. The dollar, which is not pegged to other currency but freely traded, has played an important role in the emergence of China as a global economy due to the undervaluation of the Chinese RMB. China has its own tariffs on the export of metals ranging from aluminium ore to pig iron with rates ranging from 5 to 25%. A more detailed report on the tariff can be found here.
In conclusion, new trade tariffs will undoubtedly cause a stir in the global marketplace. The short term effects on total economic well-being are usually negative, but the long-term effects may be beneficial. A well-known tariff known as the “sugar tariff” is already in place and has been for decades, and has led to the fattening of a nation addicted to using low cost high fructose corn syrup.
Top US Treasury holders especially China are increasingly vocal about their trepidation as the Federal Reserve cranks the money printing machines to full throttle. Cheng Siwei, head of China’s green energy program and former vice-chairman of the Standing Committee, recently said the following:
“If they keep printing money to buy bonds it will lead to inflation, and after a year or two the dollar will fall hard. Most of our foreign reserves are in US bonds and this is very difficult to change, so we will diversify incremental reserves into euros, yen, and other currencies.”
This is nothing new for people who are keeping tabs on the Federal Reserve, and economists in general. The solution to our economic situation was simple, simply create more money out of thin air and give it to those most in need. The very idea goes against the foundations of a free market society but according to the leaders of our country, the treasury department, and their masters when it comes to monetary affairs (the Federal Reserve board) it was something that must be done.
A measure put forward by Ron Paul to “audit the Fed” passed the House but has slowed down and will most likely be killed off by the Senate under threat of veto by the President. Local solutions to uncontrolled spending and increases in the size and scope of the government are reaching a point of futility but perhaps China will be more persuasive as the largest holder of US debt. In fact, every household owes China (taking only into consideration Chinese holdings of US Treasuries) over $6,000. Add on to that the gigantic amount of trade coming in and out of China, and you have the most important “concerned citizen” to be considered in the debate.
Cheng Siwei succinctly stated:
“The US spends tomorrow’s money today,” he said. “We Chinese spend today’s money tomorrow. That’s why we have this financial crisis.”
The funny thing about the situation is that the government is encouraging the return of the habit, as new programs encouraging people to spend their loose or non-existent money on items ranging from new homes to new ‘fuel-efficient’ cars in programs ranging from home buyers assistance and tax breaks to the novel “Cash for Clunkers” program which will be scoffed at by historians as the most ludicrous pilfering of the taxpayer’s wallet in recorded history.
I have found the ultimate cure for Facebook addiction, living in China! For about a month now, Facebook has been blocked for one reason or another. Most people would think of this as a bad thing, but I consider it a great thing! Why waste lots of time on website owned for profit while I can create my own websites and add interesting and relevant material on a variety of topics?
If you’re reading this from Facebook, it’s because I set my Facebook profile to automatically import RSS feeds into my notes.
First of all I would like to mention I am writing this based on what I have learned via word of mouth, having visited Meizhou recently and having relatives from that area who are Hakka.
The Hakka people are quite unique in many ways, first of all their name means “guest” as they are a migratory people who almost one thousand years ago migrated (were exiled) from northern China about the time that Genghis Khan took over the region starting the Yuan Dynasty.
They were not exactly welcome when they arrived in their new homeland in Guangdong, so they were forced to move to the mountainous and hilly regions, many overseas to places such as Singapore (Lee Kwan Yew is Hakka). Their capital is Meizhou, a city in eastern Guangdong with a small population of five million (small when compared to bigger cities in China such as Shanghai, Beijing, Guangzhou, etc.).
In the countryside in Hakka territory one will find that homes are a lot different than those of, say Shantou. The farm buildings are grouped together, sometimes in a circular formation that provide protection from outsiders. In fact, if one looks closely one will find holes just large enough to shoot from dotting around the outside of the fortifications. The farmers themselves are large square fields that typically yield rice. Unlike the farms in other parts of China one will not find as many small huts dotting the farmscape, instead you will find irrigation pools used for the important task of flooding the rice paddy and cooling down (one will often spot groups of young farmers taking a break in the pools. Yaks or water buffalo are very common, and are seen doing much of the work (tractors are virtually non-existent out here). When the rice is ready, one will not see water or a paddy but a field of something that looks like wheat.
In Hakka culture education is very important, but traditionally men were the only ones educated as the female’s primary role was to marry off into another family. Women also do a lot of working in this area, and while men are studying, the women are out in the fields working on the crops. It was amusing to see a woman riding a bike with a man sitting on the back holding an umbrella (there was no rain, but some Chinese are picky about not getting a tan).
In the city lots of people use tricycles to get around, and hire someone for a menial price to take them where they want to go. Unfortunately Meizhou is famous for dog meat, and one will often find signs displaying the “gou rou” characters. After a while one might also get tired of the Hakka dialect, as it has evolved from people yelling across the mountains to each other and still retains its sharp, noisy characteristics. However, Hakka people are generally more law abiding as their position as commonly not owning land has made them focus on education and many enter civil service.
Being ripped off, otherwise being fooled into giving too much for something that is worth too little, is commonplace in today’s life. One can be ripped off when one buys insurance, gasoline, food, and even schooling.
The thing is, in China getting ripped off is something that not everyone realizes, but I do. Take, for example the $80 buffet in Sheraton. Down the street one can eat a hardy sushi meal for half the price and skip out on the bland pieces of bread so artistically situated and the inconceivably mild flavors of the fried rice. Newcomers to China are often duped into eating at their hotel of residence, and while doing so in places like Japan won’t make too much difference, Chinese cities have much to offer in the way of food that large international hotels simply cannot understand.
Nearby where I reside, there is a hotel for local Chinese. There they serve dim sum “dian xing” in the mornings, and all types of food imaginable at lunch and in the evening. At first I thought they had an aquarium when I walked in, turns out they eat each and every species swimming in the glass containers. Eel, turtle, snapping turtle, shrimp, and lots of variety of fish. This place is even cheaper, where one can get a fufilling dim sum breakfast for less than $7. If you don’t know what dim sum is, they are basically steamed “things” if you will that are handmade and quite tasty.
Oh yes, and the city where I reside also has upscale malls larger than any in the state where I am from. In them one will find Gucci, Omega, etc. to fufill ones need for luxury items. Personally, I find $20,000 purses a decadent waste of money that could have better be used traveling or investing in the currently cheap stock market.
The thing I’ve noticed about farms in China is that they partition the land into very small segments, and some of these segments are covered by black tarps perhaps to protect the crops from the sun. Instead of using large machines crops are hand grown and tended, and usually there are water buffalo nearby to help with some of the labor.
There are irrigation canals through the fields, and one can often spot a group of three or more farmer kids swimming in the water. I assume they have built up a resistance to the local flora including bacteria and parasites. Most likely these people have no allergies, as studies have shown that the more hygenic the area, the more prone children are to have allergies to pollen and other materials.
In the distance one will spot the farmer’s homes, usually made of concrete and brick and built two or three stories high. Probably these building house two or three generations of one family. Once in awhile you will spot grandoise structures built in the middle of shanty villages, sporting greek columns and statues. Most likely owned by the wealthy landowners (yes land can be owned here) or the owner of one of the many factories that dot the rural towns. The pollution is not so much a problem here, as the strong winds from the ocean blow it inland.
On the hills around the farms you will spot tombs built into the rocks, on the tomb there will be one to several graves. Each family shares a tomb. Concrete is poured onto the steeper sides of rocky hills next to highways to avoid landslides, which come when the torrential rains pound the area.
Looking into the farm towns, one will see archaic three wheeled motorized contraptions, resembling tractors but much smaller. Also mopeds are pretty common in the area, along with motorcycles and blue industrial trucks used for hauling goods to the cities.
Construction is commonplace, but here in the rural areas contruction is mostly done using iron scaffolding, concrete, and bricks. More farmhouses are being constructed, all facing east. Much work is being done to improve the highway system as well, and one can spot a truck traditionally used to carry livestock being used to carry a truckful of workers to a new construction site.
All this can be seen on the five hour busride from Shenzhen to Shantou, China.
The video below was filmed in China, probably Shanghai. She comes to her SUV that was illegally parked and about to be towed. After a brief argument with the Tow Truck driver she enters her car and drives away, tow truck behind her. This only goes to show how powerful Chevrolet Captivas are.
The above article describes how three men collectively lost 427 pounds after moving to China. One man, David Anderson, a former casino employee said that: “I couldn’t move 20 feet without gasping for breath”. He also believed he wouldn’t make it to his 51st birthday if he hadn’t sold his car, dumped his job, and headed to live in China.
They live in Tianjin, a funny part of the story is that after becoming hot local topics and being covered in the local newspapers, they started being chased by Chinese women. According to Walt, “I didn’t come here to find a Chinese wife, I don’t need a wife”.
They are still obese, and according to the article and what they said some taxi drivers refused service due to their size. They also get stares everywhere they go, which made them second guess their decision. In the end, they realized they were really losing a lot of weight and decided to stay until they lose a lot more weight.
Below is a photo of the three men walking in Tianjin:
My guess is that the unfamiliar food, hot temperatures, and hesitant taxi-drivers are driving forces behind their weight loss.