James, please allow me to begin at the end, where in your last paragraph you expressed worry about our kids. I'd echo those concerns, and recognize these sentiments are mirrored by all humans and even animals. Few parents feel differently, however if the future belongs to youth it is only because their perspective is bright; they're malleable and pliant enough to accept their environment and conditions for what they are, and that they are like marines in a sense: children and youth in general are far better at adapting, compromising and overcoming what appear to be challenges in our world which, to kids with pluck, are in fact opportunities.
Moving on:
Burned up a bit of time at breakfast on sunday. Glory to food and all that nonsense. On my own, time to burn, with the Shanghai Daily spread across the table before me. What a disaster their lives are in china. But what revealing journalism. One story that struck me was of a woman run over by a bulldozer. She was deliberately squashed in full view of other villagers who were protesting against local government approved developers infringing on the land 'belonging' to those protesting.
When the police came to investigate, they did what the local authority asked of them: cover this up. So said the Shanghai Daily, in addition to their report of the officials and developers 'grinning maliciously' at the protesters while the police cleaned up the deceased woman's body. 'Nothing here, move on everybody'.
Another story that all but launched out of the paper was of a woman run over by a truck on the wrong side of the road to what it should have been on. She was protesting in a similar vein, different location, same story, cheated of 'their' land. Hard to have land in china. I haven't figured that one out yet, but in essence the developers got the people to come to a hearing with the promise of money paid to them as a small sum for attending the 'hearing' on proposed local developments. After they signed their names as attending, most being illiterate, they had in fact signed their rights away to farm the land. Enter the developers, who have the local govt in pocket. Reactions from protesters; developers bring in the local govt sponsored heavy's, who kill the protesters, the police arrive, clean up the mess and we all move on to the next story...onwards and upwards as the ultimate captialists that the Chinese infact are. In Singapore they have a saying. Singapore pretends it's a democracy, while the Chinese pretend they're Communists.
What is the trend here? It's a worry, as China is definitely moving ahead at ANY cost, including the cost of its own citizens' lives. While the govt at a federal level aka 'the communist party' condemns these acts and in fact executes local govt officials found to be corrupt in the illegal possession of land to build building power stations, dams, factories, shopping centers devoid of people and so on, ad infinitum, the acts continue and are rarely reported in the western media. But here's the paradox. In China, where they pretend they're communists but are in fact the world's purest capitalists, the news is getting out to the Chinese people, and they are furious. Not so long ago a massive protest was held by Cantonese speaking people to officially reject the pary line that insists all Chinese mainland citizens speak Mandarin. No way, no thanks, you're not taking our Cantonese language, history or heritage. End result? Huge numbers killed, many missing, many 'taken away'. More on the same theme later with the Uighurs in Xinjiang, which kind of rejects the Tunisian parallel.
So what is all this? A repeat of old news dragged out of a shabby newspaper on a cold and very windy sunday? So what?
On a qualitative scale, China is so far behind the rest of the world it's all but immeasurable. So I agree with you, James. They're a crap society, but they will continue to drive the world (along with MENA, India, CIS et al). Nor will China gain a foothold on the western world's quality of life for more than two generations, if ever. The Chinese think differently than us. Drop the pc brigade thinking, if anyone is stuck there. For the Chinese, it's all about money. They are proud of this fact and will, and do, kill each other with almost gay abandon to pursue their goals. They terminally pollute their water supply(Cougar Energy in Kingaroy has nothing on csg developments in China - and was nothing in fact, in Australia. It was all hype!). They will taint their milk, hide poisons in animal food to save costs of production, pump quantifiably rancid and toxic chemicals into the air that filter down to Hongkong where it is measured, and reported. Yet China will not go down the road Russia traveled, where the communist state was allowed to collapse into a sea of chaos that benefited one class and one class only, the oligarchs.
Chinese people share a belief that it is better to raise the masses than to raise only a few. Sacrifices are being made along these lines. While you might think the youth of China would reject these ideals for their own selfish goals, vis-a-vis follow the western model of consumption and individual self-interest, this is not what is represented by bulletin boards and blogs in China. The recent issue of Japan capturing a fishing vessel's Captain and incarcerating him set off a chain of nationalism online that the government in China tried but failed to hold back. The Chinese want China to succeed, at any cost. They believe in their country, and willling subjugate individualism when push comes to shove, as it did with Japan recently, leading to the business we saw and are still seeing with ree's being held from the world.
China's advance is not just an institutionalized ideal but an ideological mindset of concrete-like solidity in the hearts and minds of all Chinese, regardless of their standing in life. This is something few of us fully understand or appreciate simply because there are no parrallels in our post-war society - or experience this last century gone, period, for such sacrifice or thinking. It pays to recall that there is nothing more powerful, on a human scale at least, than a collective group of like-minded people moving in the one direction. China is that group, that collective.
While perhaps that appears and sounds utterly disconnected from the sentiments of those peasants who are wilfully run over by bulldozers, crushed in their cars by trucks or, perhaps worse, have their own children poisoned by tainted milk (that almost diabolic act's fallout was not limited to kids dying in the western world), China will move forward regardless, not because Gerard Lyons said so but the Chinese people, in the broadest terms, want it to be so, regardless of how contradictory or obnoxious the costs to us as western minds.
In ending - even though I'm really just beginning as I seem to live this stuff on a daily basis but can type only so much in one missive, I would suggest Tunisia is an outlier event for China. While it is not entirely disconnected from the going's on in China any more than Chaos Theory would have it be unrelated, there are no reasonable parallels to be drawn that would suggest Tunisia's uprising is about to set off a chain reaction in China.
Recent unrest did occur in an uncommon part of north-western China where a little over a year ago a bunch of (muslim) Uighurs in China's Xinjiang province's captial, Urumqi, threw their arms up in disgust and said 'stuff this' to the invasive Han Chinese, the dominant lot, bit like ourselves with the aborigines some time ago. End result: executions. Many of them. Cue stories of abject horror in the western media, none of which you hear about now.
Tunisia is a local problem for northern Africa which may ripple outward toward other muslim nations, hence Saudi Arabia's generous response to take the country's now absent President.
Of the chicken and egg scenario, I agree. However China's real game now is to add value to their product. They're no longer satified, at a top governmental level, selling trinkets to the west. Along with blankets, toys, furniture and clothing, cars and so on, China is the world's workshop. We all know this. No news there. What is new however is the stated desire, the emphatic push, to move up the value chain to create higher end products. Trains to California, the ideas for them stolen from Japan; photovoltaic cells and solar panels to the world; ree's as the end product, not just part of the supply chain, to higher end Chinese made goods. This is not to mention their recent weapons to take out a US NAVY carrier! So yeah, farm lands are being cleared, factory workers are being employed (some of whom are comitting suicide at their dreadfully poor working and living conditions - more of which was in the Shanghai Daily...get back to the story, dude), wages are being contested, inflation is rising, apartments and whole cities are being built without tenants, banks are being told to rein in the free-wheeling loans of 2009 and 2010, but China will continue to advance.
Sorry, but that's my take, and if I wanted to make money from that I'd want, as Gerard Lyons' timely observations indicate, either cash, commodities or creativity to succeed in the next 20 years' super-cycle environment. On that basis, Australia has commodities, lots of them, which is why I am bullish Australia. Properly positioned, the country will advance on the back of those things in the ground that Australia digs up. It's what Australia does. Dig stuff up and sell it, subject, of course, to policy developments outlined in the report. Nationalism is unlikely in Oz, but not so unlikely in Mongolia or South Africa. Still, Australia has issues with the MRRT.
Finally, while a bit off the side, ask yourself where Richard Chandler is heavily invested. While the answer is not Australia, a lot can still be made from Australia. He is, as a matter of interest, in Vietnam, Russia and India with a focus on banks, industrials and telecoms. Not so China but, as has been suggested, China is not the only heavy lifter in the super-cycle. Odd perhaps that RC is in telecoms, but he is a multi-billionaire and I'm just a peasant.
If an avid snow skiier - more likely snowboarder these days, wanted to be a really good 'snowboarder' he or she would follow the ways of really good snowboarders. So too would investors follow the ways of really, really successful underground investors. Richard Chandler is a really good investor, and while you might be able to counter this statement circa 2008/2009, Standard Chartered are really good money men and women.
And the XJO closed within a point of the Dec 2010 4803 closing price today. Does this say suggest we're about to revisit the dark days of 2008 GFC Mk II? I don't think so, but that's just me. Technically, this appears very bullish!
PS On a not so happy note the father whose child was killed after drinking tainted milk powder in China rose to prominence this year gone by. He organized protests against the manufacturers of the tainted milk products. he was so very successful at this, he was jailed recently for disturbing the peace. China is a hole you would really like to defecate in. But it is the hole we should also not ignore. There are hard choices in tying oneself or one country to their boat. But that boat is sailing. Like the Ark comic going around, you don't want to be the animal that is left behind saying, from the shoreline, 'did he mean today?'
Peasant uprising's or the collapse in American consumerism is not the problem here. Think high end products and a government whose control over their people is not just absolute, but wanted by those very people it controls, albeit with outliers like the sad, sad case of the father incarcerated for trying to make sense of the senselessness of his child's death.
(20min delay)