67) The Story of Academic Rankings: Nian Cai Liu - Shanghai Jiao Tong University

The Story of Academic Rankings
Nian Cai Liu
Professor and Dean of the Graduate School of Education, Shanghai Jiao Tong University, Shanghai, China.
E-mail

Building world-class universities has been the dream of generations of Chinese. At the 100th anniversary of Peking University in May 1998, the then president of China declared that the country should have several world-class universities—resulting in the 985 Project, which is especially for building world-class universities in China.

In 1998, Shanghai Jiao Tong University was selected by the Chinese government to be among the first group of nine universities in the 985 Project. At that time, many top Chinese universities drew up their strategic goals as world-class universities, and most of them set up a timetable. Shanghai Jiao Tong University was no exception. As a professor and vice-dean of the School of Chemistry and Chemical Engineering of the university, I became involved in the strategic planning process of building Shanghai Jiao Tong University into a world-class university.

During the process, I asked myself many questions. What is the definition of a world-class university? How many world-class universities should there be globally? What are the positions of top Chinese universities in the world higher education system? How can top Chinese universities reduce their gap with world-class universities? In order to answer these questions, I started to benchmark top Chinese universities with world-class universities and eventually to rank the world universities.

The Global Position of Chinese Universities
From 1999 to 2001, with Dr. Ying Cheng and two other colleagues, I worked on the project of benchmarking top Chinese universities with four groups of US universities, from the very top to ordinary research universities. The main conclusions include that top Chinese universities were estimated to be in the position of 200 to 300 in the world. The results of these comparisons and analyses were used in the strategic planning process of Shanghai Jiao Tong University. Eventually, a consultation report was written and provided to the Ministry of Education of China.

The publication of the report resulted in numerous positive comments, many of which involved the possibility of making a real ranking of world universities. During the time, many foreign friends, who visited us for other purposes, learned about our study and encouraged us to do world rankings. They reminded us that not only in China but also universities, governments, and other stakeholders in the rest of the world are interested in the ranking of world universities. Therefore, I decided to undertake this project, and with three colleagues spent another two years until the Academic Ranking of World Universities was completed in early 2003.

In June 2003, the ranking was published on our Web site (http://www.arwu.org). Although about 1,200 institutions from all over the world have actually been ranked, only the lists of the top 500 institutions have been published on the Web. Considering the significance of differences in the total scale, the ranking results include groups of 50 institutions in the range of 100 to 200 and groups of 100 institutions in the range of 200 to 500.

Ranking by Broad Subject Fields
Ever since its publication, the ranking has attracted attention from all over the world. Numerous requests have been received, asking us to provide a ranking of world universities by broad subject fields or by schools and colleges. We have tried to respond to these requests and the results were published on our Web site in February 2007. The five broad subject fields include the natural sciences and mathematics, engineering/technology and computer sciences, life and agriculture sciences, clinical medicine and pharmacy, and the social sciences.

Arts and humanities were not ranked because of the technical difficulties in finding internationally comparable indicators with reliable data. Psychology and other cross-disciplinary fields were not included in the ranking because of their interdisciplinary characteristics. Two new indicators were introduced: first, the percentage of articles published in the top 20 percent journals of each broad subject field and, second, the research expenditures (for engineering ranking). The list of top 100 universities in each broad subject field was published.

Ongoing Efforts to Diversify the Ranking
The Academic Ranking of World Universities sought to rank research universities in the world by their academic or research performance based on internationally comparable third-party data that everyone could check. The project was carried out for our academic interests, with potential impact on the strategic planning of Chinese universities.

Methodological problems involve the balance of research with teaching and service in ranking indicators and weights—inclusion of non-English publications, the selection of awards, and the experience of award winners. Technical problems exist in the definition and name given to institutions, data searching and cleanup of databases, and attribution of publications to institutions and broad subject fields. We have been working hard to study all the above-mentioned problems and to improve our ranking.

In addition to the broad subject field ranking, we are surveying the possibilities of providing more diversified ranking lists, particularly rankings based on different types of universities with different functions, disciplinary characteristics, history, size, and budget, as well as other topics. Furthermore, we have been doing theoretical research on ranking in general, seeking to contribute to the understanding of ranking. We have also been actively participating in international societies related to ranking such as the International Ranking Expert Group—International Observatory on Academic Ranking and Excellence (http://www.ireg-observatory.org).

Conclusion
Any ranking is controversial, and no ranking is absolutely objective. Nevertheless, university rankings have become popular in almost all major countries in the world. Whether universities and other stakeholders agree, ranking systems clearly are here to stay. The key issue then becomes how to improve ranking systems and how to use their results properly. Ranking methodologies should always be examined carefully before looking at any ranking lists, and ranking results should be used with caution.

Authors note: For additional information about the Shanghai higher education rankings, see http://www.arwu.org.

[Online] Available: http://www.bc.edu/bc_org/avp/soe/cihe/newsletter/Number54/p2_Liu.htm

66) Classement Shangai des universités: les Français se plaignent

O Le Monde publicou um artigo sobre o sistema de rankeamento das universidade de melhor desempenho no mundo, dizendo que os responsáveis franceses ficaram irritados em ver que apenas duas universidades francesas figuram entre as 100 primeiras do mundo. Eles têm talvez razão em reclamar de um dos critérios de classificação: a atribuição de Prêmios Nobel.
Concordo em que se trata de um critério duvidoso, pois ainda que o comitê Nobel sueco se baseie em recomendações de um número importante de cientistas de cada setor da ciência premiado, sempre se tratará de um critério subjetivo, ou seja, a preferência de alguns quantos cientistas suecos (e alguns estrangeiros), digamos uns 50 no total (que suponho sejam consultados para definir os vitoriosos), sobre outros critérios mais objetivos de impacto de suas elaborações cientificas sobre a vida humana e a sociedade. Mas, isso existe mesmo nas citações, que se baseiam em preferências individuais.
Menos aceitável é o comentário de um reitor francês, que disse que "D'autres classements ont émergé qui valorisent d'autres aspects des universités comme la formation ou l'attractivité pour les étudiants."
Ora, isso não quer dizer absolutamente nada. Como medir a formação dos estudantes senão pelas publicações de impacto, que só surgem quando (e se) eles são pesquisadores que divulgam coisas novas? O que quer dizer "atratatividade"? Viver na França, em Paris, especialmente, é mais agradável do que num campus americano, mas seria preciso medir a produtividade do trabalho (volume de leituras, seminários presenciais e participativos, etc), não esse critério subjetivo da atratividade.
Não preciso dizer que nenhuma universidade brasileira entra nas 100 melhor colocadas.
Paulo Roberto de Almeida

Un palmarès qui irrite mais qui a su s'imposer
LE MONDE, 31.10.09

En peu d'années, ils se sont multipliés. Pas moins de six classements mondiaux cohabitent aujourd'hui. Aux côtés des plus officiels, vivotent d'innombrables "hits" proposés par des journaux. Et pourtant, un seul fascine, celui de Shanghaï.

Publié en 2003 sur Internet par deux chercheurs de l'université Jiao Tong, ce classement avait à l'époque pour objectif de permettre un étalonnage du niveau des universités chinoises sur celui des meilleures mondiales, et plus spécifiquement des américaines. Pour cela, Nian Cai Liu et Ying Cheng ont classé les universités en utilisant six critères qu'ils estiment "objectifs et facilement vérifiables" (bibliométrie, publication dans Science et Nature, index de citations de chercheurs, nombre de Prix Nobel et de médaillés Fields -anciens et actuels-, et le ratio de ces critères en rapport avec la taille des établissements )

En France, la publication de la première édition de ce classement a été une douche froide. Avec à peine deux établissements dans le Top 100, la France est ressortie humiliée du grand bain mondial. "Sa publication a produit un électrochoc dans notre communauté, confirme Guy Couarraze, président de Paris-XI, mais, depuis, nous le prenons avec prudence. D'autres classements ont émergé qui valorisent d'autres aspects des universités comme la formation ou l'attractivité pour les étudiants."

Fondé 2004 en partie sur la "réputation" des établissements auprès des universitaires et des employeurs, le principal challenger de Shanghaï est le classement du Times Higher Education, publié le 8 octobre dernier dans l'indifférence générale...

La force du classement chinois réside en fait dans sa lisibilité. "Au prix de simplifications qui altèrent l'interprétation", estime Joël Bourdin, sénateur qui a, l'an dernier, consacré un rapport à ces classements d'universités. En France, il a surtout permis à la classe politique de s'emparer du sujet. Dans un article très critique publié l'an dernier, le professeur de l'université du Québec à Montréal, Yves Gingras, jugeait que "les acteurs qui veulent réformer le système universitaire se servent de ce classement de façon opportuniste pour justifier leurs politiques. En fait, il est même probable que dans l'éventualité ou les universités françaises se seraient très bien classées, il aurait été plus difficile de justifier les réformes actuelles."

De fait, le 16 décembre 2005, lors de la présentation de la loi créant les pôles de recherche et d'enseignement supérieur (PRES), Gilles de Robien, alors ministre de l'enseignement supérieur et de la recherche, déclarait au Sénat : "Si tous les PRES annoncés aujourd'hui se mettent en place, par simple effet "mécanique", la France fera un bond dans le fameux "classement de Shanghaï". Sept de nos pôles y figureraient, contre trois universités aujourd'hui."

"Pour la mise en place des PRES, le classement de Shanghaï a été un accélérateur", confie aujourd'hui l'un des initiateurs de ce projet. "Même si certains critères sont douteux, ce classement a permis à tous de constater l'éclatement de notre système d'enseignement supérieur et de recherche et de convaincre qu'une coopération plus étroite était nécessaire."

Reste que le poids médiatique de ce classement irrite. "Il n'y a vraiment qu'ici que l'on se soucie de ce classement. Il ne classe pas des universités en tant que telles, mais se contente de mesurer leur effort en matière de recherche en utilisant des critères bizarres, comme le nombre de Prix Nobel. Franchement, je ne comprends pas !", s'emporte Monique Canto-Sperber, la directrice de l'Ecole normale supérieure.

Après s'être appuyé sur Shanghaï pour réformer, l'Etat promeut l'idée de doter l'Europe de ses propres classements avec des critères fidèles au modèle universitaire européen. Dès 2010, l'Union européenne devrait proposer une "cartographie" des meilleurs établissements en ingénierie et en économie. Si informative soit-elle, cette "cartographie" risque d'avoir du mal à rivaliser avec la lisibilité d'un classement.
Philippe Jacqué
Article paru dans l'édition du 01.11.09

65) China: ciência e tecnologia

Academia de Ciências da China se esforça para chegar ao mais alto nível mundial em análise até 2020

Entidade celebra 60º aniversário
O presidente da Academia de Ciências da China, Lu Yongxiang, anunciou nesta sexta-feira (30) em Beijing que a instituição "se esforçará para dominar questões tecnológicas relacionadas ao país e ao seu desenvolvimento em longo prazo, a fim de elevar a competitividade da tecnologia chinesa no mundo". Ele declarou que a Academia almeja se tornar o instituto de análise de nível mais avançado no mundo em 2020.
O discurso foi feito por Lu na cerimônia comemorativa do 60º aniversário da fundação da Academia de Ciências da China. Na ocasião, ele apontou que, durante os últimos 60 anos, a Academia tem registrado êxitos notáveis na área de pesquisa básica e de tecnologia de ponta, além de finalizar uma série de projetos de tecnologia de base, como computadores de alta capacidade de memória, a ferrovia Qinghai-Tibete, a nave espacial tripulada e o projeto de exploração lunar. A Academia já se tornou um grupo ativo no setor de ciência internacional.
Lu anunciou ainda que, na próxima década, a Academia vai delimitar novos pontos de crescimento científico e treinar novos talentos em alta tecnologia, a fim de elevar a capacidade tecnológica para responder as necessidades do país.

Forças científicas
O presidente chinês Hu Jintao enviou carta de congratulações parabenizando a Academia de Ciências da China pelo seu 60º aniversário.
Hu Jintao afirmou que atualmente o mundo está enfrentando uma nova onda de inovações e reformas revolucionárias, portanto deve-se dar mais atenção ao aproveitamento das forças científicas e assim permanecer na liderança.
Ele espera que a Academia de Ciências da China se esforce por mais resultados científicos e desempenhe seu papel de piloto no processo de construção do país, contribuindo para o desenvolvimento acelerado da ciência e tecnologia da China e sucesso da formação de uma sociedade modestamente confortável.
(Informações do Portal Radio Online)

64) Green China

O lado verde da China
Carlos Albuquerque
O Globo, 30/10/2009

País deve cumprir a promessa de ter 15% de energia limpa até 2020

Maior poluidora do planeta, a China começa a responder as acusações de que tem trabalhado pouco para reduzir as suas emissões de gases causadores do efeito estufa.
Um relatório divulgado ontem pelo World Resources Institute (WRI), um centro internacional de pesquisas, afirma que o país tem feito mais para combater as mudanças climáticas do que os Estados Unidos, historicamente o maior poluidor do mundo.
Segundo o estudo, a China está no caminho certo de cumprir a promessa de ter 15% de sua energia limpa - ou seja, obtida a partir de fontes renováveis - até 2020.
Até o final da próxima década, o gigante asiático vai gerar 150 gigawatts a partir de fontes eólicas, cinco vezes mais do que os EUA.
Essa tinha sido uma das promessas feitas pelos negociadores do país, durante uma reunião sobre o clima, realizada na sede da ONU, em Nova York, em setembro. As outras promessas chinesas foram reduzir "notavelmente" as emissões de CO2 do país, plantar mais árvores e trabalhar para ter uma economia mais verde.

Minc vai à reunião de emergência
O relatório afirma também que as usinas de carvão chinesas - principal fonte de energia do país - são mais eficientes (ou seja, poluem menos) do que as americanas.
- A China está fazendo notáveis progressos no sentido de reduzir as suas emissões - afirma Deborah Seligsohn, autora do estudo. - O desafio tanto da China quanto dos EUA é entender suas necessidades e descobrir soluções criativas para enfrentar o aquecimento.
A indecisão americana tem sido apontada como um dos grandes nós das negociações que vão acontecer na reunião de cúpula da ONU, em dezembro, em Copenhague, quando o mundo vai tentar acertar um novo acordo climático para suceder o Protocolo de Kioto, que expira em 2012.
Para evitar que o encontro seja um fracasso, como previu recentemente Yvo De Boer, o diplomata holandês que chefia as negociações sobre clima nas Nações Unidas, ministros do meio ambiente de vários países fizeram uma reunião de emergência em Barcelona. O ministro do Meio Ambiente, Carlos Minc, disse que a reunião foi convocada pelo governo da Dinamarca.
- Essa é, de fato, uma reunião de emergência, de última hora, na qual vamos tentar resolver algumas das questões cruciais para as negociações de dezembro.
Segundo Minc, entre esses temas, estão a forma como vão ser distribuídos os fundos globais para o combate às mudanças climáticas.
- Os países mais pobres temem, com razão, que apenas os emergentes mais fortes, como Brasil, Índia e China, recebam os recursos dos países ricos. Mas são estes os que mais contribuem para o aquecimento global. É complicado.
O ministro disse também ter ficado impressionado com uma reivindicação feita no encontro por essas nações.
- Os países insulares querem que o mundo negocie um limite de elevação das temperaturas, até o fim do século, de 1,5 grau Celsius, em vez de 2 graus, como tem sido feito até agora. Para eles, esse valor já é considerado catastrófico.
Só que o limite de 2 graus tem grandes chances de ser ultrapassado até o fim do século, como dizem os cientistas.

63) Book on Monetary Policy in China up to 1937

From: Book Reviews in Economic and Business History
Date: 29.10.2009
Subject: Burdekin on Horesh, Shanghai's Bund and Beyond: British Banks, Banknote Issuance, and Monetary Policy in China, 1842-1937

------------ EH.NET BOOK REVIEW --------------
Published by EH.NET (October 2009)

Niv Horesh:
Shanghai's Bund and Beyond: British Banks, Banknote Issuance, and Monetary Policy in China, 1842-1937
New Haven, CT: Yale University Press, 2009. xiv + 240 pp. $48 (hardcover), ISBN: 978-0-300-14356-0.

Reviewed for EH.NET by Richard C. K. Burdekin, School of Economics and Finance, Claremont McKenna College.

This book by Niv Horesh of the University of New South Wales offers a meticulously researched account of British banks' involvement in monetary emissions in mainland China and Hong Kong from the cession of Hong Kong to Great Britain in 1842 up until the outbreak of war with Japan in 1937. Although the book includes details of British bank activities and note issuance in the Crown Colony of Hong Kong, the particular focus is on Shanghai, which became the center of British interests in mainland China after it was opened up for trade as a treaty port in 1842 (followed by the establishment of the International Settlement in 1844). Horesh also incorporates information on developments in China's hinterland and the implications of monetary policy changes elsewhere in East Asia, most notably Siam and the Straits Settlements. The role played by British banks in China is seen to be influenced not just by British government policy but, even more crucially, by disruptions and uncertainties regarding local Chinese money issuance under the Qing dynasty and the early days of the Republic that made the relative stability of the established British bank notes highly appealing to the local population. The author describes how the later eruption of anti-British sentiment in 1925, and increasing attempts by the Nationalist government to establish their own uniform currency, set British note issuance into decline, however. A new nationwide fiat currency standard, the _fabi_, was instituted in 1935.

This book is certainly far from being a narrow account of British bank operations in Shanghai. Although research materials from the archives of the Chartered Bank of India Australia and China (CBIAC) and the Hong Kong and Shanghai Banking Corporation (HSBC) form the centerpiece, Horesh's account places this material within the broader context of British colonial policy and evolving monetary conditions. There is extensive discussion, for example, of the differential regulations attended to banks conducting business in the colonies as well as comparisons of British bank operations in China with those in other parts of the world. A particular complication faced by banks operating in East Asia concerned the silver-based monetary system extant there versus the gold-based system entrenched in the west. British banks doing business in China were exposed to currency risks insofar as payments were received in silver whereas any obligations in London remained linked to gold. With silver generally depreciating relative to gold from the 1860s through the First World War, the author notes that this also eroded the value of bank profits when converted into pounds and reduced the scope for dividend payments to the British shareholder base. HSBC, alone among the major British banks operating in China, largely avoided this problem by being incorporated in Hong Kong rather than in London and by taking advantage of its special role as primary creditor to the Chinese Imperial Court to secure gold loans based on Chinese custom revenues. As Horesh (p. 54) puts it, these "inherent advantages were compounded by managerial prudence" that helped HSBC cement a dominant role among the British banks in China and relegated even CBIAC to secondary status.

The impact of the British banks on the Chinese economy remains extremely controversial to this day. Horesh offers a very even-handed treatment, laying out views expressed both by contemporary writers and modern-day western and Chinese historians while attempting to resolve the debates (and disputes) not by polemic but by appeal to data. Although the data available are far from complete, this book greatly adds to our understanding of the nature of the British banking operations, the extent of their money issuance, and the profitability of this issuance. There are many tables tracing the evolution of bank balance sheets over time and charts showing the trends in note issue. A number of things become clear from these data. First, British bank issuance was highly profitable and the value attached to it is affirmed not only by the data themselves but also by official correspondence expressing concerns whenever changes in British government policy, or developments in China itself, posed a threat to these activities. Second, the extent of this note issuance, relative to total monetary circulation in Shanghai and elsewhere, was never anywhere near a dominant or majority share. Horesh effectively debunks claims to the contrary as well as other overstated claims regarding the extent of Hong Kong banknote circulation in southern China. Third, British banknotes came to be highly prized by the local population owing to their proven convertibility and restraints on supply reflecting both their mandatory coverage ratios and British government quotas on global issuance by the colonial banks.

While it is true that British banks like HSBC and CBIAC drew in funds that might otherwise have found their way into Chinese-owned institutions, Horesh convincingly demonstrates that this was not due to any imperialist browbeating but rather the desire to avoid the vagaries of the local banking system, which suffered under the disintegrating financial position of the late Qing dynasty and the ensuing chaotic "warlord era" of the early Republican period. Horesh (p. 160) concludes that British banknote issuance “seems to have mattered most as a readily convertible store of value, as a resuscitator of Chinese banknote issuance, and as a touchstone for Chinese monetary reform. It was part of the formula that drew Chinese capital to the city -- a liquid safeguard against one specific form of warlord and central government depredation, that is, debased coinage and inconvertible notes.” A rather amusing confirmation of the regard in which British bank notes were held comes from a 1928 newspaper report of a gang of bandits that demanded not silver or gold but Shanghai banknotes "with the view, it is conjectured, of retiring to [Shanghai] when their fortunes are made" (p. 30).

My only minor quibble is that the organization of the later chapters to focus, first, on CBIAC and, second, on HSBC leads to a little redundancy insofar as both banks tended to be buffeted by many of the same policy changes and events. An alternative might have been to organize that body of material chronologically and then address each bank's activities over the respective time periods. Overall, however, this is a book awash with interesting and compelling insights that make an important contribution to our understanding of British involvement in prewar China. An area that I would like to see the author explore more in future work is the relationship between British banking interests and the successive Qing and Republican governments. How profitable, for example, was HSBC's pre-eminent role as creditor to the Qing government? And how important was British bank lending to the fortunes of that government and the financing of its successor? Although these relationships are discussed to some extent in the present volume, I wonder if the bank archives could shed further light on such issues and would certainly look forward to anything the author might have to offer along these lines.

Richard C. K. Burdekin is Jonathan B. Lovelace Professor of Economics at Claremont McKenna College and is an Editorial Board Member of _Economic Systems_ and _The Open Economics Journal_. His latest book, _China's Monetary Challenges: Past Experiences and Future Prospects_, was published by Cambridge University Press in 2008. E-mail: rburdekin@cmc.edu.

Copyright (c) 2009 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator (administrator@eh.net). Published by EH.Net (October 2009). All EH.Net reviews are archived at http://www.eh.net/BookReview.

62) Educacao: progressos do regime comunista na China

Educação na Nova China
Agência Xinhua, 29/9/2009

Abaixo os dados e números divulgados pelo vice-ministro da Educação chinês, Hao Ping, em uma coletiva à imprensa realizada recentemente

Beijing, China - O setor de educação da China obteve notáveis êxitos desde a fundação da República Popular da China em 1º de outubro de 1949, especialmente desde que o país adotou a política de reforma e abertura no final dos anos 1970.
Seguem os dados e números divulgados pelo vice-ministro da Educação chinês, Hao Ping, em uma coletiva à imprensa realizada recentemente:
A taxa de analfabetismo entre os 15 e 45 anos caiu para 3,58%. O número era de mais de 80% quando a República Popular da China foi proclamada.
Atualmente, o país tem 14,63 milhões de professores nas suas instituições de ensino, em comparação com 930 mil em 1949.
Hoje em dia, 99,5% das crianças em idade escolar estudam em escolas primárias. Em 1949, a percentagem era de menos de 20%.
Cerca de 98,5% dos graduados de escolas primárias continuam o estudo nas escolas secundárias. Sessenta anos atrás, a taxa foi de apenas 6%.
A China tem mais de 20 milhões de estudantes em 2.263 instituições de ensino superior. Quando a Nova China foi fundada, havia apenas 120 mil estudantes universitários.
As universidades e as faculdades chinesas recrutam mais de 6 milhões de estudantes a cada ano, quase 23,3% dos candidatos a universidades.
A China, com uma população de 1,3 bilhão de habitantes, tem mais de 82 milhões de pessoas formadas por instituições de ensino superior.
Mais de 220 mil estrangeiros estudavam na China em 2008, enquanto 180 mil chineses estudavam no exterior. Em 1950, havia apenas 33 estudantes estrangeiros na China e 35 chineses no exterior.

61) Paul Krugman, o protecionista...

CHINA DESVALORIZA DE FATO SUA MOEDA E ROUBA EMPREGO DOS DEMAIS PAÍSES!
Paul Krugman
O Estado de S.Paulo, 24.10.2009

1. Até por volta de 2001, ainda se podia afirmar que a posição da China no comércio internacional não era tão desequilibrada. Mas daí em diante, a manutenção de uma taxa cambial fixa para o yuan, em relação ao dólar, tornou-se cada vez mais bizarra.

2. Em primeiro lugar, o dólar foi perdendo valor, principalmente em relação ao euro, de modo que, mantendo essa taxa cambial fixa, as autoridades chinesas estão na verdade desvalorizando a sua moeda em relação à de todos os outros países. Ao mesmo tempo a produtividade das indústrias chinesas voltadas para a exportação cresceu prodigiosamente. Tal situação, combinada com a desvalorização de fato, torna os bens chineses extremamente baratos nos mercados mundiais.

3. A consequência foi um desmedido superávit comercial chinês. O yuan manteve-se desvalorizado por meio de sua venda, principalmente para a aquisição de um enorme volume de ativos estrangeiros, na maior parte em dólares, que hoje chega a 2,1 trilhões de dólares.

4. Com sua política de desvalorização da moeda, a China absorve atualmente parte dessa demanda inadequada de outras nações, prejudicando o crescimento quase em toda parte. As maiores vítimas são provavelmente os trabalhadores de outros países pobres. A verdade nua e crua é que a China está roubando o emprego de outros países.

60) Um americano intraquilo: um velho maoista fala da China e dos EUA

Líderes chineses são mais inteligentes que os ocidentais
ENTREVISTA DA 2ª - SIDNEY RITTENBERG
RAUL JUSTE LORES - DE PEQUIM
Folha de São Paulo, segunda-feira, 26 de outubro de 2009

Único americano aceito por Mao Tsé-tung no Partido Comunista revela que Washington, em duas ocasiões, ignorou solicitação do chinês de reunião com representantes dos EUA

ÚNICO americano membro do Partido Comunista chinês em seus primórdios, Sidney Rittenberg, 89, foi intérprete dos líderes comunistas Mao Tsé-tung e Zhou Enlai e chefiou a rádio China Internacional.
Nos anos 40, Mao pediu que ele enviasse mensagens ao governo Roosevelt, em que o líder chinês dizia que queria "manter boas relações com os EUA".
Íntimo do poder na maior parte do tempo em que morou na China (1944-1980), ele ficou dez anos preso durante a Revolução Cultural por criticar a burocracia do regime de Pequim. Casado com uma chinesa, o americano mantém até hoje o hábito de passar quatro meses por ano na China, onde tem uma empresa de consultoria.

Em seu apartamento em Pequim, Sidney Rittenberg conta como Mao via os EUA, as comunas e como a liderança comunista se encastelou na Cidade Proibida. Ele explica o que mudou na relação com os EUA e decreta: os atuais mandatários comunistas "são muito mais inteligentes e preparados" que os líderes ocidentais.

REVOLUÇÃO NOS EUA
Em 1946, tive vários encontros com Mao, ele queria saber tudo sobre os EUA. Na época, ele ainda era um excelente ouvinte. Tinha lido Rousseau, Locke, Franklin antes de Marx e Lenin. Sabia quase nada dos EUA contemporâneos. Achava que, ao fim da Segunda Guerra, com a crise e o desemprego, haveria uma revolução proletária nos EUA. Eu dizia que os sindicatos estavam enfraquecidos, mas ele discordava.

MAO IGNORADO
Duas vezes levei mensagens de Mao para o então embaixador americano. Mao dizia que venceria a guerra e que, quando fosse líder da China, queria ter boas relações com os EUA. Dizia que precisaria de dinheiro para reconstruir o país e que não queria ficar tão dependente da União Soviética. Até pediu para ter um encontro secreto com Roosevelt. Dizia não querer presentes, mas empréstimos. Nas duas vezes, os EUA não responderam e perderam uma chance de ouro.
Zhou Enlai tentou falar com o embaixador americano em Nanquim, sem sucesso. Se não tivessem fechado a porta para Mao, talvez as guerras da Coreia e do Vietnã não tivessem acontecido, e Mao teria outro sistema no qual se inspirar. Mas até hoje há americanos com dificuldades de dialogar com quem pensa diferente.

FELIZES COM MAO
Diziam que os migrantes rurais demitidos no ano passado se rebelariam? A maioria se reempregou e está feliz da vida. O mesmo aconteceu nos anos 60. Não houve nenhuma rebelião popular para derrubar Mao porque os chineses estavam felizes. Até os anos 40, a China sofria com pestes, epidemias, prostituição, ópio, invasões externas, camponeses miseráveis. Depois, a China universalizou a saúde e a educação, as mulheres passaram a ter os mesmos direitos.
A China derrotou os EUA na guerra da Coreia, "nem a maior força imperialista conseguiu dobrar a China", dizia Mao. Os chineses estavam orgulhosos pela primeira vez em um século e colocavam toda sua energia nesse novo projeto de país.

TENSÕES ÉTNICAS
No início, os comunistas procuraram apoio de tibetanos e muçulmanos contra o inimigo mais forte, as tropas de Chiang Kai Shek. Em 1942, Mao disse que Taiwan, Tibete e Xinjiang deveriam ser independentes. Já em 1948, outros líderes comunistas me diziam que seria impossível, pois esses países seriam dominados logo por potências imperialistas e seriam hostis à China.
Onde a religião é parte da identidade, as diferenças ficaram mais largas. Cada mosteiro tibetano tem um chinês han ateu como administrador. As tensões são antigas.
Mao recebeu bem o dalai-lama em Pequim. Recentemente, o dalai disse que em economia era 100% marxista, "por isso não me entendo bem com o atual Partido Comunista chinês". O dalai falava que queria acabar com a servidão no Tibete, e Mao lhe dizia para fazer reformas com calma. Aí veio a CIA, apoiou os rebeldes, ocorreu o golpe e o dalai se exilou.

MAIS INTELIGENTES
A maior diferença entre os dirigentes comunistas de hoje e os pioneiros é a enorme formação da atual geração. Os atuais líderes comunistas são muito mais preparados e mais inteligentes que qualquer dirigente ocidental. Ponto. Conseguiram acabar com a fome, reduziram o desemprego, melhoraram a educação e a saúde de um país de 1,4 bilhão de habitantes, cuja economia cresce sem parar.
É um país ainda com enormes problemas, mas os feitos são maiores. Hu e Wen são de uma geração de engenheiros muito capaz. Wen Jiabao [premiê] é o líder mais popular do país, ainda que não tanto entre seus pares, mas tem o apoio [do presidente] Hu Jintao. A prioridade é conciliar os conflitos entre trabalhadores e patrões, camponeses e urbanos, entre os han e as minorias étnicas.

CHINA NO MUNDO
Pela primeira vez em 3.000 anos de isolamento, a China está presente no mundo, faz parte das relações internacionais. Todos os grandes imperadores chineses foram usurpadores, chegaram ao trono assassinando ou derrubando os ocupantes ou herdeiros. Os sucessores apontados por Mao e Deng Xiaoping no início nunca chegaram a tomar posse. Nos últimos anos, pela primeira vez em sua história, a China tem transições pacíficas e previsíveis.
A memória da Revolução Cultural criou um medo profundo do caos entre os chineses e o governo. Para evitar o caos, faz-se qualquer coisa, veja o caso da praça da Paz Celestial. Sabia que iria acabar em sangue. Hoje não é mais necessário: os estudantes não querem saber de política, só de fazer dinheiro.

G2
Acho um delírio acreditar que EUA e China possam resolver os problemas do mundo. Mas se os dois tiverem mais convergências e trabalharem juntos, fica mais fácil convencer Europa, Rússia, Japão, Índia, Brasil e vários outros países a seguirem os consensos.

IGUALDADE
Em 1940, eu me filiei à Juventude Radical na universidade e depois ao Partido Comunista dos EUA. Mas os comunistas americanos queriam seguir a política externa soviética, e deixei o partido. Ao partir para a China, após estudar chinês no Exército, vi o cotidiano das tropas comunistas. Soldados recebiam alfabetização, a comida era compartilhada, oficiais podiam ser criticados pelos subalternos e havia escolha de líderes em votações. A sociedade igualitária com que eu sonhava.

NO CASTELO
O premiê Zhou Enlai disse uma vez que, quando eles eram estudantes, queriam invadir as muralhas e enfrentar os senhores da guerra que se escondiam em Pequim. "Um dia, virão derrubar os muros", ele disse, caso os comunistas se encastelassem na Cidade Proibida. Apesar das muitas viagens de Mao, a elite do partido se encastelou e passou a crer nas fantasias que os aduladores contavam.

REFORMA AGRÁRIA
Mao ouvia que as comunas eram um sucesso, mas acreditou nessa fantasia. Nunca funcionaram. Os camponeses se juntaram aos comunistas porque sonhavam ter um pedaço de terra, um sonho antigo no país. Quando houve a reforma agrária, a produtividade se multiplicou. O camponês chinês andava cabisbaixo, sempre olhando para o chão, e passou a andar ereto, orgulhoso.

MODELO STÁLIN
Mao dizia que em 1911, quando Sun Yat-sen declarou a República, as grandes potências não queriam que a China emergisse. Rússia, França, Reino Unido tinham seus "senhores da guerra" na China, fazendo negócios e aterrorizando o país.
Em 1939, Mao escrevia sobre a "nova democracia" e dizia que a China sofria não por ter muito capitalismo, "mas por ter pouco". Dizia que as cooperativas deveriam conviver com as estatais, com a iniciativa privada, com a reforma agrária. Entre 1949 e 1951, ele passou a seguir Stálin, com a economia planejada, a ditadura do proletariado, com as comunas.

10 ANOS DE PRISÃO
Na solitária, consegui manter a saúde mental recitando poemas, lembrando de histórias, atuando performances cômicas. A literatura defendeu minha sanidade. Quando fiquei em prisão domiciliar em 1967 por alguns meses, o único colega estrangeiro que se atreveu a me visitar foi o brasileiro Jayme Martins. Ele falava pouco chinês. Eu não falava português, mas nos entendíamos com mímica e misturando idiomas. Foi um bravo.

FONTE AMERICANA
Nunca fui tratado como espião ou traidor nos EUA. Em Pequim, em 1977, o então chefe do escritório comercial americano [não havia embaixada] me convidou para ver "Guerra nas Estrelas" no telão. Eu tinha perdido meu passaporte americano em 1946!
Ao voltar aos EUA, em 1980, era visto como fonte de informação sobre a China. Passei dias sendo entrevistado no Departamento de Estado, sem nenhum constrangimento. [O atual enviado especial americano para Afeganistão e Paquistão,] Richard Holbrooke, era subsecretário de Estado para a Ásia e disse que muitos antecessores jamais conversariam comigo. Respondi que me negaria a falar com muitos dos seus antecessores. E nos demos muito bem. Nem CIA, nem FBI jamais me interrogaram. Deviam me achar inofensivo.

59) The day Communist China entered the UN: from History

On Oct. 25, 1971, the United Nations General Assembly voted to admit mainland China and expel Taiwan.

U.N. Awaits Peking Delegates
Taipei Clings To Affiliate Ties
Rogers Calls Ouster A Mistake
Appeal By Thant Calling Vote Big Step Forward, He Urges End Of Bitterness
By TAD SZULC
Special to The New York Times, October 25, 1971

United Nations, N. Y., Oct. 26--A delegation representing Communist China, which was voted into the United Nations last night, is expected to arrive here this week to take its seat, diplomats close to the Chinese said today.

Reports from Peking quoted the Acting Foreign Minister, Chi Peng-fei, as having said that the timing was now being considered.

At the same time, Nationalist China, which was expelled from the United Nations in the same General Assembly vote, declared through its diplomats here that it would fight to remain in the International Bank for Reconstruction and Development and other agencies with ties to the United Nations. But the general view here was that the Nationalists faced a hard struggle.

'Tremendous Step'
At United Nations Headquarters, Secretary General Thant appealed to all members to "endorse the tremendous step forward" represented by Peking's admission and to set aside suspicion and bitterness.

Diplomats from African and Asian countries who played a key role in the campaign for Peking said they understood that a delegation would be arriving here from the Chinese capital as soon as practical arrangements could be made.

Other diplomats said they thought that the first group might come from the Chinese Embassy in Ottawa. They said this contingent might be headed by Huang Hua, the Chinese Ambassador to Canada and a close adviser to Premier Chou En-lai.

Instructions Not Received
Spokesmen at the Chinese Embassy in Ottawa said in telephone interviews during the day they had no instructions on any moves to New York.

United Nations officials, stressing that there were no legal or ceremonial obstacles to keep Chinese diplomats from simply walking into the meeting rooms and taking seats, said they were awaiting notification from Peking.

This would be in reply to the telegram of notification from Mr. Thant sent to Peking late last night.

The General Assembly voted 76 to 35, with 17 abstentions, to seat Communist China while expelling the Taiwan-based Nationalist Government. This automatically gave Peking the seats assigned to China in the General Assembly, the Security Council and other United Nations organs.

After the tension and drama of last night, today was spent in efforts at reconciliation and in political introspection and analysis.

Mr. Thant and Foreign Minister Adam Malik of Indonesia, the Assembly President, set the tone with separate statements underlining the reality of the decision already made and the need for living with it.

The Secretary General, the Burmese who is to retire at the end of this year after a decade in office, recalled that he had always advocated Peking's participation in the United Nations, while respecting the views of those opposing it.

"Now that the Assembly has taken a decision, that the question has been settled, let us not lose time and energy by falling into the temptation of judging attitudes which now belong to the past, of awakening suspicions which have already been overcome," Mr. Thant said.

"Let us unanimously and resolutely engage on the new road which opens today before us. I solemnly appeal to all member states to leave no room for bitterness, but on the contrary to abide by the decision of the General Assembly and endorse the tremendous step forward which has been taken last night."

Thant Sees Stronger U.N.
Mr. Thant said he believed Peking's presence in the United Nations "will eventually lead to the strengthening and betterment of the organization and that the decision reached last night may enable us to solve more effectively the international problems with which we are confronted."

"Last night's vote should not be considered in terms of either victory or defeat, but as an essential step toward a more effective and realistic international system," he added.

Mr. Malik, who presided over last night's dramatic succession of votes, said in his statement that he welcomed "China's participation in the life and work of the United Nations."

"The Assembly's decision also constitutes an important step forward in our common effort to obtain a more just and peaceful international order, where all nations, large or small, can work, in freedom and equality, for the material and spiritual betterment of their people and for the preservation of civilized life on our globe in the decades to come," he said.

Mr. Malik then touched upon one of the unresolved political questions when he expressed his hope that the "problem regarding Taiwan" could "be resolved peacefully by the Chinese people themselves."

This was a reference to rival claims by the Communists and the Nationalists to sovereignty over Taiwan. In the Peking view, the vote implied the recognition by the international community that there is only "one China," that it includes Taiwan, and that it should be ruled from Peking.

But the Nationalists along with the United States, which fought and voted against Taipei's expulsion, reject this interpretation.

The Nationalists continue to insist on their claim to represent all China. The United States avoids judgments on this point, but continues to offer the Government on Taiwan support against any attempt by Peking at an armed take-over.

Most diplomats here predicted today that Peking would not raise the Taiwan question in the United Nations upon assuming its seat here, at least in the foreseeable future.

China is expected to act "seriously and responsibly," in the words of one Western European diplomat, and avoid needless clashes.

One of the first responsibilities facing China's new delegate in the Security Council will be to take part in the decision on a new Secretary General to replace Mr. Thant.

The five permanent members of the Council--all of whom wield veto power--must agree on a secretary general. The uncertainty over the China seat has delayed discussions of candidates.

But sources familiar with the Chinese said that Peking might well favor a secretary general from a small Asian country--a person resembling Mr. Thant--rather than a candidate from a neutral European nation.

It was not immediately known when the Security Council would hold its next meeting.

The General Assembly, having completed the China issue, is scheduled to turn its attention to general disarmament.

Questions on Listing
Among the ceremonial problems linked to the change in the Chinese representation is how China wants to be officially listed here.

The United Nations announced that a message had gone to Peking raising this question so that the alphabetical order of precedence and the place for the new Chinese flag could be determined. The choice appeared to be between "China" and "People's Republic of China."

Today, however, no Chinese flag flew in front of the Assembly hall. The Nationalist flag had been lowered yesterday and the mast was naked in the sun.

=======

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58) Un libro sobre el presidente Mao, recien publicado

El libro que desvela la peor imagen de Mao Zedong
Ruben Amon - Opinion:
El Mundo, 16 Octobre 2009

Mientras China celebra los fastos que conmemoran el 60 aniversario de su advenimiento, un libro desmonta la imaginería, la propaganda y el terrible anverso de Mao Zedong. Representado como un icono paternalista, bonachón y popular, infundía tanto temor como admiración. Todavía hoy, cuestionar su revolución puede acabar en pena de muerte.

El 60 aniversario de su llegada al poder ha servido de excusa a la aparición de ‘El Mao’, un nuevo libro rojo. Nuevo porque acaban de publicarlo en Francia Guy Gallice y Claude Hudelot. Rojo porque la iniciativa editorial (Rouergue) desvertebra la propaganda maoísta con los recursos iconográficos que el propio dictador había engendrado.

Imágenes y textos redundan en la especificidad de Mao Zedong, un dictador que conserva el rango de tabú en China y que sobrevivió incluso a sí mismo amparado en el misterio de la ambigüedad. “La ambigüedad de un hombre sonriente y al mismo tiempo feroz”, nos explica Hudelot en la sobremesa de un café parisino. “Ambigüedad en su dimensión terrena y en el culto trascendental. Ambigüedad en la naturaleza de un hombre que fue un genio y que fue un diablo”, añade.

Y hasta ambigüedad sexual. No porque el polígamo e insaciable Mao Zedong (1893-1976), castigador de concubinas, tuviera dudas sobre su heterosexualidad, sino porque la imagen que proyectaba en sus carteles, fotografías y demás recursos propagandísticos participaba de una cierta androginia, de una taimada y premeditada asexualidad.

COMO UN FARAÓN. Claude Hudelot no duda que semejante manera de presentarse abundaba en su divinidad. Mao era tan dios solar como Akenatón. De hecho, los turistas que frecuentan las playas del Este todavía simulan que acarician la efigie del patriarca cuando el astro aparece en el horizonte. “Mao ha logrado una suerte de inmortalidad. Ha conseguido que su imagen permanezca venerada en la China contemporánea. Se trata de una preocupante amnesia colectiva. Peor aún: existe el riesgo de que se produzca un agujero negro de la memoria. La devoción y la negación del pasado obstaculizan seriamente el deber de la Historia”.

Para airearla, Guy Gallice (fotógrafo), y Claude Hudelot (sinólogo polifacético), han concebido un libro lujoso, atractivo. Ambos adjetivos desafinan con las aberraciones del maoísmo, pero también participan de la mencionada ambigüedad y revalidan, incluso, la seducción que ejercía el Gran Timonel entre la sonrisa, el heroísmo, la manipulación y el miedo.

Tantas formas y superficies adquiría y ocupaba el padre que Mao puede considerarse el primer antecedente del Gran Hermano orwelliano. Su efigie estaba en todas partes, tal como demuestra la colección de imágenes, cerámicas, pinturas, sellos, pancartas, pastiches, manifiestos, prendas y souvenirs que desglosan en su libro Gallice y Hudelot.

Unas veces aparece Mao como héroe romántico o como abnegado militar; otras recuerda al Oscar de Hollywood, en oro puro, o se desdobla en todas las dimensiones de un Geyperman: atleta, místico, pensador, acróbata, sobrio, exuberante, jinete, redentor, peón caminero. “Es una manera de demostrar que el ojo de Mao llegaba a todas partes. Su imagen ocupaba un lugar de preferencia hasta en el rincón más remoto de China. No era sólo una cuestión de devoción. También era la manera de intimidar al pueblo, de amenazarlo, de asfixiarlo. Los ojos de Mao escrutaban a sus compatriotas. Era el sol mismo”, explica Hudelot.

Conoce bien China el profesor porque su primera visita se remonta al año 1964 y porque ha teorizado sobre el maoísmo con distintos filmes y libros de referencia. Algunos, como ‘La larga marcha’ (1971) estuvieron proscritos por la intelectualidad francesa afín al régimen. Empezando por Simone de Beauvoir, a quien Hudelot acusa de negligencia, o de ignorancia, o de ceguera, o de complicidad.

El furor ’sesentayochista’ de París parecía ocultar que el Timonel mataba de hambre a sus compatriotas. Que depuraba a sus enemigos. Que multiplicaba los gulags. Que manipulaba a su antojo la información. Que reconstruía la Historia a medida. Y que se enorgullecía de una máxima cíclica con dedicatoria a sus adversarios: “Para construir hay que destruir”.

RODILLO MAOÍSTA. El eslogan dio cuerpo a la Revolución Cultural (1966), “que tuvo mucho de revolución y nada de cultural. Mao hizo tabla rasa. Destruyó ferozmente el patrimonio y la cultura. Sentó las bases del unilateralismo. Todo el régimen se sostenía en la gran impostura, en la mentira. Propagadas ambas con la maquinaria de la propaganda y de la seducción. No había resistencia posible al rodillo del maoísmo”, matiza Hudelot. El escritor francés no considera que Mao fuera un genocida, pero, al mismo tiempo, calcula que las víctimas de la dictadura redondean los 100 millones de personas. Empezando por los muertos de hambre y terminando por quienes pretendían discutir el liderazgo patriarcal.

“Hay constancia de que en China existió la antropofagia como solución a la hambruna”, sostiene Hudelot. “Es una de las sombras del régimen y de los tabúes. Pero también hay luces. Deng Xiaoping decía que Mao hizo un 30% de cosas malas y un 70% de cosas buenas. Mi impresión es que fue al revés: un 70% de cosas malas y un 30% de cosas buenas”.

A juicio de Hudelot, estas últimas conciernen a la unificación de China, a la comunión del orgullo patriótico, a la generalización de una cierta igualdad y a la notoriedad que adquirió el país en el ámbito internacional después de haber sufrido toda suerte de humillaciones y vaivenes históricos. “Mao no ha vuelto. Simplemente, no se ha marchado. Lo demuestra su imagen perenne en Tiananmen. Quien osa criticarlo todavía puede morir. Aún no ha habido ‘desmaoización’ en China, de tal modo que la ‘omertá’ [ley del silencio] se perpetúa y Mao se beneficia de una posición sagrada. Su iconografía es como la de un santo, incluso superior a la de un emperador. Es un mito indestronable”.

La iconografía del maoísmo se nutre del rojo, de los motivos soviéticos, incluso se alimenta del heroísmo y de la corpulencia escénica al uso en el estalinismo, aunque la especificidad china radica en las alusiones a la propia cultura popular y a las referencias patrimoniales.

EL ÚLTIMO EMPERADOR. Mao Zedong, desde este punto de vista, ha sido el último emperador. No menos autoritario ni absolutista que sus antepasados, pero mucho más hábil en su papel providencial, en su raigambre social y en la capacidad de reinventarse a sí mismo. “Mao funcionaba con una mecánica de grandes oleadas”, explica Hudelot. “Cuando temía perder el poder o cuando observaba al pueblo distraído, sacaba de la chistera sus grandes proyectos de regeneración. Fue el caso del Gran Salto Adelante, de la Revolución Cultural y, naturalmente, del ‘Libro Rojo’, cuyas páginas sirvieron para que la gente aprendiera a leer, sí, pero a leer una sola cosa. De ahí la castración y el modo en que el Gran Timonel tenía condicionado y adiestrado a su propio pueblo”.

El libro de Hudelot y Gallice se desenvuelve con sorpresa y estremecimiento. Un escaparate de fetiches, reliquias, imágenes y delirios propagandísticos que sobrepasa la cultura ‘kitsch’ y la multiplicación pop de Warhol en su célebre retrato del Timonel, de 1973. De unos años antes es el icono que preside y ‘gobierna’ la plaza de Tiananmen. Fue instalado en 1950 y se retocaba cada año para incorporar rasgos de madurez o para subrayar la idealización. El cuadro megalómano custodia ahora la entrada en el mausoleo. Mao vivirá 10.000 años, como le cantaban los escolares, pero no está claro, según Hudelot, si sus restos están realmente en el catafalco o si es una figura de cera. Es la última y sarcástica ambigüedad, el misterio de una religión difundida con la imagen, con la palabra, con el rito, con el paternalismo y con el terror.

Fuente: El Mundo

57) The Odd couple: China and USA (The Economist)

The odd couple
The Economist, 23/10/2009

It has become a tedious tradition for Westerners dealing with China to garnish their speeches with wisdom from the Chinese classics. Barack Obama, addressing Chinese and American leaders in July, used not just a banal quotation from Mencius, a Confucian sage, but a punchier one from Yao Ming, a Chinese basketball player: "No matter whether you are new or an old team member, you need time to adjust to one another." Though it is 30 years since the two countries re-established diplomatic ties severed by the Communist takeover, both sides still badly need to adjust.

The heart of the problem is a profound uncertainty in both countries about where the relationship may lead. In many respects the two countries are in the same bed. Their economies have become interlocked, especially in the past decade. America is the world's biggest debtor and China its biggest creditor. From climate change to the economic recovery, the world faces problems that demand China and America work in concert.

Prussian blues, Chinese reds
Yet relations are dogged by fears of a new cold war, or even a hot one, breaking out. Some Americans in Washington, DC, talk of China as "the new Prussia". China has engaged in a rapid military build-up that could challenge America as the defender of Asian peace (and Taiwan's sovereignty). Unannounced, China is building its first aircraft-carrier, yet its generals often refuse even to talk to their American peers.

Underlying the strategic competition is China's economic rise. Its companies are "colonising" swathes of Africa and Latin America, cosying up to regimes Westerners shun. Its huge foreign-exchange holdings and its sniffing of bargains mean Chinese investment in the West will grow rapidly in the coming years. And to cap it all, China owns $800 billion of American government debt-enough to give it power of life and death over the American economy.

Tensions will get worse in the next few years for two reasons. The first is unavoidable: 2012 witnesses important political transitions in the form of elections in Taiwan and America and a Communist Party Congress in China. Second-and more generally-there has been a recalibration of perceived power. There is now talk of a G2 of China and America, implying that their global weights are nearly equal. In fact, as our special report argues, this is a misperception, and a dangerous one.

China's economy is still less than a third the size of America's at market exchange-rates. Its GDP per head is one-fourteenth that of America. The innovation gap between the two countries remains huge. America's defence budget is still six times China's. As for the Treasury bills, dumping them is not an option for China: a tumbling dollar would hurt its own economy. And as American consumers spend less, while Chinese stimulus boosts its domestic spending, the huge and politically troublesome trade imbalances are shrinking. In the meantime, the danger of overegging China's economic expansion abroad is that it will fuel protectionism at a time when American unemployment is painfully high.

In terms of geopolitical power, China has neither the clout nor the inclination to challenge America. Confidently though China's leaders now strut the world stage, they remain preoccupied by simmering discontent at home: there are tens of thousands of protests each year. For all the economic progress, all sorts of tensions-social, cultural, demographic, even religious-haunt the regime and help explain why it resorts to nationalism so often. So it is odd, and wrong, that America's approach towards China is driven by its own insecurities.

To simplify enormously, the danger is that a frightened United States will be too tough on China over the economy, especially trade; and not tough enough on human rights. On money matters, Mr Obama's foolish decision to slap tariffs on Chinese tyres has given dangerous encouragement to protectionists in America. As unemployment there climbs inexorably towards 10%, the pressure will grow for Congress to fuel a self-defeating attack on Chinese exports and the undervalued yuan. This is bad economics: both China and America would lose enormously from a trade war.

If economic freedom is one American value that Mr Obama should not sacrifice on his first visit to China next month, the other is personal freedom. Chinese authoritarianism is not somehow more acceptable because China is a rising power; nor are human rights bargaining chips to be played only when expedient. That Mr Obama needs Chinese help to fix the global economy and on climate-change mitigation does not mean the leader of the free world should stifle criticism of its political system. Avoiding a meeting with the Dalai Lama in Washington this month was an unnecessary sop to his hosts. The Communist Party, keen to bolster its image at home, wants the trip to appear successful as much as Mr Obama does.

Same bed, different dreams-and one is stronger
A more confident approach is a bet on whose sort of system of government will prove ultimately stronger. At the moment China's responses on the climate, the financial crisis and the emerging swine-flu pandemic have won it praise internationally. But they have also borne the hallmarks of an authoritarian system. For instance, on greenery, it is clear that if China had exposed its response to the rigours of democratic debate, it would have acted more slowly: China's system enables it to mobilise huge resources and make politically difficult decisions. But an effective long-term response to climate change needs public understanding of the issues and a legal environment that allows foreign owners of green technologies to transfer them without fear of theft. China lacks both.

Behind China's façade of strength, on stunning display with its parade of tanks and missiles through Beijing on October 1st, lie fretful frailties-also on display that day, when spectators were banned for fear of protests. Social tensions in China are likely to rise, even as it grows richer. Locking up activists, as China has been wont to do recently, is not a lasting solution. Mr Obama should meet some of them in Beijing to find out for himself. If his hosts have a hissy fit, let them.

56) Universidades chinesas entre as melhores do mundo

As melhores universidades do mundo
por Cláudia Trevisan
O Estado de S. Paulo, 23.10.09

Há pouco mais de 40 anos, a China embarcou no delírio coletivo da Revolução Cultural (1966-1976), que levou ao fechamento das universidades e ao envio de milhões de jovens à zona rural para serem “reeducados” pelos camponeses. O ensino superior só foi retomado de maneira regular depois da morte de Mao Tsé-tung, em 1976, e o primeiro exame de seleção de alunos ocorreu em 1977.

Hoje, a China tem seis universidades na lista das 200 melhores do mundo preparada pela Times Higher Education, com sede na Inglaterra. O Brasil não tem nenhuma. A Universidade de São Paulo estava na lista no ano passado, na 196ª posição, mas foi excluída do ranking de 2009.
Dos quatro países que compõem o BRIC, o Brasil é o único que não está representado no levantamento deste ano da Times Higher Education. A Índia aparece com duas instituições, mesmo número da Rússia.

A China adotou nos últimos anos uma política agressiva de criação de um grupo de elite de universidades, com a atração de intelectuais chineses que trabalhavam em outros países e a contratação de professores estrangeiros. Em 2004, o país já tinha cinco universidades entre as 200 melhores do mundo e emplacou seis no ano seguinte. Outros países e regiões da Ásia avançaram ainda mais em anos recentes. A ex-colônica britânica de Hong Kong, que voltou ao domínio chinês em 1997, emplacou cinco instituições no ranking deste ano, uma a mais que em 2008. O Japão ampliou seu número de 10 para 11 instituições, seis das quais estão entre as 100 melhores do mundo.

A ascenção da Ásia tem relação direta com o recuo dos Estados Unidos, que passou de 58 para 54 instituições no ranking entre 2008 e 2009. Sob o impacto da crise econômica mundial, a posição do país deverá enfrentaquecer ainda mais nos próximos anos, na medida em que tenha de conter gastos públicos para amenizar o enorme e crescente déficit fiscal. Com sobra de caixa muito maior, a China deverá continuar sua ascenção e é bastante provável que amplie o número de instituições no ranking, do qual já fazem parte as seguintes universidades: Tshinghua, Pequim, Fudan, Shanghai Jiaotong, Ciência e Tecnologia e Nanjing. A única representante da América Latina é a Universidade Autônoma do México.

O ranking pode ser consultado no site:
http://www.timeshighereducation.co.uk/Rankings2009-Top200.html

55) McKinsey Quarterly: China's New Paradigm - Consumerism...

A consumer paradigm for China
A more consumer-centric economy would allocate capital and resources more efficiently, generate more jobs, and spread the benefits of growth more equitably. It would also even grow more rapidly.
MacKinsey Quarterly
AUGUST 2009 • Janamitra Devan, Micah Rowland, and Jonathan Woetzel

Source: McKinsey Global Institute
Economic Studies, Country Reports article, consumer paradigm China
https://www.mckinseyquarterly.com/ghost.aspx?ID=/Economic_Studies/Country_Reports/A_consumer_paradigm_for_China_2429

In This Article

* Exhibit 1: Aggressive moves will be needed to raise China’s rate of consumption.
* Exhibit 2: China’s rate of consumption relative to GDP is low compared with those of other nations.
* Exhibit 3: Households account for a relatively low and falling share of total income in China.
* Sidebar: China’s fast-evolving consumer finance market

* About the authors
* Comments (8)

The development paradigm that brought China two decades of rapid growth and lifted millions of people out of poverty is reaching the limits of its utility. Well before the US credit bubble imploded, China’s leaders recognized that this old economic model, with its heavy reliance on exports and government-led investments, was straining at the seams.1 The global recession that followed Lehman Brothers’ collapse put the model’s drawbacks into sharp relief. When exports plunged, factories closed, and millions of Chinese migrants lost their jobs, Beijing responded with a $600 billion stimulus package and a torrent of new lending by state-owned banks.

But those remedies, while highly successful in restoring short-term growth, risk aggravating structural distortions that made China’s economy vulnerable to external-demand shocks in the first place. As the global crisis ebbs, China’s leaders realize more clearly than ever that they must unleash consumer spending to achieve sustainable growth. Stoking Chinese consumption has vaulted to the top of national—indeed global—policy agendas. But how, and how much, can it be raised?

To answer that question, the McKinsey Global Institute (MGI) considered three scenarios for Chinese consumption rates over the next 15 years: a base case (no new action to raise consumption), a policy case (full implementation of proconsumption measures already announced), and a stretch case (a push beyond the current agenda to implement broad changes in the economy’s structure).

MGI estimates that in the base case, China’s consumption will rise to 39 percent of GDP, a gain of just three percentage points above the current level, leaving the country heavily dependent on exports and government-led spending for continued growth. In the policy scenario, consumption could account for as much as 45 percent of GDP, still well below levels in other major economies. If China’s leaders committed themselves to the more aggressive program of comprehensive reform envisioned in the stretch scenario, however, they could raise private consumption above 50 percent of GDP by 2025 (Exhibit 1). Clearing that threshold would bring the consumption rate in line with those in the developed nations of Europe and Asia, vaulting China’s economy into a new phase. McKinsey estimates that comprehensive reform would also enrich the global economy with $1.9 trillion a year in net new consumption, boosting China’s share of the worldwide total to 13 percent—four percentage points higher than its share without further effort.

Reaching the stretch target wouldn’t be easy. China’s leaders will have to wage a sustained policy struggle on many fronts, combining relatively straightforward measures to encourage private spending with fundamental reform of the nation’s health and pension systems and sweeping changes in the economy’s basic structure. Over the next 15 years, China can realistically hope to increase private consumption’s share of total GDP significantly—but only if policy makers depart from the current development paradigm and embrace new policies, structures, and institutions better suited to the country’s status as a large, maturing market economy. That transformation, though daunting, would have a worthy prize: a more stable and fair economy that uses resources more efficiently, creates more jobs, insulates its citizens from foreign-trade shocks, and contributes more substantially to global growth.
China’s constrained consumers

In seeking to bolster private consumption, China’s policy makers face a unique challenge. Although there is no generally accepted standard for “healthy” private consumption in developing economies, in China it is anemic by almost any measure. Private consumption there totaled $890 billion in 2007, making the country the world’s fifth-largest consumer market, behind the United States, Japan, the United Kingdom, and Germany (which China recently surpassed as the world’s third-largest economy). But relative to China’s population and level of economic development, its consumers punch far below their weight. The country’s consumption-to-GDP ratio—36 percent—is only half that of the United States and about two-thirds those of Europe and Japan. Indeed, China has the lowest consumption-to-GDP ratio of any major world economy except Saudi Arabia, where oil exports contribute the bulk of economic output (Exhibit 2).

In fact, China’s consumption-to-GDP ratio has dropped by nearly 15 percentage points since 1990 and continues to deteriorate in the aftermath of the financial crisis. While falling consumption rates are common in developing economies, the speed and magnitude of this decline have no precedent in modern history. In the United States, private consumption remained above 50 percent of GDP even during the full-scale industrialization drive of World War II. In Japan and South Korea, consumption remained above 50 percent during periods of rapid industrial development.

The sources of China’s low consumption rate are both behavioral and structural (see “China’s consumption challenge”). The country’s households have an extraordinarily high ability to save: the average Chinese family squirrels away an astonishing 25 percent of its discretionary income, about six times the savings rate for US households and three times the rate for Japan’s. Indeed, China’s savings rate is 15 percentage points above the GDP-weighted average for Asia as a region.

Frugality’s impact is compounded—and in many ways produced—by structural features that restrict consumption’s share of the national income. For one thing, Chinese households command only some 56 percent of it (Exhibit 3), compared with more than 60 percent in Europe and more than 70 percent in the United States. No effort to raise Chinese consumption rates significantly can hope to succeed without addressing the structural factors that both channel income away from consumers and discourage them from spending even their modest share.

Mending the social safety net
Perhaps the most common explanation for the Chinese consumer’s reluctance to spend more freely is the frayed social safety net. Many argue that the country’s consumers oversave and underspend because they lack adequate health insurance and can’t count on government- or employer-sponsored programs to provide for them in retirement (see “Unlocking the power of Chinese consumers: An interview with Stephen Roach”). The relationship between social-welfare programs and private consumption is complex, but the moral imperative to extend health and retirement protections to the millions of Chinese who lack them is clear. Over the long run, mending the social safety net would ease anxieties about the future and bolster consumer confidence.

But MGI believes that better health and pension guarantees wouldn’t raise private consumption significantly before 2025. In assessing their impact on consumer spending, the key question to consider is who pays for them. If enhanced health and retirement benefits were financed through increased or expanded payroll taxes—a virtual certainty—households would feel less pressure to save, but after withholding they would have less money to spend. Thus the primary impact of expanding health and pension programs would be distributive, shifting to middle- and upper-income households the cost of benefits for poor ones. Moreover, any effort to broaden health insurance coverage would probably require a substantial increase in public outlays for medical care and thus raise the government’s share of total consumption.

MGI’s effort to model the reciprocal effects of such changes suggests that, in the aggregate, even a fully fledged program to expand China’s health and retirement benefits wouldn’t raise private consumption’s share of GDP significantly. We estimate that, at best, such improvements would boost it by only a percentage point above the 2025 base-case projection.

Putting products within reach
Measures to make goods and services better and more easily available could encourage consumption much more than would fixing the social safety net. China’s consumer infrastructure is incomplete. Too few products are tailored to the needs of those who would use them. Prices remain high compared with income levels: a Chinese worker toils more than seven hours to buy the same amount of goods and services a US worker earns through only one hour of work. In rural China—home to more than half of the country’s 1.3 billion consumers—organized retail establishments mediate only 18 percent of consumption, compared with 50 percent in urban areas.

China’s fast-evolving consumer finance market
China’s consumer finance industry lags far behind the economy as a whole. In 2007, consumer finance balances still came to less than 13 percent of GDP, below India and far below Singapore and South Korea. Should recent growth rates persist, consumer lending promises to exceed 8 trillion renminbi ($1.2 trillion) by 2014, up from today’s 3.7 trillion renminbi.1 But that calculation understates the market’s latent potential. If consumer lending on the mainland rose to Taiwan’s level, for instance, the shift could unleash as much as 10 trillion renminbi in net new consumption over the next five years—an enormous opportunity for banks and retailers.

China’s people now have limited credit options. Mortgages account for 90 percent of lending to consumers, who have few choices in key product areas, such as auto loans, credit cards, and personal loans. But the market has grown rapidly in recent years. Credit card issuance is skyrocketing, from 3 million cards in 2003 to 128 million by the end of 2008. Indeed, card issuance could surpass 300 million by 2013. Similarly, unsecured personal loans and installment loans, long the domain of underground lenders, have grown at an annual rate of 33 percent since 2006, to 744 billion renminbi, as leading domestic banks and consumer finance specialists strengthened their risk-management capabilities.

For foreign and local lenders jockeying for position in China’s fast-evolving consumer finance market, we see several keys to success.

1. Recognize the market’s diversity. China is a collection of local markets, each at a different stage of development, with distinct risk profiles and unique consumer preferences. These markets generally evolve through three stages of development: nascent (such as Sichuan), emerging (Jiangsu), and maturing (Shanghai). Lenders should take a portfolio view, focusing on the most promising markets, but with enough diversity to capture the next wave of growth.
2. Find a product portfolio that matches consumer preferences. In a sense, consumer-lending products are fungible. Many consumers balance their savings and borrowing in the aggregate, not by individual products. Some countries (such as South Korea) have high levels of credit card usage; others rely more on cash and personal loans. In the present early stage, the ultimate product balance in China remains to be determined. Finding the right mix may prove crucial to success in China’s fast-growing market.
3. Know the rules and their evolution. New regulations issued by Chinese banking regulators in the spring of 2009 give local and foreign banks and consumer finance specialists greater access to the market, in the form of consumer finance companies. While initially restricted to offering installment loans to retail customers with previous track records in borrowing, such companies will probably enable attackers to participate in the unsecured consumer-lending sector more quickly and at greater scale. In addition, the further deregulation of credit cards has allowed overseas banks to issue renminbi-based ones. These banks should target clear segments and develop the ability to serve the broader market.

Would-be players in such a new market must tread carefully. To assure responsible lending and borrowing, the government must strengthen credit bureaus, improve financial education, support “new to credit” products (for instance, low-limit or collateralized credit cards), and allow consumer finance balances to be securitized. Regulators and lenders must work together to improve risk management, especially the ability to identify and address organized fraud. The government must become better at spotting national and local credit bubbles. China can manage the risks and has ample room to expand consumer credit—safely.

About the Authors
Jan Bellens is a principal in McKinsey’s Shanghai office, where Stephan Bosshart is an associate principal; Dan Ewing is a consultant in the San Francisco office.

Notes
1 This assumes a 2008–14 compound annual growth rate (CAGR) of 14 percent for all consumer lending. Taiwan’s ratio of consumer loans to GDP is 29 percent.

Even when high-quality products are readily available, China’s consumers hesitate to buy them on credit. At 3 percent of GDP, outstanding consumer debt in China falls well below that of other large developing countries, such as Brazil, at 12 percent, or Russia, at 7 percent (see sidebar, “China’s fast-evolving consumer finance market”). What’s more, the privatization of China’s housing stock created a powerful new imperative to save: only the most affluent urban families can obtain mortgages, which thus account for just 23 percent of the value of new homes in China, compared with 65 percent in the United States.

Similarly, concerns about financing the cost of a university education drive much of China’s saving: an April 2009 survey of urban Chinese households commissioned by MGI found that this was the number-one reason for it, eclipsing concerns about medical expenses and retirement. In China, local governments provide for primary and secondary education. But surveys suggest that nearly nine in ten Chinese households hope to send their children to colleges, where costs are high relative to incomes—on average, the cost of a university education is nearly half the disposable income of a typical Chinese family. China has two national student loan programs, but only 10 percent of its college students now participate in them.

MGI estimates that, in the aggregate, measures to facilitate consumer spending—through better and more easily available products and expanded access to consumer credit and to financing for a university education—could raise consumption’s 2025 share of GDP by 2.8 to 4.7 percentage points.

Restructuring an investment-centric economy
Over time, a stronger social safety net and improved access to better goods and services will encourage China’s households to save less and spend more. But the country can’t hope to increase its consumption rate meaningfully unless it reverses a major current trend: households have a small and shrinking share of the national income. Any significant rise in household incomes will in turn require far-reaching policy changes that would transform some of the economy’s most basic structures. The fundamental causes of depressed consumption rates are systemic—hardwired into a development model that values investment over household income—rather than unique consumer preferences rooted in culture.

China’s current growth model tilts overwhelmingly in favor of large industrial companies, which typically are state owned or led, benefit from preferential financing from state-controlled banks, and enjoy considerable monopoly power. These features collectively place consumers at a disadvantage and limit employment growth. In any economy, large companies in heavy industry tend to be capital intensive, requiring fewer workers per unit of output than smaller firms in light industries or the service sector. In China, state ownership of heavy industry magnifies this tendency. Such companies, which can count on ready access to capital from China’s big banks and don’t have to pay dividends on state-owned shares, have ample funds to plow back into capital investment. Large, state-led manufacturers tend to have monopoly power in their industries, making it easier to resist pressure from workers for higher wages.

The result is an economy dominated by giant, capital-intensive manufacturers with strong incentives to pile profits back into ever more plants and equipment rather than disburse them to households as dividends or wages. Labor-intensive producers—small and medium-sized enterprises—and the services sector get short shrift. Over the past two decades, the corporate share of China’s national income has risen to 22 percent, up from 14 percent, even as the share of households has fallen to 56 percent, down from 72 percent. Media images of the country’s factories teaming with workers belie the reality: the economy generates too few jobs given its size and rapid expansion. In recent years, employment growth has inched forward at a rate of 1 percent per year even as GDP advanced by double digits.

Ultimately, China can’t hope to unleash the power of its consumers unless the economy creates more jobs and pays higher wages, so regulatory policies must change. Banks should be encouraged to support the services sector as well as small and medium-sized enterprises. Dividend policies for state-owned enterprises should be changed and the development of equity markets encouraged. By 2025, a comprehensive effort to restructure the economy along these lines could add 3.5 to 6.0 percentage points to consumption’s share of GDP.

A fundamental shift
China has already embarked on measures that will shift the focus of its economy away from heavy industry and exports and toward services and consumer products. But two wide gaps remain: between what’s been proposed and achieved and between what’s been achieved and the country’s long-term potential. The government’s stimulus package, by offsetting collapsed overseas demand for Chinese goods with a huge jolt of new domestic public and business investment, has helped the country shake off the global recession’s immediate impact. But the stimulus package does little to tilt the balance in favor of private consumption. In the short term, it will do just the reverse: 89 percent of it is devoted to infrastructure investment, only 8 percent to measures supporting consumption.

A genuine shift away from the old paradigm will require difficult economic and political choices and is sure to meet with opposition. Yet such a shift is undoubtedly in the long-term interest of the nation as a whole. A more consumer-centric economy would allocate capital and resources more efficiently, generate more jobs, spread the benefits of growth more equitably—and grow more rapidly—than China will if it remains on its present course. The narrowing of the trade surplus and the Chinese consumer’s larger contribution to global growth would make foreign ties more harmonious. In years past, China has demonstrated a remarkable ability to make major economic changes rapidly in pursuit of broad national objectives. It can do so again by shifting to a new economic paradigm that unleashes the spending power of its consumers.

Janamitra Devan is an alumnus of the McKinsey Global Institute; Micah Rowland is a consultant in McKinsey’s Seattle office, and Jonathan Woetzel is a director in the Shanghai office.

The authors wish to acknowledge the contributions of Adam Eichner, Wenkan Liao, and Stefano Negri to the research underlying this article.

Notes
1 In March 2007, Premier Wen Jiabao used the occasion of his annual nationally televised press conference after the National People’s Congress to issue a rare public warning that China’s economy had become “unbalanced, uncoordinated, unstable, and unsustainable.” See Joseph Kahn, “Despite Buildup, China Insists Its Goals Are Domestic,” New York Times, March 17, 2007.

54) Myths about China

Everything You Know About China Is Wrong
By Rana Foroohar
NEWSWEEK, Oct 26, 2009

The conventional wisdom is that China is steaming through the global financial crisis by building on the momentum generated by its 30-year boom. Indeed, ever since it sailed through the last big global crisis—the Asian contagion 10 years ago—Beijing has been feted for uniquely steady helmsmanship in financial storms. So perhaps it's natural for forecasters to assume that the Chinese supertanker of state is not turning sharply now, particularly since it continues to grow rapidly even as other economies sink in the recession. Yet this crisis is different—bigger and more damaging than any seen in generations—and it is exposing limits and forcing change in just about every key piece of the China model: the supremacy of the one-party state, the smart economic management, the export-driven growth, the emerging consumer class, the burgeoning private sector, the headlong focus on growth at any environmental cost, and the drive to build world-class companies. What follows is a look at why these common assumptions about China are increasingly inaccurate or just plain wrong.

Myth No. 1: THE COMMUNIST PARTY IS A MONOLITH.
No, the financial crisis is splitting the party, pitting the rural populists against the urban growth-firsters. The populists include the current top two, President Hu Jintao and Premier Wen Jiabao, who favor slower growth, distributed more evenly to poorer rural Western regions, governed with a more careful eye to protecting the environment and less devotion to the free market. Opposed to them are the elite factions based in urban coastal cities, led by Shanghai, who want high-speed growth, more freedom for the free market, and greater support for entrepreneurs and the private sector. While it's too early to tell which faction will win out, it's clear that the new leadership will take China in new and possibly unexpected directions. "Perhaps the biggest myth about China is that it is only developing economically," says Cheng Li, a China expert at the Brookings Institution in Washington. "In fact, it's also evolving politically."

Myth No. 2: THE COMMUNISTS ARE BRILLIANT ECONOMIC MANAGERS.
On the day in September 2008 when Lehman Brothers fell, China began planning the swift rollout of a $600 billion stimulus that would prove to be the largest (as a share of GDP), swiftest, and, many say, most effective in the world. The results—China continues to grow at a world-beating pace, now 8 percent—have confirmed the reputation of the party elders as macro maestros. While most economists agree that Beijing has done a strong job of solving the short-term problem, which was how to keep growth high enough to offset massive unemployment and subsequent political unrest, there is growing unease about how the massive stimulus could distort the economy in the long term. China has become an economy driven almost entirely by state investment, which in the first half of 2009 accounted for 88 percent of GDP growth—a share for which it is hard to find any parallel, in any country, at any time.
The dangers of this lopsided boom are real. The pro-market faction worries that the liberalization of financial markets and the privatization of strategic sectors (which include most of the richest industries such as banking, telecoms, and construction) are being forgotten in favor of "bridge to nowhere"–style projects. Even government officials now admit that 60 percent or more of the stimulus money has ended up in stock and real-estate markets, fueling worries about dangerous new asset bubbles. In some coastal cities, property sales are three times what they were last year; the Shanghai stock market is up over 60 percent this year. "It's just a stopgap measure—all the stimulus has been concentrated in building new infrastructure and reheating the property sector," says Chinese independent economist Andy Xie.
This could spell trouble for Hu and Wen. The Chinese government debt, once negligible, is now officially about 30 percent of GDP, but some Western economists put the real figure as high as 70 percent. While these figures are still low compared with Western nations (the U.S. debt-to-GDP ratio will reach about 100 percent next year), they have Chinese politicians fretting. Last month Wen told a group of VIPs at the World Economic Forum in Dalian that China's rebound was "unstable, unbalanced, and unconsolidated." A week earlier Chi Fulun, a member of the Chinese People's Political Consultative Conference was blunter: "Chinese leaders," he said in an interview, "should rethink the country's reform package."
China bulls would argue that China, where 40 percent of villages still have no paved roads to the nearest market, has a huge demand for more paving projects. Yet bears would ask how much China gains from connecting poor villagers (China's per capita GDP is still only $2,000, and much less in rural areas) to the market. "Take a drive on one of those new rural highways; you won't see many cars," says Ming Huang, a finance professor at Beijing's Cheung Kong business school and Cornell University. "It's going to take a long time for this sort of investment to result in any kind of consumption boost." Meanwhile, the stimulus is like steroids for the dominant state sector, which, according to Hudson Institute fellow John Lee, has received some 95 percent of the stimulus capital so far. If it falters, Hu and Wen will be held to account, not held up as brilliant managers.

Myth No. 3: CAPITALISM IS FLOURISHING.
 That was partly true until this year. The number of private enterprises in China doubled from 20 million in 1990 to 40 million in 2008. Yet, according to Lee, that number will likely be down to about 38 million by the end of this year, as many private manufacturers go out of business. State enterprises enjoyed huge advantages, even before Beijing's stimulus started shifting more funds their way. State companies have easy access to 3 percent loans from state-owned banks, while private companies pay double-digit rates and are often forced to tap underground markets for funding. Since 1992, growth in private-sector fixed asset investment has been rising at about 10 percent per year, compared with state-sector growth of between 20 and 50 percent. Since the 1990s, the average size of a successful private business in China has flatlined at about 30 employees, due mainly to their difficulties raising capital. It's no surprise that recent market surveys show state companies are bullish on the future, while private-sector businesspeople are decidedly less so.
The last several years of boom growth have given the state little reason to ease its grip on the most lucrative industries, and the crisis may not be enough to force its hand. "Unfortunately, the low hanging fruit has been plucked," says Huang. "We've now hit a point where if you want to do more reform, you are going to have to really hurt some vested interests in the key parts of the economy—finance, telecoms, energy, government bodies, etc." The Chinese state owns more than two thirds of all fixed assets like telecommunications lines, power plants, and real estate in the country. State-controlled companies represent some 70 percent of the major stock markets. And while the private sector still controls a little more than half the total economy, most China watchers believe the stimulus package will turn the tables. "I have no doubt that after this crisis, the state will control a larger share of the overall economy," says Wang Shuo, managing editor of China's Caijing economic journal. "That's bad news for domestic demand, because it means that individuals will control a smaller share of the economy. Households are already supporting state-owned enterprises with their savings, which are given to these mostly inefficient businesses via state-owned banks at very low interest rates."
The crisis is exposing the hidden hand of the state. Back in 2007, the government listed three of its largest four banks on the Hong Kong Stock Exchange in what was described at the time as an effort to make them more commercial, less political. Yet as soon as the crisis hit, Beijing issued instructions to bank heads on how and when to start lending. That prevented the kind of credit-market heart attack that hit the West, but many analysts fear it will lead to a spike in nonperforming loans next year. Now Beijing is meddling in the market in all manner of ways—arresting executives of an Australian mining company after it jilted a Chinese merger partner, supporting state-owned firms that want to walk away from Western derivatives contracts, allowing state takeovers of more efficient private firms. China threw open its doors to capitalism under Deng Xiaoping in the early 1980s, but now "the open door has lost its momentum," says Wang.

Myth No. 4: CHINA IS AN EXPORT-DRIVEN ECONOMY.
 If that really were true, why is it that exports are down 20 percent this year, but the economy is still up by 8 percent? "While exports are important to China, in the same way that they are important to Japan or Germany, it's not the only thing going on here," says Fang Xinghai, director of the Shanghai Financial Services Office.
Take a close look at Chinese exports as a growth engine, and they begin to fall apart. While gross exports make up a bit less than 40 percent of the economy, that figure is misleading, says CLSA strategist Andy Rothman, because it overestimates the Chinese take on goods stamped made in china. Most of those goods are merely assembled in China from parts made in South Korea, Taiwan, and other richer countries. Consider a $299 iPod that sells wholesale from the Chinese assembly plant for $150. Only about 5 percent, or $7.50, of that wholesale price comes from Chinese parts and labor. That $7.50 is the net export value, and the real contribution to China's economy. Net exports account for just over 7 percent of China's GDP. That explains why China can still grow when its key Western export markets are in a deep recession.
China depends, as we've seen above, on state spending. The contribution of a growing consumer is real but widely overstated, as Morgan Stanley Asia chair Stephen Roach and many others like to point out. Chinese consumption makes up only 37 percent of the economy, the smallest share of any major nation. And to the extent that Chinese consumers are still more optimistic, and less heavily in debt than Western counterparts, that too has much to do with heavy state subsidies. Lately the middle class has been snapping up flats in Beijing and Shanghai, as well as furnishings and white goods, thanks to the massive, government-mandated increases in bank lending over the past year. Credit was up 32 percent in September, after similar rises over the past several months. Rothman's conclusion, which is increasingly supported by a number of other Chinese and Western economists, is that China can continue to grow at a 6 to 9 percent annual pace based on state and consumer spending "without any contribution from net exports." So much for China's export dependence.

Myth No. 5: CHINESE COMPANIES WILL RULE THE WORLD.
True, many big Chinese state companies are scouring the world, hunting for distressed properties, creating the illusion that the crisis is advancing China Inc.'s global ambition. But the buyers are mainly government-run oil and mining behemoths, seeking out cheap resources in other developing nations, and they have little potential to become global brands. "Quite simply, there is little real innovation or branding ability in China," says Beijing University professor Michael Pettis. The obstacles include weak legal protection for intellectual property and contracts, and an educational system focused on rote learning and metrics rather than creativity and innovation. In typical Chinese fashion, the financial crisis prompted edicts from Beijing that firms should go forth and innovate—subsidies are now being doled out for new patents filed. Yet as any economist or investor will tell you, patents rarely translate directly into real companies with new and unique technologies, and top-down efforts at creating startup companies can't compete with the sort of spontaneous germination of ideas that happens in places like Silicon Valley or Cambridge.
Meanwhile, China's Wild West atmosphere doesn't encourage the long-term thinking necessary for building global businesses and world-class research and development. "Blurry rules and corruption fosters short-term thinking here," says Huang. "Entrepreneurs don't feel safe—there are many examples of the government taking over private businesses or changing the legal landscape—so they take their profits as quickly as they can." Meanwhile, richer state companies (think Sinopec or Chinalco) use their giant war chests to make acquisitions to feed domestic demand, rather than investing in research or branding. Why spend money to become more globally competitive when you have a monopoly in the world's most populous country? Result: even China's 800-pound gorillas won't replace Western blue chips any time soon.

Myth No. 6: CHINA PUTS MONEY BEFORE THE ENVIRONMENT.
 China's growing tendency to ignore market forces is working in one surprising field: clean technology. For years China has resisted pressure to help control carbon emissions, insisting that it needs to develop first, and that its per capita emissions are far below those of the West. Now, as China has come to realize that its people could be among the hardest-hit victims of global warming, Beijing has mobilized its resources, as perhaps only China can. With the help of generous state subsidies, Chinese companies have, for example, taken the lead in solar cell production, and are powering ahead in many other areas. This fall Chinese leaders announced new targets for reducing carbon emissions, which, if met, would put the nation in the lead on combating climate change by 2020.
China has made green technology a national priority, launching major research initiatives on solar-powered batteries and wind technology. Its green stimulus package amounts to $218 billion, the largest in the world, resulting in the founding of dozens of alternative energy companies within the last year. China already produces more power from renewable energy than any other nation in the world. Meanwhile, the recession and uncertainty about the direction of oil prices has slowed the momentum of green investing in the West. This doesn't mean that China can clean up its own act soon: to meet energy demand, it continues to build old-fashioned coal-fired plants at the rate of one a week. But it may become the leading manufacturer of clean energy technology for the rest of the world.
None of these changes should come as a real surprise, on closer look. In past crises, China has always shown a bold willingness to adapt. Its original opening to global markets emerged from the turmoil of the Cultural Revolution. Its last big opening emerged from the Asian crisis, when it joined the World Trade Organization in 2001. Now the changes seem to be moving in the opposite direction, back toward a more insular economy, run by the state, less welcome to private and foreign business, and with one big surprise. If the ruling faction fails, there is an alternative waiting in the wings.

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