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China Has First World Problems
People in China have first world problems:
Peter Jolicoeur 周力克 @pajolicoe – 5:35 PM · Jul 20, 2021
My subway trip from home to Hongqiao rail station tomorrow (28 km) will take longer at 70 minutes than my high speed rail trip from Shanghai Hongqiao to Nanjing South Station at 59 minutes (295 km, averaging 300 km/h).
Who does not such hate long train rides? Well, that first world problem might be solved pretty soon:
World's first 600 km/h high-speed maglev train rolls off assembly line
China's new high-speed maglev train rolled off the production line on Tuesday. It has a designed top speed of 600 km per hour — currently the fastest ground vehicle available globally.
The new maglev transportation system made its public debut in the coastal city of Qingdao, east China's Shandong Province.
But Peter is going to Nanjing which recently had a first world problem with Covid-19. One traveler had brought it in. Ten close contacts were identified and 140 possible contacts beyond them. All were notified, isolated and tested and Nanjing is again free of Covid. Meanwhile over 90% of all adults in Beijing have been vaccinated.
What amazes me is that some in the U.S. still think they can compete with and beat such an efficient system.
@ Posted by: GalustGulbenkyan | Jul 21 2021 7:19 utc | 106
From the Global Times version of linked article in this post (which is more complete, from which the Xinhua one clearly derives from):
In global maglev train-related patents, China is first in terms of the accumulated number of patent applications by 2021, accounting for 43.52 percent, significantly higher than the 20.57 percent of Japan which took the second place, according to a report sent to the Global Times on Tuesday by PatSnap, an intelligent property data service provider.
Japan’s patents focus on the research and development of superconducting materials and basic science, while China’s patents focused more on practice, including permanent magnets, rail beams, traffic engineering and suspension frame, per the PatSnap report.
China has double the patents from the second place.
The fact that Japan’s patents focus more on what you would call “innovative” part of the research, it can be easily explained by the fact that China, having the more and most urgent social problems and obstacles to overcome, and having a more investment-friendly system for infrastructure (socialism), is more worried about putting the technology to practice as soon as possible, while Japan, stagnated for four decades now and without any prospect of future huge infrastructure investments, invests on the “theoretical” part of the research, bidding its time, waiting for the next capitalist boom to make them profitable somewhere.
The fact that the Chinese scientists are focusing on the practical part of train technology does not mean they’re less innovative. On the contrary, that shows they have awareness of the needs of their society. That’s critical thinking.
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@ Posted by: HelenB | Jul 21 2021 6:39 utc | 103
This has nothing to do with private vs public sector. Again, from the Global Times more complete article:
The network is designed to support the “National 123” transportation circle, which stands for one-hour commute within the city, two-hour trip between city clusters and three-hour travel to major cities nationwide, read the plan.
Lu Huapu, director of the Transportation Research Institute of Tsinghua University, told the Global Times that the development of the high-speed transportation system helps China realize the “National 123 transportation circle,” which was proposed in the national guideline.
So, this is not the case where the private sector is innovating in spite of the rule of the CPC. On the contrary: this is a typical case of central planned economy, of socialist planning.
Also, the 600km/h maglev makes a ton of sense. In fact, it makes mathematical sense:
The maglev train can fill the gap between the current high-speed train that runs at around 350 km/h and airplanes with a speed of 800 km/h, which will support China’s comprehensive transportation network planned by 2035, analysts noted.
The maglev train is currently the fastest available ground vehicle. It is the fastest method of surface transportation within the range of 1,500 kilometers, according to a report by the CRRC sent to the Global Times on Tuesday. What is currently a 10-hour high-speed train trip from South China’s Shenzhen to Shanghai will be shortened to only 2.5 hours once a maglev train is built.
So, as you can see, the new maglev will close the enormous gap China has between ground and air travel. It will make traveling long distances more democratic because flying by plane is – and forever will be – a middle class privilege (you can only fit so much people in a plane, and fly so many planes in so many airports in the world). It is also very eco-friendly, because air transport is, by nature, very wasteful in fuel (i.e. it is very energetically inefficient).
So, no. This is not the case of a corrupt class of bureaucratic cadre building a “white elephant” either. This is, again, socialist planning.
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@ all
The debate about immigration is a joke. China has a much more hostile policy against immigration than the USA (perhaps the most immigration friendly nation in the world). You’re comparing two completely opposite cases, countries with polar opposite policies on immigration.
Just to give you an example: there’s no green card in China; only exceptional individuals (very notable individuals) can receive this “green card”. There’s no perspective for any immigrant to China to ever become Chinese and therefore enjoying the benefits of its social system.
Besides, there’s a misunderstanding here about how an immigrant chooses his/her country of destination:
1) if they’re a war refugee, they’re going to the nearest safe haven offered to them;
2) if they’re an economic refugee, they’re still limited by geography to where they can go, but less so. Obviously, they’ll want a First World country. Even then, they will still want to go to a country with a history of accepting immigrants (because there’s already a well-established scheme of infiltrating immigrants to said country) – after all, they will have to pay to get snatched into the country, legally or illegally;
3) even then, the economic immigrant will tend to choose, even unconsciously, a country which has a culture at least in the same ballpark as his/hers. This is human nature. Since the USA’s culture is the world’s culture, and since English is the lingua franca, economic immigrants will tend to choose a Western First World country.
You can easily visualize all that I’m saying by substituting “China” by “Japan”. Japan receives almost zero immigrants relative to its population first of all because it is extremely hostile to it (it is one of the few countries that doesn’t apply jus soli: if you’re born on Japanese soil but is not a child of Japanese parents, you’re still an immigrant), but a mix of geographic and cultural factors naturally make it a repellent to immigrants.
There are other specifically historical factors that makes China naturally anti-immigration and the USA naturally pro-immigration:
1) the Monroe Doctrine, which consolidated the neocolonialism formula of the USA to Latin America, has transformed Latin America into a Third World nest of immigrants to the USA. That is, the USA transformed Latin America into its nursery of cheap, young human labor;
2) the war-torn regions near China (i.e. Middle East and Central Asia) are naturally isolated to China by an immense desert area (including here the Tibetan Plateau, Gobi Desert etc. etc.) and the Himalayan mountain chain. This geographic isolation also explains why there were no wars between the Indian and Chinese empires during Antiquity and the Middle Ages;
3) the USA’s meteoric rise in soft power during the post-war miracle (1945-1975) quickly made its culture massified around the world, and English the lingua franca. Dialectically, it also made all the cultures and languages (including here the fact that they don’t use the Latin Alphabet) that are totally different from it exotic and weirder. That helped to isolate East Asia from the rest of the world culturally (Galapagos Syndrome).
Posted by: vk | Jul 21 2021 14:58 utc | 134
@ William Gruff | Jul 21 2021 14:17 utc | 125
“The power centers in the West are not in political entities but in business/economic/finance entities.”
To reinforce this point, here’s a rather long excerpt describing the shadow banking system in the West’s global finance system. In my understanding China is working to keep such unaccountable power from developing in their public finance system. The difference between the two types of systems has real-world consequences for ordinary people.
In the privatized system the public is being looted by oligarchs and there is little policy planning that benefits ordinary people. This is a function of the logic of the system running its course unimpeded as there is no comparable political power to push back on behalf of ordinary people. Ideological training and a lack of taught rigor in understanding and criticizing what was and is casts a dark shadow, creating ignorance and concealing origins and functioning of private finance and shadow banking system.
The vast “shadow banking” system… [c]omprising pension funds, hedge funds, insurance companies and other investment vehicles, …now manages a $200 trillion stock of assets, dwarfing that $2 trillion cryptocurrency valuation, and also vastly exceeding the annual income (or GDP) of the world as a whole, estimated at $86 trillion. Being in the shadows, then, no longer means being on the margins.
Central bankers have permitted and sometimes encouraged this sector to expand beyond the regulatory frameworks of governments. But the real roots are deeper, lying in the great structural shift of pension privatisation. Between 1981 and 2014, 30 countries fully or partially privatised their public mandatory pensions. Coupled with cross-border capital mobility, the move to private retirement savings steadily generated vast cash pools for institutional investors.
Today one asset management firm, BlackRock, manages in excess of $8 trillion of the world’s savings. Such companies have outgrown the capacity of “main street” banks to provide services. No traditional commercial bank could absorb these sums; few governments are willing to guarantee individual accounts of more than $100,000. The new form of “banking” answered the need to accommodate the enormous sums of globalised capital.
Like pawnbrokers, who practised an earlier form of unregulated credit, shadow banks exchange the savings they hold for collateral. But instead of watches and wedding rings, they lend out on the strength of government bonds and other securities.
Replete with cash, they can provide “liquidity” on a vast scale to businesses or investors who need it. In return, the borrowers offer up a security—and write an IOU offering to repurchase it later, at a higher price. This markup is, in effect, the interest on the loan. These repurchase deals are struck in the “repo” markets which form the heart of the shadow banking system.
Note that this whole system avoids reliance on the social construct of credit, upheld by trust and enforced by law, which traditional banks had to work within. Instead, the system is one of deregulated exchange in which cash is simply one more commodity—no more regulated than any other.
Securities are swapped for cash over alarmingly short periods: through economic history, such churning trades have often been a sign of speculative frenzy overpowering sober judgment. Moreover, operators in the system have the legal right to re-use a security to leverage additional borrowing. This is akin to raising money by re-mortgaging the same property several times over. Like the banks, they are effectively creating money (or shadow money, if you like), but they are doing so without any obligation to comply with the old rules and regulations that commercial banks have to follow.
So we have power without responsibility, but—worse—we have parasitical power. Because, as Daniela Gabor of the University of the West of England has explained, even this “shadow money relies on sovereign structures of authority and credit worthiness.” Why? Because private financiers rely heavily on government bonds as the safest collateral for their repo trades. It is estimated that two out of three euros borrowed through shadow banks are underpinned by the collateral of sovereign bonds issued within the Eurozone. Any decline in the value of government bonds as a consequence of shadow banking activity will influence the government’s cost of borrowing, and—ultimately—fiscal decisions.
Worst of all, the shadow money that comes out of these institutions is now so systemically important to the economy that when it threatens to dry up, as it does from time to time, it cannot safely be ignored. Which brings us back to quantitative easing—the remedy that central bankers reach for in the face of this recurrent threat.
Escaping shadowland
The reason why emergency injections of money are increasingly needed is that the shadow banking system is structurally prone to volatility and debt crises. The borrower’s promise to repurchase an asset at a higher price is relatively easy to uphold when the value of that asset remains stable. But the value of assets can rise or fall suddenly, which in this system can set in train self-amplifying feedback loops—with catastrophic consequences.
Back in August 2007, the great financial crisis was triggered when a French bank, BNP Paribas, issued a press release explaining that “the complete evaporation of liquidity in certain market segments of the US securitisation market has made it impossible to value certain assets fairly—regardless of their quality or credit rating.” (Emphasis mine.) This announcement caused inter-bank lending worldwide to freeze, and required immediate central bank intervention.
The sudden loss of confidence in the value of assets severely destabilised not only shadow banking—where the exchange of cash for assets relies heavily on the fair valuation of assets—but also the supposedly “main street” banks that had become heavily embroiled in it.
The images of savers queuing to withdraw their deposits from Northern Rock in 2007 was merely a symptom of a crisis that had already taken hold. Savers had got wind that the institution was in trouble because of its exposure to exotic money market activities that went way beyond traditional commercial banking. The front door looked like a bank, but the back office was deep in the shadows.
Instead of the familiar financial panic triggered by a bank run—savers withdrawing their deposits at once—the underlying problem was something akin to a “run” on the repo market. Shadow bankers were surprised to find the mortgage-backed securities they accepted as collateral had plummeted in value. As the value of sub-prime mortgages fell, contagion spread to credit securities unrelated to sub-prime markets. The entire model threatened to collapse, spelling ruin for the global economy. Central banks were forced to intervene, reaching for QE as their preferred weapon.
But in doing so, central bankers, supposed “guardians of the nation’s finances,” accepted as given this sprawling, chaotic private system. After the crisis, capital adequacy rules for commercial banks were tightened in many countries, but little has been done since then to stabilise and regulate the shadow banking system.
As a result, another moment of grave crisis arose last March, when the tiny, invisible coronavirus triggered another potentially catastrophic shadow bank run. As one of the institutions charged with holding the ring, the New York Federal Reserve, nervously explained: “the global economy experienced an extraordinary shock… and asset prices adjusted sharply.” Once again, central bankers were forced to ride to the rescue.
Our collective vulnerability to this monster has been plain for more than a dozen years, and yet we’ve failed to tame the beast. Indeed, it has continued to grow, rising from an estimated 42 per cent of the global financial system in 2008 to nearly half in 2019.
The global Financial Stability Board that monitors (but does not regulate) the system dislikes the moniker “shadow banking” and hopes to re-brand the system as “non-bank financial intermediation,” which scarcely sounds any less, well, shadowy.
Besides, it is not what we call the system, but what we have allowed it to do that has produced today’s volatile and obscenely unequal globalised economy. Whenever the vast shadow banks wobble, there is the threat of a disastrous contraction of the credit for the real economy, which could bring everything crashing down. As long as the system is allowed to stand, there is no alternative to taxpayer-backed central banks rescuing private markets…
https://www.prospectmagazine.co.uk/magazine/quantitative-easing-qe-magicked-up-money-finance-economy-central-banks
Posted by: suzan | Jul 21 2021 16:28 utc | 146
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