Country Driving in China with Peter Hessler – Part 1/2

May 28, 2012

Most books that I’ve read of China cover its history up to Mao’s death and after 1949, it is difficult to trust almost anything one reads in the West or in China, since most of this work is either biased and/or propagandized in the West or propaganda in China since the mass media is owned by the State.

However, I’m glad that I read Peter Hessler’s memoir of China, Country Driving. Rarely does Hessler intrude with his own Western bias (if there is one), which appears to make a slight appearance near the end. I suspect that his editor at Harper Collins suggested that he add it to the story, and he complied, because the few opinions he expresses near the conclusion of his memoir do not match the experiences that he shares with his readers in the rest of the book. In fact, while reading the book, I grew to trust Hessler’s perspective of today’s China.

It is obvious that Hessler honestly loves/respects China and its people and this infatuation runs throughout the memoir. He also carefully or unintentionally avoids mention of what he thinks about his own culture, which made me wonder if there is a lot he doesn’t respect about his homeland.

Maybe the reason why he continues to return to China is because of this infatuation with a culture that values family more than most Americans do.  In fact, in the memoir’s acknowledgements, I discovered that Hessler was married to Leslie T. Chang, which even my wife—a Chinese immigrant to the US, whose first book, a memoir of growing up during Mao’s Cultural Revolution, was a New York Times Notable Book of the Year—didn’t know.


Leslie Chang discussing her novel “Factory Girls”

Hessler’s wife is the author of Factory Girls, which is also about today’s China. Chang is Chinese-American and a graduate of Harvard. She is also an accomplished journalist and was raised outside New York City by immigrant parents, who forced her to attend Saturday-morning Chinese school, which is so Chinese.

For example, our daughter speaks Mandarin fluently and she was born in Chicago and is a product of the US public schools but with an immigrant mother and an American step father (me), which may explain (in part) why she is completing her second year at Stanford currently majoring in biology instead of trying out for American Idol while waiting tables in a Hollywood coffee shop.

Both Peter and Leslie have published work that went on to be honored as New York Times Notable Books.

Anyway, back to Country Driving. Much of Hessler’s memoir was connected to projects he wrote at The New Yorker or National Geographic. The memoir is divided into three sections:  Book I, The Wall; Book II, The Village, and Book III, The Factory.

Throughout the book there is a common theme: the independence and individuality of most Chinese and the failure of Chinese Communist Party (CCP) propaganda, which is there but often ignored by most of the people unless they can use the CCP to their own advantage.  That doesn’t mean the propaganda has no influence but the people seldom let it get in their way as they work to improve the quality of their lives.

In fact, it becomes clear in Hessler’s memoir that there are three Chinas: there is rural China, urban China and the Chinese Communist Party and many shades of gray among them.

Continued on May 29, 2012 in Country Driving in China with Peter Hessler – Part 2

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Lloyd Lofthouse is the award-winning author of The Concubine Saga. When you love a Chinese woman, you marry her family and culture too. This is the love story Sir Robert Hart did not want the world to discover.

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Comparing Economy Management – China versus the United States

April 28, 2012

Over at CNN World, Stephen S. Roach wrote a post about America’s renminbi fixation.  Many of the comments that responded to the post were obviously from Internet Trolls that lack the skills for an intellectually reasoned response. Instead, the trolls resort to logical fallacies to divert attention away from Roach’s message (I left a comment and a few replies too).

While many in the West have predicted for about three decades that China is going to have a hard landing after an economic bubble of some sort bursts, it hasn’t happened yet.

I Reblogged Roach’s piece and you may reach it by scrolling down or clicking on this iLook China link.

To research this post I Googled “financial crisis in China since 1980” and found no results that answered what I was looking for.

However, I found this at Princeton.edu, which said, “It is now just over twenty years after China initiated its economic reform in 1978. Since then the average rate of growth of GDP has been a phenomenal 9.5 percent per year. This essay reviews the reform process, discusses the impact of the current Asian financial crisis and attempts to assess the prospects of China’s economy in the future…

“In summary China’s reform process has been an experimental and gradual process. It was to be continued before the Asian financial crisis (1997). State-enterprise reform, financial reform and the opening of the Chinese economy have all been affected by the crisis, but there is no question that as soon as conditions allow the reform process will continue, incorporating the lessons learned from the crisis…

“In conclusion, economic reforms in China are likely to continue in the manner and directions as described above. Because of the strong fundamentals of China’s economy as demonstrated by its good performance during the financial crisis substantial growth will continue perhaps for another decade after the current crisis.”

In addition, in an April 2008 economic study from Harvard, we discover, This Time is Different: A Panoramic View of Eight Centuries of Financial Crises.

The Harvard study said, “As the first paper employing this data, our aim is to illustrate some of the broad insights that can be gleaned from such a sweeping historical database.  We find that serial default is a nearly universal phenomenon as countries struggle to transform themselves from emerging markets to advanced economies.  Major default episodes are typically spaced some years (or decades) apart, creating an illusion that “this time is different” among policymakers and investors.  A recent example of the “this time is different” syndrome is the false belief that domestic debt is a novel feature of the modern financial landscape.  We also confirm that crises frequently emanate from the financial centers with transmission through interest rate shocks and commodity price collapses…

“The ability of governments and investors to delude themselves, giving rise to periodic bouts of euphoria that usually end in tears, seems to have remained a constant.”

Since not much time has passed since China’s economic reforms in 1978, we will look at the United States for examples.

The current total US deficit (national debt) as of today is more than $15.5 trillion and the average credit card debt per household based on 609.8 million credit cards held by US consumers is almost $16,000.

However, “Chinese households save a large share of their disposable incomes and their average saving rate has increased over the last decade and a half. This pattern is particularly pronounced for urban households, which account for about two-thirds of national income. After remaining relatively flat during the early 1990s, the average saving rate of urban households relative to their disposable incomes rose from 18% in 1995 to nearly 29% in 2009.”

In addition, if we study “Panics, Depressions and Economic Crisis Prior to 1930 in the United States”, we discover that “Those most disastrous have usually followed general injudicious speculation in lands or inflated securities. The crisis of 1816-1819 in the United States, it is claimed was due to the speculation and disorder following the War of 1812. The next occurred in 1825. A very memorable panic was that of 1837.” Source: The History Box.com

Akorra.com lists the Top 10 Worst Financial Crisis in U.S. History starting with the Crash of 1929/Great Depression; our current and continuing Mortgage Crisis of 2007; the Panic of 1893; The Banker’s Panic of 1907; the Panic of 1873; the Panic of 1819; the 2001-2002 Recession (known as the dotcom bubble that wiped out $5 trillion in market value of technology companies);  the Kennedy Slide in 1962 which caused a 22.5% drop in the S&P 500; the Panic of 1837, and The Oil Crises of 1973.

In addition, there have also been recessions in 1937, which followed the Great Depression (1929 – 1933); 1945, 1949, 1953, 1958, 1960-61, 1969-70, and 1973-75.

As for China, the predictions of an economic crises/crash keep coming as if they were being manufactured on an assembly line — but one hasn’t arrived yet and it has been 34 years since China’s 1978 economic reforms, while for the same period in the US there have been several economic recessions running from January – July 1980; July 1981 – November 1982; July 1990 – 1991; March -November 2001, and December 2007 – June 2009.

When an economic crises does appear in China (the odds favor that it will), it may be part of a global universal phenomenon as the Princeton and Harvard studies reveal, so it is a good bet that sooner or later China’s economic critics will be able to step up on their soap boxes and crow, “I told you so (a hundred times over the last several decades that it would happen one day)!”

I suggest watching the two videos with this post to learn about manufactured financial panics in the United States, which leads to a question: Is the American fixation on China’s currency manufactured too?

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Lloyd Lofthouse is the award-winning author of The Concubine Saga. When you love a Chinese woman, you marry her family and culture too. This is the love story Sir Robert Hart did not want the world to discover.

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April 26, 2012

Stephen S. Roach writing for CNN.com says, “America’s trade deficit is multilateral: the US ran deficits with 88 nations in 2010. A multilateral imbalance – especially one that it is traceable to a saving shortfall – cannot be fixed by putting pressure on a bilateral exchange rate. Indeed, America’s major threat is from within. Blaming China merely impedes the heavy lifting that must be done at home – namely, boosting saving by cutting budget deficits and encouraging households to save income rather than rely on asset bubbles.”

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Amazing, logic and truth for a refreshing change instead of demonizing China with more political/media propaganda, which is norm during the run up to a national election in the US.
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Lloyd Lofthouse is the award-winning author of The Concubine Saga. When you love a Chinese woman, you marry her family and culture too. This is the love story Sir Robert Hart did not want the world to discover.


A Coup in China? A Jasmine Spring?

March 26, 2012

Do a Google search on “News of a coup in China” and you may end up with as many hits as I had, which was more than 110,000,000 when I was researching the topic of this post.  Amazing!

I suspect this viral Internet topic has to do with dreams of democracy sweeping the world leading to global peace and prosperity for eternity, but that ain’t going to happen anytime soon.

The last time there was this much Internet excitement over revolutions was in December 2010 when the Arab Spring swept across the Middle East and North Africa toppling governments, but at what price.

In November 2011, US News and World Report said that 3,500 had died in Syria (and the fighting isn’t over yet), 250 in Yemen, a 100 in Bahrain, 30,000 in Libya, 900 in Egypt, and 300 in Tunisia.  In addition many more were injured/wounded.

Al Jazeera reported almost 11 months after the Arab uprising that “freedom is not free, and there are now some clear financial costs emerging,” and the cost has reached a grand total of $55.84 billion. (Source: International Monetary Fund)

However, as the Arab Spring blossomed and spread, in America and the West there was a sense of euphoria that democracy was sweeping the globe and would arrive in China, which did not materialize as life went on as usual in the Middle Kingdom.

Then, as if prayers had been answered, on March 19, 2012, there were rumors of a coup in China and the Blogosphere and the media exploded with speculation.

If anything happened in China on March 19, it was probably a political protest by supporters of Bo Xilai, who was yanked from his position of power that week, and Bo Xilai is and was not a democracy advocate.

In fact, what he advocated was closer to a return to the era of Mao’s Cultural Revolution. Bo Xilai was also a populist figure and the last time China had a populist figure that was equal parts showman and strongman, his name was Mao Zedong, and he ruled China for twenty-six years and is infamously known in the West for his political purges, the failure of The Great Leap Forward and his closing act, The Cultural Revolution.

Hannah Beech of Global Spin, a blog about the world, its people and its politics, says, “Last May, I said on my blog that Bo Xilai wanted to become Mao Zedong,” Yang told me after Bo’s dismissal. “But he failed because in today’s China there is no need for a Mao.”


In the video, China analyst Jennifer Richmond dispels rumors of a recent coup attempt in Beijing and explores the intensifying political and economic reform debate happening in China ahead of its 2012 leadership transition.

Then the BBC reported, “Damaging coup rumours ricochet across China. Have you heard? There’s been a coup in China! Tanks have been spotted on the streets of Beijing and other cities! Shots were fired near the Communist Party’s leadership compound!

“OK,” the BBC says, “before you get too agitated, there is no coup. To be more exact, as far as we know there has been no attempted coup.

“To be completely correct we should say we do not know what’s going on. The fact is there is no evidence of a coup. But it is a subject that has obsessed many in China (and outside of China) this week.

“Photographs of tanks and armoured cars on city streets were flying around Twitter and elsewhere,” the BBC report continued. “On closer inspection though, some of the pictures seemed to be old ones from rehearsals for military parades, others did not even seem to be of Beijing, as they claimed, but different Chinese cities.”

Then in another report covering this rumor, Shanghaiist.com said, “In other countries, you might see reporters offhandedly refer to their unnamed contacts inside the Prime Minister’s Office, or the White House, or whatever institution they’re covering. Even when I worked in famously enigmatic Russia, I had a few ‘Kremlin sources’ I could occasionally turn to.”

“Not in China,” Shanghaiist continued. “I know many of the foreign journalists based here, and more than a few of the Chinese ones. None have ever claimed to me, or their readers, that they have a contact inside, or even close to, the decision-making Standing Committee of the Politburo of the Communist Party of China.”

Meanwhile, what about an update on the Arab Spring, the so-called democracy movement in North Africa and the Middle East that this post started with?

According to the “2012 Index of Economic Freedom”, Heritage.org said, “Corruption and Terrorism: Will They Undermine the Arab Spring?

Heritage.org says, “Any kind of political instability has important policy implications for development in general, and for sustainable economic growth in particular. The recent turmoil in the Middle East is no exception…”

The Heritage.org study by Nahid Kalbasi Anaraki, Ph.D. asked three questions:

  • Is terrorism more likely to appear under more corrupt regimes?
  • Is there a long-run relationship between a country’s level of economic freedom and terrorism?
  • What is the impact of terrorism on foreign direct investment (FDI) and gross domestic product (GDP) per capita?

Anaraki says, “The results point to a high risk that the hopes of the revolutionary movements will founder on the rocks of terrorism and corruption.”

For more on this, Professor Timur Kuran of the Cline Center for Democracy said, “A striking feature of these uprisings is the lack of an existing opposition or charismatic revolutionary leaders. These have been truly popular revolutions. While the popular character adds legitimacy to the ideals and aspirations of these uprisings, it may also prove a weakness on the path to actual democracy. Due to decades of severe oppression, the opposition forces in almost every transforming country in the region lack recognized leadership, partisan organization, and coherent political ideology. In fact, the only organized political force in this region comes from conservative Islamist groups. Meanwhile, the emergent transitional governments are being formed under the tutelage of defecting, formerly authoritarian elites and their militaries.”

In conclusion, an Arab Spring leading to democracy, a Jasmine Revolution in China, or any revolution by any other name does not guarantee an American and/or Western style democracy will emerge in time.  The only guarantee is that people in Western democracies will get excited and then soon forget they were excited as the next sensation appears, since attention spans and memories in the West are often short and opinionated.

In fact, to many in the West, the Arab Spring and rumors of a coup in China were entertainment, and the same people will soon switch to American Idol or another show such as America’s Next Top Model or maybe Survivor.

Note: Other posts and comments that focus on the 2012 transition of political power in China may be found at Breaking News – a Warning for the CCP from Premier Wen Jaibao and China’s Translation Sensation.

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Lloyd Lofthouse is the award-winning author of The Concubine Saga. When you love a Chinese woman, you marry her family and culture too. This is the love story Sir Robert Hart did not want the world to discover.

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Americans doing Business in China – Part 16/16

March 7, 2012

Note from Blog host — another example of East meets West through business and trade:  “Avon, the first direct-sales company in China, has 85,000 agents knocking on doors and yurts in every region except Tibet, racking up sales of $68 million in 1996. A year before, Mary Kay opened its first cosmetics plant outside the U.S. in Hangzhou. Demand has been so keen that the Texas-based firm has already broken ground on a new China factory, 15 times larger than the first one…

“China’s American embrace is most fervent at the cathedral to Yankee culture, the cinema. Beijing still allows distribution of a handful of imported flicks each year, but the ration is no longer a forced diet of scratchy Hollywood flops. These days Chinese eschew the patriotic reels still churned out by government filmmakers for the latest Sylvester Stallone and Tom Cruise blockbusters, which laud Western excesses…

“Mainland TV, undergoing its own revolution, offers another shock to seasoned sinologists. Thanks partly to satellite TV, Chinese soaps and historical serials now compete against programs that would have seemed unimaginable only a few years ago: episodes of Baywatch and The X-Files.” Source: The Americanizaton of China

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Part 2 – In the PBS documentary of foreign entrepreneurs in China we discover (when the US financial crises hit the world causing more than $64US trillion in global loses while those who caused the crises walked away with fortunes) China experienced a slowdown in economic growth in 2008.

One foreign entrepreneur, Ed Hung, talks of the clothing store he co-founded, NLGX Design, which opened in Beijing in 2008. He said rent was still increasing.

Ed Hung was born and raised in San Francisco. His business partner, Michel Sutyadi, was born and raised in Germany. They met in Beijing while studying Mandarin in 2005.

Ed Hung says modern Beijing is becoming a consumer culture.

Then Doug Ma, a co-founder of Go Tour-ING, talks of how the global financial crisis (which was started in America) has affected business.

In the spring of 2008, Dough Ma left his job at an investment bank to travel. He wrote a post for Jet Set Zero in July 2009, and said, “It has been quite a challenge starting up Tour-ING. For one thing, it has been a tough year for the tourism industry. Less people are traveling due to the global economy and the outbreak of swine flu has hindered a lot of travel plans.”

Brian Sloan, CEO of Robotic Blow Job, says the sex toys he manufactures and sells seem more popular in hard economic times since people spend less money going out and stay home more so they need a method of self-entertainment.

Due to legal problems in Chicago, Sloan took his business to China because, “In China, people respect what I do as a business,” he says.

Note from Blog host – If you plan to do business in China, I recommend visiting the China Law Blog first.

Return to Americans doing Business in China – Part 15 or start with Part 1

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Lloyd Lofthouse is the award-winning author of The Concubine Saga. When you love a Chinese woman, you marry her family and culture too. This is the love story Sir Robert Hart did not want the world to discover.

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Note: This post first appeared on January 24, 2011