I have a lot more reports from a lot more sectors, but all lead toward the same conclusion: China’s economy may suffer more than most others, but it also has more tools and resources in reserve than most others.
Beyond straight economics, the “China is over” hypothesis seems to miss important cultural and political realities. Its unspoken premise is that average Chinese people just barely tolerate the social bargain the government now offers””limited freedom, potentially unlimited wealth. So if the regime ever falls short on its material promises, the deal will be off and people will rebel.
This does not square with what I have seen. I have often wondered why so many people in different roles and regions in China seem vivid. The answer has to be more than contrast with my own blandness. I think it is because being in China today is like being in Western Europe in the 1950s. No one’s family story is dull or uneventful. People doing routine jobs have been through great hardships and dramatic swings of fate. Last year I interviewed a party official in Shanxi province who was laying out his regional-development plans. Every 10 or 15 minutes, he would stop and say (through an interpreter), “Do you understand? If it had not been for Deng Xiaoping, I would be behind an ox in a field right now. I would not be sitting here wearing a necktie and talking to a foreigner.” Or, “Do you understand how different this is? My mother has bound feet!” A scholar I know in Beijing once offhandedly remarked that he had developed self-confidence when learning that he could survive for four years as a teenager on a labor gang during the Cultural Revolution. People in their teens and 20s were not on the labor gangs””kids today!””but they have heard the stories.
Layoffs and stagnant wages? People have seen worse. Last summer my wife and I went through villages in Sichuan province where refugees from earthquakes prepared for the next few years of residence in temporary shelters and tents. Laid-off migrant workers are returning to many of these same villages now. This is terribly hard, but in the same villages, grandparents remember when half the local population starved to death during the famines of Mao’s disastrous “Great Leap Forward” in the 1950s.
To use his own example: Yes, you’d put out the neighbor’s fire, but not build while the flames are still showing. There is fraud and corruption throughout AIG. Put the fire out by allowing it to go into bankruptcy and restructure…not continue to dump more money into it (and those like it).