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Daily Archives: August 22, 2022

Chart: The Euro Crossed the Key 1 Dollar Parity in the Fourth Week of August 2022

Source : Trading Economics

Chart: U.S. Builder Confidence Underwater After Falling for Eighth Consecutive Month

Source : Calculated Risk

In Pictures: Food of Florilège in Tokyo, Japan

French-inspired Japanese Cuisine

No.30 of The World’s 50 Best Restaurants 2022

UK Economy Shrank Record 11% in 2020, Worst Since 1709

Britain recorded its biggest fall in output in more than 300 years in 2020 when it faced the brunt of the COVID-19 pandemic, as well as a larger decline than any other major economy, updated official figures showed on Monday.

Gross domestic product fell by 11.0% in 2020, the Office for National Statistics said. This was a bigger drop than any of the ONS’s previous estimates and the largest fall since 1709, according to historical data hosted by the Bank of England.

British statisticians regularly update GDP estimates as more data becomes available.

The ONS’s initial estimates had already suggested that in 2020 Britain suffered its biggest fall in output since the “Great Frost” of 1709. But more recently the ONS had revised down the scale of the fall to 9.3%, the largest since just after World War One.

Even before the latest revisions Britain’s economic slump was the largest in the Group of Seven, and the latest downward revision makes it greater than Spain’s, which recorded a 10.8% fall in output.

However the ONS cautioned against direct comparisons with other countries as most – with the exception of the United States – had not yet undertaken the same type of in-depth revisions as Britain had.

The downward revision in GDP reflected lower contributions from healthcare and retailers than previously thought.

“The health service faced higher costs than we initially estimated, meaning its overall contribution to the economy was lower,” ONS statistician Craig McLaren said.

The ONS had already factored in a fall in routine care provided by Britain’s National Health Service as it focused on treating COVID-19 patients and limiting the spread of the disease in hospitals.

A closer look at the increased costs faced by individual retailers also led to a downward revision of the sector’s contribution, while factory output was revised up to take account of lower raw material costs.

Britain’s economy bounced back sharply last year and recovered its pre-pandemic size in November 2021. But fast-rising inflation means the Bank of England expects the economy will slip back into recession later this year.

The ONS will publish updated growth figures for 2021 and the first half of 2022 on Sept. 30.

Source : Reuters

China Is Pushing for a Baby Boom. It’s Getting a Baby Bust.

Gu Peng and Fan Yiying wrote . . . . . . . . .

Julia Li has spent much of the past few years wrestling with a dilemma: She was married, in her late 30s, and still undecided about whether to start a family.

Li had been putting off having children for years, but now she was running out of time — and excuses. Her family and friends were urging her to have a baby on an almost daily basis. Even the government was seemingly trying to convince her, offering a slew of new incentives including extended maternity leave.

Last August, however, Li and her husband made a choice that’s becoming increasingly common in China: to remain a DINK — “double income, no kids” — couple.

In the end, Li felt that the costs of having a child outweighed any benefits, especially as recovering from childbirth at her age would be a “huge challenge.”

“I would face a high risk of accelerated aging, getting out of shape, and losing energy,” Li tells Sixth Tone. “It would significantly affect my career development and competitiveness.”

China is struggling to overcome young people’s growing reluctance to start families. Over the past year, the government has launched an unprecedented drive to push couples to have more kids, raising the birth limit and introducing a range of policies to support new parents. So far, however, the measures appear to be having almost no effect.

The country’s birth and marriage rates have plunged to record lows in recent years, threatening to trigger a demographic crisis. China already has one of the fastest-aging societies in the world, and the population may begin shrinking as early as this year. Unless something changes, experts predict that the nation will get sucked into a “fertility trap” of stagnant growth and skyrocketing social care costs that could last decades.

In a bid to boost the birth rate, the government scrapped the two-child policy — which had been in place since 2015 — for a three-child limit last July. Since then, it has introduced a number of other policies to encourage families to have more kids, including offering new financial incentives, improving access to kindergartens, and extending parental leave. It also said that couples who violated the birth limit would no longer face punishment, overturning 40 years of policy.

Some local governments have gone further. Beijing has added assisted reproductive technologies to its public medical insurance scheme, which will give couples an 11,000 yuan ($1,600) discount on in-vitro fertilization. Panzhihua, a city in southwest China’s Sichuan province, is paying families who have a second or third child 500 yuan per month for each infant until they reach the age of 3. Hangzhou, the capital of east China’s Zhejiang province, has even given families with three children a rare exemption from its strict housing rules, allowing them to buy a second property.

But the policies haven’t worked as expected. In April, China’s National Bureau of Statistics revealed that the nation’s birth rate had fallen yet again in 2021 — reaching its lowest level since 1949. Several provinces also confirmed that their birth rates had dropped to record lows.

Data for 2022 is scarce, but the early signs aren’t promising. An estimated 372,000 newborns were registered in the central Henan province during the first half of this year, down 9.5% compared with the same period last year. In Jiaozhou, a city in the eastern Shandong province, the number of birth certificates issued was down 25.5% year-over-year.

Public enthusiasm for the new policies appears to be tepid at best. On the day the government announced the three-child policy, state-run news agency Xinhua ran a poll on the social platform Weibo asking users if they were ready to have a third child. Over 90% of respondents said they “wouldn’t consider it at all.” Xinhua deleted the poll later that day.

Other surveys have produced similar results. In December 2021, 90% of respondents to an online poll of 50,000 people said they weren’t willing to have three children. When a user on the social platform Xiaohongshu asked their followers whether the new policies had made them more open to having children, the three highest upvoted comments read: “the policies are like a drop in the ocean,” “it won’t help at all,” and “it’s just empty talk without offering cash.”

The main issue is that the policies haven’t gone far enough, experts say. China is one of the most expensive countries in the world to raise a child, and the measures so far have done little to change this. In February, a survey found that the average cost of raising a first child in China was nearly 500,000 yuan, which is even higher than wealthy nations such as the United States, Germany, and Japan.

A study by scholars at Renmin University of China, meanwhile, concluded that the cost of getting married and raising children was the biggest factor putting off Chinese graduates from starting families, alongside the country’s highly competitive work culture.

Ren Yuan, a professor at Fudan University’s Population Research Institute in Shanghai, echoes this view. Studies have found that Chinese couples’ willingness to have children is “not very low” in principle, he says. But there is a substantial gap between the number of couples saying they’d like to have children and the number of people actually having them in reality.

“That is to say, some people who are willing to have children may eventually give up on the idea due to work pressure of lack of access to childcare services,” says Ren.

Supportive policies can help narrow this gap, Ren says, but the specific measures China has implemented so far haven’t moved the dial. The introduction of paternity leave is a positive step, but won’t affect families’ decision making. Similarly, the tax rebates offered to parents will barely affect the household budgets of couples in expensive major cities like Beijing and Shanghai.

For Ren, the most effective measure China could take to boost the birth rate would be to further improve access to nurseries and child care services for infants and children under 3 years old.

“It’s not that such support should be provided only to encourage people to have second and third children; it’s about providing more inclusive and high-quality reproductive services to all families with children or who intend to have a child,” he says.

But the reality is that China’s birth rate will probably fall again this year — and the country’s population is highly likely to experience negative growth, Ren says.

A nationwide Omicron outbreak has led to prolonged lockdowns in cities across China in recent months, which has triggered an economic slowdown, rising unemployment, and a growing sense of uncertainty about the future. All of this “is likely to adversely affect fertility intentions and decisions,” Ren says.

Li says the pandemic — and especially the Shanghai lockdown earlier this year — was another major reason why she decided against having kids. “Since we don’t have children, our lives weren’t significantly affected, but some families with children that we know suffered materially and emotionally,” she says.

In some cases, policies designed to support parents have also had unintended side effects, which could lead people to reconsider having more children. The decision by most Chinese provinces to extend parental leave is one example. Many women have complained that the policy is exacerbating gender discrimination in the workplace, as employers are unwilling to bear the extra cost.

Liu Qin, a former sales manager in Shanghai, had to resign from her job just two months after returning from maternity leave last year. During her absence, a colleague had filled her role at the company, and her manager would no longer assign Liu any “meaningful and challenging” projects, she says.

“My income was reduced by half without all the bonuses I used to make,” the 29-year-old says.

According to Liu, several other new mothers that she knows are also under pressure to quit their jobs. “It’s not just the employers; other colleagues have complained that we often take leave to take care of our babies, or that we aren’t as devoted as they are to work after we become mothers,” she says.

The extension of maternity leave also appears to be making it harder for women to get hired. Liu says she has been asked about her marital status during job interviews — a question that nearly 60% of female applicants in China face, according to a 2021 report. Several recruiters in Shanghai have told Sixth Tone that the new policy has made them reconsider hiring women with children, particularly young children.

For most couples, meanwhile, the subsidies on offer are still barely a consideration when it comes to having children. Camellia He, a mother of three living in the eastern city of Suzhou, says she chose to have three kids because she wanted to — and because she could afford it.

“I was pregnant, so I gave birth,” He says. “It just happened naturally.”

Zhao, a new mother living in the eastern city of Nanjing, also says that the new policies were barely a factor when she decided to get pregnant. “Those who don’t want more children won’t change their minds because of the policies,” she says.

The 29-year-old just had her baby in July, but she says she plans to stop at one child. The couple, who both graduated from top Chinese universities and have decent white-collar jobs, are struggling to save up for a deposit to buy a home in Nanjing.

“Because of the financial pressure, I wouldn’t consider having a second child for the time being,” Zhao says.

Source : Sixth Tone

Non-nutritive Sweeteners Affect Human Microbiomes and Can Alter Glycemic Responses

Since the late 1800s non-nutritive sweeteners have promised to deliver all the sweetness of sugar with none of the calories. They have long been believed to have no effect on the human body, but researchers publishing in the journal Cell on August 19 challenge this notion by finding that these sugar substitutes are not inert, and, in fact, some can alter human consumers’ microbiomes in a way that can change their blood sugar levels.

In 2014, senior author Eran Elinav an immunologist and microbiome researcher at the Weizmann Institute of Science and the German National Cancer Center (DKFZ) and his team found that non-nutritive sweeteners affected the microbiomes of mice in ways that could impact their glycemic responses. The team was interested in whether these results would also be found in humans.

To address this important question, the research team carefully screened over 1300 individuals for those who strictly avoid non-nutritive sweeteners in their day-to-day lives, and identified a cohort of 120 individuals. These participants were broken into six groups: two controls and four who ingested well below the FDA daily allowances of either aspartame, saccharin, stevia, or sucralose.

“In subjects consuming the non-nutritive sweeteners, we could identify very distinct changes in the composition and function of gut microbes, and the molecules they secret into peripheral blood. This seemed to suggest that gut microbes in the human body are rather responsive to each of these sweeteners,” says Elinav. “When we looked at consumers of non-nutritive sweeteners as groups, we found that two of the non-nutritive sweeteners, saccharin and sucralose, significantly impacted glucose tolerance in healthy adults. Interestingly, changes in the microbes were highly correlated with the alterations noted in people’s glycemic responses.”

To establish causation, the researchers transferred microbial samples from the study subjects to germ-free mice — mice that have been raised in completely sterile conditions and have no microbiome of their own.

“The results were quite striking,” says Elinav. “In all of the non-nutritive sweetener groups, but in none of the controls, when we transferred into these sterile mice the microbiome of the top responder individuals collected at a time point in which they were consuming the respective non-nutritive sweeteners, the recipient mice developed glycemic alterations that very significantly mirrored those of the donor individuals. In contrast, the bottom responders’ microbiomes were mostly unable to elicit such glycemic responses,” he adds. “These results suggest that the microbiome changes in response to human consumption of non-nutritive sweetener may, at times, induce glycemic changes in consumers in a highly personalized manner.”

Elinav says that he expects the effects of the sweeteners will vary person to person because of the incredibly unique composition of our microbiome. “We need to raise awareness of the fact that non-nutritive sweeteners are not inert to the human body as we originally believed. With that said, the clinical health implications of the changes they may elicit in humans remain unknown and merit future long-term studies.”

“In the meantime, we need to continue searching for solutions to our sweet tooth craving, while avoiding sugar, which is clearly most harmful to our metabolic health,” says Elinav. “In my personal view, drinking only water seems to be the best solution.”

Source: Science Daily

Long Read: The Rise And Fall Of Chimerica

Jacob Dreyer wrote . . . . . . . . .

For decades, America gave China a vision of future prosperity. But today, America has mostly ceased to offer a model for China or anywhere else, leaving China’s leaders without a guide as they chart a course into a future filled with potential turmoil.

I. Chinese Atlantis

“Why is there an America?” — Wang Huning

Once upon a time, there was an enchanted kingdom called Chimerica, with a beautiful capital known to residents and visitors alike as “Magic City” (“魔都”). The streets of Magic City were leafy and green, the people beautiful, their minds filled with visions. A city of water, rain and shadows, for some 30 years this Atlantis rose above the waves of the Pacific, the vast ocean on its doorstep. Fantastic wealth poured in from all over the world to the city’s banks and businesses, and skyscrapers were flung into the sky. “The bubble that never pops,” some called it. What once seemed like impossible dreams turned into realities.

魔都 is a slang term for Shanghai. And though it was of course never as perfect and pristine as imagined, over the past three decades, it has been the place where multinational capital met Chinese workers, engendering a chemical reaction that changed the world as we know it.

For those three decades, planet China revolved around a mysterious sun — the United States. Cunning, baffling and powerful, America as an idea (much more than as an actual place) allowed Chinese to redefine themselves and their expectations of life. This engagement with an abstract America, driven by a desire to enrich China, is quite unique in Chinese history. Chinese elites voluntarily ceded control of their national narrative to a foreign nation, and they internalized the ideas and forms that the other society cherished.

“Cunning, baffling and powerful, America as an idea (much more than as an actual place) allowed Chinese to redefine themselves and their expectations of life.”

In fact, the U.S. is a real country, populated by human beings. But for the Chinese Communist Party, it seemed to be, as the 19th-century philosopher Pyotr Chaadayev once wrote of Russia, “one of those nations which do not seem to be an integral part of the human race, but exist only in order to teach some great lesson.”

This spring, Shanghai suffered siege warfare, under attack by the COVID pandemic, and many Chimericans left, waking up to the sense that the community they had imagined had been a dream. Shanghai is a temperamentally capitalist and modern city in a communist, traditionalist country. Under capitalism, everything that is solid melts into air — family ties, language, nations. In Shanghai’s mist and smoke, these things begin to seem insubstantial, doubtful.

Mao famously said that over a lifetime of seeking to revolutionize China, he only succeeded in changing anything in the area around Beijing. Capitalism, on the other hand, has changed the country utterly, down to every city, town, village and family. Shanghai has always been the capital of that revolution — the altar where prayers to the power of global wealth and enlightenment were cast off in the direction of distant America. With a certain vision of Shanghai vanishing, what’s next for the country?

II. America Against Itself

“Some people don’t think that Americans are lonely either, or at least they may not all think so themselves. It may not be true that every American is lonely, but there are plenty who feel lonely. … She was alone in America, and America was alone in her.” — Wang Huning

Following the calamity of the Cultural Revolution, a professor of politics at Fudan University named Wang Huning — who would later join the Politburo and is today Xi Jinping’s chief ideologist — visited America to “实事求是” (“seek truth from facts”). In the late 1980s, it seemed to Wang that the central reality of global politics was American hegemony, so with an open mind he went to Iowa, Berkeley, Harlem and beyond to discover “American culture, or more precisely, the American way of life (since many people find it difficult to determine what American culture is).”

In this “least mysterious country,” Wang followed in the footsteps of travelers to countries they perceive as being their own future. His chronicle of his travels, “America Against America,” reads as if Alexis de Tocqueville’s aristocratic curiosity was blended with a dose of Fyodor Dostoyevsky’s resentful brooding in “Winter Notes on Summer Impressions” and the future shock of H.G. Wells’ Time Traveler. Wang passed through a landscape that seemed extraordinary and contradictory; puzzling it out, he wrote: “On the one hand, it is conservative and on the other hand, it is innovative. There seems to be some contradiction here. … The use of human ability to conquer nature is one of the values of the American tradition, so here innovation and tradition are not contradictory.”

Following the Opium Wars during the late Qing Dynasty (1636-1912), China had an official policy of “中体西用” (“Chinese learning as substance, Western learning for application”) — Western technology and Chinese essence. But what if technology becomes a way of life and thus a culture all its own? What if the spirit of St. Louis, when imported to China, transformed China in its most profound essence?

As a scion of China’s Cultural Revolution, Wang would have been familiar with the Maoist idea that “all contradictory things are interconnected; not only do they coexist in a single entity in given conditions, but in other given conditions, they also transform themselves into each other.” With that in mind, he ruminated in Atlanta that “Coca-Cola directs [an] army of one million people around the world. When you think about it, does it make political sense? Or have a broader meaning?”

“The America that inspired China to change in its own image has become a baneful indication of what not to do, a monument to aristocratic liberalism’s propensity to overtake democracy.”

I am an American, and Wang’s question about why America exists is one that I have never been able to answer. In fact, it may not exist in any meaningful sense — certainly not in the emphatic sense that Wang’s question suggested.

Accustomed to hierarchically ordered, planned societies, Chinese observers of America are forever searching for the conspiracy, the real leaders. They cannot believe that a society can keep rolling along as chaotically as America seems to do. For them, America has always been an idea first and foremost: an organizing principle that subsumes an incredible diversity of human experiences and types. The actual America contains both form and content, both capital and labor, but the Chinese only sought to learn from capital. In much of the Chinese intellectual universe, the American model has transformed from being a subject to emulate into a father who must be argued with in order for China to realize its own true identity.

After Donald Trump’s election, the historian David Runciman wrote that if the U.S. is suffering a crisis of democracy, it is a midlife crisis. While ostensibly ancient, a China recovering from what Chinese political scientist Gan Yang calls the “creative destruction” of the Cultural Revolution is an adolescent society that now must emerge from its American shadow. Thirty years after Wang’s trip, the America that inspired China to change in its own image has become a baneful indication of what not to do, a monument to aristocratic liberalism’s propensity to overtake democracy. To many Chinese, too often these days, America smells like gun smoke: a country whose leaders and population are united by a tendency to random outbursts of violence.

Chinese intellectuals such as Eric X. Li argue that today’s China, with leaders whose domestic approval purportedly tops 90%, is far more democratic than the U.S., at least in the sense that leaders relate to the masses on shared values. Judging by the more than a hundred million subscribers of Li’s media project, Guancha — a Chinese digital media outlet known for a nationalist slant on current affairs, the only privately-owned media in China that functions in this way — these views are widely shared.

Is the entire population of China experiencing some kind of fake reality, or did the country’s leaders really create a modern, technologically advanced nation with a political structure built on “Chinese essence” rather than American-style democracy? And when can China define itself on its own terms without the crutch of the American other to revere or despise?

III. A Universal Institution

“The more China liberalizes its economy, the more fully it will liberate the potential of its people — their initiative, their imagination, their remarkable spirit of enterprise. And when individuals have the power, not just to dream but to realize their dreams, they will demand a greater say.” — Bill Clinton

Philip Tinari, a son of suburban Philadelphia, arrived in Beijing in late August 2001, a golden month at the end of history. His language program at Tsinghua University began on September 10. He told me about his experience of the next day: Something seemed to be happening, and he rushed to the television, hearing a crash that was surprisingly loud. The TV was on mute. He watched the twin towers go down in flames while next to him — in the neighborhood that became Zhongguancun, sometimes called “China’s Silicon Valley” — massive skyscrapers were going up into the sky, creating construction noise that felt like China’s national anthem in those years, the omnipresent rhythms of GDP growth.

China’s entry into the World Trade Organization followed two months later, and its bid to host the 2008 Summer Olympics had been announced a few months previously. September 11 notwithstanding, China was heavily invested in recreating the world of 1980s and 90s America, implementing what leaders like Wang had seen on trips abroad.

American leaders thought the U.S. would succeed at remaking China in its own image, a process bankrolled by Chinese industrialization and factories. Eventually, American globalists believed, much as Marx once did, that the people would no longer need a state — the Chinese Communist Party’s political alterity would simply melt away when confronted by “Friends” and McDonald’s. Just like how the U.S.S.R., in the words of the novelist Victor Pelevin, “improved so much that it ceased to exist.”

Having today passed through the hallucinogenic white heat of capitalism, China remains recognizably itself, but there is one class that voluntarily Americanized. They are the middle class, and they are the audience for Tinari’s blockbuster shows at the Beijing and Shanghai museums he directs.

Much as I did, Tinari found China at the time of his arrival to be a space of radical freedom, a society in flux lending itself to individual experimentation. His new life was inspired by the radical choices made by the first Chinese artists he got to know — the generation that had come up in the 80s and 90s who saw art as a space for freedom and expression, and maybe for the betterment of the wider world.

For a decade, he led a bohemian lifestyle that shaded into prosperity, writing for Artforum, founding the bilingual magazine LEAP (where I was a contributing editor for a while), curating shows here and there, exploring the new world that was emerging. In 2011, he became the head curator at the Ullens Center for Contemporary Art (UCCA), China’s premier contemporary art institution. Reflecting the country’s tentative steps into globalization, the UCCA started with foreign art collectors amid a Beijing art world whose patrons were often diplomats and ambassadors.

At a certain point, the balance shifted to the point that the market for Chinese contemporary art became dominated by locals seeking to curate their own world, rather than foreigners seeking to enter Chinese history. In June 2016, the UCCA was put up for sale by its Belgian owners. A long period of restructuring began. The worldview that the UCCA embodied was a relic of its founding nine months before the 2008 Olympics — which was a “special moment of China’s maximal openness,” as Tinari put it. “We had a responsibility to keep on going,” he said. “And I felt like there was a space for us to do that.”

In the vast and lumbering historical structure that is China, people like Tinari construct their own ideal communities within preset boundaries. “I believe that the ultimate error of the idea that economic liberalization would inevitably bring about political reform should not discount the gains in individual possibility that it empowered during the decades while it was operative,” Tinari told me. “There was a very deep transfer not just of technology but of self-conception that has influenced so much of what has followed. Despite it all, people in China today are more free to imagine and create a life for themselves than they were 20 or even 10 years ago. I didn’t think it would be possible to open the largest Warhol show China has ever seen just after the Party celebrated its hundredth birthday, but it was. And the fact that it was should tell us something.”

“Being an observer free to move and act on a continent in the process of radical transformation is irresistible.”

In his speech welcoming China into the W.T.O., Bill Clinton envisioned the ensuing economic changes would propel a generation of Americans (like Tinari and myself) into China to pass on the blueprints of a universal human society structured by liberalism: The museum, the university, the corporation. But even then, something was rotten in the state of Chimerica.

The percentage of the U.S. population that can access the middle-class way of life that Wang observed in the late 80s has been shrinking, in part due to the breakdown of the Chimerican economic model. As the economist Li Xunlei pointed out recently, China’s share of global GDP growth went from 3% 60 years ago to 15% today, while America’s decreased from 39% to 24%. The figures vary depending on the source, but the share lost by the U.S. was more or less the share gained by China.

Sufficient wealth has been transferred from the U.S. to China that the Chinese now insist on managing themselves, and America has a glut of educated globalists — the would-be colonial administrators of ideology — that NYU Shanghai, the UCCA and the Shanghai branch of the American Chamber of Commerce are too small to absorb. Anticipating a global empire, America trained a significant percentage of its population to be aristocrats. Upon reaching adulthood, these scribes discovered that instead of a world to manage, they have a rebellious and unmanageable American interior that does not accept their ideological dominance.

Ask not whether Tinari or I have considered returning to New York; we probably considered this idea every other day, especially during the closed border years. But when you do the math, being an observer free to move and act on a continent in the process of radical transformation is irresistible — even or perhaps especially now that we know that Beijing isn’t going to become New York anytime soon, that UCCA will never become a Chinese MoMA. Maybe our dreams now stretch beyond the boundaries of New York and MoMA anyway.

Even as many of our friends and neighbors back in America are experiencing downward social and economic mobility, Tinari has, like the Jesuits of the late Qing Dynasty, hosted foreign dignitaries like Emmanuel Macron at the UCCA. He has transformed from an emissary of American soft power into a representative of Chinese soft power. In recent years, the UCCA has hosted monumental shows by Xu Bing, Cao Fei, Liu Xiaodong, Huang Rui and others. It has created a contemporary Chinese canon in a meaningful way, entering into the realm of the Chinese imaginary.

IV. American Chamber

“The West’s universality was in truth no more than a moment (keiki) in Asia’s own ‘formation as subject.’” — Yoshimi Takeuchi

In late June 2022, the director of the China Institute at Fudan University, Zhang Weiwei, led a Politburo study session that was later reproduced and broadcast on TV to warn against the “spiritual Americans” who have internalized American aesthetic modes of thought:

One of the most common forms of Western discourse and cultural infiltration of China is to instill certain ‘aesthetic standards’ (审美标准) into Chinese intellectual elites through various forms of exchange or awards, and then to use these Westernized intellectual elites to monopolize Chinese aesthetic standards, and even Chinese standards in the humanities, arts and social sciences — in this way achieving a kind of ‘cultural training’ and ‘ideological hegemony’ (意识形态霸权) over China.

Zhang was essentially warning against the ideological apparatuses of American soft power: television, news media, art. Western technology, including its vision of a society in which citizens are consumers, is fine. But a Chinese political essence — the CCP as a sort of social backbone — must combat spiritual Americanism, even its banal clichés, which are arguably what made America a “universal” culture.

Zhang is a figure in Eric Li’s Guancha intellectual network. Li was educated at Berkeley and Stanford and is friendly with all sorts of American elite insiders. When I asked Li why he didn’t think China should follow the American social model, he scoffed. Not even Americans like what’s happening in their country, he said. Why should we copy their failures in ours?

In the U.S., the conflict with China that has emerged over the past five years is often narrated as one of values — democracy versus autocracy. The Chimerican economists Michael Pettis and Matthew Klein argued in their 2020 book “Trade Wars Are Class Wars” that it is better understood as a conflict in which workers and the means of production (primarily in China) haggle over terms and capital with executives at multinational corporations (primarily in the U.S.). “A conflict … between the very rich and everyone else,” as the authors put it.

For years, Chinese elites welcomed foreign capitalists and regulations intended to accelerate the smooth flow of capital — that was what the W.T.O. was all about. But the constant mandatory Marxist study sessions must have woken Chinese government officials up to the fact that the Sino-U.S. relationship has a class component — one side operates the machines, the other prints the banknotes.

“A Chinese political essence — the CCP as a sort of social backbone — must combat spiritual Americanism.”

This tended to marginalize Chinese economic captains, like the bosses of state-owned enterprises and local monopolies, as well as American workers. The cuckolded parties, however, objected, and this transformed American and Chinese politics. Xi Jinping’s marquee “anti-corruption” campaign was a partly way of taking back control on behalf of CCP party bosses and directors of state-owned enterprises; as he recently commented, “By its nature, capital pursues profits, and if it is not regulated and restrained, it will bring immeasurable harm to economic and social development.” Meanwhile in America, the rise of anti-China politics accelerated by Trump is now mostly bipartisan, centering around the negative impact of trade with China on American workers — even though, way back when, the decision-makers who created this system were mostly American.

In the coming decades, Chinese leaders will have to figure out how to compel American capital to come to China on terms that the CCP finds acceptable. American financiers goggle at the size of the market when the millions of Chinese who haven’t yet bought cars, sneakers or hamburgers start to.

Chinese economists like Justin Yifu Lin believe that the transnational capital that uses Manhattan as its headquarters won’t be able to reject a consumer class bigger than the one at home, even if liberal values — an independent civil society, elections that outside finance can influence, a freely floating currency — don’t exist there. Chinese working people, meanwhile, like Andrei Platonov’s railway worker, “understand that a paradise has been built and exists all around him, but he is himself unable to see or sense it.”

V. Anfu Road

“[In my dream I was] closed up in a kind of Oriental folly. I could see the gleaming of treasures, shawls and tapestries. A landscape illuminated by the moon appeared to me through the grille of the door, and I thought I could see the outlines of tree trunks and rocks. … Gradually, a bluish light penetrated the folly and brought forth bizarre images. Then I thought that I found myself in a huge charnel-house where universal history was written in strokes of blood.” — Gérard de Nerval

On a humid evening recently, I went to visit Eric Li; an on-the-spot COVID test was required to enter his compound, and I found him out in the garden, a bottle of wine from his friends in Napa Valley on the table, peacocks angrily cawing in the night. Peacock owners, he explained, need a minimum of three birds for it to make sense — only the males have dramatic plumage, but for them to show it, both a female and a male rival must be around. Without rivalry, there’s no need to show off, and males will take a lone female for granted.

While the views expressed in Guancha may be extreme, Li seemed mild in person. China must resist cultural Americanization, he said, because China’s system offers both material and spiritual sustenance to the Chinese population — a fact, he added, that is confirmed by independent surveys and by anybody who’s been to the country. For the most part, Chinese people, complacently enough, like China, in the way that characters in a John Updike novel like America.

But America today is no longer what Updike envisioned. “America,” he wrote in 1979, “is a vast conspiracy to make you happy.” Forty years later, only the first part is still true.

Li’s China, which is hiding just around the corner (of the upcoming Communist Party Congress), is one of solid families, of small businesses that are flourishing, of citizens who have bank accounts, use computers, work as engineers and support a growing family of sons who enjoy gym class and daughters who excel at Chinese. Structurally, it looks a lot more like an idealized American suburban past than any moment in Chinese history — like Utah, with low crime rates, great (though racially homogenous) demographics and a shared belief in something that, even if outsiders think it’s crazy, provides social unity.

If this sounds conservative, it is, although it’s not clear that the traditions conserved are specifically Chinese; rather, they pertain to the vision of a middle-class life pioneered in America shortly after the Second World War, before the rupture of 1968. After January 6, 2021, a Chinese banker I know asked me about the difference between blue states and red states. As I tried to explain, not really knowing what to say, he laughed. All of China is a red state, he said. The collectivist impulse that American populists point to as a paradise lost is a paradise present in China today.

During Shanghai’s lockdown, Li managed to secure the right to take long walks every day. Twice he walked to the Bund and back; other times to Fudan University or the Hongqiao railway station or to obscure and forgotten neighborhoods. He was looking at the face of his lover while she was sleeping.

“The collectivist impulse that American populists point to as a paradise lost is a paradise present in China today.”

Despite the oppressive restrictions for most people, China this summer simmered with hopes for the future, a sense that certain things needed to change. But unlike previous times like this, America didn’t seem like the answer to any of the questions. Increasingly, China is not following in the footsteps of others, but charting its own path.

I asked Li to explain what China’s plan was. In his view, U.S. hegemony is rooted in the dollar’s reserve currency status, the innovations of Silicon Valley and the American military. Of the three, the dollar is the most easily displaced. Some say that’s unlikely, which might be true. But being irreplaceable doesn’t mean something is robust — not if it is managed by irresponsible idiots. I didn’t ask about the composition of Li’s portfolio.

Guancha recently ran an article about how China cannot become a second America, that it would be a betrayal. I challenged Li: So let’s say China builds a few aircraft carriers, convinces a few foreign countries to use the digital RMB, gets a few tech champions. It’s plausible enough, I said to Li, but what’s it for? Isn’t it an inferior version of America, which was not good enough in its original format?

Guancha author and University of Chicago-trained intellectual Gan Yang has sought to reconcile Chinese traditions like the elitist or meritocratic element of Confucianism and the Maoist tradition of equality and justice with the Dengist (American) tradition of markets and competition. China doesn’t have to choose between modernization and Chinese-ness, Gan has argued. It needn’t accept Western modernity in order to gain the technological and financial benefits that coincided with it.

Gan was sent down to Daqing, the Siberian oil city, when he was 18 years old. There, as the historians William Sima and Tang Xiaobing have written, he had an experience that left him with a lasting suspicion of the ways that “liberal discourse in China evinces a pervading concern, born of a kind of intellectual conservatism (保守主义), for promoting freedom for intellectual elites and the upper classes at the expense of democracy and equality for the masses.”

The “democracy” that Li or Gan talk about isn’t votes for candidates, who in any case represent the interests of capital, but some sort of syncretic vision of an organized society structured around the Confucian values of the family and indexed to material prosperity, whose aspiration to sovereignty is defined as not being told what to do by the usual out-of-touch global elites, the scourge of populists from Ohio to Moscow.

“Increasingly, China is not following in the footsteps of others, but charting its own path.”

“In fact,” Gan wrote in 1999, “many of the intellectuals who pontificate about liberalism today are talking about liberty for the bosses and liberty for the intellectuals; that is, liberty for the wealthy, liberty for the strong and liberty for the capable. At the same time, they neglect even to mention that the starting point for the liberal theory of rights is the rights of all, and on this point it must be emphasized that this means particularly those who are unable to protect their own rights: the weak, the unfortunate, the poor, the hired hands and the uneducated.”

Hegelianism without Daqing, Gan concluded, is meaningless — in other words, a democracy needs the full participation of the entire population. Democracy must be a vehicle that everybody can travel in, perhaps especially those who cannot walk by themselves. The model whereby Hyde Park, the University of Chicago’s picturesque neighborhood, coexists with Cottage Grove, the rougher neighborhood just south of there, doesn’t offer much for a China searching for radical social equality, the prerequisite to the collective life that Li sees as the antidote to the alienation of modernity.

For Gan, as for Li, democracy and liberalism are fundamentally in opposition, with an eternal conflict between the masses and the aristocrats. A lesson extracted from Tocqueville, this has obvious implications for Chimerica, the aristocratic class of which traverses the two continents. (Pre-COVID, Apple would book 50 business class seats from San Francisco to Shanghai every day as a general policy.)

The aristocrats for whom liberalism was an affect — John Locke’s “society of property owners” — opposed the party-state and the revolution. Of course they did, Li reasoned. As he writes in a forthcoming book (that I am editing and publishing through Palgrave Macmillan): “Most modern liberal political institutions in the rest of the West were designed as much to check the will of the people as to enable it.” The revolution was intended for Chinese people to stand up against landlords, not for the landlords to take Thomas Jefferson-style gentleman farmer attitudes to the world, with grand tours of the old continent supported by slave labor.

In truth, the Anglo-Saxon moment of individualism — an edifice built, above all, on slave labor, the subjection of women and certain media and built environments that privilege a form of solitude and reflection called “romantic” — may be passing, replaced by the social form that China is creating. The individual is, in one sense, an aristocrat like Tocqueville or Joseph de Maistre, perhaps Wang Huning. But an individual also harvests an aristocrat’s coffee beans, prints his paper, cleans the tangerine peels off his floor, irons his crisp white shirts and polishes his dirty wine glasses.

For every individual enabled to realize his true identity under liberalism as it is construed today, there are 10 ghostly individuals constrained to do the lord’s bidding by economic structures that are apparently immutable and impersonal. During the high tide of Chimerica, American lives were served by distant and unknown armies of Chinese workers. No more, insist Chinese nationalists — now is the time to live for ourselves.

VI. At The Wudaokou Forum

“Only a crisis — actual or perceived — produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around.” — Milton Friedman

The real test of any system of thought is to provide an alternative. China isn’t that. Not yet. With the property bubble slowly bursting, China needs to find a new direction, whether by elevating more of its population into the wider economy or through technological innovations that can be exported to the Global South.

At the height of Shanghai’s lockdown, with bad news for China’s export-driven economy coming every day, a colloquium of Chinese economists assembled in Beijing to discuss what to do next. Ray Dalio joined by Zoom. Yu Yongding, the influential economist, fretted about Chinese vulnerability to American financial warfare. Liu Shijin of the Harbin Institute of Technology (Shenzhen) asked: “How can the pressure to address climate change be transformed into a global engine of innovation and growth?”

Others, like David Daokui Li, advocated the creation of a unified national market to stimulate the growth of the middle class. The hard line toward America expressed on Zhang Weiwei’s TV show is not taken very seriously in these quarters. As the political scientist Zheng Yongnian (who didn’t attend the forum) told me: “The Chinese view on the U.S. is not unified. The view of the East rising and West declining is popular among nationalistic groups (from the leadership to the masses), but many people (including me) continue to be positive on the U.S.”

What these Chinese economists have been realizing is that a global government already exists, and it is called capitalism. Ultimately, China’s sovereignty is only realized within this system, whose market logic assesses every person, place and thing in the cold light of use and value, far away from banalities about “collective” and “spirit” and “soul” and entirely within the realm anchored by the U.S. dollar.

“Dominated by capital, the U.S. political system gravitates towards oligarchic liberty.”

China’s techno-authoritarianism mixes various elements from America’s past 70 years to try to create a universal society capable of providing a basic floor to the standard of living of over a billion people. Implicitly (or visibly in the plans of Chinese brands like Huawei, Haier or Geely) this is possible to extend to the Global South. Ethiopians, Indonesians and Mexicans can stop trying to migrate to the U.S.; they can live well and earn a good income in their home countries.

Dominated by capital, the U.S. political system gravitates towards oligarchic liberty. Dominated by working classes, China’s system tends toward a chauvinistic egalitarianism.

Amid Russia’s war on Ukraine, the real estate theorist Zhao Yanjing wrote:

We should not get carried away when we think about the United States. There are two authentic Americas — the America of capital, which is backed by Wall Street, and the true America, which is backed by the military-industrial complex and the rednecks. The former relies on Chinese labor and is a friend to China; the latter has its industries and jobs stolen by Chinese labor and is an enemy of China. Biden represents the former, Trump represents the latter. … Who should China stand for? Don’t tell me to stand for the American proletariat, to stand for the rednecks, because China is stealing their jobs. China should stand for American capital, for Wall Street, for globalization! Why? Because globalization’s biggest winners are the United States and China!

For Chinese thinkers like him, America stands against itself, in 2022 just as surely as when Wang visited in the 80s. But if it is difficult for them to explore China’s own internal class contradictions, it is because, by definition, all of the male Party members are in the ruling structure, the 体制.

Today, an adolescent critical attitude of America — the “primary contradiction” of socialism with Chinese characteristics — is a reassuring source of comfort for Chinese intellectuals. But sooner or later, they will have to build a Chinese-style democracy, Chinese-style rule of law and a Chinese-style middle class, instead of decrying the collapse of their American antecedents. Reform in China will take an unexpected form — certainly, it will not reiterate the American ancien régime in Asia — but come it will. The hundreds of millions of Chinese citizens who are waiting for their dreams to come true will insist upon it.

Source : NOEMA