Via Richard, a welcome dose of antidote for China hype from Foreign Policy.:

Western investors hail China’s strong economic fundamentals—notably a high savings rate, huge labor pool, and powerful work ethic—and willingly gloss over its imperfections. Businesspeople talk about China’s being simultaneously the world’s greatest manufacturer and its greatest market. Private equity firms are scouring the Middle Kingdom for acquisitions. Chinese Internet companies are fetching dot-com-era prices on the NASDAQ. Some of the world’s leading financial institutions, including Bank of America, Citibank, and HSBC, have bet billions on the country’s financial future by acquiring minority stakes in China’s state-controlled banks, even though many of them are technically insolvent. Not to be left out, every global automobile giant has built or is planning new facilities in China, despite a flooded market and plunging profit margins.

And why shouldn’t they believe the hype? The record of China’s growth over the past two decades has proved pessimists wrong and optimists not optimistic enough. But before we all start learning Chinese and marveling at the accomplishments of the Chinese Communist Party, we might want to pause for a moment. Upon close examination, China’s record loses some of its luster. China’s economic performance since 1979, for example, is actually less impressive than that of its East Asian neighbors, such as Japan, South Korea, and Taiwan, during comparable periods of growth. Its banking system, which costs Beijing about 30 percent of annual GDP in bailouts, is saddled with nonperforming loans and is probably the most fragile in Asia. The comparison with India is especially striking. In six major industrial sectors (ranging from autos to telecom), from 1999 to 2003, Indian companies delivered rates of return on investment that were 80 to 200 percent higher than their Chinese counterparts. The often breathless conventional wisdom on China’s economic reform overlooks major flaws that render many predictions about China’s trajectory misleading, if not downright hazardous.

Technorati Tags: asia, china, east asia, economy, northeast asia

AsiaPundit hadn’t been too enthused by Boing Boing’s transit system anagram series, until he realized that he used to ride the train daily from ‘A Herman Hut’ to ‘japan Gang Rot’:

Full size image here and more station name variations are at Double Yellow,

Technorati Tags: asia, east asia, singapore, southeast asia

The year of the dog should be interesting for Asia. A little over two months ago, AsiaPundit visited Austin’s site and questioned the possibility of a coup happening in either Thailand or the Philippines, arguing that after a decade of democratic rule it seems unlikely either country would really care for a return of dictatorship (even if elected governments were seen as corrupt or incompetent).

Two months has made quite a difference, and while neither country seems likely to suffer a coup, stability has suffered a double blow. The pace at which the governments of President Gloria Macapagal Arroyo and Prime Minister Thaksin Shinawatra have unravelled is impressive.

While it’s quite possible that some sort of people-power backed coup was being planned in the Philippines, its success was not assured, and Arroyo’s declaration of a state of emergency seems extreme. That civic groups are now reproducing literature on what constitutional rights citizens have under military rule is disheartening. Todd Crowell has a good summary of recent events.

The situation in Thailand is more surprising, while Arroyo has been facing increased pressure since the alleged election fraud allegations emerged last summer, the populist Thaksin was simply facing growing rumblings from a relatively weak opposition. The backlash to the sale of his family’s Shin Corp conglomerate to Singapore’s Temasek went far beyond expectations. The Foreigner in Formosa has a good backgrounder.

The Foreigner and Todd, of course, are far removed from the events and have the extra perspective that distance provides. Bloggers on the ground provide a more varied perspective.

From Thailand, Magnoy’s Samsara offers some links to opposition mixed media projects and an outline of the coalescing of Thailand’s opposition.

From the Philippines, a greater multitude of English-language voices is available: MLQ3 has amazing coverage and linkage following the events of Saturday, Sunday and Monday. Torn looks at the restive situation and the legality of 1017. the Unlawyer thinks it’s 1972 all over again. Carlos backs Gloria.

And from the mainstream press, there’s a lot of commentary that would have unimaginable just a couple of years ago including this piece praising the stability and democratic development of Indonesia compared to the neighbors.

Technorati Tags: asia, coruption, east asia, economy, indonesia, philippines, thailand, southeast asia

While AsiaPundit has been critical of Chen Shui-bian’s economic policies, the Taiwan president’s move to abolish the National Unification Council should be welcome. Chen has just saved the taxpayers of Taiwan 32 bucks per year.:

We got rid of a US$32 budget item, and managed to piss off the two most powerful nations in the world. What do have for it? Anything concrete? Maybe for an encore, Chen can personally call the heads of the Hong Kong triads and tell them their wives are ugly and their children are stupid too.

While AsiaPundit welcomes any attempt to rein in wasteful spending, he opposes Michael’s suggestion about the triads. It would be safe to assume that the gentlemen of Hong Kong’s top crime families have attractive wives and even more attractive girlfriends. Plus, taunting the triads would be a serious provocation.

MeiZhong Tai offers a brief wrap on the issue - which includes Michael’s post. The consensus on the other side of the Strait, generally, does acknowledge that the NUC was an obviously insignificant and outmoded institution.

Taiwan’s Other Side, a resolutely pan-blue blogger, sees has harsh criticism of the move.:

This is a move that has no widespread popular support - the office is yet another harmless idiosyncrasy in the dual identity of the Republic of China on Taiwan. Removing it provides no benefit for the people of Taiwan, at the price of straining relations with not one but TWO of Taiwan’s major trading partners. A bold move to be sure, but why? CSB has, as usual, offered no explanation of how removing the UC will benefit anyone except his own craving for publicity. This is just another publicity stunt that comes at a painfully high price.

Ranc, as well, notes that this will be seen by the Communist Party as a significant provocation that will require a significant counteraction.:

Beijing has to have a big reaction. If Chen could get away with this, there will be no return for the independence movement. The reaction could be a SUBTLE one, unlike the 1996 war exercise, but it has to be BIG and OBVIOUS. The point is to show the COMMITMENT and CAPABILITY of Beijing stopping the independence movement. Expand the military immediately, for example. Or show off a really really powerful weapon that the world has never seen before, if there is such a weapon. In any case, the commitment has to be real for anyone to believe you.

Technorati Tags: asia, china, east asia, northeast asia

Via Marcus Troiano, news of a business decision that AsiaPundit would welcome, but has not been expecting,:

It’s well known that China is one of the largest breeding grounds for piracy of software, DVDs and CDs, and it’s for that reason that video game makers have been wary of entering that market.

Despite these concerns, Microsoft said that it’s currently evaluating China for a possible launch of the Xbox 360 in that market, according to the Associated Press.

Speaking prior to the launch of the next-gen console in South Korea this Friday, Alan Bowman, general manager of entertainment and devices for Asia Pacific and Greater China said, “We’re working with the government pretty actively in trying to understand what it is we need to do. We’re taking a very careful approach in China.”

Upon being pressed further Bowman would not elaborate on any possible timeframe for the launch of the 360 in China. He added, “It’s a very controlled environment. We’re going to make sure that we make the right moves, develop the right content, have the right partnerships in place. It’s not something you want to rush in and do.”

AsiaPundit has spoken with Sony representatives in China who have bluntly admitted that the Playstation 2 has been a "miserable failure." Hardware for game consoles is sold at a discount, and the companies make money in software or services. In China, that means making money for subscriptions to online game services. If Microsoft can pull off a money-making method for the 360 in China, AsiaPundit will be impressed.

Technorati Tags: asia, china, east asia, northeast asia, xbox 360

AsiaPundit was going to link to Imagethief’s posts on how US corporate leaders need to show some more leadership or on how Google may be the victim of a dispositioning campaign in China, but instead AsiaPundit will give this post on topless lemur photos top billing.:

So combining live actors and cartoons is a deadly sin, but it’s still OK for the state news agency to publish a photo of a t*pless woman clutching a lemur to her bare chest,

Ya gotta love this country. More Xinhua “Beauties with Animals” here. If you must.

If I get any Google hits to this page from searches for “lemur+bra” I’m abandoning the Internet forever.

Other interesting reading on lemur bras Google in China see Non Violent Resistance, and Rebecca’s article in the Nation, where she asks:

The question is not whether the Chinese Communist Party will succeed in hanging on to power. The real question is, For how long? A few years? A few decades? Another half-century?

If they can continue to distract the populace with pictures of women wearing lemurs, AsiaPundit would be willing to bet the CCP will be able to stave off the revolution for quite a while.

(Photo stolen from Xinhua, copyright unknown)

Technorati Tags: asia, censorship, china, east asia, media, northeast asia

AsiaPundit has just returned from a Shanghai Foreign Correspondent’s club event featuring speaker Jerome Cohen. That means light blogging this evening. Cohen spoke of “China’s Impending Crisis of Administrative and Legal Institutions,” arguing that China’s legal reforms, while impressive on paper, have not taken hold in practice.

The government has been educating peasants on their rights and telling them to use the legal system to solve their problems. These could be good things, but as the legal system is biased and does not provide unbiased redress, it only adds extra frustration when cases fail to be heard or addressed in a just manner. To simplify one aspect of a 90-minute talk, China’s legal reforms are in a broad sense leading to more frustration rather than greater justice. Elites, who control the system, have little incentive to reform.

This Financial Times item reproduced by Howard French makes a similar argument but with a different focus. Reforms on state-owned companies have also failed to deliver. A full reading is recommended: ‘China is Stagnating in its Trapped Transition‘:

These two anomalies - faltering institutional reforms and political stagnation - are central to understanding a “trapped transition”, a transformative phase in which half-finished reforms have transferred power to new, affluent elites who know better than their Little Red Book-waving predecessors how to resuscitate moribund communism with crony capitalism. Partial reforms have thus created a hybrid, albeit state-centred, system that allows these elites to perpetuate their privileges. In China, mixing command and control with embryonic market forces enables the Communist party to tap efficiency gains from limited reforms to sustain the unreconstructed core of the old command economy - the economic foundation of its political supremacy.

In a “trapped transition”, the ruling elites have little interest in real reforms. They may pledge reforms, but most such pledges are lip service or tactical adjustments aimed at maintaining the status quo. In economic reform, after making an excellent start in de-collectivising agriculture and privatising small state-owned enterprises, momentum has stalled. The state still owns nearly 60 per cent of fixed assets and dominates vital industrial sectors, from financial services to energy. Today, Beijing’s guiding principle is not to exit these Leninist “commanding heights” but to reinforce them. The private sector remains hobbled by government restrictions and discrimination.

Technorati Tags: asia, china, coruption, east asia, economy, northeast asia