February 16, 2020

DealBook: In China, the Appearance of Consensus Is Breaking Down

Xiao Qinshan, foreground, demonstrated for free speech from his wheelchair at the offices of the publisher of Southern Weekend in Guangzhou, China.Jonah M. Kessel for The New York TimesXiao Qinshan, foreground, demonstrated for free speech from his wheelchair at the offices of the publisher of Southern Weekend in Guangzhou, China.

GUANGZHOU, China — For two decades after the Tiananmen Square crackdown in 1989, China seemed on the surface like a country where free-market and even laissez-faire principles prevailed. It looked as if a consensus had been reached on putting economic policy and the headlong pursuit of affluence ahead of ideology and politics.

That appearance of consensus, which in fact had always masked some internal divisions in the Communist Party and in Chinese society at large, is now breaking down. The question is whether this will lead to greater political openness, an authoritarian clampdown to restore the veneer of stability, or social turmoil — all possibilities that could have hard-to-predict consequences for the country’s economic expansion, and for the world’s.

The unraveling has been visible in several ways, including the large environmental protests that have occurred in nearly a dozen Chinese cities over the last year and a half. Tens of thousands of residents of each of those cities, including Dalian and Tianjin, have turned out in successful efforts to block the construction of chemical factories, smelters and power plants, as fears of pollution outweigh the promise of job creation.

The breakdown was also apparent in September, when thousands of demonstrators carried large portraits of Mao past the Japanese embassy in Beijing as tension between China and Japan mounted over disputed islands near Taiwan.

The protesters’ choice of Mao posters conveyed an undercurrent of criticism of the country’s present leaders, who conspicuously omit Mao and his collectivist ideology from most speeches these days.

And even more recently, the breakdown of the consensus was evident during four days of protests over free speech this month outside the offices here of the most famous crusading newspaper in China, Southern Weekend, also known as Southern Weekly.

The journalists were calling for the removal of a provincial propaganda chief who had rewritten a New Year’s editorial, contorting an anguished review of social troubles into a paean to the accomplishments of the Communist Party.

“It is very clear that the kind of willingness that has been there, in the name of economic growth, to brush everything under the carpet is now gone,” said Odd Arne Westad, a professor of international history at the London School of Economics.

While the police peacefully persuaded demonstrators to go home on the fourth day, it was significant that the protest lasted as long as it did.

“People were standing on the podium saying, ‘press freedom, press freedom,’ and the police did not drag them down — it shows that the police in dealing with societal conflict now respect the right of free speech, and it is a new evolution that the people feel they have the right of free speech,” said Yuan Weishi, a retired historian at Sun Yat-Sen University in Guangzhou who is also one of the best-known liberal intellectuals in southern China.

Clutching several placards covered with slogans in Chinese characters, a short-haired young man in a brown jacket bravely hovered near the newspaper’s driveway through the fourth day of the protest, despite police efforts to persuade him to leave. As police officers formed a human wall that moved back and forth to prevent him from walking over to talk to a foreign journalist, he yelled over their shoulders, “The police have no right to prevent me from speaking to anyone.”

While the Chinese Constitution guarantees freedom of speech, that freedom has only infrequently been permitted on a broad scale since the founding of the Communist state in 1949, and seldom in the centuries before that. But the growing perception that the freedom exists or should exist, particularly among young people accustomed to fairly freewheeling discussions on the Internet, suggests a fundamental shift in Chinese society.

Equally important is that young people in China today increasingly seem to feel not only that they have a right to speak out, but also that they have a responsibility to air social problems.

Mr. Westad, who was living in China before, during and immediately after the Tiananmen Square killings, noted that among the young, this sense of personal responsibility in addressing social ills in a public way was last apparent in the 1980s, before nearly disappearing in the subsequent repression and amid the “get rich quick” mentality that later emerged.

What is far less clear is whether the emerging, faint hints of pluralism in China can produce a new social consensus and perhaps even a few tentative steps toward democracy. The question is whether the dialogue will someday produce something like the Arab Spring, which Vali R. Nasr, dean of the Paul H. Nitze School of Advanced International Studies at Johns Hopkins University, describes as a series of headless revolutions — hard to decapitate, but also hard to guide, control or predict.

Sharp, conflicting divisions about China’s future were visible at the Southern Weekend protests, and could someday prove to have been an early warning of social schism.

On one side of the newspaper’s driveway were a dozen self-appointed advocates of some combination of stricter authoritarianism, anti-Western nationalism and economic isolationism. These demonstrators, representatives of a “new left” group called Utopia, castigated the newspaper’s journalists as unpatriotic. They also denounced a list of culprits that might have been lifted from a far-right blog in the West, claiming an international conspiracy of financiers, the media and the United States government.

Yet more numerous and more noisy on the other side of the driveway were the free-speech protesters, mostly young journalists and their local supporters, who also received heavy support in Chinese Internet postings. They showed personal courage in assailing a senior censor, a daring that is becoming increasingly common in China as more and more people start standing up to the authorities and often suffer few penalties for doing so — except if they call for a multiparty democracy or a review of the Tiananmen Square killings.

The advocates of greater political openness may have time on their side. Utopia demonstrators tend to be middle-aged, part of a generation whose early education was stunted by the Cultural Revolution when many schools and universities effectively closed.

The free-speech demonstrators were considerably younger and far better educated, beneficiaries of China’s huge expansion of higher education in recent years.

The educated youth of China also seem less inclined for now to support aggressively nationalistic policies toward China’s neighbors, professors and young people say. College students were numerous in a previous round of anti-Japanese protests in 2005, particularly in Guangzhou. But Japanese fashions and popular entertainment have become much more popular among young Chinese since then.

The rioters who overturned and destroyed about 100 Japanese-brand cars during demonstrations in major Chinese cities in September, before a more peaceful march in Beijing, tended to be predominantly older, blue-collar workers.

Mr. Yuan, the historian, said he perceived an evolution in the thinking of the country’s elite. “The mind-set is changing, all the way from the central government to local officials,” he said.

Article source: http://dealbook.nytimes.com/2013/01/22/appearance-of-consensus-is-breaking-down-in-china/?partner=rss&emc=rss

Your Money: An Invitation to High School Seniors to Write About Finances

At Pitzer College, a student used the example of the Ponzi schemer Bernard L. Madoff to take a philosophical look at how much money people truly need to be happy.

As the economy has suffered in recent years and college costs have risen, high school seniors have grappled with the fallout in their own families and channeled their feelings into an increasing number of memorable college application essays about sacrifice, social policy and affluence or its opposite.

“Students never used to write about this stuff,” said Angel Pérez, vice president and dean of admission and financial aid at Pitzer, which is in Claremont, Calif. “I think there is this new consciousness. It’s unlike anything I’ve ever seen.”

Given the Your Money team’s long-standing endorsement of raising the financial consciousness of the younger set, we wanted to see these writings for ourselves. So we’re asking high school seniors who are applying for college this year to send us application essays that have anything at all to do with money, working, class, the economy and affluence (or lack thereof).

We’ll read them all and publish the best on our Bucks personal finance blog.

There is more on our editorial criteria and the logistics down below, but if you’re trying to figure out what counts as a money essay, think broadly, as many applicants have in recent years. “An essay ought to try to fill in the gaps, to tell us things that we don’t know about you,” said Erica Sanders, managing director of the office of undergraduate admissions at the University of Michigan.

Your guidance counselor and teachers who are writing letters of support for your application may not know about or think to write about your family’s financial status, good or bad. “Maybe a parent had to move out of town for work, and the student writes about taking on more responsibility, that it allowed them to take on more leadership and to contribute to their family in a way that they didn’t even know was possible,” she added, echoing essays she’s read in recent years.

Even if your family has not struggled or become fabulously wealthy, an essay about your part-time job certainly qualifies. “Many of our engineering students will talk about building something and the costs of putting it together,” Ms. Sanders said.

Aside from the Madoff essay, Mr. Perez has read other Pitzer applicant essays and had other conversations with applicants about money and the economy in recent years that have stuck with him.

“One student last year was very affected by the whole conversation about the 1 percent,” he said. “He sent us his proposal for the tax code. The committee thought that this is someone who is clearly thinking about this in a critical way, is informed about what is going on the world and has done some dissecting of the information, and that’s the kind of student we’re looking for.”

The college essay is always a bit of a high-wire act. Harry Bauld, the author of “On Writing the College Application Essay,” which I credit with helping me get into college, paints a visceral, frightening picture of haggard admissions officers reading dozens of essays each day. Then, he asks readers to imagine that their application is 38th in the pile. How are you going to excite that person?

Writing about money can offer a bit of voyeuristic thrill in this regard, but it also poses its own particular challenges. “Most of my students are absolutely brilliant,” said Mr. Bauld, a high school English teacher at Horace Mann School in New York City and a former admissions officer at Columbia and Brown. “But they cannot see their own relationship to economic culture. It’s not comprehensible.”

The more affluent ones, if they do understand it, struggle further when trying to put it into words. “When it becomes visible, it comes accompanied with a U-Haul full of guilt that they’re towing behind them,” he said. “Then, it forces them into various clichés.”

Twitter: @ronlieber

Article source: http://www.nytimes.com/2013/01/05/your-money/an-invitation-to-high-school-seniors-to-write-about-cash.html?partner=rss&emc=rss

Bucks Blog: Seeking College Application Essays About Money

This weekend’s Your Money column includes a call for submissions from current high school seniors who have written their college application essays about money. We’ll read them all and publish the best here on Bucks. You can send us yours at moneyessays@nytimes.com.

Anything about affluence or lack thereof, social class, the economy, your family’s financial situation or paid work you’ve done is fair game here. If you’re in doubt, send it in anyway, as we intend to cast a wide net and define money pretty broadly.

This is open only to people who are applying to college this year. But if you took on similar issues in your application essay in the past, please post a comment about what you wrote (and whether you got in). And if you’re a high school guidance counselor or college admissions officer, please share memories of particularly good essays on money.

Article source: http://bucks.blogs.nytimes.com/2013/01/04/seeking-college-application-essays-about-money/?partner=rss&emc=rss

U.S. Forecast as No. 2 Economy, but Energy Independent

Russia’s clout will wane, as will the economic strength of other countries reliant on oil for revenues, the assessment says.

The product of four years of intelligence-gathering and analysis, the study, by the National Intelligence Council, presents grounds for optimism and pessimism in nearly equal measure. The council reports to the director of national intelligence and has responsibilities for long-term strategic analysis.

One remarkable development it anticipates is a spreading affluence that leads to a larger global middle class that is better educated and has wider access to health care and communications technologies like the Internet and smartphones. The report assesses global trends until 2030.

“The growth of the global middle class constitutes a tectonic shift,” the study says, adding that billions of people will gain new individual power as they climb out of poverty. “For the first time, a majority of the world’s population will not be impoverished, and the middle classes will be the most important social and economic sector in the vast majority of countries around the world.”

At the same time, it warns, half of the world’s population will probably be living in areas that suffer from severe shortages of fresh water, meaning that management of natural resources will be a crucial component of global national security efforts.

But these developments also bring significant risks, allowing radicalized groups to enter world politics on a scale even more violent than that of current terrorist organizations by adopting “lethal and disruptive technologies,” including biological weapons and cyberweapons.

The study warns of the risk that terrorists could mount a computer-network attack in which the casualties would be measured not by the hundreds or thousands killed but by the millions severely affected by damaged infrastructure, like electrical grids being taken down.

“There will not be any hegemonic power,” the 166-page report says. “Power will shift to networks and coalitions in a multipolar world.”

It warns that at least 15 countries are “at high risk of state failure” by 2030, among them Afghanistan and Pakistan, but also, Burundi, Rwanda, Somalia, Uganda and Yemen.

The study acknowledges that the future “is malleable,” and it lists important “game changers” that will most influence the global scene until 2030: a crisis-prone world economy, shortcomings in governance, conflicts within states and between them, the impact of new technologies and whether the United States can “work with new partners to reinvent the international system.”

The best-case situation for global security until 2030, according to the study, would be a growing political partnership between the United States and China. But it could take a crisis to bring Washington and Beijing together — something like a nuclear standoff between India and Pakistan resolved only by bold cooperation between the United States and China.

The worst-case situation envisions a stalling of economic globalization that would preclude any advancement of financial well-being around the world. That would be a likely outcome after an outbreak of a health pandemic that, even if short-lived, would result in closed borders and economic isolationism.

The chief author and manager of the project, Mathew Burrows, who is counselor for the National Intelligence Council, said the findings had been presented in advance in more than 20 nations to groups of academic experts, business leaders and government officials, including local intelligence officers.

In an interview, Mr. Burrows noted that the audiences in China were far more accepting of the American intelligence assessments — both those predicting China’s economic ascendancy and those warning of political dangers if there was no reform of governance in Beijing — than were audiences in Russia.

Article source: http://www.nytimes.com/2012/12/11/world/china-to-be-no-1-economy-before-2030-study-says.html?partner=rss&emc=rss

Beneath Connecticut’s Image of Affluence, Deep Fiscal Pain

The reality is different. For the past two decades, the state has finished dead last nationally in creating new jobs. A recent forecast by an industrial consulting firm, IHS Global Insight, projected it would also finish last in job creation over the next five years.

Connecticut’s finances are among the most troubled in the nation: it is last or close to last in financing pension obligations and retaining reserves for emergencies, and near the top in per-capita debt. And on Tuesday, Moody’s lowered its outlook for the state’s bond rating to negative from stable.

Despite already passing the largest package of tax increases in state history, legislators must return to Hartford on Thursday after an agreement with the state employee unions imploded. But the unbalanced budget is hardly the only problem. Connecticut, despite its affluent image and past successes, is facing a startling series of economic and fiscal challenges that it now has no option but to confront.

“No state had more resources and did less with them over the past 20 years,” said William E. Curry Jr., a former Democratic candidate for governor who now writes about state and national politics. “Yeah, we wiped out in finance and real estate, but the real problem was our own poor choices.

“We tried to import jobs you must grow yourself. We tried to save cities with ballparks and convention centers. We borrowed like shopaholics, shortchanged pension funds and barely showed up for collective bargaining.”

Gov. Dannel P. Malloy, a Democrat elected last year, recommended this week that the state eliminate 6,500 jobs — 5,500 through layoffs and the rest by attrition — to help close a projected $700 million deficit in the coming year. The hole was created last week when unions rejected a plan, negotiated by their leaders, that called for wage freezes for two years and a no-layoff guarantee for four years, as well as concessions on pensions and health care. Though 57 percent of union members approved the plan, it failed because collective bargaining rules required that at least 14 of the 15 unions ratify it and that the approving unions represent 80 percent of workers.

The stakes are enormous for Mr. Malloy, who has built a Connecticut-esque image as a rare governor charting a balanced path amid anti-union sentiment; for Democrats who control the legislature and have close ties to the unions; and for the unions themselves, which infuriated many allies by turning down a deal seen as far better than those being offered in other states.

After approving large tax increases this spring, mostly on sales and services, Mr. Malloy has said he would reject any additional ones. And though he was elected with strong union support, he said Wednesday that he now wanted to impose benefit cuts on the unions and would ask the General Assembly to pass legislation changing the way employees’ pensions are calculated, reducing their sick days and freezing longevity payments.

But, according to many experts, the stakes are highest for the state itself. After two decades of stagnation, they say, the state cannot afford the short-term torpedo of mass layoffs at a time of high joblessness; the long-term hit of chaotic, ineffectual state government; or the old option of papering over liabilities with gimmicks and debt.

Fred V. Carstensen, director of the Connecticut Center for Economic Analysis at the University of Connecticut, said the state faced two major, interrelated problems.

The first is fiscal. Due in large part to a 20-year labor agreement negotiated by Gov. John G. Rowland in 1997, Connecticut has been locked into an increasingly untenable relationship with its employees. Under that contract, the state is obligated to pay 10 times as much for employee pension costs as workers do — the second-highest ratio among the 10 largest state pension systems, after Florida. But it has not been paying what it owes into the pension system. A 2010 report said Connecticut had the second-highest unfunded pension liability per capita in the country, after Alaska, at more than $4,500 per resident.

Article source: http://feeds.nytimes.com/click.phdo?i=86f2e333589ea7d89f479c19b03844f4

China Raises Banks’ Reserve Ratios After Inflation Stays High in May

The central bank increased the so-called reserve requirement ratio, which dictates the amount of cash that banks must set aside, by 0.50 percentage point, effectively reducing the amount they can lend.

The ratio has been raised six times this year alone and now stands at 21.5 percent for the biggest lenders.

The latest increase came only hours after the national statistics bureau reported that consumer prices in China rose 5.5 percent last month from the same period a year earlier. That was slightly more than analysts had expected, and faster than the 5.3 percent increase in April.

Soaring commodities prices, strong economic growth, wage pressures and, in some cases, adverse weather conditions have pushed inflation higher in many parts of the world.

Some of the steepest rises are happening in fast-growing emerging nations.

Data from India on Tuesday further highlighted the trend, as well as the pressures on policy makers to intensify their anti-inflation efforts.

India’s main inflation gauge rose 9.1 percent in May from a year earlier, topping both analysts’ expectations and the reading from the previous month. Analysts widely expect the Indian central bank to continue its series of interest rate increases at its next monetary policy meeting Thursday.

The Chinese authorities are intensely sensitive to rising consumer costs and social tensions that could be set off by soaring food and fuel prices. Despite rising levels of affluence in China, higher prices for fuel, cooking oil and other staples take a significant toll on the wallets of everyday workers.

“Inflationary pressures remain acute,” commented Qu Hongbin, China economist at HSBC in Hong Kong, adding that food prices, which have been responsible for much of the recent overall increase in inflation, have risen at a double-digit pace for five consecutive months. “Inflation, not growth, remains the top macro risk facing Chinese policy makers.”

Reassuringly, the Chinese economy, which is a major engine of growth in the region as a whole, has remained resilient despite a moderate slowdown in overall economic growth.

Last month, industrial output and retail sales rose 13.3 percent and 16.9 percent, respectively, from May 2010, according to figures released Tuesday. Both increases were below those recorded in April, echoing other data that have showed slowing growth over the past few months.

Taken together, the Chinese data show that additional steps to combat inflation were needed, and that Beijing had room to rein in lending conditions without stifling overall economic growth.

“Inflation was higher than expected, and growth was stronger than expected,” said Dariusz Kowalczyk, an economist at Crédit Agricole in Hong Kong. “That means that there is room to tighten interest rates further.”

At the same time, the economic statistics Tuesday also helped ease fears that China, the biggest economy in the world after the United States, could experience too steep a slowdown.

Worries about a hard landing and excessively rapid tightening by the authorities have weighed on stock markets in China and elsewhere in recent months and have helped send the Shanghai composite index in mainland China lower by about 10 percent since mid-April.

The index rallied 1.1 percent after the release of the data Tuesday.

“The market has been increasingly worried about a hard landing in China, but the latest data show that the economy is still going strong,” Tao Wang, head of China economic research at UBS in Beijing, wrote in a research note. The current “soft patch,” she added, was likely to last only a couple of months.

Brian Jackson, an emerging markets strategist at the Royal Bank of Canada in Hong Kong, echoed this sentiment.

“Today’s numbers provide further evidence that growth is moderating in response to recent policy measures, but at a very gradual pace, with little to suggest that Beijing needs to worry about a hard landing in coming months,” he wrote in a note.

Many economists now expect the Chinese central bank to raise interest rates at least a quarter of a percentage point later this month and possibly again in July or August.

Such actions would come on top of the four rate increases staged since October.

More reserve-ratio increases also could follow as Beijing continues its fight against inflation. Rising global commodities prices and wage expectations, as well as severe droughts in China this year, are expected to fan price rises in coming months before inflation levels off again later this year, analysts believe.

Article source: http://www.nytimes.com/2011/06/15/business/15yuan.html?partner=rss&emc=rss