Confucianism and Trade Imbalances

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“Occupy Obama”

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I recently learned a new Chinese word: 屌丝, which translates directly to something like “pubic silk.”  In a way, it’s a more elegant term than it needs to be, since “hair” could be used instead.  Anyway, even though I’m not sure I quite understand the full connotations, it’s clearly an insult – something about people who have no pride, no money, etc.

I then ran into this article about “屌丝” “occupying” Obama’s Google+ page last February (so I’m a little behind on this story…I don’t exactly get paid for this.)  For a short period, the GFW failed and allowed people in China unfiltered access to google+, and Chinese users took the opportunity to post messages on his wall.

“It is everyone’s responsibility to promote the Chinese language.”  These words now appear on US President’s Obama’s google+ page; how do Obama’s fans feel?

“Mr. President, I want to teach you Chinese, so that you can read all these posts.”

“Can such high popularity help you in the next election?” Chinese 屌丝 asked on Obama’s google+ page.

Funny enough, I hadn’t heard anything about this in the Western media. So I decided to check it out.

The comments have been almost uniformly free of the vitriol that often rages on the Internet. And, to the extent that harsh sentiments have been expressed, the criticism has been more often directed at the Chinese government. One user did write that it was disappointing to see how “weak” Obama was on the issue of human rights in China.

Even more surprising is the unusual absence of jingoistic China defenders who commonly rebut pro-democracy, pro-America comments in Chinese internet forums.

As you can see, the comments range from fawning to mischievous to thoughtful. More than a few ask for a Green Card or American citizenship. And, of course, there are a few Americans who resent these Chinese users posting in their native language as opposed to English – or who simply use it as an opportunity for sarcasm.

Although the last commentary seems to be more along the lines of the Chinese coverage, it seems like a real gap on the way internet commentary is perceived.

Written by Maofucious

January 1, 2013 at 4:48 PM

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China schooling the US

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I knew it had to happen someday.  The rough consensus among China-watchers is that the best precedent for China’s rise, at least in the realms of economics and business, is Japan.  One peculiar phase of the Japanese-American relationship was when Harley-Davidson ended up redoing its entire production methodology based on what it had learned from its Japanese rivals (who were willing to help, in order to defuse trade tensions.)  The Japanese Production System might have been inspired by an American consultant (Deming), but American companies never became world-class experts in applying it.

I ran into an article the other day, although minor, that marks the first time I’ve ever heard a similar story about China.  Ford’s China social marketing team was sent to the US to train their counterparts there.  Many people know that the Chinese government controls almost every form of communication.  The word 宣传 sort of shares the meanings of “propaganda” and “marketing;” ‘red envelopes’ are an expected practice at press conferences.  And of course Facebook and other American-based social networking services are blocked.  But focusing on the top-down aspects of this phenomenon neglects that it comes equally from the bottom up. Despite all of the censorship, there really is a vibrant Chinese internet. People simply expect their information to come from sources close to them – another aspect of the Chinese attitudes towards geography I’ve mentioned several times before.

A lot of this seems very different from Japan.  Innovative marketing and Kanban production are very different things, implying very different personality types.  It’s important when making the comparison to Japan to note that there are some deep-seated differences that have nothing to do with Capitalism or Communism.  On the other hand, these examples do both come from the auto industry – an important status symbol in either production or consumption.

Written by Maofucious

December 9, 2012 at 3:26 PM

The hierarchical logic of the Chinese language

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What number is halfway between 1 and 9?  Is it 5, or 3?  I have a graduate degree, and I’ve read The Black Swan, so I’m quite comfortable answering 3.  This also a natural answer for children, traditional peoples, and animals, according to researchers at MIT.  But logarithmic thinking is apparently driven out of people with an intermediate level of education. How could one go about teaching logs without scary multiplication tables and the constant e?  One of the best ways I could think of would be the Chinese language (as an example of fractals in general, but again those can be scary for kids.) For instance, take the pictogram for heart.

This character can be used separately, or in combination with other characters to form ‘words’ (which were not really a concept in Chinese at all until outside contact was established.)

心里

Literally, “inside the heart” = psychology (or just “inside the heart”).  But the character can also be squeezed into portions of other characters, as a “radical.”

情  患  恭  必

So shish kebab (I’ll let you figure out which one that is) your heart = disaster or anguish.  But then there’s chengyu, another level above words consisting, typically, of four characters, generally with some logic to their placement.  For instance:

心上心下

“heart goes up, heart goes down.”  Sometimes, chengyu also have history behind them, something like an inside joke (although the heart character doesn’t lend itself to good examples of this, as far as I know.) So the Chinese language is built around this concept of nested levels, of the type you get by using power laws, very different from the Western logical, grammatical mindset.

Written by Maofucious

November 24, 2012 at 10:47 AM

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Mining and weiqi

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I’ve been learning more about the mining industry in China for a project I’m doing at work.  Chinese mining  has created a lot of publicity abroad due to its willingness to overpay for projects around the world with a strategic mineral output.  This publicity has often left out the fact that the industry has been quite stagnant and fragmented domestically, with little investment in technology.  It seems that the government has actually favored overseas acquisition at the expense of domestic development.

Hearing this situation made me think of this paper (pdf) on China’s strategic mindset, as it relates to weiqi, a Chinese version of chess.  (The paper – and Henry Kissinger’s subsequent endorsement in his book – focus on security and warfare, but I’ll be coming back to this argument to show apply it to economics as well).  Weiqi doesn’t end with the capture of a particular piece, but is rather scored at the end by the amount of territory captured, reflecting Sun Zi’s principles of warfare and the importance of geography.

I’ve been learning the game over the last few months, and one of the most difficult parts about it is knowing when to leave something alone.  Players who are much better than me will apparently abandon the most unsupported pieces, while going off to play in some other corner of the board.  The typical progression of the game is therefore to start at the corners, then the sides, and finally move towards the center.  This looks very much like the way China is approaching its natural resources problems.

Written by Maofucious

November 4, 2012 at 5:51 PM

Tech wars and value rigidity

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The Washington Post this week had an interesting article about Japanese manufacturing.  I don’t inherently trust Western declinist views of Japan, and clearly the Washington Post is aware of the political context of its piece.  (It had another piece a few months ago on Japanese fondness for the fax machine, which while cute, clearly had a political subtext.)  But in the manufacturing article, this section stood out to me as being plausible:

Those who study the consumer electronics industry describe a decade of missteps and miscalculations. Japan’s giants concentrated on stand-alone devices like televisions and phones and computers, but devoted little thought to software and the ways their devices synced with one another. As a result, their products don’t always work in harmony, in the way an iPhone connects naturally with a laptop and a digital music store.

In the heyday of Japanese manufacturing, quality was the typical selling point of an electronics product, whereas today that’s changed.  Now, I can’t help think about this comment in light of the current rivalry between Google and Apple over maps.

Apple has just released its iPhone 5, which has been heavily criticized for its premature mapping technology. For some background, Apple has been making huge profits in China.  Its products are must-have items, which I would put in the category of luxury “face” goods.  These small, integrated electronics goods are quite suitable for Asian consumer preferences, of which I’m reminded every time I try to take my laptop on the bus to do reading, and can’t fit it on my lap.  These are the sorts of things that are more expensive in China than abroad, because of occasional supply shortages.

Google, with its mission to “organize the world’s information and make it universally accessible and useful,” has had a tougher time in China.  One might point to specific disputes it has had with the government regarding censorship, but I wonder if there’s a deeper cultural undercurrent here.  Its most innovative projects now involve geographical information, and it is pushing its maps to new frontiers (South Pole?  underwater?).  This sort of work has also been banned in China, where geographic information is extremely sensitive.  (Curiously CCTV anchor Yang Rui, in an unrelated and totally unprofessional rant against foreigners, accused us of compiling GPS data, among other things – giving us more of an insight into his mind than reality.)  Satellite maps are required to have a certain amount of inaccuracy, so that anyone bombing China will be forced to use map view.  In some ways, this mirrors Google’s prior larger controversy over censorship, but it is also different.  There are no blatant political  motives here, but I think there are more in the way of cultural biases.

So I wonder if China, in its clamor for handheld devices popular in its heyday (which I would say ended around 2009, when the stock market started its quiet death plunge) is going to miss out on the next wave of geographical technology, just as Japan also did when high technology ceased to be about things simply not breaking down?

Written by Maofucious

October 2, 2012 at 5:47 PM

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IQ, language, and political economy

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There hasn’t yet been enough controversy on this blog, so I will now talk about race and intelligence.

The American Conservative (who I don’t normally read) has an article on how Asian IQs seem to be invariant to economic development.  Asians in general (now I’m talking about Asian immigrants to the US) aren’t rewarded for their above-average IQs.  This guy (apparently an academic who wants to remain anonymous) thinks it’s because their verbal-analytic skills lag other races, compared with visuospatial skills. This shortcoming makes it more difficult for them develop lawyer-type skill sets, and it ultimately impacts economic growth.  I won’t comment on his theory of an IQ cutoff for economic development, and gaussian vs. linear regression, but I did notice that the way he treats his data to subtract 6.5 points from Asian IQ statistics.

All of this fits into my preconceived notions of how the Chinese language fits in with the culture.  (The Chinese language is a cultural foundation for all Confucian societies.)  Chinese has no grammar, using classifications and complex rules of the type lawyers would be expected to understand.  At best, all of its rules are situational, applying to groups of a few words.  (In policy terms, I would relate this to industrial growth policies.)  The language is also hierarchical (with an obvious political analogy) as certain themes reappear in related contexts.  I think the best way to illustrate this might be in reference to my point in the last post about little kingdoms and geography.  Place names typically have two characters.  One of those characters is likely to be some kind of moniker for the area as a whole, and so you are likely to see that character in the names of smaller districts (down to danwei) within the district, or around the  district.  One example off the top of my head is Guangdong province, which borders Guangxi and has Guangzhou as its capital.  (Dong is east; Xi is west; and zhou might be translated as -ville; although these transformations don’t always follow these sorts of formulas.)  This process is replicated in the the highly transparent evolution of the characters themselves.

This sort of setup makes it natural to base economic growth on evolutionary trial and error, arbitrated by face. This entire process creates a strong sense of conservatism that helps mediate between the highs and lows of economic development – what the American Conservative article was getting at.  Also, I suspect this relation to characters and geography has something to do with why Asians’ visuospatial skills are so well developed.

None of this, by the way, says anything about the direction of the causality.

Written by Maofucious

September 22, 2012 at 9:38 PM

An update on the short-selling situation

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There have been a number of worrying developments following the accounting standoff, which has already seen Deloitte employees threatened with life inprisonment for doing their job.  The WSJ reported in July on how short sellers are now feeling their safety is being threatened.  The Globe and Mail has an excellent article on how local police in Henan Province allowed themselves to be used as sock-puppets for a company that wanted to investigate a short seller.  The Canadian researcher may end up in prison for two years on charges of “disseminating false facts to impair another person’s commercial reputation.”

The state-run Xinhua service, demonstrating a surprising lack of understanding of Western capital markets for a media organization that has international aspirations, had an editorial last week calling for the SEC to “seriously investigate the short sellers” for unspecified charges.  Well, the SEC can’t just make short-selling illegal retroactively – the writer/editor seems to think that they can just make up charges to fit the political situation.

But I will give them the benefit of the doubt,and assume ignorance, rather than the level of planning implied by a Reuters piece calling this an “official editorial.”  The question is, where does that ignorance come from?  The author clearly had some reason to think the US would do that.  I have two ideas:

  • Defamation laws in Asia are much stronger than in most Western countries, because of the social role of face. In China, it can be a criminal offense.  If you report negatively on somebody, you better have it right. Part of the deal right now is that short sellers have been attacking companies that were apparently better prepared for it.
  • From more of an economics standpoint, Asians don’t have very well-developed attitudes towards risky investments.  The Hong Kong Stock Exchange weeds out risky stocks, which go on to the US. The American attitude is that with risk must come disclosure, but by avoiding risky investments, there is no need to strongly consider alternate viewpoints.

Now, my thought is that these two points are one and the same.  Face, as a social structure, implies a certain attitude towards risk, because if you have face, you don’t want to lose it at the end of the trading day.

Written by Maofucious

September 13, 2012 at 9:41 AM