Re: China's wealthy bypass the banks
Re: China's wealthy bypass the banks Tyler Durden Wed, 10 Nov 2004 14:56:08 -0800 Oh No Way overly simplistic. Also, you are comparing apples to bushels of wheat. [James Donald:] However Confucianism vs Daoism/Taoism is rather different from what you would get in the west. Confucianism is somewhat similar to what you would get if western cultural conservatives allied themselves with nazi/commies, in the way that the commies are prone to imagine conservatives have supposedly allied themselves with nazis. Taoism somewhat similar to what you would get if anarcho capitalists allied themselves with pagans and wiccans... WOW! I'll skip the obvious comments and ask, In which centuries are you suggesting this applies? Now? If so, you are clearly NOT talking about mainland China. Please re-define the centuries/epochs during which you believe this to have been true, and then maybe I'll bother responding. Actually, that doesn't apply to any century. The ancient philosophical school that inspired Mao Zedong was actually Legalism, which provided the theoretic foundations to the absolutist rule of Qin Shi Huangdi (to whom Mao liked to compare himself). Mao, as many other Chinese reformers and writers of the early XX Century, hated Confucianism as symbol of China's ancien regime and decay. Which is why the campaign against Zhou En-lai of 1974-75 had an anti-Confucian theme (see e.g. the posters at http://www.iisg.nl/~landsberger/plpk.html ) Legalists and Qin Shi Huangdi himself were pretty nasty types, and their domination saw widespread confiscation of books, ridiculously harsh rule (arriving late to work could bring the death penalty!) and large-scale assassination or rivals: several Confucian philosophers were buried alive. The ruthless methods of the Qin dinasty ultimately resulted in its downfall: it only lasted one and half decade (221 - 206 BC), half of what Maoism did. By comparison, Confucianism was remarkably enlightened, which is also why Voltaire expressed a good opinion of it. Some Confucian philosophers like Mencius (372-289 AC) were early theorists of people's sovereignty: The people are the most important element in a nation; the spirits of the land and grain are the next; the sovereign is the lightest [...] When a prince endangers the altars of the spirits of the land and grain, he is changed, and another appointed in his place. [Mencius, Book 7: http://nothingistic.org/library/mencius/mencius27.html ] ..and of the right to tyrannicide, justified by the loss of legitimacy brought by misrule: The king said, 'May a minister then put his sovereign to death?' Mencius said, 'He who outrages the benevolence proper to his nature, is called a robber; he who outrages righteousness, is called a ruffian. The robber and ruffian we call a mere fellow. [Mencius, Book 1: http://nothingistic.org/library/mencius/mencius04.html ] Enzo
Re: China's wealthy bypass the banks
Ah. A fellow knowledgeable China-hand. As far as I'm concerned, what Kung Tze does ca 5 BCE is really consdolidate and codify a large and diverse body of practices and beliefs under a fairly unified set of ethical ideas. In that sense, the Legalists were merely a refocusing of the same general body of mores, etc...into a somewhat different direction. One might call it a competing school to Kung Tze de Jiao Xun, but I would argue only because, at that time, Kung Tze authority as it's known today was by no means completely established. But in a sense, the early legalists weren't a HECK of a lot different from Confucious. As for Mr Donald's ramblings, the are in which they most closely approach reality is where filial obedience to the emperor is developed as an extension to his ethical system, but even here there are significant differences. For one, that filial loyalty is not portrayed as being ultimately political, but almost an extension of family (which is why the emperor was known as the Son of Heaven). Also, and this is fairly Cypherpunkish, unlike in the west the notin of Emperor was not ultimately a genetic one. That is, there's a Mandate of Heaven, and when the mandate of heaven is removed from an Emperor and his line, it's time to bum-rush his show, which was done on a regular basis in China. As for the Taoists this comment by Mr Donald is almost completely nonsensical. -TD From: Enzo Michelangeli [EMAIL PROTECTED] To: [EMAIL PROTECTED] Subject: Re: China's wealthy bypass the banks Date: Fri, 12 Nov 2004 17:53:07 +0800 Re: China's wealthy bypass the banks Tyler Durden Wed, 10 Nov 2004 14:56:08 -0800 Oh No Way overly simplistic. Also, you are comparing apples to bushels of wheat. [James Donald:] However Confucianism vs Daoism/Taoism is rather different from what you would get in the west. Confucianism is somewhat similar to what you would get if western cultural conservatives allied themselves with nazi/commies, in the way that the commies are prone to imagine conservatives have supposedly allied themselves with nazis. Taoism somewhat similar to what you would get if anarcho capitalists allied themselves with pagans and wiccans... WOW! I'll skip the obvious comments and ask, In which centuries are you suggesting this applies? Now? If so, you are clearly NOT talking about mainland China. Please re-define the centuries/epochs during which you believe this to have been true, and then maybe I'll bother responding. Actually, that doesn't apply to any century. The ancient philosophical school that inspired Mao Zedong was actually Legalism, which provided the theoretic foundations to the absolutist rule of Qin Shi Huangdi (to whom Mao liked to compare himself). Mao, as many other Chinese reformers and writers of the early XX Century, hated Confucianism as symbol of China's ancien regime and decay. Which is why the campaign against Zhou En-lai of 1974-75 had an anti-Confucian theme (see e.g. the posters at http://www.iisg.nl/~landsberger/plpk.html ) Legalists and Qin Shi Huangdi himself were pretty nasty types, and their domination saw widespread confiscation of books, ridiculously harsh rule (arriving late to work could bring the death penalty!) and large-scale assassination or rivals: several Confucian philosophers were buried alive. The ruthless methods of the Qin dinasty ultimately resulted in its downfall: it only lasted one and half decade (221 - 206 BC), half of what Maoism did. By comparison, Confucianism was remarkably enlightened, which is also why Voltaire expressed a good opinion of it. Some Confucian philosophers like Mencius (372-289 AC) were early theorists of people's sovereignty: The people are the most important element in a nation; the spirits of the land and grain are the next; the sovereign is the lightest [...] When a prince endangers the altars of the spirits of the land and grain, he is changed, and another appointed in his place. [Mencius, Book 7: http://nothingistic.org/library/mencius/mencius27.html ] ...and of the right to tyrannicide, justified by the loss of legitimacy brought by misrule: The king said, 'May a minister then put his sovereign to death?' Mencius said, 'He who outrages the benevolence proper to his nature, is called a robber; he who outrages righteousness, is called a ruffian. The robber and ruffian we call a mere fellow. [Mencius, Book 1: http://nothingistic.org/library/mencius/mencius04.html ] Enzo
Re: China's wealthy bypass the banks
-- James Donald: However Confucianism vs Daoism/Taoism is rather different from what you would get in the west. Confucianism is somewhat similar to what you would get if western cultural conservatives allied themselves with nazi/commies, in the way that the commies are prone to imagine conservatives have supposedly allied themselves with nazis. Taoism somewhat similar to what you would get if anarcho capitalists allied themselves with pagans and wiccans... Enzo Michelangeli [EMAIL PROTECTED] Actually, that doesn't apply to any century. The ancient philosophical school that inspired Mao Zedong was actually Legalism, which provided the theoretic foundations to the absolutist rule of Qin Shi Huangdi In my original post, I said that legalism was pretty much the same thing as communism/nazism, so you are not disagreeing with me, merely re - raising a point I had already raised. However, whereas legalism is much the same thing communism/nazism, confucianism is legalism moderated by conservatism (to whom Mao liked to compare himself). Mao, as many other Chinese reformers and writers of the early XX Century, hated Confucianism as symbol of China's ancien regime and decay. And the commies hated the nazis, as well as other commies slightly different from themselves, and the nazis hated other nazis slightly different from themselves. The conflict between confucianism and legalism does not imply the difference betweent the two is very large, though it is a good deal larger than the miniscule difference between communism and nazism. By comparison, Confucianism was remarkably enlightened, by comparison. Well most things are pretty enlightened by comparison with communism/legalism/nazism. I am less impressed by this fact than you are. Confucianism is despotic and oppressive. Even if confucians do not bury scholars alives, they suppress their opponents by means less spectacular, but in the long run comparably effective. China stagnated because no thought other than official thought occurred. --digsig James A. Donald 6YeGpsZR+nOTh/cGwvITnSR3TdzclVpR0+pr3YYQdkG HNIR6uGQUMyllJLev2ryOe5xvv1qtUyvgvnFXy4J 4HfiAds3UvnSj3hJTTbW4uTzwvqIlszbh7H0gilkM
Re: China's wealthy bypass the banks
-- On 12 Nov 2004 at 11:12, Tyler Durden wrote: However, blaming the Chinese response to the Meiji restoration on officially unsanctioned thought illustrates a complete cluelessness about China. During that time Chinese intellectuals (which at the time meant practically anyone who had any kind of an education) regularly debating notions of Ti Yung, or the tension between what is esentially Chinese vs what's useful from the Western World (and by the 1860s it was starting to become clear that the west had some advanced ideas). This is far more than a top-down dictatorship in the Stalinist sense, That is the revisionist version - that china was a free and capitalist society, therefore freedom is not enough to ensure modernity and industrialization - a proposition as ludicrous as similar accounts of more recently existent despotic states. China during that period was the classic exemplar of oriental despotism, the place on which the idea is based. just as the Cultural Revolution was far more than a bunch of teenagers obeying orders. But the Cultural Revolution was merely a bunch of teenagers obeying orders, merely the simulation of a mass movement, with mass compliance instead of mass initiative. --digsig James A. Donald 6YeGpsZR+nOTh/cGwvITnSR3TdzclVpR0+pr3YYQdkG A3r+IPhnwM5iwqn01H7AuV9g1K9PgqLsYSmZVb6P 4ewsr2ejzouasJCmgOSl3a3j3FucBkMACrPcAsosX
Re: China's wealthy bypass the banks
-- ken wrote: And when was this stagnation? R.A. Hettinga wrote: Two words: Ming Navy For those who need more words, the Qing Dynasty forbade ownership or building of ocean going vessels, on pain of death - the early equivalent of the iron curtain. --digsig James A. Donald 6YeGpsZR+nOTh/cGwvITnSR3TdzclVpR0+pr3YYQdkG Iw7Wkew4KTQWmS2lvvIMd7+fR3rWAWagnqJ4cF0k 4Ee4DcVaw474VQFVRrwVAXR4XZSXiaNtRuKXYpsBo
Re: China's wealthy bypass the banks
-- On 12 Nov 2004 at 15:08, Tyler Durden wrote: The Qing were 1) Manchus (ie, not Han Chinese)...they were basically a foreign occupation that stuck around for a while; and 2) (Nominally Tibetan) Buddhists. Although they of course adhered to the larger Confucian notions, they in many ways deviated from mainstream Confucian beliefs. The mainstream Confucian belief, like the mainstream legalist belief, was that the emperor should have absolute power. The Qing dynasty was successful in giving effect to this belief, and justified that effect on confucian grounds. This makes them more confucian, not less confucian, than the Sung dynasty, for the Sung were confucian merely in intent, much as the current chinese regime is communist merely in intent. Also, you need to get more specific about WHEN during the Qing dynasty you believed this occurred. During the 19th century this is most certainly NOT true, and there are many famous naval battles that occurred between the British and the Chinese navies (in fact, the famous Stone Boat in the Summer palace was built using funds that were supposed to pay for real ships). The Qing dynasty prohibited anyone other than themselves from owning seagoing boats - that is why I called it the equivalent of the iron curtain. But this has nothing to do with Confucianism per se, but is more directly related to good old traditional Chinese xenophobia. The prohibition was not against foreigners sailing, but chinese sailing, so the intent was not fear of foreigners, but as with the iron curtain, fear of chinese wandering outside government control and being contaminated with unauthorized foreign thoughts. --digsig James A. Donald 6YeGpsZR+nOTh/cGwvITnSR3TdzclVpR0+pr3YYQdkG QpsnWCawMTxeL36my3kdz4SvKVqTYqmGh2nPCY2E 4vCwJru3POMcSWlMD2yDlvSJWTIOuNvDNItpg37fe
Re: China's wealthy bypass the banks
China stagnated because no thought other than official thought occurred. And when was this stagnation? And what were the reasons China did not stagnate for the previous thousand years?
Re: China's wealthy bypass the banks
-- On 12 Nov 2004 at 14:29, Tyler Durden wrote: OK, Mr Donald. You clearly imagine the China of 2,500 years ago to operate like a modern 20th century nation-state. You need to rethink this, given a few simple facts: My delusion is evidently widely shared: I did a google search for legalism. http://tinyurl.com/56n2m The first link, and many of the subsequent links, equated legalism with totalitarianism, or concluded that legalism resulted in totalitarianism. 1. There were no telephones during Confucious' time. Pol Pot's goons mostly murdered people by killing them with a hoe, and mostly tortured people with burning sticks. Does this make Pol Pot's Cambodia not a modern nation state? What made the Ch'in empire a modern despotism was total centralized control of everything, and a multitude of regulations with drastic penalties for non compliance. Telephones are irrelevant. It was the liberal use of the death penalty for non compliance, not the telephone, that made it centralized. 2. Several provinces of China are larger than all of Western Europe. Even a very high-priority message could take months to propagate. 3. Control' of China 2500 years ago was almost nonexistent. When a provincial commander marched fresh conscripts from place A to place B, he would do it in the time alloted, and be there on the date specified, or the Ch'in emperor would cut his head off. It is the cut-his-head off bit, and the minute and overly detailed instructions concocted by a far away bureaucracy, that made it a modern totalitarianism. Analogously, in the recent war, Iraqi troops failed to blow several bridges because they had to wait for orders from Saddam. Wireless and telephone did not help. It was a geographically, ethnically, and linguistically diverse set of quasi-nation-states. So was the Soviet empire. Law in early China was NOTHING like what you imagine it to be, and was a higly decentralized affair. So was Stalin's Soviet Empire, and Pol Pot's Cambodia, in the highly unusual sense of decentralized that commie/nazis use. Pol Pot's Cambodia was, like Ch'in dynasty china, decentralized in that they had twenty thousand separate killing fields, but was, like Ch'in dynasty china, highly centralized in that the man digging a ditch dug it along a line drawn by a man far away who had never seen the ground that was being dug. --digsig James A. Donald 6YeGpsZR+nOTh/cGwvITnSR3TdzclVpR0+pr3YYQdkG kIKFSkaq39tHojTf6+FAu2WFT3X6iHJMyTUNi7kx 4kLyg7PvSEfnbAOwjYFVGCmxNpP52VH6X9inrj6cM
Re: China's wealthy bypass the banks
Mr Donald's comments are almost completely nonsensical. or rather, they vaguely reflect some aspects of reality glimpsed through a really fucked up mirror while on bad crack. Probably Mr Donald is referring to something he saw on TV about China's response (or relative lack of response) to Japan's Meiji Restoration. China definitely did not respond to foregin ideas of industrialization and technology like the Japanese did. (Or at least, not at the time!) But it should be remembered that China did slowly and steadily evolve it's technology, and was well ahead of the western world until the Enlightenment. However, blaming the Chinese response to the Meiji restoration on officially unsanctioned thought illustrates a complete cluelessness about China. During that time Chinese intellectuals (which at the time meant practically anyone who had any kind of an education) regularly debating notions of Ti Yung, or the tension between what is esentially Chinese vs what's useful from the Western World (and by the 1860s it was starting to become clear that the west had some advanced ideas). This is far more than a top-down dictatorship in the Stalinist sense, just as the Cultural Revolution was for more than a bunch of teenagers obeying orders. In the end, a simplistic (though not clueless) argument could be made that China decided to remain Chinese rather than embrace what would have been a big disruption to their way of life. As it turned out, the 20th century (and the Japanese) more or less forced this new way of life on them. Hell..come to think of it, the closest precedent to the US invasion of Iraq might be the Japanese invasion of China in 1937. -TD From: ken [EMAIL PROTECTED] To: cypherpunks [EMAIL PROTECTED] Subject: Re: China's wealthy bypass the banks Date: Fri, 12 Nov 2004 15:40:27 + China stagnated because no thought other than official thought occurred. And when was this stagnation? And what were the reasons China did not stagnate for the previous thousand years?
Re: China's wealthy bypass the banks
-- James A. Donald. China stagnated because no thought other than official thought occurred. On 12 Nov 2004 at 15:40, ken wrote: And when was this stagnation? Started soon after the Qing dynasty And what were the reasons China did not stagnate for the previous thousand years? When the Song dynasty attempted to appoint important people, they did not necessarily become important people, and when it attempted to dismiss important people, they did not stay dismissed - The Song dynasty was unable or unwilling to give full effect to Confucianism. The local potentates conspicuously failed to behave in a properly confucian manner towards the emperor. The Song emperor could not reliably make local authorities obey him, which mean that his confucian mandarins could not reliably stop anyone other than themselves from thinking - much as today the communists are unable to stop anyone other than themselves from banking - in part because they are reluctant to apply the rather drastic measures that they have frequently threatened to apply. China prospered under Song Confucianism for pretty much the same reasons as it is today prospering under communism. --digsig James A. Donald 6YeGpsZR+nOTh/cGwvITnSR3TdzclVpR0+pr3YYQdkG Yv20dIxJj7Vr+GPh5ImGfq9c3N7OLh5qda5/qc+9 49HxvL6pJJ1duyj3afDTLVoAjtWFWKz322go1DD9I
Re: China's wealthy bypass the banks
At 3:40 PM + 11/12/04, ken wrote: And when was this stagnation? Two words: Ming Navy Cheers, RAH -- - R. A. Hettinga mailto: [EMAIL PROTECTED] The Internet Bearer Underwriting Corporation http://www.ibuc.com/ 44 Farquhar Street, Boston, MA 02131 USA ... however it may deserve respect for its usefulness and antiquity, [predicting the end of the world] has not been found agreeable to experience. -- Edward Gibbon, 'Decline and Fall of the Roman Empire'
Re: China's wealthy bypass the banks
That is the revisionist version - that china was a free and capitalist society, therefore freedom is not enough to ensure modernity and industrialization - a proposition as ludicrous as similar accounts of more recently existent despotic states. I can't tell if you're arguing me with or just yourself. You seem to equate disagreement with your assessment with a viewpoint that is completely opposite. To say that China was despotic would, on average, be accurate. But then again, one must remember that a form of despotism where the despots are months away is very different from modern forms of despotism. Today's China is in some ways similar to China during many dynasties. The emperor sleeps some insect with a big, fat stinger awakens him and then he gets mad, swats it, and then goes back to sleep. When the locals are fairly certain the emperor is sleeping soundly, they go about their business. Call it despotism if you want, but really it's essentially Chinese. -TD
Re: China's wealthy bypass the banks
-- On 12 Nov 2004 at 9:51, Tyler Durden wrote: As far as I'm concerned, what Kung Tze does ca 5 BCE is really consdolidate and codify a large and diverse body of practices and beliefs under a fairly unified set of ethical ideas. In that sense, the Legalists were merely a refocusing of the same general body of mores, etc...into a somewhat different direction. One might call it a competing school to Kung Tze de Jiao Xun, but I would argue only because, at that time, Kung Tze authority as it's known today was by no means completely established. But in a sense, the early legalists weren't a HECK of a lot different from Confucious. Which is a commie nazi way of saying that the the Confucians were not a heck of a lot different from the legalists - and the legalists set up an early version of the standard highly centralized totalitarian terror state, which doubtless appears quite enlightened to the likes of Tyler Durden. --digsig James A. Donald 6YeGpsZR+nOTh/cGwvITnSR3TdzclVpR0+pr3YYQdkG k9Dumf7XMAhNCRDuxNd2aKQtrN2PqD2p2l3TDcjw 4SMVqw0LGnr3oZKU5v0WQpooJ4tKHdZvNiokzj2e9
Re: China's wealthy bypass the banks
Ah. This is an interesting point. The Qing were 1) Manchus (ie, not Han Chinese)...they were basically a foreign occupation that stuck around for a while; and 2) (Nominally Tibetan) Buddhists. Although they of course adhered to the larger Confucian notions, they in many ways deviated from mainstream Confucian beliefs. Also, you need to get more specific about WHEN during the Qing dynasty you believed this occurred. During the 19th century this is most certainly NOT true, and there are many famous naval battles that occurred between the British and the Chinese navies (in fact, the famous Stone Boat in the Summer palace was built using funds that were supposed to pay for real ships). But perhaps you meant ocean-going boat ownership by private individuals, and that is certainly something that was a BIG no-no during many epochs of Chinese civilization. And indeed, this is probably precisely why the Chinese had to defend themselves from British attack, rather than the other way around. But this has nothing to do with Confucianism per se, but is more directly related to good old traditional Chinese xenophobia. In the end, Chinese unification was probably a devil's bargain. It created a far more stable nation, but at the cost of human freedom. But it's not precisely like this was imposed on the populace from without...that it was successful at all in a place as large and remote as China is a testimony to Chinese dislike of Wai Guo culture. -TD From: James A. Donald [EMAIL PROTECTED] To: cypherpunks [EMAIL PROTECTED] Subject: Re: China's wealthy bypass the banks Date: Fri, 12 Nov 2004 10:11:09 -0800 -- ken wrote: And when was this stagnation? R.A. Hettinga wrote: Two words: Ming Navy For those who need more words, the Qing Dynasty forbade ownership or building of ocean going vessels, on pain of death - the early equivalent of the iron curtain. --digsig James A. Donald 6YeGpsZR+nOTh/cGwvITnSR3TdzclVpR0+pr3YYQdkG Iw7Wkew4KTQWmS2lvvIMd7+fR3rWAWagnqJ4cF0k 4Ee4DcVaw474VQFVRrwVAXR4XZSXiaNtRuKXYpsBo
Re: China's wealthy bypass the banks
OK, Mr Donald. You clearly imagine the China of 2,500 years ago to operate like a modern 20th century nation-state. You need to rethink this, given a few simple facts: 1. There were no telephones during Confucious' time. 2. Several provinces of China are larger than all of Western Europe. Even a very high-priority message could take months to propagate. 3. Control' of China 2500 years ago was almost nonexistent. It was a geographically, ethnically, and linguistically diverse set of quasi-nation-states. To even imagine them to be anything like a modern nation state indicates you are extrapolating your bizarre little philosophical universe well beyond the breaking point. (But then again, that wasn't too hard!) 4. Event the early Ryu-Jya (Legalists) were nothing like what you imagine modern laws to be. In fact, their activity probably centers on creating an established set of standardized weights (ie, for weighing food and whatnot). Law in early China was NOTHING like what you imagine it to be, and was a higly decentralized affair. Indeed, modern China is rapidly 'deteriorated' into the same. As for... Which is a commie nazi way of saying that the the Confucians were not a heck of a lot different from the legalists - and the legalists set up an early version of the standard highly centralized totalitarian terror state, which doubtless appears quite enlightened to the likes of Tyler Durden. Again, you seem to visualize me as (-1) times yourself, or basically your old commie self. The point I continue to harp on (and that you fail to understand) is that, despite how well one may argue that one sees reality 'objectively' (and others don't), completely alternate viewpoints are possible and very often held by others throughout the world. An action like the US in Iraq (irregardless of what you believe the objective reality to be) is futile precisely because it only re-inforces the world view of the locals (ie, that the US is a giant, bullying oppressive regime that has stuck it's big dick into the holy land and needs force to remove it). In other words, perception is often reality, and until you (and others like you) accept that, then we'll continue to have bloodbath after bloodbath, initated by 'Christian' and 'Islamic' true believers alike. -TD From: James A. Donald [EMAIL PROTECTED] To: [EMAIL PROTECTED] Subject: Re: China's wealthy bypass the banks Date: Fri, 12 Nov 2004 09:41:20 -0800 -- On 12 Nov 2004 at 9:51, Tyler Durden wrote: As far as I'm concerned, what Kung Tze does ca 5 BCE is really consdolidate and codify a large and diverse body of practices and beliefs under a fairly unified set of ethical ideas. In that sense, the Legalists were merely a refocusing of the same general body of mores, etc...into a somewhat different direction. One might call it a competing school to Kung Tze de Jiao Xun, but I would argue only because, at that time, Kung Tze authority as it's known today was by no means completely established. But in a sense, the early legalists weren't a HECK of a lot different from Confucious. Which is a commie nazi way of saying that the the Confucians were not a heck of a lot different from the legalists - and the legalists set up an early version of the standard highly centralized totalitarian terror state, which doubtless appears quite enlightened to the likes of Tyler Durden. --digsig James A. Donald 6YeGpsZR+nOTh/cGwvITnSR3TdzclVpR0+pr3YYQdkG k9Dumf7XMAhNCRDuxNd2aKQtrN2PqD2p2l3TDcjw 4SMVqw0LGnr3oZKU5v0WQpooJ4tKHdZvNiokzj2e9
RE: China's wealthy bypass the banks
Fascinating. And typical of the unusual Chinese seesaw that has occurred throuout the aeons between hyper-strict centralized control and something approaching a lite version of anarchy. There's no good mapping of this into Western ideas of fascism, marxism, and economics. Interesting too that there's a ganster base in Wenzhou. This is precisely where the young Chiang Kai Shek consolidated his power early on as a local gangster/warlord. -TD From: R.A. Hettinga [EMAIL PROTECTED] To: [EMAIL PROTECTED] Subject: China's wealthy bypass the banks Date: Tue, 9 Nov 2004 16:10:52 -0500 http://www.iht.com/bin/print_ipub.php?file=/articles/2004/11/09/business/yuan.html China's wealthy bypass the banks By Keith Bradsher The New York Times Wednesday, November 10, 2004 WENZHOU, China The Wenzhou stir-fry is not a dish you eat. But it is giving indigestion to Chinese regulators and could prove troublesome to many investors worldwide, from New York money managers, Pennsylvania steelworkers and Midwestern farmers to Australian miners. Here in this freewheeling city at the forefront of capitalism in China, the dish is prepared when a group of wealthy friends pool millions of dollars' worth of Chinese yuan and put them into a hot investment like Shanghai real estate, where they are stirred and flipped for a hefty profit. The friends often lend each other large amounts on the strength of a handshake and a handwritten IOU. Both sides then go to an automated teller machine or bank branch to transfer the money, which is then withdrawn from the bank. Or sometimes they do it the old-fashioned way: exchanging burlap sacks stuffed with cash. The worry for Chinese regulators is that everyone in China will start cooking the Wenzhou stir-fry and do it outside the banking system. In the last few months, borrowing and lending across the rest of China is looking more and more like what is taking place in Wenzhou. The growth of this shadow banking system poses a stiff challenge to China's state-owned banks, already burdened with bad debt, and makes it harder for the nation's leaders to steer a fast-growing economy. The problem starts with China's low interest rates. More and more families with savings have been snubbing 2 percent interest on bank deposits for the double-digit returns from lending large amounts on their own. They lend to real estate speculators or to small businesses without the political connections to obtain loans from the banks. Not only is the informal lending rate higher, but the income from that lending, because it is semilegal at best, is not taxed. For fear of shame, ostracism and the occasional threat from thugs, borrowers are more likely to pay back these loans than those from the big banks. Tao Dong, chief China economist at Credit Suisse First Boston, calculates that Chinese citizens withdrew $12 billion to $17 billion from their bank deposits in August and September. The outflow turned into a flood last month, reaching an estimated $120 billion, or more than 3 percent of all deposits at the country's financial institutions. If the bank withdrawals are not stemmed in the months ahead, Tao warned, this potentially could be a huge risk for financial stability and even social stability. And with China now accounting for more than a quarter of the world's steel production and nearly a fifth of soybean production, as well as some of the largest initial public offerings of stock, any shaking of financial confidence here could ripple quickly through markets in the United States and elsewhere. For instance, if the steel girders now being lifted into place by hundreds of tower cranes in big cities across China are no longer needed, that would produce a worldwide glut of steel and push down prices. On Oct. 28, when China's central bank raised interest rates for one-year loans and deposits by a little more than a quarter of a percentage point, it cited a need to keep money in the banking system. Higher official rates should reduce external cycling of credit funds, the bank said in a statement. Eswar Prasad, the chief of the China division of the International Monetary Fund, expressed concern about bank withdrawals in a speech in Hong Kong three days before the central bank acted. The main Chinese banks have fairly substantial reserves, but they need those reserves to cover huge write-offs of bad debts some day. The hub of informal lending in China is here in Wenzhou, 370 kilometers, or 230 miles, south of Shanghai. Some of China's first experiments with the free market began here in the late 1970s, and the result has been a flourishing economy together with sometimes questionable business dealings. Depending on how raw they like their capitalism, people elsewhere in China describe Wenzhou as either a center of financial innovation or a den of loan sharks. But increasingly, Wenzhou is also a microcosm of the kind of large-scale yet informal financial dealings now going on across
China's wealthy bypass the banks
http://www.iht.com/bin/print_ipub.php?file=/articles/2004/11/09/business/yuan.html China's wealthy bypass the banks By Keith Bradsher The New York Times Wednesday, November 10, 2004 WENZHOU, China The Wenzhou stir-fry is not a dish you eat. But it is giving indigestion to Chinese regulators and could prove troublesome to many investors worldwide, from New York money managers, Pennsylvania steelworkers and Midwestern farmers to Australian miners. Here in this freewheeling city at the forefront of capitalism in China, the dish is prepared when a group of wealthy friends pool millions of dollars' worth of Chinese yuan and put them into a hot investment like Shanghai real estate, where they are stirred and flipped for a hefty profit. The friends often lend each other large amounts on the strength of a handshake and a handwritten IOU. Both sides then go to an automated teller machine or bank branch to transfer the money, which is then withdrawn from the bank. Or sometimes they do it the old-fashioned way: exchanging burlap sacks stuffed with cash. The worry for Chinese regulators is that everyone in China will start cooking the Wenzhou stir-fry and do it outside the banking system. In the last few months, borrowing and lending across the rest of China is looking more and more like what is taking place in Wenzhou. The growth of this shadow banking system poses a stiff challenge to China's state-owned banks, already burdened with bad debt, and makes it harder for the nation's leaders to steer a fast-growing economy. The problem starts with China's low interest rates. More and more families with savings have been snubbing 2 percent interest on bank deposits for the double-digit returns from lending large amounts on their own. They lend to real estate speculators or to small businesses without the political connections to obtain loans from the banks. Not only is the informal lending rate higher, but the income from that lending, because it is semilegal at best, is not taxed. For fear of shame, ostracism and the occasional threat from thugs, borrowers are more likely to pay back these loans than those from the big banks. Tao Dong, chief China economist at Credit Suisse First Boston, calculates that Chinese citizens withdrew $12 billion to $17 billion from their bank deposits in August and September. The outflow turned into a flood last month, reaching an estimated $120 billion, or more than 3 percent of all deposits at the country's financial institutions. If the bank withdrawals are not stemmed in the months ahead, Tao warned, this potentially could be a huge risk for financial stability and even social stability. And with China now accounting for more than a quarter of the world's steel production and nearly a fifth of soybean production, as well as some of the largest initial public offerings of stock, any shaking of financial confidence here could ripple quickly through markets in the United States and elsewhere. For instance, if the steel girders now being lifted into place by hundreds of tower cranes in big cities across China are no longer needed, that would produce a worldwide glut of steel and push down prices. On Oct. 28, when China's central bank raised interest rates for one-year loans and deposits by a little more than a quarter of a percentage point, it cited a need to keep money in the banking system. Higher official rates should reduce external cycling of credit funds, the bank said in a statement. Eswar Prasad, the chief of the China division of the International Monetary Fund, expressed concern about bank withdrawals in a speech in Hong Kong three days before the central bank acted. The main Chinese banks have fairly substantial reserves, but they need those reserves to cover huge write-offs of bad debts some day. The hub of informal lending in China is here in Wenzhou, 370 kilometers, or 230 miles, south of Shanghai. Some of China's first experiments with the free market began here in the late 1970s, and the result has been a flourishing economy together with sometimes questionable business dealings. Depending on how raw they like their capitalism, people elsewhere in China describe Wenzhou as either a center of financial innovation or a den of loan sharks. But increasingly, Wenzhou is also a microcosm of the kind of large-scale yet informal financial dealings now going on across the country. The withdrawals by depositors and the informal money lending has spread so swiftly here that it is only in Wenzhou that the Chinese central bank releases monthly statistics on average rates for direct loans between individuals or companies. The rate hovered at 1 percent a month for years until April, when the authorities began limiting the volume of bank loans. Borrowers default on nearly half the loans issued by the state-owned banks, but seldom do so here on money that is usually borrowed from relatives, neighbors or people in the same industry. Residents
Re: China's wealthy bypass the banks
-- Tyler Durden wrote: Fascinating. And typical of the unusual Chinese seesaw that has occurred throuout the aeons between hyper-strict centralized control and something approaching a lite version of anarchy. There's no good mapping of this into Western ideas of fascism, marxism, and economics. Maps near enough. The Chinese concept of legalism is barely distinguishable from German concepts of communism and nazism. However Confucianism vs Daoism/Taoism is rather different from what you would get in the west. Confucianism is somewhat similar to what you would get if western cultural conservatives allied themselves with nazi/commies, in the way that the commies are prone to imagine conservatives have supposedly allied themselves with nazis. Taoism somewhat similar to what you would get if anarcho capitalists allied themselves with pagans and wiccans, in the way that conservatives are prone to imagine that they have, though in reality the pagans and wiccans line up with the greenies and nazis, for the most part. This is the result of a Chinese heritage of politicide and mass murder, whereas the west has a heritage of compromise and negotiation. So in the west, we have ordinary people forbidden from doing banking stuff, but a pile of loopholes in that law, and we do not have the death penalty for unauthorized banking, whereas in China, they do have the death penalty, and despite the death penalty, massive defiance of the law. --digsig James A. Donald 6YeGpsZR+nOTh/cGwvITnSR3TdzclVpR0+pr3YYQdkG NWin7CjdJuYCUBbj9jwfYAiCHobTuUO1Bw3DLogP 4Unpss2ukPbY+HeKKDTu441IpswCXzfXLuU2FCphs
Re: China's wealthy bypass the banks
Oh No Way overly simplistic. Also, you are comparing apples to bushels of wheat. However Confucianism vs Daoism/Taoism is rather different from what you would get in the west. Confucianism is somewhat similar to what you would get if western cultural conservatives allied themselves with nazi/commies, in the way that the commies are prone to imagine conservatives have supposedly allied themselves with nazis. Taoism somewhat similar to what you would get if anarcho capitalists allied themselves with pagans and wiccans... WOW! I'll skip the obvious comments and ask, In which centuries are you suggesting this applies? Now? If so, you are clearly NOT talking about mainland China. Please re-define the centuries/epochs during which you believe this to have been true, and then maybe I'll bother responding. -TD
