====================================================================== Rule #1: YOU MUST clip all extraneous text when replying to a message. ======================================================================
----- Original Message ----- From: "DW" <dwalters...@gmail.com> > Michael, > I think the comparison one "what China is doing" with the what the US > is or > was doing are like apples and koala bears. There simply is no > comparison > albeit the motivations for both economies might be similar. Actually David I should clarify that the main point I was making was to ridicule the claim in the WSJ article that it is the "free market" in the US which was being contrasted to China's "state-capitalism" or whatever we call it, pointing to the fact that the US state (and other capitalist states) also give huge favours, include bucket loads of cash, to favoured businesses. I wasn't saying they are the same, but I concede my "China does it better" is a significant understatement. In fact while I agree with most of SArtesian's comments I probably am somewhat more impressed than he is, quite genuinely, with what China has done the last half-decade, and not only from the point of view of it being more effective from a capitalist point of view than the US "model." A lot of that infrastructure probably is good and necessary, and as you say the Chinese capitalist state is being very successful - well apparently, to date anyway - in promoting its national bourgeoisie. Perhaps a better comparison than the current US "stimulus" would be Roosevelt's infrastructure program. But that is kind of the point too - US and Chinese capitalism have different needs and are at very different stages of development. It's quite possible however that quite a lot of that infrastrcuture is not so good and necessary, however, as the drive to hand out contracts to the national bourgeoisie and semi-'state' companies driven by profit, and with connections to various politicians, can have a life of its own in the process of accumulation of capital. If some of it does become dinosaurs it won't be those making a buck now who will pay in the future. For example, I haven't studied much about China's High Speed Rail but SArtesian's explanation of why such trains can't carry freight was very enlightening, because Vietnam has just gone through a similar discussion, and I hadn't quite got it (the point being that if they could carry freight they may be a little more viable). In Vietnam's case, the proposal was to build a 350 km/hr HSR from Hanoi to Saigon, to do the trip in 6 hours. Now personally that sounds like a dream to me, I'd do that rather than take a plane any day, but at a cost of 54 billion USD - some 50-60% of the country's GDP on one project - it met huge opposition and was actually voted down by the National Assembly despite strong advocacy by the government and most of the party leadership. How much land was it going to steal from peasants for shitty compensation, how many normal small roads or train lines or bridges or other simple infrastructure that would actually be used by people throughout the country could have been built with just a fraction of this sum? I'm glad it was canned, and I just wonder how many similar issues there are with the Chinese case. Actually it is not the only piece of grand infrastrcuture development recently rejected by the National Assembly following much opposition recently, it also rejected a plan by the government to move the entire governing apparatus from the centre to a new developing part of Hanoi where the rich have moved to; many believed it was a way for a bunch of connected people to buy up land cheap and cash in as land prices in the area hit the sky. The fact that things get knocked back here (there was also a small scale victory in a major park in hanoi preventing hotel development, for example) is one reason the development of infrastrcuture is so far behind China, though of course being a much poorer country has much to do with that too. My problem with all these articles about how "dizzying" China's recent infrastructure development has been is how much of a story are we missing about peasants and poor urban residents being shunted off their living places, relocated, getting shitty compensation, how many small scale struggles were efficiently suppressed by the cops in order for such a "dizzying" speed to have been achieved. One of this plethora of articles for example described how the IOC had to tell China to slow down as it had completed its Olympic Stadium so long before time. What tales of resistance and suppression were involved there? The result certainly is impressive - we recently went up to Beijing and its a first world city, whole worlds away from Hanoi. As for where you deny state companies are putting much into real estate, luxury apartment blocks, luxury hotels and other such "construction" nonsense, there was this article posted several months ago "State Owned Bidders Fuel Chinas Land Boom" http://www.nytimes.com/2010/08/02/business/global/02chinareal.html which claimed that "All around the nation, giant state-owned oil, chemical, military, telecom and highway groups are bidding up prices on sprawling plots of land for big real estate projects unrelated to their core businesses" and gave plenty of examples, and further noted quite succinctly, I thought, the connection between out of control infrastrcuture development under capitalism and the drive for profit by the capitalist class, where it wrote: "Rosealea Yao, an analyst at Dragonomics, a research consultant in Beijing, says a growing number of municipalities have formed local investment vehicles that borrow heavily from state-owned banks to pay to relocate residents and build infrastructure around big plots of land they intend to sell at auction. (In China, local governments cannot directly borrow from banks or issue bonds for real estate development.) Those off-balance-sheet debts are essentially bets on rising land prices, she says, which could become big liabilities if land prices were to decline sharply or the auction market were to dry up. "This is why local governments are so enthusiastic about infrastructure," Ms. Yao says. "They borrow to build something that raises the value of the land they want to sell at auction." We know the problem well in Vietnam, but it is a more recent phenomenon, at least in such an open form, because it is only in the last half-decade that state enterprises have been "liberalised" away from having to fulfil certain core functions with the bulk of their cash, and allowed to pump investment into hotels, real estate, stock market etc, leading to the hyper-inflationary boom-crash opera of 2007-8. A major scandal has now erupted over Vinashin, the state-owned (but with "equitised", ie semi-privatised) subsidiaries, which was provided massive quantities of state money from 2006 to develop VN into a great port and shiping nation, but which pumped a lot of it into all this other rubbish, and much of this has now disappeared down a black hole. I suspect in the long run SArtesian's predictions about a big bust in China are probably right, but with such a huge economy it has lots more assets to draw on and such a time of reckoning may be some time off yet. ________________________________________________ Send list submissions to: Marxism@lists.econ.utah.edu Set your options at: http://lists.econ.utah.edu/mailman/options/marxism/archive%40mail-archive.com
