Some Interesting China Pieces

First off, an interesting article about China's economy from the Washington Post. Like many Asian countries, China has essentially nothing that could be called a "safety net" for the poor - ironically, given it's nominal Communism. This lack of any safety net for the elderly, combined with the one-child policy, has led to massive savings by the Chinese people. The Chinese savings rate is something like 20-30%, compared with the US's average of something close to zero. The article discusses some of the effects of this - China has been unable to tap it's own consumption, so all of it's production goes to exports (cough cough Walmart.) However, this is one of those things that can't go on forever.

Secondly, and staying with the economy, Reuters is reporting that China's GDP is likely to slow relative to last year's 9.5%. The article attributes this to the Party's efforts to build a more sustainable economy. The reason this is interesting is that the party has always had to deal with more domestic unrest in economic down-times. Tiananmen itself took place after a bad year of low growth and high unemployment. If China's GDP growth is slowing, it's hard to see how this won't result in more domestic problems, unless part of the "sustainability" efforts find ways to help the underclass.

Thirdly, an interesting editorial from my hometown paper about the increasing integration of south and east asian countries under an American banner. The article discusses the US's increasing drive to build a strategic relationship with India, most certainly as a counterweight to China in Asia. This is a process that started under Clinton, showing once more that when it comes to serious foreign policy, call a Democrat. I'll have to remember to do more research on what aid India is getting from the US. India recently announced the construction of it's first aircraft carrier. I wonder if they're getting US help.

Finally, Russia is announcing that it will prioritize China over Japan when it comes to oil purchases through the far east pipeline. Unless this statement is quickly retracted, this could get messy. The Japanese have offered billions of dollars - real money, as they say - to build the far east pipeline, and I doubt they've done it to take second place in the line for Russian oil. China, to my knowledge, hasn't offered anything like that much money - China might not be capable of offering that much money. On the other hand, Russia and China don't have territorial disputes the way Russia and Japan do, so it's possible that Putin has written off the Japanese. It would be a stupid thing to do over the Kuril islands, but that's Russia for you.