China Collapse Theory" Collapses

China Collapse Theory" Collapses
China Times Editorial (Taipei, Taiwan, ROC)
A Translation
April 27, 2015

Executive Summary: "The Coming Collapse of China" is a book by Chinese-American lawyer Gordon Chang. It was published in 2001. Fifteen years later, the Chinese mainland has not collapsed. The events predicted in the book have not come to pass. But one of this has silenced these doomsday prophets. Last year Gordon Chang wrote an article for Forbes magazine. He alleged that the economic growth rate on the Chinese mainland during 2013 was not the officially announced 7.5%, but only 2%.

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"The Coming Collapse of China" is a book by Chinese-American lawyer Gordon Chang. It was published in 2001. Fifteen years later, the Chinese mainland has not collapsed. The events predicted in the book have not come to pass. But one of this has silenced these doomsday prophets. Last year Gordon Chang wrote an article for Forbes magazine. He alleged that the economic growth rate on the Chinese mainland during 2013 was not the officially announced 7.5%, but only 2%.

Gordon Chang cited numbers provided by Rhodes Raul, IMF Asia and Pacific Department Deputy Director, who said that "Ten to fifteen years ago, China created 1 million jobs. That required a GDP growth rate of 1.4%. Five to ten years ago, it required 1%. Now it requires only 0.8%." In 2013, the Chinese mainland created 2.73 million more jobs in 2013. According to Raul Rhodes' formula, the Chinese mainland's annual economic growth rate should be 2.2%.

If Gordon Chang read more about economic growth, he probably would not make such crude estimates to confirm his pessimism. The Economist, by contrast, published a more professional article on the Chinese mainland in its latest issue, entitled "Quiet Revolution: A slowing economy commands headlines, but the real story is reform." The article said rapid development of the service sector on the Mainland in 2014, led to the creation of 13 million urban jobs. Therefore the slowdown in the growth rate will not lead to social problems. Indeed, urbanization and raised income levels, coupled with policies to encourage domestic demand, have increased the Mainland service sector to GDP ratio significantly, from 24% in 1978, over 30% in the 1990s. Last year, it reached a record high of 46.1%. That is why even though overall GDP growth has slowed, job growth has remained at a tolerable level.

The Economist noted that the real reason behind the Chinese mainland's economic slowdown is three reforms. The first is financial reform, including the internationalization of foreign exchange and the liberalization of interest rates. Many state-owned enterprises now pay market interest rates. The second is fiscal reform. Local government debt is more transparent and market-oriented. This inhibits overcapacity and the inflation of GDP caused by blind and excessive investment. The third is administrative reform, including anti-corruption and deregulation. Last year, 3.6 million new businesses were established on the Mainland, twice as many as the previous year, evidence of its swift success .

Besides Gordon Chang, we have David Shen, an academic at George Washington University in Washington, DC. In a Wall Street Journal article, Shen offers a pessimistic prediction. He says the Chinese mainland's political system has obvious weaknesses, the first of which is a brain drain of its best and brightest. Over half of the Mainland's wealthy hope to emigrate. An unprecedented number of children of wealthy Mainlanders are studying abroad. Mainland women hope to move to the US before bearing children.

This behavior is supposed to mean that the Mainland is about to collapse. But haven't wealthy people the world over been doing the same thing? Didn't they do the same thing in Taiwan and South Korea? Aren't they doing the same thing now in India, Thailand, Indonesia, and Malaysia? The wealthy move their assets, property and their children to nations where they believe private property is the most secure. Usually that means the US. But do these children of the wealthy invest in their country of birth? Do these students return home to find work? If they do, it means they are optimistic about the economic prospects of the country in which they were born.

Shen noted other "significant weaknesses", including "intensified political pressure", lack of enthusiasm within the CCP for the "Chinese Dream", "lack of talent within the anti-corruption movement that has endangered the Xi regime", and "ineffective financial and administrative reforms". Former US State Department official Stephen Harner currently works in Japan. In the Asian edition of Forbes, Harner disagreed. He believes Mainland anti-corruption reforms have won universal approval. Other reforms will pave the way for smooth Mainland development.

The Mainland economy is of course huge and complex. Sound governance is definitely a challenge. The economic future of the Mainland has its bright side as well as dark side. The real answer may be found somewhere in between Shen's view and Harner's view. But indications are that Shen's view is less and less likely, while Harner's view is more and more likely. Not only is growth not decelerating, it may even be accelerating.

Any decisions made by businesses, individuals, and government based on the assumption that the Mainland is about to collapse, are probably grossly mistaken. The best approach is to take advantage of the opportunity provided by Mainland development to grow Taiwan's economy, giving more people on Taiwan a way out. In the meantime, one must also have risk awareness and use risk management. Those who hope the Mainland will collapse will not listen to other views. Those who actually need to make decisions must distinguish between subjective wishes and objective analyses by professionals. Only then can they arrive at scientific, empirically-based conclusions. People must learn how to think independently and decide for themselves.

「中國崩潰論」走向崩潰

2015年04月27日 中國時報

《中國即將崩潰》是美籍華裔律師章家敦在2001年出版的一本著作。15年過去了，大陸沒有崩潰，該書所預測的事沒有發生，卻沒有讓這些末日的預言家封口。章律師去年在美國《福布斯》雜誌撰文，懷疑2013年中國大陸經濟成長率不是官方公布的7.5%，而是只有2%。

章律師所舉證的數字來源，是國際貨幣基金亞洲及太平洋部副主任羅德勞爾曾說的：「10到15年前，中國創造100萬就業，需要1.4%的GDP增長；5到10年前，需要1%；現在只需要0.8%。」而中國大陸在2013年增加了273萬就業，依照羅德勞爾的公式，在該年經濟成長率應為2.2%。

如果章律師多讀過一點經濟成長的書籍，大概就不會以如此粗糙的估算，來證明他的悲觀論。相形之下，英國《經濟學人》最近一期刊登了一篇有關中國大陸的文章，標題為〈寧靜革命：經濟放緩成為標題，但真正的故事是改革〉，比較專業。這篇文章指出，由於服務業的快速發展，大陸經濟在2014年創造了1300萬個城市工作，使得放緩的成長率不至於造成社會問題。的確，城市化、所得水準增加，加上政策鼓勵內需，大陸服務業占GDP的比率大幅提升，由1978年的24%，上升到1990年代的3成以上，而去年則達到46.1%的歷史新高，這就是整體GDP成長減緩但就業成長還是維持在可容忍水準的真正原因。

《經濟學人》該文還指出，大陸經濟成長趨緩背後的真正原因是三個改革。一是金融改革，包含外匯的國際化、利率的自由化，使得眾多國營事業開始必須支付市場利率；二是財政改革，讓地方政府的債務透明化、市場化；兩者都會抑制盲目舉債和過度投資所引起的產能過剩和GDP虛胖；第三個改革是行政，包含反貪和鬆綁；去年大陸民營事業新增了360萬家，約是前年的1倍，由此可看出其快速的成效。

即便如此，最近除了章氏以外，還有一位華府喬治華盛頓大學的學者沈大衛，在《華爾街日報》撰文，提出了悲觀的觀點。他認為大陸的政治系統有明顯的弱點，其中第一個就是「菁英出走」：一半以上的大陸富豪有意移民，富人子女在海外留學人數創新高，婦女則爭相來美生子。

但這代表國家快崩潰，還是全世界有錢人都在做的事？早期的台灣、南韓不都這樣在做嗎？甚至到現在，不是也還在做？印度、泰國、印尼、馬來西亞，不都一樣？有錢人為了鞏固其資產，把財產和子女的國籍，放在一個他們認為對私人財產權最有保障的國家，那不就是美國嗎？其實，只要看這些富豪和其子女是不是繼續在其出生國投資，留學生是否有意願回國就業就知端倪；如果有，而且日益興盛，就表示他們看好出生國經濟成長遠景。

沈氏提到的幾個其他「明顯弱點」還包括「政治高壓變本加厲」、「『中國夢』無法激起忠貞黨員的熱情」、「可用人才不多造成反貪運動最終危及習政權」和「財政和行政改革推動不力」等。對於這些看法，目前在日本工作的前美國國務院官員何思文在《福布斯》亞洲版上撰文指出，他並不贊同。他認為大陸的反貪改革明顯獲得社會普遍的認同，其他的改革也會讓未來發展的道路更加平順，對大陸的發展前景看好。

當然，以大陸經濟之龐大與複雜，能否落實良好的治理，絕對會是莫大的挑戰。未來大陸經濟的走向，有其光明面，也有其風險面，真實的答案可能在沈氏和何氏的看法之間；但目前所有的跡象均顯示，往沈氏方向走的機率愈來愈小，而往何氏看法走的機率，不但不因成長趨緩而變小，反而愈來愈大。

企業也好、個人也好、政府也好，如果是在「中國大陸即將崩潰」的假設下做決策，恐怕會有很大的錯誤風險。最好的作法是，利用大陸發展的機會，壯大台灣的經濟，為台灣的人才多找到出路；但在此同時，也具有風險意識，對風險有所控管。對於「希望」看到大陸崩潰的人，他們聽不進去其他的看法；真正需要做決策的人，必須分辨何種言論代表了立論者的「主觀期待」，何種言論代表了專業的「客觀分析」，才能做出合乎科學和實證基礎的判斷。民眾也應該自我訓練獨立思考、自我判斷的能力。