Two Poems

Liu Xiaobo and His Widow Liu Xia

On July 13 of last year, Chinese Nobel Peace Prize laureate Liu Xiaobo died in Shenyang after years of persecution by the monolithic Communist Party he dared to oppose. Here are two poems, first by his widow Liu Xia dedicated to her husband:

Road to Darkness

For Xiaobo

Sooner or later you will leave
me, one day
and take the road to darkness
alone.

I pray for the moment to reappear
so I can see it better,
as if from memory.
I wish that I, astonished, would glow, my body
in full bloom of light for you.

But I can’t make it except
clenching my fists, not letting
the strength,
not even a little bit of it, slip
through my fingers.

The following is a poem by Liu Xiaobo dedicated to his wife:

Morning

For Xia

Between the gray walls
and a burst of chopping sounds,
morning comes, bundled and sliced,
and vanishes with the paralyzed souls
of the chopped vegetables.

Light and darkness pass through my pupils.
How do I know the difference?
Sitting in the rust, I can’t tell
if it’s the shine on the shackles in the jail
or the natural light of Nature
from outside the walls.
Daylight betrays everything, the splendid sun
stunned.

Morning stretches and stretches in vain.
You are far away—
but not too far to collect the love
of my night.

Both poems appeared in the September 28, 2017 issue of The New York Review of Books.

 

Mad About Travel

Crescent Lake Oasis Near Dunhuang, China

Immanuel Kant was a great philosopher, but I have no desire to emulate him. According to an editorial in Philosophy Now:

A curious case, this Kant. They say that travel broadens the mind, but Kant never in his whole life travelled more than ten miles from his home city of Königsberg (now Kaliningrad). He scraped a living for years as a private tutor before eventually becoming a hardworking professor at the university. He lived a life of disciplined regularity, taking the same walk around Königsberg at the same time each day, with such regularity that it was said that the inhabitants set their watches by him.

Living in Cleveland in the 1950s and 1960s, I desired more than anything else to travel. Even when I came out to California and got a job, it was a full seven years before I could afford to go anywhere but Cleveland. And when I did, my parents were appalled. “Why don’t you come to Cleveland?” Mom wheedled. “I’ll cook my favorite dishes for you.” That’s all I needed—to get even fatter.

I started out with baby steps, going to Mexico and traveling all around the country by bus and train (back when there were trains). I went to England and Scotland, too, and even joined my parents in 1977 to visit Hungary and Czechoslovakia.

In 2001, I went to Iceland; and, in 2006, I discovered South America. Now my desire for travel is insatiable. On the left corner of my kitchen table is a collection of travel guides from Lonely Planet and moon. While waiting for my morning paper to be delivered, I can read about the Trans-Siberian Railroad (2 guides), Iceland, Bolivia, Ecuador, and New Mexico while sipping a cup of hot tea.

December 29 is the last day of my working career, so I may not be able to afford some more distant locations; but Mexico and Guatemala continue to beckon. If I should win the lottery (hah!) I will try for the Trans-Siberian Railroad between Moscow and Vladivostok, though maybe diverting through Mongolia to Beijing. I can always dream, can’t I?

 

 

 

 

Messing with Mother Nature

Chinese Mass Wedding

Chinese Mass Wedding

China is worried. The all-powerful Communist Party has messed with Mother Nature once too often. For many years, they banned having more than one child per family. That led, not surprisingly, to an excess of male newborns over female newborns. (Accidents sometimes happened to infant girls, when it was boys who were desired.)

Although the Party has eased up on its child restrictions, there are two serious consequences:

  1. The number of marriages is dropping, possibly because many young men cannot find a sufficient number of marriage-age women to wed. I also remember reading stories about suicides of male factory workers because they had no hope of being able to raise a family.
  2. A disconcerting 500,000 elderly have wandered off—most of them suffering from dementia—partly because there are not enough children to bear the burden of their support.

China has been in this type of situation before. One of the decrees during the Great Leap Forward period (1958-1962) was that the “Four Pests” were to be eradicated. The pests in question were rats, flies, mosquitoes, and sparrows. One effect of killing massive numbers of sparrows was that the ecological balance was upset as crops were eaten by insects that were kept under control by the birds.

Maybe having too much power over men and animals is dangerous in the long run.

 

Will China Overtake the U.S.?

Daniel Rohr of Morningstar Thinks Not

Daniel Rohr of Morningstar Thinks Not

The following article was published in March by Morningstar on the subject “What Will China Look Like in 2025?” I was rather surprised by its findings and would like to share it with you.

China’s faltering economy has sent shivers through the global markets in 2016, and for good reason. As the world’s second-largest economy and leading source of global growth for the past decade, China matters more than ever. Guessing what comes next for China and the implications for the rest of the world is an exercise fraught with uncertainty, but we believe China’s arrival at two major and near-certain inflection points will alleviate some of that uncertainty. First is China’s economic rebalancing. As we’ve argued for the past five years, excess capacity across broad swaths of the economy and mounting bad debt will force a transition to consumption-led growth. The second inflection point concerns China’s demographics. The country’s working-age population will shrink by 43 million by 2030, by which time China will have more seniors than the European Union, Japan, and the United States combined. These two inflection points shape much of our long-term outlook, which we’ve summarized here with 10 predictions for the next 10 years.

First, we expect China’s GDP growth to slow to less than half the pace of the past 10 years. The historical experience of economies making the transition from investment-led to consumption-led growth shapes much of this outlook. In every case, the rebalancing economy experiences not only a sharp deceleration in investment growth, but also weaker consumption growth. Historical precedent also suggests magnitude matters; the bigger the boom, the weaker the ensuing GDP growth. China’s boom has been greater in magnitude and duration than anything that has come before. In our view, consensus expectations, while moderated, remain too optimistic in the 5%-6% range. We expect GDP growth to average 1.5%-4.5% in the next 10 years. Attaining the upper end of that range would require major reforms to unleash household consumption, reallocate credit from the state to the private sector, and boost productivity at China’s bloated state-owned enterprises.

Second, we believe reforms are likely to disappoint, making even 4.5% GDP growth a challenge. Our skepticism is rooted in the inherent conflict between key reforms and Beijing’s two overriding political aims: control and stability. For example, we think it is unlikely Beijing will allow the major defaults that would be necessary to eliminate state-owned enterprises’ preferential credit access and reallocate credit to more productive borrowers. Doing so would risk massive social disruption and diminish the state’s control over capital allocation. For similar reasons, we doubt meaningful interest rate liberalization is a near-term prospect, as many state-owned borrowers would be unable to afford market-set interest rates. Consequently, the implicit wealth transfer from household savers to state-owned borrowers is likely to persist, hindering consumption growth.

Third, stimulus is likely to prove ineffective at best. Questions of whether Beijing will go back to its old growth playbook overlook evidence that the government has been trying to stimulate the economy since November 2014. Multiple interest rate cuts and reductions to the portion of deposits that banks must hold in reserve haven’t delivered the sort of boost they did in prior years. This is partly because of borrowers’ unwillingness to invest amid a deteriorating economic outlook, a reticence reflected in all-time low readings on the central bank’s loan demand survey. It’s also because of capital outflows from China, which we estimate at roughly $640 billion in 2015. The case against stimulus extends beyond doubts over its efficacy. Many of the problems China is dealing with today, from excess capacity to bad debt to falling prices, are the consequences of too much stimulus. At this point, stimulus is a shot of whiskey to cure a hangover.

Fourth, despite looser family-planning laws, we expect births to fall by 25 million versus the past 10 years. The female population of child-bearing age will fall by 50 million by 2025, with 41 million of that decline concentrated in women with the highest fertility rates: those ages 20-29. Assuming no change in age-specific fertility rates, births would decline 30% by 2025. A comparison of Chinese fertility rates versus those of neighboring countries at similar points in their economic development suggests economic and cultural factors account for China’s low birth rate, not government policy.

Fifth, China’s urban population growth will fall by nearly half. Over the past 10 years, as China urbanized roughly 200 million people, it traversed the steep portion of the urbanization-to-income curve we observe globally. Looking ahead, that curve will flatten considerably, with lower urbanization growth for each percentage point of GDP growth. Moreover, China will be moving along that curve at a slower pace because of weaker GDP growth. We forecast China will urbanize 115 million over the next 10 years. While this would mark a significant deceleration, it would nonetheless see China add the equivalent of Japan’s entire urban population.

Sixth, we believe the yuan will fall 20% against the U.S. dollar. Defending the de facto dollar peg amid massive capital outflows has cost the People’s Bank of China billions in foreign exchange. Unless the underlying causes of capital flight are addressed, including expectations of falling interest rates and a weaker yuan, we see little reason for those outflows to end. By devaluing the yuan to a level approximating market expectations, Beijing would reduce a major incentive for capital to leave China. A fair value estimate that draws on the global relationship between market exchange rates and purchasing power parity exchange rates across income levels suggests that level is roughly CNY 8 per $1.

Seventh, we expect China’s economic rebalancing to trigger another “Dark Age” for industrial commodities such as copper, coal, and steel. China is the dominant consumer of industrial commodities and has accounted for the overwhelming majority of global demand growth in the past decade. We forecast China’s industrial commodity demand to decline in the next several years as investment growth wanes. As a result, demand growth globally is likely to expand far more slowly than global GDP. Historically, sub-GDP demand growth has been associated with falling real commodities prices, a situation that prevailed in the decades before China’s investment boom.

Eighth, we doubt India will fill China’s shoes as far as commodity demand is concerned. India is the only country that can match China’s demographic heft. The fact that Indian GDP per capita now approximates that of Chinese GDP per capita 10 years ago has led many to suggest that Indian commodity demand is on the verge of takeoff. This line of thinking confuses the origins of China’s commodity demand growth. It wasn’t so much China’s level of development a decade ago nor the economic growth it registered in subsequent years that led to the country’s insatiable appetite for commodities. Rather, it was the heavy investment orientation of the Chinese economy. Unless India duplicates China’s growth model, India will not deliver the same boost to global commodity demand. Because of India’s pluralistic political structure and because New Delhi lacks Beijing’s tools to shape economywide capital allocation, we doubt India’s growth pattern is likely to follow that of China.

Ninth, we believe China’s health spending will more than double. We expect healthcare outlays to grow far faster than GDP for a couple of broad reasons. First is the tendency of healthcare to claim a larger share of total spending as incomes rise. This trend is evident globally and within China itself. Second is the fact that China is aging at an incredible pace. China’s population 65 and older will be 50% larger by 2025 and 130% larger by 2030, by which time it will have more seniors than the EU, U.S., and Japan combined. China will be an “old” country by middle-income standards, and we expect it to spend proportionately more on healthcare than the typical middle-income country.

Tenth, despite many high-profile predictions that China will overtake the U.S. as the world’s largest economy in the relatively near future, we don’t see that happening in the next decade. At prevailing exchange rates and assuming the U.S. musters 2.2% annual GDP growth (in line with the International Monetary Fund’s forecast) while China grows at 4.5% (the upper end of our 10-year forecast), the U.S. economy would be roughly 30% larger than China’s by 2025.

A Forgotten War

Chinese Troops in the Sino-Vietnamese War of 1979

Chinese Troops in the Sino-Vietnamese War of 1979

Once the U.S. abandoned Saigon to the Viet Cong in 1975, we seem to have lost all interest in Southeast Asia. There was, however, a lot happening. The Pol Pot regime in Cambodia, which was supported by the Chinese, was engaged in genocide on a massive scale. Also, we must not forget at that time that the Sino-Soviet conflict was at its height: The Russian-Chinese border fairly bristled with guns and military units. At the time, the Hanoi government had a military alliance with the Soviet Union. When Vietnam invaded Cambodia and deposed the Khmer Rouge, China decided to punish its neighbor to the south.

On February 17, 1979, somewhere between 200,000 and 600,000 troops of the Peoples’ Liberation Army (PLA) invaded North Vietnam and occupied the all territory for approximately twenty miles south of the border. It appears that China either wanted to test the alliance with Russia or divert the crack Viet military units engaged in Cambodia—or both, or neither. A number of reasons have been adduced for this incursion, and China wasn’t owning up to its motivation for so doing. Vietnam met the attack by the 1st and 2nd military regions—essentially militia—under the command of Dam Quang Trung and Vu Lap. The number engaged of the Vietnamese forces was a fraction of the Chinese force, but it inflicted heavy casualties on the PLA, and suffered heavy casualties in return. (The numbers vary depending on whether one is following Chinese or Vietnamese statistics.)

Newsweek Cover in Feb 1979

Newsweek Cover on March 5, 1979

When I heard that, after thirty-five years of relative peace, the Chinese are once again testing the resolve of the Vietnamese by drilling an oil well off the Paracel Islands in the South China Sea, which are claimed by both nations, my antennae started to tingle. Tiny uninhabited islands are big news these days, mainly because they extend the territories claimed by adjoining land powers. Claiming a tiny rock can extend one’s territorial waters by literally thousands of square miles. And both China and Vietnam need all the oil they can get.

The Vietnamese responded by rioting and attacking Chinese within their borders, along with the businesses they ran. China has been chartering flights to evacuate its nationals from Vietnam.

Although the PLA is huge, it is largely untested in battle. The Sino-Vietnamese War of 1979 was probably the largest military conflict it faced in the last half century—and it did not fare too well faced with a smaller number of Vietnamese militia. At that time, one must remember that the Vietnamese had been at war ever since the end of World War Two and, as a people, were probably as battle-hardened as one could be.

It would be interesting to see whether China is willing, once again, to test Vietnam’s resolve.

 

A Cultural Treasure

Liao Chiung-Chih, the Embodiment of Taiwanese Opera

Liao Chiung-Chih, the Embodiment of Taiwanese Opera

Today, Martine and I did something a little different. The Taiwan Academy had a film, presentation, and performance by the star of the Taiwanese Opera, Liao Chiung-Chih. Most of the presentation was in the Taiwanese dialect, but it didn’t matter, because I was enthralled from start to finish. Ms. Liao was phenomenal: I have never seen anyone with her extraordinary control of voice and movement. After a short film, she demonstrated several vocal singing styles, followed by a library of hand, foot, and torso gestures—and this at the age of approximately eighty.

While we did not understand a word of the language, we appreciated an artistry that goes far beyond anything that performers in the West are called upon to demonstrate. Ms. Liao kept me on the edge of my seat for two hours. There was a translator with a microphone, but still many sentences got lost. It almost didn’t matter, however, because the actress’s talent was so apparent that it almost obviated the need for translation.

At the end, of her presentation, Two performers from the Taiwan Opera, Chang Meng-I (below right) and Hwang Yea-Rong (below left), acted a sequence from one of the most famous operas in the genre, The Butterfly Lover. Based on a folktale some 1,600 years old, the opera can be traced to the Jin Dynasty. It has become the Chinese equivalent of Romeo and Juliet, with their star-crossed lovers, Liang Shanbo and Zhu Yingtai.

Two Taiwanese Opera Performers Dressed for a Scene from The Butterfly Lover

Two Taiwanese Opera Performers Dressed for a Scene from The Butterfly Lover

Originally, I thought I was going to have to work on taxes today, but I got a last-minute reprieve. So we took the bus to the main branch of the Los Angeles Library downtown, where the performance was held in the Mark Taper Auditorium. Sponsoring the event was the Taiwan Academy, which has opened a branch in Los Angeles.

Below is a photo of Liao Chiung-Chih made up as a character in the Taiwan Opera:

This Woman Is Eighty Years Old?

This Woman Is Eighty Years Old?