Category Archives: China

by | 25 January 2009 · 2:21 am

Attitudes toward Religion in China

From Under the Heel of the Dragon: Islam, Racism, Crime, and the Uighur in China, by Blaine Kaltman (Ohio U. Press, 2007), p. 127:

The single most important tie that binds the Uighur to one another and forms the foundation on which the Uighur have developed their sense of national identity and shared consciousness is their belief in Islam. All of the Uighur I interviewed, regardless of their individual religious practices, adamantly and proudly maintained that they were Muslim. Even those Uighur who admitted that they drank alcohol, didn’t fast during Ramadan, and never attended services at a mosque, nonetheless maintained that in their hearts they were religious. This profession of faith in Islam was the one universal characteristic shared by all of the Uighur I met during the course of this study.

The Chinese constitution contains a guarantee of freedom of religion for ethnic minorities. However, the Chinese Communist Party, aware of the role that the Catholic Church played in undermining Communist regimes in Eastern Europe, is suspicious of organized religious activity. Prior studies have reported that Uighur religious activities have been widely suppressed and criminalized; however, during the course of my research, I observed no evidence of the criminalization of Uighur religious activities. While the Chinese government requires all Islamic organizations and places of worship to register with the Religious Affairs Bureau, services in the mosques that I observed (all of which were officially registered) occurred without any noticeable governmental interference.

Uighur were generally reluctant to speak about religion, usually saying that it was a private matter. However, while only a few of them were openly critical of the government’s policies concerning religion, many of them were uncomfortable with the way religion was viewed by the Han. Uighur feel that Han look down on them, as one explained, “because they are too ignorant to understand the benefits of religion.” According to another, “The people of China—the Han—are taught that religious belief is ignorance. And now, more than before, that Muslims are terrorists. Being a minority, being religious, especially Muslim, doesn’t improve your situation in China. It only makes things more difficult.”

The mandarins of Western societies seem to share those same Han attitudes toward religious belief and religious people.

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by | 19 January 2009 · 9:11 pm

A Uighur Dance Hall in Urumqi

From Under the Heel of the Dragon: Islam, Racism, Crime, and the Uighur in China, by Blaine Kaltman (Ohio U. Press, 2007), pp. 56-57:

In Urumqi, Han bands often learn Uighur songs and perform at Uighur bars. Most of these are Uighur-owned and Uighur-operated and have an almost entirely Uighur staff and clientele, although there are usually a few token Han waiters and customers. The musicians performing Uighur songs at these bars, however, are almost always Han.

There is also a disco in Urumqi that has a Uighur clientele but whose owner is Han. The staff is all male and almost entirely Han. However this does not dissuade Uighur from coming—and coming in droves—every night of the week. Between 11:30 p.m. and 3:00 a.m., the disco is packed.

The DJ is a Uighur woman, and all announcements are made in the Uighur language. She plays Uighur popular music, with a few Russian and Indian songs mixed in. I never heard any Han songs played. Toward the end of the night, an occasional American pop song is played—Britney Spears or the Backstreet Boys. After every fourth or fifth song, the dance floor clears, and a Uighur dance team—sometimes two men and two women, sometimes three women, all dressed in traditional Uighur outfits—performs traditional dances. Although the music is traditional, a computerized dance beat is almost always mixed beneath it. And even though the Uighur women hold candles during some of the dances, modern strobe lights still flash to illuminate and intensify the performance.

The disco’s clientele on any given night is entirely Uighur. Most of the patrons are in their mid- to late twenties, although there are some older people and a few families who bring their teenage children. Some of the older women wear head scarves and long sleeves, although most female patrons, regardless of age, dress in jeans or skirts. The women in this disco do not dress as revealingly—or formally, for that matter—as Han women typically do in Han discos.

Most of the dancing, despite the modern music, has an air of traditionalism. Uighur spread their arms like wings and circle each other with pride. During slow songs, men and women dance together. Women also dance with other women, and sometimes men dance with men. The women who wear head scarves usually dance with other women. Occasionally they dance with men, probably their husbands. However, when these women dance with a man, they dance without touching.

According to the disco’s owner, “Han don’t usually come here because they don’t like Uighur music. Maybe they think it’s interesting at first, but they prefer modern Han music. I opened this place because I had been in other Uighur discos and knew they could make money. Uighur don’t mind who runs their disco, they just want a place to go play.”

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by | 19 January 2009 · 5:06 pm

Japan’s Women vs. Children Left Behind in China

From Memory Maps: The State and Manchuria in Postwar Japan, Mariko Asanoi Tamanoi (U. Hawai‘i Press, 2009), pp. 91-92 (Japanese kanji added):

Today the Japanese state and media woman call [women abandoned in Manchuria at war’s end] chūgoku zanryū fujin [中国残留婦人](Japanese women left behind in China) and distinguish them from chūgoku zanryū koji [中国残留孤児] (Japanese orphans left behind in China) in terms of age and gender. The latter were born of Japanese parents, mostly agrarian colonists, in either Japan or Manchuria, and were younger than thirteen at the time of the Soviet invasion of Manchuria. In the wake of Japan’s capitulation, their parents entrusted them to Chinese families, either because they were too sick to take care of their children or because the latter had little hope of survival. Children who were orphaned or accidentally separated from their families were also adopted by Chinese families. Today, owing to the tender age of these children at the time they were separated from their relatives, they are unsure of their mimoto, their “roots” [身元]. Since the mid-1970s, such children have been urged by the Japanese state to prove their identities as Japanese in the system of nation-states. Only those who have successfully proved their Japanese nationality have been officially allowed to return to Japan permanently.

In contrast, chūgoku zanryū fujin is a gendered category, referring to women who were over the age of thirteen when separated from their families. By 1945, most Japanese men older than thirteen had already been mobilized into the Youth Brigade or military. Hence, whether they were married or not, the women in this category had been left to take care of themselves and all the children. In the turmoil after Japan’s capitulation, some of these women chose to marry Chinese citizens for their own survival, and they stayed in China. These women are different from the children who were left behind in one important way: because they were older, they firmly remember their roots as well as the Japanese language. Precisely for this reason, the Japanese state deemed these women old enough to make choices when they were left on their own. Thus until 1993, the state did not permit them to return permanently to Japan; they were regarded as belonging to China as the spouses of Chinese citizens.

The set of terminology is confusing largely because the difference between the women and the children was artificially created by the Japanese state and media. In addition, the categories excluded Japanese men older than thirteen who left in China as of 1945. In 1994, the Japanese state admitted this confusion. Through the Repatriation Support Law (Kikoku shienhō [帰国支援法]), the state eliminated the differences between the two categories and combined them under the umbrella term of chūgoku zanryū hōjin [中国残留邦人] (Japanese left behind in China). Nevertheless, this term too has generated confusion; as a result, the state and media continue to use the two earlier terms today.

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Filed under China, Japan, language, migration, nationalism

by | 16 January 2009 · 4:18 pm

Manshū Jizō for Japanese Orphans & Their Chinese Parents

From Memory Maps: The State and Manchuria in Postwar Japan, Mariko Asanoi Tamanoi (U. Hawai‘i Press, 2009), pp. 113-114 (inline reference citations omitted):

In 1998, I was introduced to Kōji, a repatriate from Manchuria and a volunteer who assists [Japanese] orphans [left behind in 1945] and their [Chinese] families [who adopted them]. When I visited him at his home in downtown Tokyo, he showed me some fifty tiny figurines of Jizō, placed neatly in a box. Jizō, one of the most important Buddhist deities in Japan, is believed to comfort the souls of dead children while simultaneously comforting their mourning parents. Jizō statues are found throughout Japan, and the deity is “perhaps the most ubiquitous, popular, and widely loved in Japanese religion.” Kōji makes these little figurines. He starts by collecting tiny stones on the beach or by the roadside. Using his artistic skills, he smoothes the surface of each stone, paints a child’s face on it, and transforms the stone into Jizō. Each Jizō represents an immigrant child who died in Manchuria, as well as the sorrow of the child’s parents. According to Kōji, however, each Jizō also represents an immigrant child who has survived in China, as well as the devotion of the child’s Chinese adoptive parents. While the postwar Japanese state regarded orphans as “the dead” for quite some time, Kōji resurrected them in tiny stones and made the compassion of their adoptive parents known to the Japanese public. Kōji also took me to a gallery near his home. Located in the posh Roppongi district of Tokyo, the small gallery attracted many young women and men. There he displayed his figurines—called Manshū Jizō (Manchurian Jizō)—and sold them to gallery visitors. The money he made from the sale of these statues, Kōji said, would go into a fund to support another project: a stone monument to be built in China to express gratitude to the Chinese adoptive parents of the Japanese orphans. Indeed, by the time I met Kōji, the project was already well under way; a well-known artist, himself a repatriate from Manchuria, was already building a monument of a Chinese couple and their adopted son, a child of the Japanese agrarian colonists.

In 1999, Kōji and his group finally completed this grand project. When I read the newspaper report of this event, it surprised me greatly that they had built the monument in Liutiaogou, the very site of the Japanese invasion into Manchuria on September 18, 1931. In addition, they held the ceremony celebrating the completion of this monument inside the September-Eighteenth Museum, which is known for its displays condemning Japan’s imperialism. The monument, then, embodies more than the suffering of the orphans. It embodies the pain of their adoptive parents and, by extension, the pain of the people in China who suffered not only from the departure of their adopted children to Japan but also from the Japanese invasion in the age of empire. Representing the orphans, Fumio spoke at the ceremony to an audience of about two hundred, including his eighty-four-year-old adoptive father. He is reported to have said the following: “After the normalization of diplomatic relations between Japan and China, my adoptive father saw me off to Japan while crying. … My adoptive parents made me eat steamed rice every other day while they ate corn and kaoliang.” Fumio now lives in Japan as a Japanese citizen and yet has never forgotten the adoptive parents he left behind in China.

Kōji and his friends, who erected the monument and organized the ceremony in Liutiaogou, represent the parental generation of Japanese colonists. I later learned that Kōji, along with Satoshi, was one of the key figures who helped the orphans stage their protest march in downtown Tokyo. These volunteers, who themselves experienced tremendous hardships during the journeys of repatriation, are now keenly aware that the suffering of the orphans belongs not only to the past but to the present and the future as well. They are also aware that to understand their concerns and worries, they must go back to the past, and that is why they traveled to Liutiaogou. By so doing, they went far beyond Japan’s national space to understand not only the fates of the orphans and their adoptive parents but also their own involvement in Japanese imperialism. Are the children of orphans, being Japanese-Chinese, no longer Japanese? Is it necessary for the Japanese public to distinguish orphans and their families from Chinese “economic refugees”? I will leave these questions unanswered for now, but note that the wisdom of people such as Kōji gives us the hope that people, regardless of nationality, can learn the value of humanism from a past that they once shared in some ways.

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by | 13 January 2009 · 9:10 pm

Hui vs. Uighur Mosque Architecture

From Under the Heel of the Dragon: Islam, Racism, Crime, and the Uighur in China, by Blaine Kaltman (Ohio U. Press, 2007), pp. 49-50:

Most mosques throughout China’s northwest, and almost all mosques in Xinjiang, are constructed in a traditional Afghani or Arabian style. From an architectural standpoint, Hui mosques in Yunnan and the Great Mosque in Xi’an, where Hui constitute a large portion of the population, could be mistaken for Buddhist or Taoist temples, as could the Niu Jie Mosque in Beijing. Uighur in Urumqi are proud of the way their mosques look, that is, they feel their mosques look Islamic in comparison to Hui mosques built in the style of traditional Chinese temples….

The Niu Jie Mosque is Beijing’s most famous mosque and the one most frequented by the city’s Muslim population. The Niu Jie Mosque is built in the Chinese style. There are no domes or minarets. The roofs slope up at the eaves in the traditional style of the Ming dynasty. Originally built in the ninth century, the mosque’s current architecture is a reflection of enlargements and refurbishments made throughout the Yuan, Ming, and Qing dynasties. There are a number of relics and artifacts inside, many of which are Han and have no relation to Islam. According to one of the mosque’s groundskeepers, an older Han woman, the mosque was completely renovated in 1979.

The photo below shows the entrance to the Great Mosque in Xian, China, which I visited in 1988.Great Mosque courtyard, Xian, China

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by | 10 January 2009 · 8:29 am

Japan’s Genre of Uprooted Colonist Memoirs

From Memory Maps: The State and Manchuria in Postwar Japan, Mariko Asanoi Tamanoi (U. Hawai‘i Press, 2009), pp. 53, 59-60 (inline reference citations omitted):

In Japanese, the verb “to repatriate” (hikiage-ru) has multiple meanings; among these are to pull up, raise, refloat, pullout (of a place), and (close a business and) return home. [‘Pull up stakes’ seems the best English equivalent to me—J.] As a noun, “repatriate/s” (hikiage-sha) becomes not only historically but also morally charged in postwar Japan. Repatriates are those who emigrated to Japan’s overseas territories in the age of empire but were forced to (close their businesses and) return home after Japan’s capitulation in the Asia-Pacific War. Once in Japan, however, they were often seen as social misfits, largely because the dominant perception of them dramatically changed over the divide of August 15, 1945. Before then, they were imin (emigrants) who were hailed as the vanguards of imperialism in official discourses. After Japan’s defeat, they were hikiage-sha, who were greeted with pity, suspicion, and callousness by their compatriots who had never left Japan proper. Here, the oral narrative of Aki … is helpful: “When we returned home [to Fujimi in 1946], our neighbors were very cold to us Manchurian daughters. I truly worried that I might become an old mistress.” An arranged marriage for Aki would fail largely because she was “a returnee from Manchuria” who might carry “foreign sexual diseases.” In the end, she married a “Manchurian boy” whom I could not meet since he died a few years before the beginning of my fieldwork. After all, kaitaku imin (agrarian emigrants) were not supposed to return, for they had left Japan to rehabilitate the rural economy at home. With Japan’s capitulation, they lost land and houses in Manchuria that the state had taken away from Chinese farmers. Hence they had no recourse but to return to Japan, the only country on earth that was obliged to take them. Yet in the immediate postwar period, when resources were so meager, the people of their mother villages, who had sent them off enthusiastically, were reluctant to welcome the repatriates back to their home….

Although the first memoir written by a returnee from Manchuria appeared as early as 1949 (and was reprinted in 1976), the upsurge in this genre came decades later, from the late 1960s to the 1990s, with several published in the early years of the twenty-first century. This means that the majority of authors waited for more than two decades before publishing their memoirs—in order, possibly, to keep a certain distance from the past. What characterizes the memoirs is that most authors rely only on their personal memories, as well as the memories of their fellow settlers that they (over)heard while fleeing from Manchuria. In addition, they cite each other’s memoirs, rather than primary or secondary sources on Japanese imperial history. After all, hikiage-mono are the authors’ eyewitness reports and they force the reader to believe in the authenticity of their personal memories.

For all these reasons, the genre is called hikiage-mono rather than hikiage-bungaku, “repatriate literature.” Though a generic term for “genre,” mono is primarily used for classifying popular cultural productions such as movies, comedy shows, and songs. In other words, the term indicates the genre’s lower position in the hierarchy of cultural production: it is neither “literature” (bungaku) nor “history.” Indeed, most repatriate memoirs have small readerships, as the authors, being amateurs, submitted their works to small, local publishing houses. Many of the works are not even for sale. Others are not books at all but short essays printed in magazines published by organizations of former colonists and soldiers, as well as alumni organizations of the Japanese schools built in Manchuria. In fact, I bought most of the works that I examined in secondhand bookstores in Japan since the collections at university libraries are rather limited. It is for this reason, I believe, that Japanese as well as Anglophone scholars have hardly paid attention to them.

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by | 8 January 2009 · 11:14 am

What It Means to Be ‘Chinese Uighur’

From Under the Heel of the Dragon: Islam, Racism, Crime, and the Uighur in China, by Blaine Kaltman (Ohio U. Press, 2007), p. 17:

While discussing the importance of learning Mandarin with a twenty-nine-year-old unmarried Uighur man originally from Kashgar, I was introduced to the expression “Chinese Uighur.” It is a derisive term referring to Uighur who have learned to speak Mandarin properly and are making every effort to assimilate into Han society. While usually relatively well off economically, these Uighur are generally looked down on by other Uighur who feel they have sold out or betrayed their identity to advance in Han society.

As the man from Kashgar explained, “I think it’s harder for Uighur than for Han, because we do have to learn a second language. And, although the Chinese government encourages businesses to hire Uighur in Xinjiang, no one will hire a Uighur who can’t speak good Mandarin. But now, as Xinjiang becomes more developed, it is getting easier. Uighur children learn Mandarin at such a young age that it’s not so hard for them.”

He laughed and said, “you know, now there are many Uighur in Urumqi whose Mandarin is better than their Uighur because they go to Han schools, where all their classes and interactions are in Mandarin. Especially those rich Uighur children who have parents who send them to live at Han schools. They spend more time speaking Mandarin than Uighur, and when they come home they forget how to speak Uighur. In fact, now more and more Urumqi Uighur, middle-class Uighur children, can’t read Uighur. They can still speak it, because it’s their first language, but they never learn to read. And some speak it so poorly.”

He laughed again and said, “We call them ‘Chinese Uighur’ because they aren’t real Uighur.”

I asked, “What do you mean by ‘real Uighur’?” “My meaning is Chinese Uighur don’t read Uighur. They might not eat pork, but they don’t know why. They don’t keep Uighur traditions and culture alive. Many of them date Han or Hui girls. Many don’t go to pray.”

I wonder if there’s an epithet applied to Chinese Uighur that is the equivalent of oreo, banana, coconut, or apple.

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by | 8 January 2009 · 10:56 am

Uighur Bilingual Education Debate

From Under the Heel of the Dragon: Islam, Racism, Crime, and the Uighur in China, by Blaine Kaltman (Ohio U. Press, 2007), pp. 18-19:

The use of Mandarin as a vehicle for instruction and the benefits of learning Mandarin versus the Chinese government policies designed to maintain Uighur culture and language were issues that frequently came up during interviews. According to one Uighur businessman who was in his midforties, “This [the Uighur need to learn Mandarin] is a tricky problem because, while more and more schools [in Xinjiang] are teaching in Mandarin, there are still far too many that don’t. Many Uighur teachers don’t speak Mandarin. This is especially true outside Urumqi. Furthermore, the Han government wants Uighur to maintain their local language, so they encourage Uighur schools to teach in Uighur.” He thought for a moment and then added, “But this should be a Uighur responsibility. The Han know little of our culture. It’s up to Uighur parents to teach their children our language and about our Uighur culture. But it’s up to the schools to teach our children Mandarin and Han culture.”

Although many Uighur parents want their children to have a proper education and to learn Mandarin—which almost always means attending a predominantly Han school—they feel that being a Uighur student in a school where Han teachers and students make up the majority population is difficult because of racist attitudes and language difficulties. Some Uighur believe that Chinese government policies encouraging instruction in Uighur, not Mandarin, are designed to limit Uighur development in Chinese society.

Speakers of minority languages the world over face similar choices.

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by | 23 December 2008 · 8:58 pm

The Korean War as Mao’s Triumph

From: The Coldest Winter: America and the Korean War, by David Halberstam (Hyperion, 2007), pp. 634, 636, 638:

Because the Chinese viewed Korea as a great success, Mao became more than ever the dominant figure in Chinese politics. He had shrewdly understood the domestic political benefits of having his country at war with the Americans. As he had predicted, the war had been a defining moment between the old China and the new one, and it had helped isolate those supporters of the old China—those Chinese who had been connected to Westerners—and turned them into enemies of the state. Many were destroyed—either murdered or ruined economically—in the purges that accompanied and then followed the war. From then on there was no alternative political force to check Mao; he had been the great, all-powerful Mao before the war began, and now, more than ever, his greatness was assured in the eyes of his peers on the Central Committee, who were no longer, of course, his peers. Before the war he had been the dominant figure of the Central Committee, a man without equals; afterward he was the equivalent of a new kind of Chinese leader, a people’s emperor. He stood alone. No one had more houses, more privileges, more young women thrown at him, eager to pay him homage, more people to taste his food lest he be poisoned at one of his different residences. No one could have been contradicted less frequently. The cult of personality, which he had once been so critical of, soon came to please him, and in China his cult matched that of Stalin.

There was in all this a scenario not just for political miscalculation but for something darker, for potential madness with so much power vested in one man, a man to whom so much damage had been done earlier in his life. That was always a critical element of what happened next: Mao as a young man, not unlike Stalin, had been hunted too long and too relentlessly, as it were, by so many enemies; the deepest, most unwavering kind of paranoia grew out of that past and was the most natural part of his emotional and political makeup. At the same time he had become the principal architect of an entirely new political economic-social system. He existed and operated in a nation without any personal limits on him and yet where everyone could be an enemy. Both his power and his paranoia were without limits. He who had been for so long the ultimate outsider now lived a life of imperial grandiosity. He no longer needed to listen to others; if the others differed from him on issues, it was because they did not hold China’s welfare as close to their hearts as he did, and were perhaps enemies of his and of China as well—the two he judged to be the same.

He was sure that he was right on all issues—his words as they escaped his mouth were worthy of being codified as laws. China, he had decided, his China, was ready to rush into modernity—the Great Leap Forward, it was called, and the burden of turning a poor agricultural society into a modern industrial state virtually overnight fell on the peasants. If he had once been uniquely sensitive to their needs, more tuned to them as a political force than anyone else in the leadership, he now seemed prepared to put the entire burden of modernization, brutal though it would be, on them for his larger purpose. His new China would, if need be, be built on their backs. It was their job to make his dreams, no matter how unlikely, come true. The Great Leap Forward was probably the first example of a turn toward madness: as it went on, the peasants suffered more and more, under growing pressure to produce more agriculturally than ever before, even as there were conflicting pressures—for them to convert to a kind of primitive industrial base, as if there were to be a small foundry in every Chinese backyard. The Great Leap Forward was always more vision than reality. Figures on agricultural production were severely doctored to make the program look like a success. Almost everyone in the bureaucracy knew that it was largely a failure—the phrase that the distinguished Yale historian Jonathan Spence used was “catastrophic hardship”—but for a long time no one dared challenge Mao. The genuine independence of the rest of the Central Committee seemed in decline; the power and authority of Mao in a constant ascent. His will had become the national will; his truths were everyone’s truths. He was never wrong. If he said that night was day, then night had become day.

Because his hold over the government was so complete, because his need to dominate every decision was so total, he forced anyone who was a potential critic or dissenter, no matter how essentially loyal, into the most dangerous role. Those who challenged him were not merely wrong, they could become, if the issue were serious enough, enemies of the people. Those who thought they were his friends and peers and old colleagues were, it turned out, badly mistaken; they were his friends and allies only as long as they agreed with him on all issues all the time. No one suffered more than one of his oldest allies, Marshal Peng. He was a simple man who had always known his limits and thus his place, a true Communist, a man who always deferred to Mao on politics. But Peng was also a proud man, every bit as confident of his sense of the peasants’ welfare. Peng became a dissenter almost involuntarily—almost, it seemed, as if Mao wanted a break with him, wanted to turn on him and make him an enemy. By 1959, the early results of the Great Leap Forward were in and China was in the midst of a terrible famine. Yet ever higher agricultural yields were being reported. Almost , every senior official understood this—that the chairman’s Great Leap was buttressed by lies and falsified statistics, but no one dared take him on.

Finally Peng did. He was by then the minister of defense …

By the time he died from his beatings, he had been interrogated 130 times. As Mao destroyed Peng, he destroyed much of what had been the best and most idealistic part of the Chinese revolution, turning his government in the process into one where only his own monomania could flourish.

This book has been a good read in parts, but I’m more impressed by Halberstam’s storytelling than by his scholarship. The major strengths, as far as I can see, are (1) his many gripping accounts of the fighting, based on interviews with survivors; (2) helpful maps; and (3) his incorporation of much new research, especially that based on recent access to Chinese archives. Otherwise, he just seems to be digesting a lot of secondary sources. Moreover, much of his very extended political spin (all Democrats, good; all Republicans, bad; anticommunism, worse than communism) is both tedious and tendentious, and his handling of sources often seems rather sloppy, as does his handling of lesser-known Sinitic names (like Han Liqin). The 669 pages of text contain no source citations whatsoever. Instead, endnotes list page numbers, quoted passages, and short reference citations.

However, in the passage cited above and elsewhere in the chapter, Halberstam quotes the words of Jonathan Spence, whose name appears neither in the bibliography nor in any endnote. In fact, there are no notes at all for pages 631–647, which includes the entirety of Chapter 53, Section 11, “The Consequences.” Readers who do a little extra research on their own are thus left to assume that Halberstam’s insights into the consequences for Mao perhaps come from somewhere in the 208 pages of Spence’s 1999 Mao Zedong, leavened with who-knows-what.

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by | 21 December 2008 · 5:39 pm

Niall Ferguson on Current Economic Prospects

Economic historian Niall Ferguson weighs in on China’s and America’s role in the current global economic crisis under the provocative headline, What “Chimerica” Hath Wrought.

The most important thing to understand about the world economy over the past decade has been the relationship between China and America. If you think of it as one economy called Chimerica, that relationship accounts for around 13 percent of the world’s land surface, a quarter of its population, about a third of its gross domestic product, and somewhere over half of the global economic growth of the past six years….

Yet commentators should hesitate before prophesying the decline and fall of the United States. It has come through disastrous financial crises before—not just the Great Depression, but also the Great Stagflation of the 1970s—and emerged with its geopolitical position enhanced. That happened in the 1940s and again in the 1980s.

Part of the reason it happened is that the United States has long offered the world’s most benign environment for technological innovation and entrepreneurship. The Depression saw a 30 percent contraction in economic output and 25 percent unemployment. But throughout the 1930s American companies continued to pioneer new ways of making and doing things: think of DuPont (nylon), Proctor & Gamble (soap powder), Revlon (cosmetics), RCA (radio) and IBM (accounting machines). In the same way, the double-digit inflation of the 1970s didn’t deter Bill Gates from founding Microsoft in 1975, or Steve Jobs from founding Apple a year later….

But the most important reason why the United States bounces back from even the worst financial crises is that these crises, bad as they seem at home, always have worse effects on America’s rivals. Think of the Great Depression. Though its macroeconomic effects were roughly equal in the United States and Germany, the political consequence in the United States was the New Deal; in Germany it was the Third Reich. Germany ended up starting the world’s worst war; the United States ended up winning it. The American credit crunch is already having much worse economic effects abroad than at home. It will be no surprise if it is also more politically disruptive to America’s rivals.

Among the other developed economies, both the Eurozone and Japan are already officially in recession, ahead of the United States. The European situation is especially precarious because, contrary to popular belief, European banks are in worse shape than their American counterparts. Average bank leverage in the United States is around 12:1. In Germany the figure is 52:1. Short-term bank liabilities are equivalent to 15 percent of U.S. GDP; the British figure is 156 percent. Indeed, the United Kingdom runs a real risk of being Greater Iceland—an economy crushed by a super-sized financial sector.

Moreover, unlike the United States, there is no single European Treasury that can implement multibillion-dollar fiscal stimulus. Monetary policy may be uniform throughout the Eurozone, but fiscal policy is still a case of every man for himself.

Emerging markets, too, have been hammered harder by the crisis than the “decoupling” thesis promised. In the year to the end of October 2008, the U.S. stock market declined by 34 percent. But Brazil’s was down 54 percent, China’s 58 percent, India’s 64 percent and Russia’s 66 percent. When Goldman Sachs christened these four countries the BRICs, they little realized that their equity markets would one day be dropping like bricks. These figures are scarcely good advertisements for the more regulated, state-led economic models favored in Beijing and Moscow.

via A&L Daily

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