Friday, January 28, 2011

Much ado about China

A book about the Chinese famine (1958-1962) claims that many more people may have died than originally believed: around 45 million. It includes a conversation alleged to take place just before the famine when China had bumper crops, with Chairman Mao reported as saying "With so much grain, in future you should plant less, work half time and spend the rest of your time on culture and leisurely pursuits, open schools and a university, don't you think?...You should eat more.  Even five meals a day is fine!" One commenter reminds us from Amartya Sen that the death rate in India at that time was at least as high, but this is rarely mentioned.

Yglesias wonders what Obama's latest State of the Union speech would have sounded like if given by Hu instead....

Coase recommends that Chinese economists do not take theory or empirics straight from Western models - even his own - but they should develop their own work on how the Chinese economy works.

While China has complained about the US quantitative easing, Beckworth and Wolf point out that the only reason China is importing our inflation - which it doesn't need - is because it is actively pursuing its own monetary policy to maintain exchange rate stability. If they didn't buy up dollars, it wouldn't affect them nearly as much. "While QE2 may be good for the U.S. economy, it seems a stretch to think its optimal for an economy with 10% annual real growth."

Speaking of which, China's largest bank is making a bid to buy a very small retail banking branch in the US. In order to approve of the purchase, the US regulator not only has to approve the Chinese bank, but the bank's regulator. The Economist opines that, while American's can't complain about the spread of the bank per se, "They will hope, though, that if its local operation fails, it won’t have to be bailed out by Uncle Sam."

Jon Huntsman, our ambassador to China and former Utah governor, apparently has a unique style of diplomacy, such as riding a bicycle to some official meetings. He says his goal is to "humanize" the Chinese-US relationship so that the citizens of both nations value it.

Chinese parents have more choice about their children's schooling than US parents.

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