Pogue on Foxconn: hey, at least it's not rice farming or prostitution! A job seeker yawns as he queues outside Foxconn recruitment center in Shenzhen, Guangdong province February 22, 2012.
Finally, Outrage in China Against Bear Farming. M.
Silverberg/TRAFFIC Southeast Asia, via Associated PressA caged cub at a bear bile farm in Hanoi, Vietnam. Apple investigates 'sweat shop' factories following suicide threat. China shuts down around 1,000 factories over toxic glue. China’s Low New Year Sales Ripple Across Asia. Chinese shoppers on their Lunar New Year holiday were less lavish than expected by Hong Kong jewelers, curbed spending on beauty brands and slowed spending at South Korean stores.
They may keep that pace in the coming year of the dragon. Holiday sales on the mainland grew 16 percent to 470 billion yuan ($75 billion), according to data from the Ministry of Commerce, the slowest pace since the 2009 financial crisis and three percentage points below last year’s increase. China is finding it is not immune to global economic forces and the slowdown is hitting Chinese consumers, who may increase this year’s spending at a slower pace than in 2011. This may mean trouble for the growing number of foreign companies rushing into China, especially luxury brands, said Jason Yuan, an analyst at UOB Kay Hian in Shanghai. We're All State Capitalists Now - By Niall Ferguson. If there is one issue on which the rival candidates for the U.S. presidency agree, it's that America's global leadership will endure.
Mitt Romney insists it is not a "post-American century," while Barack Obama declared in his State of the Union address that "anyone who tells you otherwise, anyone who tells you that America is in decline or that our influence has waned, doesn't know what they're talking about. " They must enjoy this kind of chest-beating in Beijing. That a resurgent China poses a challenge to American power -- especially in the Asia-Pacific region -- has been clear for some time to those who know what they're talking about. The real question is whether the United States has a credible response. Should it apply some version of the "containment theory" that the late George Kennan recommended for dealing with the Soviet challenge after 1945?
Leave aside the military and diplomatic calculus and consider only the economic challenge China poses to the United States. Robert Kagan on Why the World Needs America. History shows that world orders, including our own, are transient.
They rise and fall, and the institutions they erect, the beliefs and "norms" that guide them, the economic systems they support—they rise and fall, too. The downfall of the Roman Empire brought an end not just to Roman rule but to Roman government and law and to an entire economic system stretching from Northern Europe to North Africa. Culture, the arts, even progress in science and technology, were set back for centuries. Modern history has followed a similar pattern. After the Napoleonic Wars of the early 19th century, British control of the seas and the balance of great powers on the European continent provided relative security and stability. With the outbreak of World War I, the age of settled peace and advancing liberalism—of European civilization approaching its pinnacle—collapsed into an age of hyper-nationalism, despotism and economic calamity. American power may diminish, the political scientist G. Mr. Gold Confirms Investments In China Will Eventually Be Worthless.
There is reason to believe investments in China will eventually be worthless for firms such as PetroChina (PTR) and China Life (LFC) and that the supply chains of companies sourcing in China such as Apple (AAPL) and Walmart (WMT) will eventually be broken.
The question now is how soon? (There is an entire December 26 Seeking Alpha article "Why Investments in China Will Eventually Be Worthless" explaining why this will occur.) Presently there is an implicit social contract between the Chinese people and their ostensibly communist government: the people don't challenge the government and, in exchange, get a degree of economic freedom and access to better paying jobs. In essence, the political leadership provides stability and mostly low-wage job opportunities and, in exchange, gets to remain in control while its officials and their cronies get rich.
China's Social Contract is breaking faster than expected. China Reduces Holdings of U.S. Treasuries to Lowest Level Since June 2010. China, the largest foreign lender to the U.S., reduced its holdings of Treasuries in December to the least since June 2010 amid efforts to assist Europe in addressing its debt crisis.
The world’s second-largest economy decreased its U.S. debt securities by $31.9 billion from November, or 2.8 percent, to $1.11 trillion, according to Treasury Department data released yesterday. Its position in longer-term notes and bonds also fell $32.5 billion, or 2.8 percent, to $1.1 trillion, the least since June 2010. Japan, the second biggest buyer, increased its holding by $3.5 billion to $1.04 trillion.