We’re at Peak Panda

The South China Morning Post describes Hong Kong uber-tycoon Li Ka-shing’s strategic shift from Greater China property to international utilities and infrastructure. Li’s model – make big easy profits in Hong Kong and Mainland real estate and buy revenue-generating assets in the West – goes back years. But as the SCMP notes, even Cheung Kong’s property arm is moving out of property.

A Bloomberg story provides some context about China’s rise topping out. Even the Communist Party’s most loyal admirers must concede that the huge gains of the last few decades have run their course. The leadership is now trying to keep growth going artificially through a credit binge while it figures out a way to move on to a higher-productivity economy without relaxing Communist Party control over markets, or pretty much anything.

The accepted wisdom is that the CCP keeps itself in charge by delivering economic growth. According to this rosy view, Xi Jinping’s Clampdown on Everything and Everyone – now approaching its fifth anniversary – is calculated, prudent preparation for the next bout of liberalization.

Some, perhaps including Hong Kong’s nimbler ‘instant-noodle patriot’ tycoons, might have a more cynical interpretation. That is that the CCP will in fact sacrifice economic growth to keep itself in charge – if that’s what it takes. The clampdown is to avoid economic (social/political/all-the-same-thing) liberalization.

Look at it this way: why are Chinese elites and the upper-middle class moving their assets offshore, sending their kids to overseas universities and acquiring foreign passports?

The stock answer is that they are concerned about air pollution, tainted food and overpriced housing, which makes it sound like a passing lifestyle trend. But it looks more like a long-term hedge against permanently worse conditions at home – relative economic stagnation, an unpredictable government, possible foreign adventurism, looming demographic horrors. (On the subject of ditching the old country: at this stage in its rise to global might, the US was processing millions of migrants at Ellis Island. Huddled masses yearning to breathe free are still giving China a miss.)

Oddest thing of all, China’s elites are moving their wealth and families to decaying English-speaking sunset-empires whose degenerate liberal democratic capitalist model is dragging them into the quagmires of Trump and Brexit.

Meanwhile, the Hong Kong government announces the latest instalment of your endless Belt and Road Opportunities.

 

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8 Responses to We’re at Peak Panda

  1. Winston Smith says:

    “Power is not a means; it is an end. One does not establish a dictatorship in order to safeguard a revolution; one makes the revolution in order to establish the dictatorship. The object of persecution is persecution. The object of torture is torture. The object of power is power.”

  2. HillnotPeak says:

    A fine piece of journalism from The Standard. Hunter S. Thompson would be jealous.

  3. Yes, Li really will be soon the richest man in the cemetery. Thank God for that. I hate all the arsshlickan articles about him and all the attention you pay to him today.

    (And all your sad biased unthinking Tory and CIA and GCHQ and MI6 Economist boring cliches of course too. You really do need a brain enema.)

    Fortunately, the revenge of genetics is at hand and his two fuckwit sons will quickly dissipate his fortune.

    Hurrah!

  4. Red Dragon says:

    I say! Steady on, Don. “Two Iron Ladies in Asia”. That’s a bit rich.

    Poor old Aung San Suu Kyi has hardly proved herself to be particularly ferrous in standing up to the vested interests of the Burmese military junta, which continues to call all the shots.

    And as for Carrie, well she’s probably pretty rigid when it comes to her mindset; four hundred years in the Hong Kong “civil service” will have ensured that. But to call the mayor of a failing Cantonese city an “Iron Lady of Asia” strikes me as pretty hyperbolic even by Siamese standards.

  5. Reader says:

    Hmm. I don’t recall ‘welcoming huddled masses’ as a prerequisite of other empires. The founding fathers of the US of A needed to populate its sprawling hinterland with people that looked like them. China has no such population shortage.

  6. LRE says:

    Not sure we’re at peak panda — more peak Pooh.

    I’m with the instant noodle patriots — the CPC are not going to relinquish any power over the economy, because they know making people rich is the only thing that has kept them from being overthrown.

    Of course this invasive micromanaging to keep the economy profitable is the very thing that will hasten an economic downturn. Thus they are irrationally sealing their own fate by trying to avoid it, but the paranoid sociopaths running the CPC were never rational people. Rational people don’t lock up booksellers and essay writers or live in fear of people with facebook and twitter.

    @Red Dragon
    Whilst the mindset may be rigid, Carrie “It is time to retire. This is also my promise to my husband” Lam is so spineless she didn’t even dare retire: she’s closer to jelly than iron. Her current policy of dealing with the political strife in Hong Kong appears to be avoiding being in the city altogether, in the vague hope that if she’s far away and very quiet, we might blame someone else.

    Aung San Suu Kyi might not be the quickest or most iron revolutionary in the face of the military dictatorship, but at least she has a backbone: unlike CY Lam, she is actually opposing her country’s dictatorship, rather than actively representing it and trying to sell it as “an opportunity” to her people.

  7. Red Dragon says:

    Your points are well made, LRE. I cannot cavil.

  8. Joe Blow says:

    No empire in history has ever survived. Interesting. The Soviet Union collapsed under its own weight 25 years ago (lasted 70 years). The American Century has come to an end with the Trump Train Wreck. China ditched its founding ideology all but in name after a mere 30 years and now it is about to implode, helped by massive debts that can never be repaid and a level of corruption that would make Marcos blush.

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