Feedback on China Video Story from Mike "In Tokyo" Rogers, Sculptor Hopen, Others; Reserve Currency Reflections

In response to A "Must See" Heart Wrenching Video of Moral Deterioration in China I received several emails saying I should have posted a warming about graphic content.

Yes, I could have done that.

I also received emails from several people who were upset at this video thinking it does not belong in an economic blog at all. They are mistaken.

The often repeated story regarding China is that the country will grow without end, it will overtake the US, and rule the world.

Instead, I propose the China story is really about rampant credit expansion, malinvestments, unproductive assets, no free capital markets, centralized planning that people mistake for capitalism, no legal system of merit, no freedom of speech, no respect for either property rights or human rights, and that peak-oil will in and of itself kill the story.

In short, all the people who think China is some sort of miracle savior for the world economy are going to find out otherwise.

Let's move on to emails from readers.

Mike "In Tokyo" Rogers Replies

You are absolutely 100% correct in showing this video. Even though I live in Japan, I have been to China many times and even handled marketing in promotion in Japan for Chinese companies.

The reason I have never commented on these things is because China and Japan have had a bad and contentious and violent enough history without me throwing in my 2-cents.

In Japan, perhaps because of of a "Japanese homogeneous" mind-set or a common history this sort of thing would be an incredibly rare experience. In general, the Japanese feel like they are all part of the same family. This is an important thing that keeps the fabric of society here stable.

This is also why Japan does not have crime and social problems like the rest of the world.

Anyway, thanks for the video.

Reader "Larry" Writes
Dear Mish,

I regard your comments on this video wholly appropriate. Basic economic hardship drives people to terrible inhumanity. Allowing choice is very important but there is no choice without truth.

The trouble is we are told so many lies that proper choices are very hard to make without a strong commitment to the facts.

Thank you for your integrity in this vital matter even if I don't always agree with you when the figures don't add up but the heart is quite clear on the matter.

Bill Hopen, Sculptor Replies
Hello Mish

Mike, you and I live in a different culture, different economy, different head space. Americans who help strangers are a curiosity in China, often applauded in the media.

This is because most urban Chinese people stay to themselves, don't get involved, don't help, unless it is a friend or family. I, like you, are of the boy scout persuasion, I stop to help if there is trouble.

Once I interceded in a NYC street incident, saving two women who were being beaten by a drug crazed person. I was the only one to act. Still this horrible neglect of this poor little run down girl is beyond belief.

Shanghai is a city squared, 30 million, in its poorer areas, the residents work 14-16 hours a day for survival, for several dollars a day.

If you get sick with no money, you die. If you lose your job you starve. There is no social net to save you. The message a Chinese feels is: "No One Cares if I Live or Die".

Within living memory, 20 million people starved in China. The ones who made it through that time were hardened with the attitude "take care of yourself and do what you need to do. Don't waste time and effort on strangers. There are too many and you have too little to help."

Everyone knows of this incident in China now. The Chinese public is horrified and outraged by the video. They feel shame at what their society has become.....the cars scooters, pedestrians running over or passing by without regard for this poor little injured human being in need.

This video hit me like a punch in the gut, I have 5 little ones now, an almost two and a three year old among them.

Bill Hopen, Sculptor
Bill Hopen lives part-time in China, part-time in the US. He met his wife in China. For more on his story please see Inside China: A Sculptor's View.

His latest work is "Dedication of the Wedding Feast of Cana" in bronze.

Final Comments

There is quite a difference between failing to act out of fear for yourself or life vs. complete indifference as to what happens to a little girl run over by a van. The video represents the tragic state of everyday affairs in China.

The Yuan will not become the new world reserve currency.

China does not have deep enough capital markets or deep enough bond markets. China does not respect human or property rights, and contrary to popular belief there are so many problems with being the world's reserve currency that Chinese leadership does not even want it.

Mike "Mish" Shedlock
Click Here To Scroll Thru My Recent Post List