Inflation, recession, stagflation, oh my!

Last week I gave a speech entitled: "The End of Loose Money: Subprime, The Credit Crunch and What it Means for China." I gave the obvious, yet necessary disclaimer before the speech that I am not an economist, affiliated with the real estate industry and/or an expert on the material in any way shape or form, BUT I do enjoy reading about such topics and find them worthy of further discussion. I would say that the speech was partly intended to introduce economics-related vocabulary to the students and partly intended to explain the current economic landscape in the United States and its impact on China. No need to discuss here what I covered during the speech, except one specific economic term called "decoupling" that I think is quite interesting. In describing the future (and arguably the current) Sino-US economic relationship, this concept has been floating around lately, most notably at the Davos 2008 World Economic Forum Annual Meeting. The theory of decoupling postulates that the developing economy of China is progressively inching away from its reliance on exporting goods to the US in order to fuel growth. Instead, China is both strengthening economic ties with other nations around the globe and, even more importantly as the standard of living rises for millions of its citizens, boosting domestic consumption. Of course the US is China's leading export destination and there is little indication that this will change any time soon, however it is important to understand that this relationship is dynamic and that such trends shape not only the future Sino-US economic landscape, but also the global economy as well.

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In my last entry I posted a few excerpts from students sharing their viewpoints on a few touchy current event issues. Again, I want to continue writing this blog so for the sake of self preservation, I will not make my own comments. Here's what one of my students had to say about the unrest in western China.

"We all know that Tybett (sic) is part of China for more than 700 years. None of the Chinese government has ever surrendered the sovereignty of Tybett to others. How can some people say that China invade Tybett? "Invasion" has no meaning to a country exercising its sovereignty right on its own land. Nobody can separate Tybett from its mother-China. Just like every mother loves her child, China loves Tybett very much and tries her best to help Tybett to develop itself. For example, we spend considerable manpower and material resources to build the Qing-Tybett Railway in order to intensify the contact between Tybett and other parts of China. So that every part of China can head for prosperity together. I think it's beneficial to every part of China if they help each other and become stronger together. Since they can become better if they cooperate, why did Dalai Lama still started the violence to separate Tybett from China? Which is more important, people's happiness or authority? ... you can easily get more information about the violence that happened in some countries such as America. But you can hardly get more information about the violence that happened in China. I think this is probably because Chinese government doesn't want all the national people to know about the violence. They can well handle it alone. So it's better not to let all the national people know about the violence so as not to make the common people feel frightened or unsafe. Maybe this is because we Chinese are more conservative. We don't want other people to know about our troubles. Just like the proverb "Family scandals shouldn't made known in public." Despite the difference in violence among different countries, violence does more harm than good to every country. So we appeal to the public for peace. Violence should be cleared away from the whole world. Because we are all human beings. Let's say loudly "We love peace! We want to live in harmony!"

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As an American living in China, I often find myself questioning the validity of both "sides" on most of these controversial topics. It is almost too easy to dismiss the overly-rosy depictions by the Chinese news agencies as purely propaganda, but then again I can't remember the last time I read a positive account of anything related to China or Chinese people in the western media, instead just disparaging remarks and finger pointing. As I read article after article both from the western and Chinese media, in my head I liken the situation to a massive four-lane highway. To elaborate on the idea, let's designate the north-bound set of lanes the western viewpoint and the south-bound as the Chinese or vice verca for that matter. The one car on the road represents constructive dialog, its sole passenger truth. I would like to think the car drives directly in the median, sometimes traveling north and sometimes south, but never carrying truth absolutely to one side or the other. In reality, I think our car is erratically hopping the median, switching directions and most often settling in the passing lanes on either side. Thus truth is made to resemble the voice of one side on this point and that, but it's never an exact reflection of either voice. Unfortunately the powers that be are attempting to pull the car closer and closer to their respective shoulders. It is my hope that intelligent readers, listeners and viewers realize that the break-down lane is where the car of communication stops dead in its tracks and truth is made a stranded bystander.
While mulling this over one day, I came across this quote that I think is quite pertinent to this particular situation.

"When an intelligent man expresses a view which seems to us obviously absurd, we should not attempt to prove that it is somehow true, but we should try to understand how it ever came to seem true. This exercise of historical and psychological imagination at once enlarges the scope of our thinking, and helps us to realize how foolish many of our own cherished prejudices will seem to an age which has a different temper of mind."
-Bertrand Russell

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