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China's Flaws, Liabilities Could Impede Its Future Growth

China's Flaws, Liabilities Could Impede Its Future Growth

Tuesday, 03 July 2018 01:46 PM Current | Bio | Archive

To govern China, with a population of 1.3 billion souls and 14 diverse ethnic groups, is a daunting task for any type of government. To remain in power, the Chinese Communist Party’s top priority is to keep the population content by trying to increase the standard of living and to provide steady employment.

To aid the last objective, they maintain a major share of the manufacturing capacity in the hands of the state, thus providing a buffer in order to avoid the typical ups and downs of western economies. All this requires large amounts of bureaucrats amassed in large buildings.

Taking a page from the Greek philosopher Plato’s discourse, the Chinese government tries to select its leaders on the principle of meritocracy, by selecting candidates for higher offices based on a selection of best performing candidates from a group of peers at lower administrative levels.

For example, only the best performing mayor of a number of towns is suitable to become the leader of a county, and so on. As in other countries, parents desire that their offspring become civil servants due to a lifetime of employment, good salary, health benefits, plus generous retirement benefits.

The result is the government employment offices see substantially more candidates as there are job openings.

This has lead to parents paying bribes to the officers in charge of hiring.

This form of corruption already has spread to higher levels of government.

As an example, a recent report cites an Army general who was convicted for accepting a bribe from a junior officer asking for a promotion.

Chinese President Xi is well aware of the corruption problem and is investing much time and effort to fight it.

He may well know, from reading past history how corruption can destroy an empire.

The reign of Chinese Emperor Qianlong (1735-1796) happened during a period of great prosperity, where the Chinese population grew from 300 to 400 million. This produced an excess of well-educated men, most of whom sought employment at imperial offices.

Here too, the number of applicants far exceeded the number of job openings.

This led to widespread attempts to bribe government examiners, with the aim to at least be admitted to the rigid civil service examination.

However, even passing the examination was no guarantee of being hired, thus creating frustration and resentment among the students and disappointment for the parents. There now were a great number of highly educated men who had to make do with low-paying jobs such as tutors, scribes and secretaries.

The resultant bribery started to affect all levels of imperial governance. This all led to discontent within the population, which finally culminated in the "white lotus" rebellion in 1791, resulting in warfare, much blood-letting and economic chaos. Emperor Qianlong finally resigned in 1796.

History teaches us that revolutions are typically instigated by elderly, well educated men; but it is always young men and students who do the rioting or man the barricades (an example is the Tiananmen square problem). In order to avoid this from happening do not watch the students, watch their professors instead.

Having an educated elite is a blessing but can also be a source of trouble. Educated young people without jobs and a proper purpose in life, coupled with widespread corruption, can be the Achilles Heel of the Chinese Communist Party.

Another Achilles Heel is China’s dependence on imported energy. China imports about 9 million barrels per day of crude oil, while only producing 4 million barrels domestically. A similar relationship exists with natural gas. Here China last year imported 23 billion dollars of liquefied natural gas (at a cost of three times the price of U.S. domestic natural gas).

This situation has improved since the natural gas pipe line from Russia’s Siberia finally is running. If I were the Chinese president, my consistent nightmares would be that the U.S. Navy would blockade all of my imports of oil and gas.

Hans Baumann is a licensed engineer in four states and a member of Sigma Xi, the Scientific Research Society. He is an adviser to the dean of the University of New Hampshire Business School. Dr. Baumann has published manuals on valves and was a contributor to many works including the "Instrument Engineers' Handbook" and the "Control Valves Handbook." He has also published several books on business management and German history, including "Hitler's Escape," which suggests that Adolf Hitler did not commit suicide and survived World War II. In his latest book, "Atomic Irony" he proves that the Hirshoma Atom Bomb contained captured German Uranium. For more of his reports, Go Here Now.

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The Chinese Communist Party keeps the population content by trying to increase the standard of living and provide employment. They maintain a major share manufacturing in state hands, thus providing a buffer in order to avoid the typical ups and downs of western economies. This requires bureaucrats.
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Tuesday, 03 July 2018 01:46 PM
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