Well it works for us and it works for China ... right now. It's not a permanent situation nor will it unravel catastrophically nor unexpectly. In the meantime it serves as a political stabilizer beneficial to all parties on the Pacific rim. That's the long view from these granite hills.

If the occupant of the White House would listen to the name Kerry, Krugman would be writing columns about the economic genius of the president.

OJ, exactly. This is the same reason so many Chinese Communist "leaders" make sure they have private family ties and secret bank accounts in the United States. When the crap finally hits the fan, they'll have a chance to escape to the most politically stable country in the world.

During the Tiananmen demonstrations so many years ago, what enraged more than a few Communist Party "leaders" was that the students had made public a list of the private bank accounts those "leaders" had in the United States. That one unforgiveable act, which exposed the complete hypocrisy of the Party, probably did as much as anything to doom the Tiananmen movement.

A great many people pay lip service to the vision of a stable and powerful China under Communist rule. Some naive souls even believe in this vision. But hundreds of millions of Chinese, including the dictators who rule over them, know better.

X:

As always, you have to live here to think socialism works...

X:

Hadn't heard the story about the financial disclosures intensifying the Tiananmen response, but it makes perfect sense. My time in China is obviously more limited than yours, but even I know that the yuan peg to the dollar (and resulting advantage in Chinese exports to America) has meant huge sums flowing to Chinese elites (read sons of generals and party leaders) who control those export companies. This fact of financial corruption, however, apparently escaped the attention of Mr. Krugman. The result is not, as Mr. Krugman would have it, 'economically perverse'. To the contrary, it is economically enriching to those running the show.

A few months ago, the Beijing government released figures that showed (in a previous quarter) that Chinese foreign investment (i.e. in other countries) grew by 25% or so. That likewise, on its face, is economically perverse. If, as Beijing publically alleges, the Chinese GDP is growing at 9% a year, who in the world would not invest in China. As Orrin surmises (and correctly I believe), the ChiCom elites prefer to invest their 'hard-earned' money in more stable countries. I'd go a step further, however. I believe it is plausible, if not a certainty, that the Chinese elites know damned well that their GDP figures are illusory, if not downright fraudulent. I don't know of many con men who invested in the swamp land they were touting.

As a footnote, and apropos your observation about American bank accounts, I represented some Taiwanese clients years ago and traveled there. I was told that the most precious asset of a Taiwanese elite was an American passport (Singapore a close second, then Phillipines, etc). I don't imagine that the value of such passports has declined given China's recent saber-rattling.

Fred, your comment about the value of an American passport is spot on.

Several decades ago, when Taiwan was still a military dictatorship controlled by the KMT, there was an immense amount of native Taiwanese resentment about "toothbrushism." This was short-hand slang for the attitudes of many mainland Chinese supporters of Chiang Kai-shek who had fled to the island with him, but who were basically treating it as a hotel from which they could flee to America and other countries if it ever looked as if the Chinese Communists had a real chance of invading.

The difference between Taiwan then and China today was the very different relationship between society and the ruling political party. In Taiwan, the Chinese Nationalist Party's mainland Chinese supporters concentrated on making careers in the military and the civil service. By and large, the KMT left the economy to the native population, who came to dominate industry and business overwhelmingly in both numbers and wealth. In China today, as you say, it is the princelings of the Communist Party who have the inside track on lucrative business deals and who control the country's levers of money and power.

As a result, the motives of many of those in Taiwan and China today who, out of fear, are planning an escape route to America are also different. In Taiwan, it is because the elite are afraid of the Chinese Communists, who have done nothing to assure anyone they still aren't the same incompetent, rapacious, and power-hungry oppressors they have always been. In China, it is because the Communist elite is afraid of the people.

What an irony! In the People's Republic, the "leaders" are afraid of the people!

Krugman's Communist elites are like OJ's monarchs: dedicated solely to the good of the country.

No, communists care only about the party, the economy and the classes. They're incapable of considering the nation as a whole.

Remember when all the Hong Kongese were flying to SF and Vancouver to have their kids so they'd be able to come here if the transfer went too badly?