No travel for you

North by Northwest smoking on trainIn the latest evolution of China’s social credit system, people who have committed offenses like smoking on trains or defaulting on fines will now be effectively banned from traveling:

China said it will begin applying its so-called social credit system to flights and trains and stop people who have committed misdeeds from taking such transport for up to a year.

People who would be put on the restricted lists included those found to have committed acts like spreading false information about terrorism and causing trouble on flights, as well as those who used expired tickets or smoked on trains, according to two statements issued on the National Development and Reform Commission’s website on Friday. […]

However, there are signs that the use of social credit scoring on domestic transport could have started years ago. In early 2017, the country’s Supreme People’s Court said during a press conference that 6.15 million Chinese citizens had been banned from taking flights for social misdeeds.

That’s an extraordinary number of people. A case could be made that people who, for example, open the emergency exit of a moving plane should be put on some kind of no-fly list, but only a small fraction of 6.15 million citizens can possibly be guilty of those types of offenses.

Protectionist China

Reuters provides a handy rundown of China’s restrictions on US imports. They are… significant:


China keeps close control over the use of tech within its borders, including full or partial blocks against many popular U.S. firms including Google, Facebook Inc, Twitter Inc and others.

The Chinese government has adopted a raft of strict new cybersecurity regulations, which foreign business groups complain either put China off limits or require them to provide sensitive intellectual property for government checks. […]


Global carmakers can only operate in China, the world’s largest auto market, via joint ventures (JVs) with local partners, with their stake limited to 50 percent, part of a government drive to protect home-grown auto firms.

Tesla Inc chief executive Elon Musk said on Twitter earlier this month that China trade barriers created an unfair playing field and that it was “like competing in an Olympic race wearing lead shoes.” […]

China also imposes a 25 percent duty on imported vehicles, versus a 2.5 percent import tax in the United States.


Foreign financial firms face long-standing equity caps to participate in some services in China, including a 50 percent limit on life insurance and a 49 percent cap on foreign-invested securities broker-dealers. […]


China has a strict quota system for imported movies, limiting the number allowed to be shown on domestic cinema screens through the scheme to 34 each year. Hollywood producers also get around 25 percent of the box office, compared to nearer 40 percent they received in other overseas markets.


China bans imports of poultry, poultry products and eggs due to avian flu. It conditionally lifted an import ban on U.S. boneless beef and beef on the bone in June last year. […]


China requires rail equipment suppliers to its domestic train networks, which are among the world’s longest, to prove that at least 70 percent of their supply chain is in China.

Embracing “free trade” when your trading partners are severely protectionist is a bit like leaving all your doors unlocked when your neighbors are thieves.


Beppe Grillo

Italy’s Beppe Grillo

The enigmatic Five Star Movement (Movimento 5 Stelle, or M5S) is now Italy’s biggest political party:

One person notably absent from the Five Star Movement’s triumphant celebrations at a plush hotel in Rome in the early hours of Monday morning was Beppe Grillo, the comedian who less than a decade ago founded the party that seized the biggest share of the vote in Sunday’s inconclusive election. […]

Grillo, who was instrumental in turning the movement built by a rabble of rebels into Italy’s strongest political force, said in January that unless it won an outright majority in the election it should remain in opposition. “It would be like saying that a panda can eat raw meat. We only eat bamboo,” he said of the prospect of sharing power.

But Di Maio, said to have been groomed by Grillo for the leadership, has other ideas. On Monday he said he was open to talks with all political parties, and he has already presented his would-be cabinet – a list of what he calls “anti-politicians”.

In light of the news from Italy, I remembered this prescient article by Francesco Sisci — from April 2013:

Italy over the past century was a staging ground for experiments with new political solutions that had global consequences. Fascism was born in Italy in the 1920s, although it also flourished elsewhere and caused the start of World War II. In the 1970s, the Italian pro-Soviet Communist Party supported coalition governments that included pro-American parties, showing that communism could be adapted to a democratic environment. Thus, it inspired reforms in Gorbachev’s USSR some years later, something that led to the collapse of communism in Europe altogether.

One then wonders whether the new Italian political entity the “5 Star Movement”, created by comedian-turned-politician Beppe Grillo, will also lead to something else – and what that could be. The “5 Star Movement” scored a huge success in the recent Italian elections while refusing to reach out to voters through talks and debates on TV, the traditional means of political campaigning for the past five decades.

It canvassed votes by means of old-fashioned public meetings and by modern web chats and Tweets shot through the Internet and mobile phones. He and his followers explained that this is the new web democracy. In fact, there is something extremely modern in Grillo’s political movement. Certainly, US President Barack Obama understood the importance of the web and relied on songs spread on Facebook and Twitter slogans. But he still went on TV and engaged in all the traditional campaign activities.

Grillo, conversely, refused TV appearances, political debates, and even interviews in the Italian press, and this magnified his image, bringing him almost 25% of the vote. The Internet is and was the ground for internal debates. Candidates were selected through mock elections on the web among Grillo’s supporters; policy discussions were held in web chats rather than in smoky rooms. There were no meetings, no cells, and no steering committees.

Actually, this is not the only new element of Grillo’s party. Contrary to all past practices, Grillo and his main partner, Gianroberto Casalegno, chose not to run for parliament. Notwithstanding that, these two extra-parliamentary leaders control all their elected deputies in parliament through a series of binding agreements. Meanwhile, the few top leaders decide the party line in informal gatherings on phone calls. It may not sound good – the party looks more like a private entity than an organization to promote political change and effective popular participation – but it has so far provided an organization that works similar to, if not better than, the old party systems.

Social networking is devouring the political systems of the West, starting in Italy and the US. It’s easy to imagine that in another five or 10 years, online networks will have taken over the machinery of the major parties, turning politicians into puppets for internet movements/mobs. Which may or may not be an improvement over the existing, obsolete party systems.

In any case, China’s prescience in censoring the internet more severely than Saudi Arabia is now clear. China’s rulers are extremely uninterested in dealing with uncontrollable, socially networked movements that could destabilize the country and threaten the Party’s grip on power, so it has opted to wall off China from huge swaths of the global internet.

Under this brutal logic, all major foreign social media platforms are blocked, and the domestic platforms are heavily censored and monitored. Weibo, the closest thing to Twitter, has recently been chastened (again). The closed nature of WeChat, which now has a billion active monthly users, does not lend itself to hashtag activism. There will be no Beppe Grillo on China’s watch.

Wrestling minus Marx

Antonio Graceffo has the distinction of being an American who wrote and defended a PhD dissertation entirely in Chinese at the Shanghai University of Sport. He has also arguably hit and kicked more people in more countries than any economist alive.

A sort of modern-day, Brooklynite version of Sir Richard Francis Burton, Dr Graceffo has learned pretty much every Asian language I’m aware of and has studied more varieties of martial arts than I ever knew existed, and that was before he decided to become a specialist on economics and US-China trade.

Anyway, I’m currently reading The Wrestler’s Dissertation: Shanghai University of Sport PhD in Wushu, Chinese and Western Wrestling, which is an English-language version of the paper that earned him a doctorate in China, but with all the boring Marxist theory crap taken out and all the interesting stuff, which the university urged him not to include, put back in.

I have to say that although I’m not the kind of person that would normally be enthralled by a book about wrestling, Graceffo offers some fascinating insights into the differences between Western and Chinese culture through the lens of the ancient sport.

You’ll have to read the book for all the details, but this article is an appetizer:

Finally, I determined that the major reasons for differences in wrestling rules, techniques and cultures between China and the US came down to competitiveness, aggression, and violence. The most popular sports in China are ping pong and badminton. Like wushu, these are neither aggressive nor violent. In the US, nearly 800 universities have American football teams, with over a million Americans playing on high school and college football teams. This suggests that American and western sports culture is far more aggressive and violent than Chinese sports culture.

I even made a handy, meme-able table summarizing the differences:

There’s a great deal else in the book, from discussions about Roman gladiators to Andre the Giant, UFC, and the Soviet-style sports education system that exists in China (and why it sucks). The amount of research that went into the book is alarming, actually, and made me want to call Antonio to ask if he was ok.

I did ask him to elaborate on how he was required to stuff his original paper with Communist agitprop, and he had this to say:

PhD dissertations generally have standard sections such as literature review, objectives of study, motivation of study, theoretical framework and expected findings and so forth. In China, however, you also have sections for Marxist theoretical framework, where you extol the benefits of Marxism and explain how the teachings of Marxism enhance your research. A Chinese PhD student who is currently one of my unofficial advisees is writing his sport PhD these about Marxist Policies and Their Effect on Athletic Performance.

When I was at the sports university, for my first PhD, I learned from my Chinese classmates to just write my dissertation in the normal way and with a normal topic, but to include two to three sections for “correct political thought” or “Marxist ideology” which were just huge, the bigger, the better, and complete nonsense fluff, unrelated to the rest of the paper. These things were easily searchable online, so you could find models to follow, so I wrote one, basically saying Marx was great and without him, people couldn’t wrestle. My class sister reviewed my paper and said, “You really need to say more nice things about Marxism.” So, she helped me flesh out that section.

When I went for my defense, I was very worried they would ask me about Marxism. In theory, they could ask you about any part of your dissertation. While they didn’t actually ask me about Marxism per se, they asked a number of very loaded questions about Chinese culture and within the context of Marxism, People’s Republic of China vs. Republic of China. So, I prepared answers which included the words “development, ideological framework, and 5,000 years of history.” Also, when I talked about these concepts, I said “our” rather than “China’s’, as in “We Chinese have 5,000 years of cultural history and exist within an ideological framework of Marxism which is why we are developing faster than the West.” While the professors were all smiling and nodding, satisfied, and my advisor was looking very proud, I quickly added, “and wrestling.”

Fortunately there’s none of that nonsense in the English version, so if you like martial arts, but you’re not big on dialectical materialism, this might be the book for you. You can download the Amazon Kindle edition for $5.49.

Tariff talking points

Some thoughts from trade expert Alan Tonelson on the impending metals tariffs:

>Many countries have declared their intention to retaliate against the American tariffs with higher barriers to U.S. exports. Curiously, they are overlooking the Chinese government-subsidized overcapacity at the root of the long-time distortions in world steel and aluminum markets.

>Many of these countries want the problem tackled multilaterally. But the World Trade Organization (WTO) has failed to stem this overcapacity (or deal effectively with many other forms of Chinese trade and broader economic predation), and a G20 forum specifically addressing the steel issue has produced nothing since its founding in December, 2016.

>Although major steel-producing powers like the European Union have imposed their own steep tariffs on shipments from China, the global glut has continued. One reason may be that, since the global economic recovery took hold in 2010, according to World Steel Association data. the United States has been the major steel producer that has suffered by far the greatest loss of global production share by volume. (See this post of mine for the 2010 figures and the Steel Association’s latest report for the most recent – January, 2018 – figures.) And as of the most current World Steel Association data (2016), the United States is also the steel producer with the highest steel trade deficit by volume (21.7 million tons).

As a result, charges that American steel tariffs in particular will jeopardize the rules-based global trade system seem to be arguing that this system requires the United States to remain as the world’s dumping ground for government-subsidized steel.

Also don’t miss the follow-up post.

Top 6 Scenic and Cultural Hotspots of Nanchang

The below article from 2013 is an attempt at Lonely Planet-style travel writing following a trip to the provincial city of Nanchang, which is notable for its role in spawning China’s Communist revolution (and is therefore a key destination for “red tourism”). As the capital of one of China’s poorer provinces, it’s sort of a backwater, albeit developing fast — the city has since opened its first two metro lines — and an important manufacturing center. It’s a very likeable place with a friendly, laid-back feel despite having a population the size of Chicago. Some of the information below may be outdated by now. Enjoy.

Cradle of revolution and “Hero City” of Communist legend, Nanchang – the capital of southern China’s Jiangxi Province – is gritty, dynamic, and compelling. When not wandering its charming back streets, visitors to this fast-growing but laid-back city can discover a wealth of history, culture, and even entertainment at these popular sites:

1) Tengwang Pavilion (滕王阁)

Ascend this nine-story tower to peer at the Gan River from on high, enjoy a traditional music and dance performance, take in the colorful frescoes that decorate the interior, or get photographed sporting the golden dragon robe of a Qing Dynasty emperor.

Originally built in A.D. 653 by Emperor Taizong of the Tang Dynasty as a townhouse for his younger brother, the eponymous Prince Teng, the pavilion was destroyed and rebuilt many times over the centuries – the current incarnation, in Song Dynasty style, was completed in 1989 – and immortalized by a famous Preface penned by the poet Wang Bo.

In the base of the pavilion you can wander around the China Imperial Edict Museum (华夏圣旨博物馆), housing a collection of – you guessed it – imperial edicts and other government paperwork from the Qing and Ming Dynasties. History buffs may find these bureaucratic relics intriguing, though adrenaline junkies should steer clear of such items as the “Official receipt issued by the Provincial Administration Commissioner and Provincial Judicial Commissioner of Anhui Donation Head Office of the Supervising Department.” Of more interest, perhaps, are a printed silk cloth and miniature books that were used for cheating on the imperial civil service exam.

Admission to the pavilion and grounds is 50 RMB.

Tengwang Pavilion (滕王阁 Téngwáng Gé), 榕门路 Róngmén Lù, ticket office hours: 7:30 AM – 6:15 PM (May 1 – Oct 7), 8:00 AM – 4:50 PM (Oct 8 – Apr 30), +86 791 8670 2036, (

2) Musical fountain at Qiushui Square (秋水广场)

Qiushui Square fountain

One of the largest such displays in Asia, this complex, fifteen-minute extravaganza of music, laser lights and elegantly gushing water is fun to watch – even if, like other spectators, you do so with a smartphone held up between the fountain and your face. In the show’s dramatic finale, water spurts as high (allegedly) as 128 meters. The free show starts at 7:50 PM, 8:30 PM, and 9:00 PM every night.

Qiushui Square (秋水广场 Qiūshuǐ Guǎngchǎng), ask around for the fountain (喷泉 pēnquán) (you can’t miss it), +86 791 8388 3496, (

3) Jiangxi Provincial Museum (江西省博物馆)

Explore the rich history and culture of this important province. The museum is divided into wings for Natural History, History, and Revolution. The Natural History wing features minerals, dinosaurs, and wildlife dioramas.

In the History wing, you can check out artifacts from Jiangxi’s many-layered past, stretching from Neolithic pottery fragments to Song Dynasty jewelry and Ming Dynasty ivory chopsticks, and learn about the region’s traditional arts, literature, industry and government (labels in Chinese and English). This wing also houses an exhibit on the Hakka ethnic minority and a jade and precious stone collection.

The Revolution wing chronicles the Communist uprising that broke out in Nanchang through a myriad of historical photos and kitschy propaganda art. Captions are in Chinese only, except for the introductory labels which have English translations.

Admission is free.

Jiangxi Provincial Museum (江西省博物馆 Jiāngxī Shěng Bówùguǎn), 新洲路99号 Xīnzhōu Lù 99 hào, Tue-Sun 9:00 AM – 5:00 PM, +86 791 8659 5424, (

4) Bayi Square (八一广场)

The first shots of the Chinese Communist uprising were fired in Nanchang on August 1, 1927, occasioning Mao Zedong’s famous remark that “Political power grows out of the barrel of a gun.” Led in part by future Premiere of the PRC Zhou Enlai, the revolt marked the founding of the People’s Liberation Army and the start of the decade-long “Agrarian Revolutionary War” against the Nationalist government and hated class enemies. Although the Communists were swiftly ejected from Nanchang and then decimated by Nationalist garrisons on the way to Guangzhou, the somber monument looming over Bayi Square – named after the date of the uprising (bayi means “eight one”) – celebrates their extremely short-lived “victory.”

Bayi Square (八一广场 Bāyī Guǎngchǎng), always open

5) Youmin Temple (佑民寺)

First built during the Liang Dynasty in the sixth century A.D., Youmin Temple housed the reportedly huge-tongued Zen master Mazu. Today it’s an active temple with few tourists, and you may get scolded for taking photos in the quiet, serene interior. The sprawling temple complex, decorated in bright primary colors, contains beautiful statuary, including a giant bronze Buddha.

Admission is 2 RMB.

Youmin Temple (佑民寺 Yòu Mín Sì), 民德路和苏圃路 Míndé Lù hé Sūpǔ Lù, 9:00 AM – 5:00 PM, +86 0791 8529 2203

6) Bada Shanren Meihu Scenic Spot (八大山人梅湖景区)

Cheng Yunxian Sculpture Art Gallery Nanchang

Take a taxi about 20 minutes from downtown to spend an afternoon roaming around this expanse of parks, woods, galleries and other cultural sites on the banks of the Meihu Water System.

Follow the signs to reach the Bada Shanren Memorial Hall (八大山人纪念馆), which has a gallery of classic works by the Nanchang-born painter and calligrapher of the late Ming and early Qing Dynasties. Of particular interest are the gloomy, eccentric master’s freehand “flower-and-bird” works and his literati paintings, which fuse the arts of painting, calligraphy and poetry.

On the Scenic Spot’s grounds you can also find the Cheng Yunxian Sculpture Art Gallery (程允贤雕塑艺术馆), an austere collection of sculptures of Chinese Communist leaders and heroes – including busts of Marx, Engels, and Lenin. Admission is 15 RMB.

Keep strolling and you’ll find a Painting and Calligraphy Art Showroom (书画文玩展厅), outside of which is a Bansai Garden (盆景园) – I found both places completely deserted – and the somewhat eerie Jiangxi Celebrity Sculpture Park (江西名人雕塑园), featuring statues of historical figures from the province.

Admission to the Scenic Spot is free.

Bada Shanren Meihu Scenic Spot (八大山人梅湖景区 Bādà Shānrén Méi Hú Jǐngqū), +86 0791 8529 2203

Who’s afraid of a trade war?

Can you be afraid of something that doesn’t exist?

Economist Ian Fletcher writes in the HuffPo:

Trade wars are mythical. They simply do not happen.

If you google “the trade war of,” you won’t find any historical examples. There was no Austro-Korean Trade War of 1638, Panamanian-Brazilian Trade War of 1953 or any others. History is devoid of them.

Please don’t respond with that old canard about the Smoot-Hawley tariff of 1930 starting a trade war and causing the Great Depression. It doesn’t stand up, as actual economic historians from Milton Friedman on the right to Paul Krugman on the left have documented. See here, and here, and here.

The Depression’s cause was monetary. The Fed allowed the money supply to balloon during the late 1920s, piling up in the stock market as a bubble. It then panicked, miscalculated, and let it collapse by a third by 1933, depriving the economy of the liquidity it needed to breathe. A wave of bank failures in 1930 spread the collapse around the country. Trade had nothing to do with it.

As for the charge that Smoot caused the Depression to spread worldwide: it was too small a change to have plausibly so large an effect. For a start, it only applied to about one-third of America’s trade: about 1.3 percent of GDP. Our average tariff on dutiable goods went from 44.6 to 53.2 percent—not a large jump. Tariffs were higher in almost every year from 1821 to 1914. Our tariff went up in 1861, 1864, 1890, and 1922 without producing global depressions, and the recessions of 1873 and 1893 managed to spread worldwide absent tariff increases.

Now, there will be much sound and fury about the decision by the US to slap tariffs on steel and aluminum imports (of 25% and 10%, respectively). China, which accounts for 2% of US steel imports, will mostly shrug:

But most analysts said the move was more of an irritant to China than anything serious at this stage.

A glut of steel from China has fueled global oversupply, but Lu Zhengwei, chief economist at Industrial Bank in Shanghai, said China had already been working to cut overcapacity in its steel industry.

Anti-dumping duties imposed by the Obama administration on China two years ago had also helped cut U.S. imports from China and protect a restructured U.S. steel industry based around mini-mills, experts said. Last year, China’s steel exports fell 30 percent […]

The uproar over trade in nineteenth century commodities is drowning out the far more important issue for the US, which is the destruction of the American edge in advanced manufacturing thanks to trade and technology transfers:

America produced every important invention in the digital age, from integrated circuits to semiconductor lasers, solar cells, flat panel displays, sensors and light-emitting diodes. Except for integrate[d] circuits, Asia now produces virtually all the world’s output of these building-blocks of the electronics industry, and China has a crash program underway to become the world’s major producer of semiconductors.

The steel tariff could be just an opening salvo, as the US prepares to take action on high-tech manufacturing. That’s when the sparks would really fly. On the other hand, there are no clear signs that this will actually happen, so we’ll just have to wait and see.

Striking while the iron is hot

Just about everyone has something to say about the recent political news out of China. This limerick pretty much sums it up:

I was impressed by this analysis by Jerome Cohen, expert on Chinese law and government, who (rather amazingly) practiced law in Beijing back in 1979:

Xi’s move will have a profound effect on world order. It will enable him to move more boldly and increases the risk of his acting arbitrarily and perhaps mistakenly in international relations. It will surely hinder China’s efforts to be respected for “soft power” as well as military and economic prowess.

Xi decided to strike while the iron is hot rather than wait for later in his new term when increasing problems might have made the change more difficult. His brash step has undoubtedly aroused profound concern among the elite. Many high Party personnel, bureaucrats, judicial officials, lawyers, intellectuals, academics and business people, mindful of the past Maoist dictatorship and the increasingly repressive and arbitrary government under Xi, have seen this coming and now, in social media and other informal ways, are showing their anxieties and opposition.

But not many public signs of protest can be expected, since he has stifled free expression in the past few years.

At least it’s a relief to be able to quit pretending that the spread of liberal democracy has ushered in the end of history. Nope, the party is just getting started… and it’s gonna be lit….

Term limits

Impressive shilling here:

What’s more, America’s belief in the redemptive value of term limits merits further examination. In some political jurisdictions, it has helped bring in new blood; but, in others, it has replaced seasoned leaders with fresh nonsensical amateurs, to the detriment of good governance.

Indeed, in the 20th century, most assessments of presidential performance would place Franklin D. Roosevelt, our 32nd president, at the top of the list. He was elected not just to three terms but four. In 1951, the 22nd amendment to the US Constitution was ratified, which seemed like a good idea at the time; and perhaps even more so now. But there were moments in-between when America had its doubts about the constitutional dogmatism of having to force someone out of office who was doing the job well.

The problem with citing America’s “doubts” about the wisdom of term limits to defend another country’s scrapping of term limits under completely different circumstances is that it’s risibly stupid. With the notable exception of FDR, the consensus in the US has always been that a president should not hold office for more than two terms. What this signifies is not a “belief in the redemptive value of term limits,” which is just a dumb strawman, but a profound unwillingness to be ruled by another monarch.

Formal term limits weren’t needed for most of American history because the informal convention of a two-term limit, established by Washington, prevented nearly all presidents from even seeking a third term until FDR. After FDR was elected for an unprecedented four terms, Congress adopted the 22nd Amendment creating a formal two-term limit in 1951.

The key point here is that Americans decided it was time to slap some term limits on their leaders, and then did so. The 22nd Amendment was enshrined in the Constitution through a lawful, public and consensual process, which required ratification by three-quarters of the states of the Union. And public opinion is strongly against repealing it.

Compare this process to the shady, unilateral power-grab that is the topic of Tom Plate’s article, and laugh.

Sakdina: a prototype social credit system

Reading about the Siamese kingdom of Ayutthaya, which reigned from 1351 to 1767, I was struck by a description of the feudal ranking system called “sakdina” that was put in place by King Trailok in the early 15th century. Here’s the Wiki summary:

Sakdina (Thai: ศักดินา) was a system of social hierarchy in use from the Ayutthaya to early Rattanakosin periods of Thai history. It assigned a numerical rank to each person depending on their status, and served to determine their precedence in society, and especially among the nobility. The numbers represented the number of rai of land a person was entitled to own—sakdina literally translates as “field prestige”—although there is no evidence that it was employed literally. The Three Seals Law, for example, specifies a sakdina of 100,000 for the Maha Uparat, 10,000 for the Chao Phraya Chakri, 600 for learned Buddhist monks, 20 for commoners and 5 for slaves.

China’s rulers may have learned something from Thai history, because they are now rolling out a dynamic, interactive, socially networked sakdina system for their own people. It is called the social credit system.

Whether it can successfully keep 1.4 billion people in line, in an advanced, high-tech and globally connected society, remains to be seen.