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.

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, (http://www.cntwg.com/)

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, (http://english.nc.gov.cn/tour/scenicspots/200911/t20091120_187749.htm)

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, (http://www.jxmuseum.cn/)

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.

Leader for life

“CPC proposes change on Chinese president’s term in Constitution”:

The Communist Party of China Central Committee proposed to remove the expression that the President and Vice-President of the People’s Republic of China “shall serve no more than two consecutive terms” from the country’s Constitution.

Bill Bishop comments:

Xinhua has published some of the State Constitution changes that should be ratified at the National People’s Congress (NPC) that opens March 5. There are several interesting changes, including the standing up of the new National Supervisory Commission system and the addition of the adjectives of “great”, “modern” and “beautiful” to describe “a socialist country”, but the biggest change looks to be the scrapping of the two-term limit for President and Vice President.

This revision is another move in the growing list of norm-busting changes Xi has pushed to allow him to stay in power for life. The most important substantive move towards this end was the inclusion of Xi Thought in the Party Constitution last Fall. […]

Now the NPC will provide the institutional framework of the State to allow Xi, so long as he is alive and the Communist Party is running China, to be the most important and powerful person in China for life.

The New York Times calls this “a dramatic move that would mark the country’s biggest political change in decades.”

All hail the Son of Heaven, Lord of Ten Thousand Years.

Khaosan Road: a mile-long mosh pit

Khaosan Road in Bangkok, aka the “center of the backpacking universe” — actually a quarter of a mile long, though it feels longer — is a fun place to visit, if you enjoy being surrounded by approximately 2 trillion people in a loud, confined space.

A similarly pleasant experience can be had at a Chinese train station during the holiday travel rush, though unfortunately without the tattoo parlors and street hawkers offering you delicious fried scorpions.

Personally, I’d prefer to spend my time reclining:

Reclining Buddha Ayutthaya

Reclining Buddha at Wat Lokayasutharam (Phra Noon), Ayutthaya

Contemplating the Temporality of things:

Wat Yai Chai Mongkhon Ayutthaya

Wat Yai Chai Mongkhon (the Great Monastery of Auspicious Victory), Ayutthaya

Or riding a clickety-clackety old train between Bangkok and the ancient capital of Ayutthaya:

“Enron on steroids”

The collapse of Alibaba, when it happens, is going to be spectacular. From the accounting blog “Deep Throat”:

So here are the metrics we’ve been discussing since the IPO, as described in the 12/31/17 materials/filings.

1.) Fake Revenue: Incredible 56% revenue growth last quarter. Most of this growth is likely just “fake” consolidation revenue masquerading as “organic” growth. (i.e. If Ebay bought Macy’s and consolidated same, Ebay’s revenue would jump 400% YOY in the consolidation quarter.) That’s probably what’s going on here (Intime, Cainiao, SunArt, Hema, Lazada, etc.). The “New Retail” model that management has been referring to (buying up brick and mortar) would have a much lower gross margin, and consequently, a much lower Price/Revenue ratio. Management has also, yet again, increased their “guidance”. It’s presumably much easier to forecast growth when you can go out and “buy” it. Unfortunately, since Revenue is, and has always been, reported as one big “Blob” we have no idea what it’s comprised of. (i.e. “Organic” e-Commerce vs. “Purchased” Brick & Mortar Revenue)

2.) “Questionable Assets”: (Investment Securities, Goodwill, Intangibles, Land Use Rights and Investments in “Investees”) are now a whopping US$56 Billion (51% of the balance sheet), up $9 Billion from $47 Billion in the prior quarter…..compared to roughly US$0.00 (0.00%) prior to the IPO just four short years ago. Alibaba Management continues to create financial vapor at an unprecedented pace.

3.) “Questionable Assets” – Valuation: I’ve long opined that IFRS accounting rules had required Alibaba Management to write down their interest in Alibaba Pictures and Alibaba Health by roughly $3.5 Billion because the publicly traded value simply didn’t support their carrying value. (See: Finding Inner Peace in Dharamsala …..and thoughts on the Alibaba 20-F…. ) Good news! ….this quarter they’ve finally written off $2.8 Billion on Alibaba Pictures!. We’re making progress!……Oh….but wait….when they consolidated the money-losing-dog-turd Cainaio “junk delivery by tuk-tuks & scooters ecosystem” business, they somehow reported a $3.45 Billion gain on the consolidation….more than fully offsetting the Alibaba Pictures write-down!

Etc, etc, etc. From a comment cited in the blog post:

I read your analysis on BABA and on so many different levels this screams “Enron 2.0”. The similarities are uncanny. But it’s actually worse than that. It’s Enron on steroids due to the fact that the Chinese government and regulatory bodies are likely aware of, and support the companies shenanigans, both implicitly and explicitly. If BABA is able to fleece American investors for billions of dollars in exchange for what will ultimately be worthless (or near worthless) equity, all the better. The average analyst/fund manager on Wall St. is likely too young to remember Enron as it happened in real time; even fewer of the older professionals who do remember could explain in depth how the company manufactured their financials and the machinations involved. Once again, history seems doomed to rhyme, if not repeat.

Hundreds of millions of bullet train trips expected during Chinese New Year

China high-speed rail update:

China already has the globe’s longest bullet-train network, but it’s plowing 3.5 trillion yuan ($556 billion) into expanding its railway system by 18 percent over the next two years, to 150,000 kilometers, or more than 93,000 miles.

Ponder this as the US considers a budget plan that includes $200 billion in federal spending on infrastructure over 10 years. (State and local government and private firms are expected to step in, bringing the total to $1.5 trillion.)

Almost 400 million people — that’s more than the U.S. population — will travel by train over the Lunar New Year, also known as Spring Festival. China’s factories and offices shut down for the week-long holiday, which unleashes the largest migration of humans on the planet. Many of the country’s 1.4 billion citizens return to their hometowns for family gatherings, or, increasingly, are taking the chance to be tourists both at home and abroad.

While the advent of cut-price flights has dimmed the appeal of rail travel in other parts of the world, in China it’s on the rise. Last Spring Festival saw a record 10.96 million trips on one day, and for the first time more people took bullet trains than conventional ones, according to official data.

From state media:

About 390 million trips will be made by train, China Railway said in a news release sent to the Global Times.

China Railway said 57.5 percent of rail travelers will take high-speed trains, up 4.8 percent from previous year.

I’ve been caught up in the Spring Festival travel rush on more than one occasion. It’s not pleasant.

If you can’t get your hands on a high-speed train ticket (starting at $42 for the 409-mile journey between Chengdu and Xi’an), may I suggest some alternative methods of travel?

By car:

China Spring Festival travelOn foot:

China Spring Festival travelBy ferry:

China Spring Festival travelIn uniform:

China Spring Festival travelI wrote about my bullet train ride from Guangzhou to Beijing in 2013 here. In that post, I noted:

Infrastructure in China tends to be unsettlingly vast, so I had a familiar feeling when walking around Guangzhou South Station. Designed by a London architecture firm, the mammoth structure sprawls over some 5.2 million sq ft, with multiple floors for arrivals, departures, and metro lines. A beautiful 1,142-ft-long skylight soars over the departures concourse. The enormous size of the station seemed to be justified by the crowds, which even on a Monday afternoon were substantial. During Chinese New Year the place is probably packed, and usage will surely increase over time as the region continues to boom.

At the time, it wasn’t necessarily clear that there was enough demand to justify this vast high-speed rail buildup. I think that question has been settled in the affirmative by now.