China has been playing a dangerous game since the end of the Mao Dynasty, and the advent of the reformers.

Not that they had a choice.  The stark reality of China today, like all nations, is a culmination of Geography, Climate, and Politics.

China has been trying to limit population growth, while transforming a largely agrarian society into a modern technological one.

The problem is that they have many decades of work left ahead of them, and time is running short due to the aging of the population, and the costs that will incur to society.

China had 153 million people aged 60 or over by the end of last year, accounting for 11.6 percent of the country’s 1.3 billion population, said Vice-Premier Hui Liangyu at a plenary meeting of the China National Committee on Aging (CNCA) Friday.

While Industrialization has been beneficial for some regions, the workforce is shrinking, with many workers leaving rural provinces to work in Special Economic Zones.  These workers typically leave the parents behind – though they send money back home to support the elders.  This is leading to “aging villages”, where most of the inhabitants subsist off of remittances sent back from their children, and government benefits.

Many smaller factories have moved inland as the government, aiming to spread development more evenly, uses tax breaks and looser pollution
controls to lure enterprises to poorer central provinces from the traditional manufacturing heartland near Hong Kong.

This, in turn, is creating a nascent labor shortage, and increasing the cost of labor for manufacturers.  And while China still enjoys a wage advantage over Mexico, and Latin America in general, that will evaporate over the next few years.

But even as China tries to spread Industry, the shortcuts that made them a manufacturing giant are coming Ho-ome, as Rev. Wright says, To Roost!

Two years of disastrous quality-control breakdowns, from foul fish and lead-tainted toys to poisoned drugs and dairy products, are taking their toll on China’s allure as a manufacturing platform. A new study by supply-chain consulting firm AMR Research found that quality concerns are among the chief reasons U.S. manufacturers are scaling back plans to source more goods from China.

Instead, U.S. companies are looking harder at Mexico and other locales closer to home when exploring where to put new capacity.

China was an attractive place to manufacture because of the tax advantages of the Special Economic Zones, coupled with a low wage work force, and inexpensive transportation costs. 

Today, though, with Transport costs fluctuating wildly, and a steady rise in wages, other issues are accumulating to lessen China’s desirability as a manufacturing locale.

Now, the biggest concerns over China are quality and theft of intellectual property (BusinessWeek.com, 4/27/06). Half of respondents to the survey cited China as the biggest source of “risk” for product quality failure. Fifty-seven percent rated China as the biggest risk of
intellectual-property infringement.

“China is in a league of its own in terms of risks associated with intellectual property and quality,” says Kevin O’Marah, AMR’s chief strategist.

In fact, China ranked highest in 9 of the 15 risk factors. Rising labor costs are still an important factor for businesses, with 35% citing China as the leading source of concern. Other risk categories where China ranked highest included regulatory compliance, commodity price volatility, supply-chain security breaches.

And china has not effectively dealt with issues that are damaging to the image of companies manufacturing there:

Quality problems, rampant piracy (BusinessWeek, 10/2/08), allegations of sweatshop abuses, worker protests, and other factors not only drive up costs but also harm the value of brands and corporate reputations. “Companies are realizing that the fully loaded costs of importing from China are a lot higher than they imagined,” says O’Marah.

But China is running out of time, and skilled manpower to get a handle on these problems.  By encouraging unchecked growth with a near total lack of oversight, they have been left with a nation of factory workers, and a rapidly aging agricultural workforce.  They have serious environmental pollution issues to deal with, and a serious lack of quality controls on food production, piracy, and a myriad of other ills that other societies, with longer transition periods, have dealt with.

Now, with the prospect of a dwindling foreign investment, the question becomes whether China can build up a Middle Class (read: Consumer Class), to support the existing Manufacturing base; while converting from family/village based agriculture to large scale automated agriculture (to feed that middle class); while caring for the increasing number of aged (and no longer productive) citizens.  If not, they are looking at more than just an economic crisis…  The chance that the Communist Party that still runs the country can solve these problems in time is slim to non-existent.

Tags: China

And if you’ve never read Tundra before, you should take a few minutes to smile.

Tags: Tundra

Rachel Lucas talked about this quiz.

I’ll wait here, while you link over and take the quiz.

(on hold music playing:  Girl From Ipenema)

How’d you score?  I got an 88% (ok, ok, 87.88%). missing 4.  One was a lack of attention to the question, but I will fess up to ignorance on the other three.

Now, the really interesting data is in the breakdown of how our fellow citizens fared:

Of the 2,508 Americans taking ISI’s civic literacy test, 71% fail. Nationwide, the average score on the test is only 49%.

The results reveal that Americans are alarmingly uninformed about our Constitution, the basic functions of our government, the key texts of our national history, and economic principles.

• Less than half can name all three branches of the government.
• Only 21% know that the phrase “government of the people, by the people, for the people” comes from Lincoln’s Gettysburg Address.
• Although Congress has voted twice in the last eight years to approve foreign wars, only 53% know that the power to declare war belongs to Congress. Almost 40% incorrectly believe it belongs to the president.
• Only 55% know that Congress shares authority over U.S. foreign policy with the president. Almost a quarter incorrectly believe Congress shares this power with the United Nations.
• Only 27% know the Bill of Rights expressly prohibits establishing an official religion for the United States.
• Less than one in five know that the phrase “a wall of separation” between church and state comes from a letter by Thomas Jefferson. Almost half incorrectly believe it can be found in the Constitution.

Kind of scary, isn’t it…

Some more points:

The Couch Potato Phenomenon:

This Table shows the change in a respondent’s test score associated with six selected behaviors in his or her life.

Behavior Change in Civic Knowledge Positive Influence of Active Learning:

• Frequently discussing current events and public affairs (Daily or weekly as opposed to monthly, rarely, or never) +5.5%
• Participating in more involved or advanced politics (Nine items ranging from signing a petition to contacting a public official) +1.7 per action
• Reading history or current events in books, newspapers, or magazines +0.1 per hour per week

Negative Influence of Passive Electronic Medium  

• Watching movies you own or rent -0.14 per hour per week
• Visiting on the telephone -0.10 per hour per week
• Watching television news or documentaries -0.08 per hour per week

So, reading Political blogs is good for your civic knowledge, watching TV News is bad.  I think we all knew that already, but it’s nice to have some hard data for the supposition.

Of the 2,508 People surveyed, 164 say they have held an elected government office at least once in their life. Their average score on the civic literacy test is 44%, compared to 49% for those who have not held an elected office. Officeholders are less likely than other respondents to correctly answer 29 of the 33 test questions.

Particularly disturbing is the lack of knowledge of elected officials on some key items:

Question and Knowedge Gap % between Elected Officials and Citizens:

• Declaration of Independence

  -13.31

• Definition of Free Enterprise

  -9.37

• Electoral College

  -8.57

• Power to Declare War

  -7.78

• Business Profit

  -7.73

• International Trade

  30.45

  -7.02

• Federal Branches and Foreign Policy

  -6.32

• First Amendment Freedoms

  -6.26

• Taxes and Government Spending

  -5.58

• Free Markets vs. Centralized Planning

  -5.54

• Action Prohibited by the Bill of Rights

  -5.17

Which only reconfirms my stand that today’s politicians are just D-list actors, and bureaucratic hacks, not statesmen.

The conclusions of the report on the survey are that Colleges and Universities need to do a better job in teachings Civics.  This ignores the rest of the US citizenry.  My own take is that Civics in general, and American History in specific needs to be remphasized in 7-12 education (mid/high school), as well.

How can we expect Citizens to make informed choices, when 71% score less than 60% on a quiz like this?

Does explain the results of the last election, though.

Tags: Citizenship

The first failure of Socialism in the America’s occurred at Plymouth Plantation, in the 1620s…

From a piece by Rick Williams Jr.:

On December 16, 1620, the tiny ship loaded with “tools and weapons, a stock of dried and salted foods, a few goats, pigs, and chickens” landed at Plymouth Rock. Their hardy Christian faith and work ethic enabled them to hang on with tenacity, despite battles with the elements and Indians. The Pilgrims also experienced the devastating “Starving Time” when half of them perished from malnutrition, pneumonia, and tuberculosis. This time of want was due primarily to their unbiblical economic system.

For the first two years of the settlement, the colonists labored under an economic system that they called, “The Common Course and Condition.” This was a primitive and simple form of socialism. The family households commonly shared whatever products they could produce. If one family worked diligently, rising early, working hard until sundown, and produced a bumper crop, while his neighbor lay in bed until noon and produced little, they shared equally the sum of both. There was no incentive to work hard and apply one’s God-given talents and abilities. This system produced consistent shortages. There was never enough food for everyone. It also produced squabbles among the colonists. There was resentment and envy—predictable results in socialist economies. Fortunately, the colonists had elected a young, but wise and godly governor for the colony—William Bradford. In 1623, Bradford recognized the failure the “Common Course.” Bradford would later write that this failed economic system “was found to breed much confusion and discontent and retard much employment.”

Bradford had a better plan. Each family would be given a piece of land based on the size of their family. Larger families received larger tracts. Each household was allowed to grow corn for their own families and to do with it what they wished. The results were phenomenal.

“This had very good success, for it made all hands very industrious, so as much more corn was planted than otherwise would have been by any means the Governor or any other could use.”

While under the original system, the women of the colony had complained that they were “oppressed.” The Pilgrims experience proved that a biblically based economic system could provide liberty and a “family-friendly” means of production: “The women now went willingly into the field, and took their little ones with them to set corn.” Bradford had recognized that “the primary agency of economic planning is the family, as the primary owner of property.” Bradford realized that the family and ownership of the means of production were an unbeatable economic formula. This recognition caused the economy of the fledgling settlement to flourish and when 60 more settlers arrived in 1623, there was more than enough food for them as well. And despite continued challenges from Indians, pirates, and sometimes harsh weather conditions, the little colony prospered as God blessed their steadfast faithfulness.

The best (and unkindest) teacher is cold, hard, reality.

Bradford and the Pilgrims learned the value of Capitalism over the inherent failure of Socialism (that some people simply will not contribute if the can rely on others to do their part) and the end of a veritable blunt instrument.

Given how many people in this nation voted for a man with an undeniable Socialist stand on most economic issues, it is obviously a lesson America will be learning again soon…

Too bad they don’t require Ayn Rand’s Atlas Shrugged in high school…

Tags: Socialism

Californians Gather To Celebrate Annual Wildfire Tradition

So, I keep asking my friends in California, explain to me why you live there again?

• You have the annual Wildfire festival.
• In the odd year that the Rains come, you have massive mudslides and flooding.
• You have one of the highest tax burdens in the country.
• And you have to deal with the insanity vortex in the Bay Area.
• Oh, and the occasional earthquake that could always be the potential (and often predicted) Big One.

Wow, makes living with a 14,000 foot volcano less than 60 miles away seem almost idealic.  I guess I can put up with the rainy season in Puget Sound (the time of the year known to out of staters as “Fall/Winter/Spring”).

Tags: California

I despair of ever being able to comment on things with the flair of Bill Whittle, or the ability to phrase complicated issues in easy to understand ways, like Walter Williams:

Evil acts can be given an aura of moral legitimacy by noble-sounding socialistic expressions such as spreading the wealth, income redistribution, or caring for the less fortunate. Let’s think about socialism.

…This mechanism makes the particular victim invisible, but it still boils down to one person being forcibly used to serve the purposes of another. Putting the money into a government pot makes palatable acts that would otherwise be deemed morally offensive.

This is why socialism is evil. It employs evil means, coercion or taking the property of one person, to accomplish good ends, helping one’s fellow man. Helping one’s fellow man in need, by reaching into
one’s own pockets, is a laudable and praiseworthy goal. Doing the same through coercion and reaching into anothers pockets has no redeeming features and is worthy of condemnation.

Some people might contend that we are a democracy where the majority agrees to the forcible use of one person for the good of another. But does a majority consensus confer morality to an act that would otherwise be deemed as immoral?

I don’t believe any moral case can be made for the forcible use of one person to serve the purposes of another.

You should read the whole thing yourself, to get the meat of Williams’ argument.

Oh, but here is his parting shot:

The bottom line is that we’ve become a nation of thieves, a value rejected by our founders. James Madison, the father of our Constitution, was horrified when Congress appropriated $15,000 to help French refugees. He said, “I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents.” Tragically, today’s Americans would run Madison out of town on a rail.

Tags: Socialism

When GHW Bush failed to deliver the coup de grace to Saddam Hussein’s Iraq, and failed to support the uprisings against him in the aftermath of the 1st Gulf War, the stage was set for the current conflict.

Likewise, the failure of Clinton and the UN to effectively deal with Somolia in the 1990s leads us to the ongoing problems in that region, which has now brought us piracy at a level unseen for many decades.  And now, this piracy threatens the lifeblood of modern civilization – oil.

From FT.Com:

A Saudi supertanker laden with an estimated 2m barrels of oil that was seized by pirates was on Tuesday confirmed to be anchored off the coast of Somalia.

While most other seizures have been of vessels heading into or out of the Suez Canal, the latest incident will raise question marks about the safety of the route from the Arabian Gulf to the Cape of Good Hope – a route taken by the largest oil tankers heading from the world’s main oil-producing regions to both Europe and North America.

The development therefore puts at risk a far higher proportion of the world’s energy shipments than the 12 per cent that shipping organisations had already considered in danger. “That route from the Cape to the Gulf was not considered the riskiest route,” said Mr Mukundan.

What is the response of the US Military (from AFP)?

The top US military officer said Monday he was “stunned” by the reach of the Somali pirates who seized a Saudi supertanker off the east coast of Africa, calling piracy a growing problem that needs to be addressed.

But Admiral Michael Mullen, the chairman of the Joint Chiefs of Staff, said there were limits to what the world’s navies could do once a ship has been captured because national governments often preferred to pay pirates ransom.

That’s right, the US Navy and Marines will…do nothing…

“…once they get to a point where they can board, it becomes very difficult to get them off, because, clearly, now they hold hostages.

“The question then becomes, well, what do you do about the hostages? And that’s where the standoff is.

“That’s a national question to ask based on the flag of the vessel. And the countries by and large have been paying the ransom that the pirates have asked,” he said.

So once again, our miltary leadership acts more like international lawyers than warriors.  And the willingness of the victims to pay ransom for the ships and crews trumps action against the pirates.

But things may be beginning to change (courtesy Times Online):

The furious Saudi foreign minister said the banditry was akin to terrorism and demanded an international crackdown on the pirates.

Prince Saud Al-Faisal said: “Piracy, like terrorism, is a disease which is against everybody, and everybody must address it together.

“This outrageous act by the pirates, I think, will only reinforce the resolve of the countries of the Red Sea and internationally to fight piracy,”

The prince suggested that several nations in the Red Sea region were willing to form a coalition to combat the ascendency of pirates in the Gulf of Aden and surrounding waters.

The Saudi’s, and the other oil producing states in the Persian Gulf, certainly have the resources, and the need to protect their tankers and merchant ships.  They may not have the military hardware or trained personnel to protect their shipping, or to strike back against the pirates.

But the level of piracy, and the growing reach of the pirates, should be sounding warning bells in Washington DC, Beijing, and other states dependent upon trade trasiting the horn of Africa.

The International Maritime Bureau has reported that at least 83 ships have been attacked off Somalia since January, of which 33 were hijacked. Of those, 12 vessels and more than 200 crew were still in the hands of pirates.

There is no doubt that the Pirates base of operations is Somalia.  When the last group of warlords that exerted some type of central control (the Islamic Courts – not a nice bunch of guys) was ousted in 2007, the last vestiges of government in the area went with them.

There is no doubt the the US and UN bungled the mission to Somalia in the 90′s, leaving things worse than when they arrived.  There is also no doubt that the world missed an opportunity after the overthrow of the Islamic Courts to attempt to impose order on Somalia.

There can be no doubt that Somalia will continue to be a festering sore of lawlessness, misery, and piracy until the warlords are put down, and order is restored.

It will not be cheap, and it will not be easy.  But having just come through the crucible of the Iraq War, there is no doubt that America has the military know how and skill set – what we used to call “lessons learned” (usually the hard way).  The Gulf States have the financial resources, and almost as importantly, the proper religious leanings to bankroll actions to intervene and start the rebuilding process.  But America does not have the manpower to take on this task, while the Afghanistan conflict continues to brew.

However, the Chinese have the manpower to spare, and financial interests in Africa, and are also dependent upon Persian Gulf oil.

So, perhaps we have a clear opportunity for President Elect Obama to use some of his vaunted Worlwide Political Capitol, and use Petro State money, with Chinese Troops, and American know how, to solve a pressing problem, and restore some order to one of the most chaotic failed states in Africa.

Just a suggestion.

Tags: Oil, Pirates