China's Economy

If ever the time should come, when vain and aspiring men shall possess the highest seats in government, our country will stand in need of its experienced patriots to prevent its ruin. -Samuel Adams, revolutionary

Montreal looks a lot better, young and vibrant, but still under construction. And still with miserable weather.
McGill will have 180 medical students this year but, as a state school, will allow only 12 from out of the Provence of Quebec, including two from out of Canada.
Ferocious rain this morning.
I am overwhelmed with unread emails.

After just seven years of service in the Brazilian Navy where it was wracked with maintenance and structural problems, given that by the time it was purchased from the French it was already four decades old, Brazil's only aircraft carrier is now up for sale. Officially decommissioned in 2017, the São Paulo never actually saw more than three months of successful continuous operation without the need for repairs and maintenance. According to The Drive, it's now up for auction with bids starting at $1.275 million, or "roughly a tenth of what the country paid to buy the ship from France". 

Doughtery, writing of the "impeachment #3" in NR says, "Is the request for information itself interference? Prove it to me."

On this day in 1938, Adolf Hitler, Benito Mussolini, French Premier Edouard Daladier, and British Prime Minister Neville Chamberlain sign the Munich Pact, which seals the fate of Czechoslovakia, virtually handing it over to Germany in the name of peace. Although the agreement was to give into Hitler’s hands only the Sudentenland, that part of Czechoslovakia where 3 million ethnic Germans lived, it also handed over to the Nazi war machine 66 percent of Czechoslovakia’s coal, 70 percent of its iron and steel, and 70 percent of its electrical power. It also left the Czech nation open to complete domination by Germany. In short, the Munich Pact sacrificed the autonomy of Czechoslovakia on the altar of short-term peace-very short term. The terrorized Czech government was eventually forced to surrender the western provinces of Bohemia and Moravia (which became a protectorate of Germany) and finally Slovakia and the Carpathian Ukraine. In each of these partitioned regions, Germany set up puppet, pro-Nazi regimes that served the military and political ends of Adolf Hitler. By the time of the invasion of Poland in September 1939, the nation called “Czechoslovakia” no longer existed.

                                  China's Economy

The Wall Street Journal’s Greg Ip, in a column, observed that “the country’s state-led growth model is running out of gas. … Absent a change in direction, China may never become rich.” Not only has growth slowed, but alternative data such as nighttime light and tax collections suggest even that reduced rate might be significantly overstated.

 A slowdown would mean China is falling short of previous Asian economies that enjoyed long periods of rapid growth after opening their economies to global trade and investment. Sustained growth of even 4% might be tough going forward, Ip writes, but after “reaching levels comparable to China today, Taiwan’s per-capita income grew 7.5% for another decade, South Korea 6.3%, and Japan 4.7%.”

And while China faces some different challenges, including demographic and the limitations of its export model given its massive size and saturated global markets, there’s also this: China may be suffering from a fatally flawed growth model. Ip: “For 30 years the Communist Party opened ever more of the economy to private enterprise, trade, foreign investment, and market forces. Yet it never relinquished its commitment to socialism … The trade clash has also hurt the private firms, many foreign owned, that dominate exports while rallying nationalists to defend China’s state-centric model.” 

The Soviet Union also had an economic model that for a time seemed like a threat to capitalism. Maybe the same will happen for socialism with Chinese characteristics. As Reuters recently reported, “Chinese productivity growth has gone into reverse for the first time since the Cultural Revolution tore the country apart in the 1970s, according to a new study, highlighting the failure of recent reforms to set China on a sustainable development path.” And it that really surprising? And as my AEI colleague Derek Scissors has noted, “Beijing has long abandoned the pro-market path and shows no true interest in returning to it.”

Even as some China hawks urge active US effort to undermine Chinese economic progress, particularly as it relates to technology, the communists running the country are proving to be their own worst enemy.