Me pro-China? I accept the label, says ex-foreign minister George Yeo as he weighs in on Sino-US tensions
This statement by George Yeo Yong Boon may seem to be just a casual remark but it is a big thing in Singapore, especially coming from an ex minister, a PAP minister. According to George Yeo, a Chinese must be a lesser Chinese in Singapore, meaning he has to keep his Chinese profile low, not to be exuberant about being a Chinese. A Chinese professing to be pro China is like using a megaphone saying 'I am Chinese' in Raffles Place. This is a no, no. I have never heard of any PAP minister mentioning 'pro China' casually in public. Even when Lee Kuan Yew was wearing his signature ethnic Chinese designed shirt in official functions, no one dared to mention it or whether he was making a statement, that he was a Chinese after all and proud of it.
Since his passing, no ethnic Chinese minister would dare to put on an ethnic Chinese shirt but happily putting on ethnic Malay or Indian dresses during their respective festivals. OK, some did put on during Chinese New Year festival. Even the beautiful and elegant cheongsam, a signature dress of Mrs Lee Kuan Yew, is hardly donned by the female PAP ministers or MPs, albeit a few did.
Something is puzzling. Is there an unwritten message that PAP ministers and MPs are to avoid or shun looking like Chinese or to mention that he is pro China? Or it is a fact that they are all not pro China but pro West, pro Americans, because Singapore is pro America? Oops, oops, Singapore is neutral, not pro America and definitely not pro China. OK, I will not dispute with anyone disagreeing with me on this point.
In the last 200 years, when the evil West invaded, destroyed and looted China to bankruptcy, and condemned China and Chinese as a no talent, useless and clueless subhuman, evil, hideous, no character, poor and despicable, a far change from the glorious days of Chinese Empires with 5,000 years of culture and literature and inventions, it was understandable to dissociate with China or being identified as a Chinese. When a country or civilisation is poor and destroyed, a country in disarray, poverty and illiteracy everywhere, everyone trying to eke out a living, it was difficult, very difficult to stand out and say I am Chinese, I am proud of my Chineseness and China.
Those sad and pathetic days of China and the Chinese Civilisation are passe. China is now a rich and prosperous nation state, vying to be the number one super power with America, and actually has surpassed the Americans in may fields. China is still calling itself a developing country but in many senses already a developed country. The per capita income may look low but in purchasing power terms, hundreds of millions of the Chinese are already middle class with more millionaires and billionaires than the Americans. China probably is the only major economy that can proudly claim to have wiped out poverty among its people.
Today, there is no shame to be called a Chinese. The smear and slandering by the white men to condemn Chinese as no talent and clueless subhuman have been smashed as a mischievous white myth. The Chinese people are as talented if not more talented than the white men. And they are very proud of being Chinese, proud of the achievements of their govt and CCP. It is glorious to be citizens of the next super power, the next biggest economy, the most advanced nation in science and technology etc etc.
And yes, I have yet to see a proud and confident Chinese PAP minister or MP identifying himself as a Chinese or like George Yeo, not fighting the label of being pro China. Of course he qualified himself by asking others to judge him after reading his books. Maybe he is still more comfortable being a baba or a banana, being a lesser Chinese. But by not feeling defensive when labelled as pro China, is already a big step forward for an ex PAP minister. I have not read his books. It may turn out that he is still pro America. This is serious stuff. In the USA, the political career of a politician would be finished if he called himself pro China. Not sure if this is also the case in Singapore.
Any PAP minister or MP dares to say he is pro China? Or is it an official but unspoken policy not to have this mentioned? I am still waiting for the day when an ethnic Chinese minister or MP would be comfortable to identify himself as ethnic Chinese and pro China. This is the 21st Century. But the mindsets of the 60s and 70s are still the predominant consideration in the calculus of the ethnic Chinese politicians. It is easier to be pro Americans than pro China.
During LKY's days, Singapore always deferred to the sensitivities of the neighbouring countries, and was the last to officially recognise China, after all the neighbouring states had done so. Today, some of the Asean states are more closed to China diplomatically and strategically than Singapore. Indonesia and Malaysia's economies are increasingly more integrated with China than Singapore. Hardcore pro America Philippines is openly pro China for a change. Asean used to be taken for granted as pro America but now stubbornly neutral.
The Chinese politicians of Singapore are queer when China is concerned. Being too close to China or to be seen as pro China is taboo, like a disease. It is alright to be pro America. Better to be seen or called a baba or banana than to be called a Chinese. The Chineseness is unspoken and not to be mentioned. Very sensitive.
And, Singapore is a Chinese majority nation state. Is it? If the babas and bananas are not Chinese (OCBC), or would not called themselves Chinese but lesser Chinese, is Singapore a Chinese majority state? Would it be more appropriate to call Singapore a baba/banana majority state?
What do you think?
PS. According to Singlish Dictionary, OCBC means Orang Cina Bukan Cina or Chinese but not Chinese.
Give the man a beer!
ReplyDeleteOCBC = Chinese But Not Chinese is a dichotomy, a person who has lost his ancestry lineage; a person who neither belong here nor there. He is simply a stateless person, a wanderer - thinking all the time - who am I?
ReplyDeleteSuch a person cannot be called anything else but Bananas!
Just like the woman trying to demonise China in a video by asking the host at a seminar or some event, trying to hit out at China building the BRI and setting debt traps helping countries to progress. The host hit back and said that the debt trap had long been proven a lie, and asked her what is wrong with helping countries to progress? She also claimed that China is out to gain influence with that soft power. Again the host hit back and asked her what is also wrong with that? She sniggered away like a beaten dog.
ReplyDeleteThe USA and the West talk so much about human rights. Lifting people out of poverty is the most caring thing and that is the most important criteria of judging what human rights ought to be measured. And China has lots to show for lifting hundreds of millions out of poverty and moving closer to Middle Class living. And China is doing it outside the country as well. And yet they want to demonise China for human rights abuse.
Compare that with the champion of human rights, the USA, a country that is destroying it's own Middle Class to fatten the super rich. A country that lets the homeless people fester and live on street corners under extremely unsanitary conditions. That is not walking the talk of protecting human rights, which first and foremost is to give citizens a decent living in the richest country in the world. Yeah, just forget the debts and everything looks and sounds great.
And not to forget that the USA only has a quarter of the population of China and yet cannot solve the homeless problem. How to make America Great Again?
ReplyDeleteSome are pro-India and anti-China, very obviously . . .
ReplyDeleteRed dot Chinese r not real Chinese lah they r juz Singanese (aka Chinese skin speaking Singlish not a pure Chinese lah.. ho boh).
ReplyDeleteChinese in Sinkieland some called themselves Sing-Ka-Por-Lang.
ReplyDeleteThey even dare not admit they are Chinese
ReplyDeleteYa like the stupid taiwanese
DeleteWhat about Chinese who married a non-Chinese and practice their other religions, and have children ? How to be Chinese again or r they considered or deemed a Chinese anymore ? Their children r no more a "pure" Chinese ?
ReplyDeleteBeijing’s Debts Come Due
ReplyDeleteThe Chinese real estate sector is teetering. The largest private Chinese developer has defaulted on its external bonds. Most developers are struggling to refinance their domestic bonds. Home prices have gone down for the last 11 months. New construction is down 45 percent. The most acute stress can be traced back to developers who raised large sums by preselling yet-to-be built apartments. Some, however, failed to set aside reserves to guarantee the completion of these units, and households that took out mortgages to buy these homes have threatened to stop paying.
China’s real estate crisis poses financial risks, but it is ultimately a crisis of economic growth. Since the development and construction of new property is estimated to drive over a quarter of the country’s current economic activity, it is not difficult to see how a temporary downturn in the property market could become a prolonged economic slump.
The country’s state-backed financial system can still take large losses and thus avoid a financial meltdown. One state-backed institution can put money into another state institution, limiting the chance that losses on lending to a failed property firm will lead to the collapse of its creditors and trigger a cascade of defaults. The Chinese government can ask state-backed developers to complete building projects abandoned by private developers, providing financial help through the state policy banks. Pervasive government intervention isn’t the best way to run an economy over time, but the presence of institutions with deep pockets can prevent the destabilizing withdrawal of all financing to the property market.
As a result, China likely will not suffer a crisis that recalls the U.S. Great Recession of 2008. But that doesn’t mean the Chinese economy is in the clear. A new growth engine won’t automatically replace the boost that the property sector traditionally provided. If China elects to goose growth by increasing exports—as it has done in the past—that could have serious implications for countries around the world struggling to find their economic footing after the shocks of the COVID-19 pandemic and Russia’s invasion of Ukraine.
The Ant, Not the Grasshopper
China’s banks, trusts, and other financial institutions have lent huge sums to China’s property developers, to households looking to buy apartments, and to local governments building public infrastructure even as China’s big policy banks financed construction projects around the world as part of its Belt and Road Initiative. China’s financial system could do both kinds of lending without borrowing large sums from the rest of the world, thanks to the country’s enormously high domestic savings rate, which has averaged about 45 percent of its GDP over the last 20 years. By contrast, most large economies save about 25 percent of their GDP; before the pandemic, the high-saving Asian economies other than China generally saved about 30 percent of their GDP. Only oil-exporting economies generate comparable levels of national savings to China, and they usually do so for only a brief period after a large and unexpected rise in the price of oil.
Saving is often considered a virtue and the absence of significant external debt gives China more options for managing the current property slump. External credit, especially external credit to banks, is often withdrawn quickly during a market downturn. Domestically raised funds, in contrast, are generally stuck inside China.
But too much saving helped create China’s current financial difficulties, as it fostered an economic environment where China’s rapid growth effectively required increasing domestic debt. To understand why, it helps to remember that the counterpart of high savings is low domestic consumption. As a result, China’s rapid growth over the last 20 years has rested on either the ballast of exports or periodic bursts of investment.
China will not likely suffer a crisis that recalls the U.S. Great Recession of 2008.
ReplyDeleteBefore the 2008 global financial crisis, China’s internal debt-to-GDP ratio was stable, as China could rein in its financial sector while stunning export growth propelled China’s economy and industrial development. Export-led growth minimized debt risks inside China but was destabilizing to the rest of the global economy. It led to job losses in the manufacturing-intensive parts of the European and U.S. economies; the United States was able to overcome the drag on demand from large external deficits only through an increase in household borrowing that proved to be globally destabilizing. Put simply, it was one of the factors that helped spark the 2008 recession.
After the global financial crisis, China maintained its rapid growth while its trade surplus shrank through extraordinary investment in property and infrastructure. Mobilizing such high investment required higher domestic borrowing as well. In the ten years following the global financial crisis, China’s internal debt-to-GDP ratio rose from around 150 percent to well over 250 percent of GDP. In essence, the debts of households, local governments, real estate developers, and state firms have all increased faster than their incomes. Ultimately, that is a risky dynamic.
That said, China’s central government debt has been stable: the country’s debt is less than 20 percent of its GDP—far below that of the world’s other major economies. China’s central state unambiguously has a large role in China’s economy, but that is because it backs most large Chinese banks and many investment funds. The Chinese government doesn’t collect a lot of tax, nor does it spend a lot on social benefits: China has not created a national system of unemployment insurance, does not offer high-quality universal health care, and limits the public services available to Chinese workers who move from rural areas to more prosperous coastal cities.
The result is an unusual mix of financial strengths and weaknesses. The central government in Beijing owns some of China’s most profitable companies, and it backs the healthiest part of China’s financial system, namely the big national banks. It has little direct debt. Local governments, however, are carrying substantial debt and have a weaker revenue base. They are also indirectly responsible for the many state firms that have been created to finance local infrastructure projects, and they back many of the weaker locally owned banks.
China’s central government doesn’t want to cover all losses from the real estate bubble.
The big property developers, meanwhile, carry staggering debt. The market borrowing of the largest private property developer, Evergrande, is around $100 billion. If all its promised apartments and unpaid bills are counted, the company owes an estimated $300 billion. Its peers have only slightly smaller balance sheets. China’s total debt isn’t a problem for an economy that saves as much as China does—the real problem is that the wrong parts of the economy are carrying most of the debt and will have difficulty repaying.
Still, China will likely manage the immediate financial risk that its property downturn has created. Some of the weaker property developers may not pay all their debt on time and in full. But China’s central government has the capacity to protect important institutions that lent to the big property developers. Beijing can also help local governments that will need to rescue local banks so they can support locally important firms.
China’s central government doesn’t want to cover all losses, however. Too much help would fail to teach a lesson to those who lent to the most poorly managed property developers, and that could potentially lead to a new round of risky behavior. At the same time, the central government cannot allow all the big property developers to fail simultaneously. It also cannot allow losses on past investment projects to stop the flow of new infrastructure financing because China’s economy would seize up from unpaid bills and stalled building projects. Unemployed urban workers and angry buyers of unbuilt apartments would threaten social and political stability. A restructuring of the debts of the developers is inevitable—but that restructuring must be combined with steps to help the financial system bear the associated losses and make sure the flow of credit to the economy doesn’t stop completely.
ReplyDeleteA New Model
In addition to avoiding a severe financial crisis, the Chinese government also needs to find a new growth engine to replace the ballast the property sector used to provide. Specifically, household consumption needs a jolt. COVID-19 lockdowns have taken a toll, and falling property prices could lead worried households to cut back on spending just when the overall economy needs more consumer demand.
This means China must shift to a new model for delivering stimulus by providing help directly to households. China’s persistently low consumption reflects the insecurities created by limited social benefits, high income inequality, and the burden low-income households carry because of a tax system that raises the bulk of its revenue from consumption taxes and poorly designed payroll taxes. In the long term, China needs a stronger national system of social insurance—in particular, more spending on public health and a better system of unemployment insurance—that is financed by higher progressive income taxes collected by the central government.
In the short run, China simply needs to shore up its existing system for providing social services and income support by transferring more revenue to local governments. China has historically kept central government borrowing down by shifting the fiscal burden to local governments. But this approach now risks the country’s financial stability. Local government revenues are under pressure from the property downturn, as they have relied extensively on land sales to property developers to help cover their budgets. The path to a healthier economy—one driven more by household consumption and less by state-guided investment—currently runs through an increase in the central government’s budget.
China, however, has been reluctant to move away from its existing model. The country’s top leadership views direct support for household spending as unproductive, and the finance ministry has consistently resisted running large central government budget deficits. The Chinese government’s recent announcements suggest that it wants to try to restart growth by authorizing more local investment in infrastructure and displacing imports with Chinese technology. But the high-wire act required to keep China’s economy moving without a more stable base of increased domestic consumption will only get more precarious over time.
Global Implications
China’s trade partners have a large stake in the outcome of the internal Chinese debate. For most of the global economy, the way China grows matters at least as much as how fast it grows. China relied on exports, rather than a rebound in household consumption, to drive its recovery from the outbreak of COVID-19 in Wuhan in 2019. With a shift in global demand toward goods putting upward pressure on prices everywhere, countries around the world have tolerated (if not always warmly welcomed) the increased supply out of China. China’s trade surplus was expected to fall naturally as COVID-19-related disruptions eased globally and in China.
ReplyDeleteThat hasn’t happened. Instead, the latest trade data show that China’s external surplus is rising on the back of weakness in China’s imports. Over the summer, the world economy was lucky, as China’s slowdown reduced demand for commodities when the global economy was struggling to adapt to a reduction in the supply. But this doesn’t mean that the global economy can make up for a sustained shortfall in China’s own ability to generate demand for the industrial goods that its economy can now produce in large quantities.
Back in 2009, China’s economy was able to pivot away from exports toward domestic real estate investment to mitigate the global fallout from the U.S. housing crisis because China’s financial system was strong enough to support this shift. Plus, China needed more housing and modern infrastructure. Today, China could not reverse that pivot with a large move away from real estate and back to exports without significant disruption, in part because its share of the global economy has roughly tripled in the years since the global financial crisis. The scale of the lost domestic activity from real estate that would need to be made up through a shift in global demand toward Chinese goods is just too big, and China’s trading partners themselves are often struggling with their own debt challenges.
China can try to manage a permanent downshift in real estate investment by taking steps to sustain and strengthen household demand and by finding new ways to help the industrial sectors that have relied on excessive property investment retool to meet internal consumer demand. Above all, Chinese government officials need to accept this difficult truth: rising internal debt and the end of a period of unusually high investment means that China’s historic growth surge is most likely a thing of the past.