TigerHawk

I am writing this from the single computer in the lobby of our hotel Yangshou, which is a couple of hours by slow bus south of Guilin. The region is a major tourist destination for both Chinese and Western backpackers, mostly because of its extraordinary natural beauty. This is the site of those strange pointy mountains that show up so often in Chinese paintings (the photo at right is recruited from Google images -- I can't upload my own pictures from this machine).

Last night we saw an extraordinary sound and light show on the Li River, with literally hundreds of boats, dancers in lighted costumes, barges with magnificent displays and lights playing off the rock faces in the background over a distance of miles. The French may have invented son et lumiere, but the Chinese have perfected it.

Anyway, in response to at least some popular demand I did manage to scribble up some notes from our three days in Shanghai while on the flight down here.

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We are on a very extravagent five city, two week tour. The advantage is that we can see and learn a great deal in a short period of time. The disadvantage is that we are indemnified against meaningful intercourse with any Chinese bureaucracy. Our sole contact with the Communist Party, for example, was the smiling "neighborhood committeewoman" who took us to see a kindergarten class, complete with five year-old ballerinas and violin recitals. The local Commie was very warm an inviting, but it seemed to me that people were quick to do as she asked.

I have been to China before, although not Shanghai. In 1984 I spent a week or so in Beijing, traveling with only friends and a backpack and living and eating with the people. In 1986 I took a train from Hong Kong to Canton and on to Guilin, where I am headed now by Boeing 737. On those trips we spent about $10 per person per day, and that included a buck for a foreign newspaper when we could lay our hands on one. On this trip we are spending that much on Starbucks alone, and sixty times that amount in total. My own economic circumstances have apparently boomed along with China's, for which fact I am deeply thankful.

Shanghai was simply astonishing, especially, I suppose, if you saw China before its long boom and are only now returning. It is every bit as impressive as Hong Kong was twenty or even ten years ago， a reflection of the astonishing growth of China's coastal economy. Large parts of Shanghai are vastly nicer than I expected them to be. We saw very little obvious poverty -- at least compared to my memories of twenty years ago -- and a great deal of the rising consumer economy. The Starbucks are packed with locals paying 30 Rmb. for lattes, even as pensioners in the neighborhoods get by on perhaps 1000 Rmb ($125) per month.

The streets are cleaner than most American cities, the highway system is extremely modern, and the air -- while thick with traditional industrial pollution and smog -- no longer smells of human waste. The night soil collectors are gone, at least from Shanghai. That is progress by any measure.

Compared to 1984, when there were virtually no cars apart from a tiny number of official vehicles of a Soviet design dating from the 1950s, there are a lot of cars on the road. Many brands are represented, including most Japanese marks and Volkswagon, which apparently has a big market share in Shanghai. There are a huge number of Buicks on the road; our guide said they are considered quite chic. As anybody who has ever bitten into a Chinese pastry knows, there is no accounting for taste. But good for GM anyway.

There are many more mopeds on the street, and surprisingly few bicycles. There are more fat Chinese, too (from none then to a few today, although they could have been from overseas). In all three respects, it looks a lot like Taipei did twenty years ago.

All things considered, the traffic wasn't too bad. It was no worse than a typical American city, and substantially more obedient and efficient than, say, Mexico City or Rome. Apparently this is because the city government of Shanghai rations license plates, much as taxi medallions fix the number of yellow cabs in Manhattan. A Shanghai license plate, which is a tradeable asset, now goes for the equivalent of US$5000. This fact and Shanghai's relative density has affected the spending priorities of Shanghai's rising middle class. Shanghalese, we were told, spend their first new wealth on a single family house in the suburbs. Residents of Beijing spend their new money on a car, which Shanghalese claim accounts for the greater congestion in that city. We will see next week.

Of course, Shanghai is not typical of China. It has long rivalled Canton as China's most cosmopolitan city, and even after forty years of unreconstructed communism it retains an internationalism and an affluence not seen elsewhere in China. While Shanghalese drink coffee at Starbucks and buy Western luxury goods, most of rural China remains mired in poverty. Monday's China Daily describes a massive new initiative to link China's many rural villages to the highway network. There are still 380,000 villages that are not yet connected to a rail head or highway by any paved road. The program to connected these villages is extraordinarily ambitious, and may well change the circumstances of rural Chinese life forever. The hundreds of millions of peasants in rural China are about to find out how the "other tenth" live. What will happen then?

By all accounts, the urban/rural and coastal/interior tensions are growing strong. The gulf between these two economies is so profound that the stability of China is at stake. Indeed, the conservative Communists who can command the allegiance of the peasants may yet assert themselves in a last reaction to international capitalism. Do not assume that there cannot be another massive retrenchment, to the great detriment of the affluent post-Communist Chinese and the foreigners who have bet so heavily on China's peaceful evolution.

Frankly, I am not one who believes that China is an expansionist threat to the United States. True, China will compete for natural resources, particularly fossil fuels, but in the end I think that we do not have to devote ourselves to the geopolitical containment of China.

First, it is obvious that the Chinese are extraordinarily ambitious in the making of money. The People's Liberation Army remains a center of power, but it bends that power toward commercial enterprise. By all accounts, the PLA and its officials are "participating" fully in China's economic boom.

Second, China faces tremendous internal stresses, both because of the income gap discussed above and the dire state of the banking system (which carries massive non-performing loans underwritten by a government that does not know how to contend with widespread bankruptcy). While these tensions might boil over into conflicts that damage Western business interests, it seems implausible to me that China can both resolve its internal troubles and confront the West. Indeed, threatened Chinese elites will need the West under such circumstances, and are likely to send their staggering wealth abroad tot he United States and Europe at the first sign of trouble. If the peasants rise, the dollar will soar.

Third, the "one child" planning policy will constrain China's willingness to risk casualties. Why? Because people will rebel rather than lose their only child as a conscript in a foreign war. I'm no China expert, but I'd bet dollars to dumplings that the government in Beijing is terrified of the prospect of casualties. Combine that with the legendary corruption in the PLA's officer class, and you have to wonder whether today's China has the stomach for war. I think not.

The other remarkable change since 1984 is the commitment to learning English. All the street signs in Shanghai are in English as well as Chinese, the huge sign on the airport road says "Welcome to Shanghai" with no Chinese translation, and there are huge numbers of young people who clearly understand some English. Our local guide told us that parents with money invest in "American English" lessons for their children. The employees in Starbucks here ar more obviously comfortable with transactional English than their counterparts in Mexico City (or perhaps they were simply more willing to use it). This is probably just another aspect of the tremendous ambition of China's aspiring class.

More later.