If there was ever a time to pivot your attention to China, it is now. Major events are going to be happening over the next few weeks. We got kind of a head start this year with the Bo Xilai soap opera, but things are going to come to a head next month. And you should be following it because it’s what happens in China is going to influence the world much more than the presidential election.
The trial of Bo Xilai
This saga is better than any TV series I’ve seen lately. To sum it all up there was this Brit, Neil Heywood, working for the head of Chongqing, Bo Xilai, and his family. Neil was quite close with the Bo family and took care of various matter for them over the years, including helping secure little Bo Junior a spot at a fancy pants British boarding school. Unfortunately though last November, Neil crossed the great divide under mysterious circumstances. Officially the cause of his death was alcohol poisoning.
Then in early February of this year, Bo’s right hand man, Wang Lijun was suddenly demoted from his posts of vice-mayor and chief of police in Chongqing. Days later Wang showed up at the U.S. consulate in Chengdu to tell our boys that not only was Neil in fact murdered last November, but that the culprit was none other than Bo’s crazy wife, Gu Kailai. After leaving the consulate, Wang was of course whisked away to Beijing to have a friendly chat with the powers that be.
Cue Shitstorm.
A few weeks later Mr. Bo was sacked, rebuked, and has not been seen in public since. Rumors spread like wildfire of major power struggles and conflicts within the Party, including one that tanks were rolling through the capital as part of a coup.
Of course there were major divisions and huge disagreements, but the Party would never allow these to become public. It is of utmost importance to give the impression of Party unity to the Chinese people and the world.
Gu was given a ‘suspended death sentence’ in July and Wang was convicted this week on various corruption charges. Not that there was ever any question of their guilt. In China the courts answer only to the will of the Party.
This sets the stage for the final chapter in this saga, the fate of Mr. Bo. Most believe that Wang was given a relatively lighter sentence because of his cooperation in exposing the misdeeds of his former boss so that a good healthy purge of Bo can occur, like that cheesy gordita crunch you had at T-Bell last night.
And how exactly this purge takes place is what you should pay attention to. These kinds of purges only come along once a decade or so, so it will be very interesting to see how exactly the Party goes about doing it, the language that they use and what kind of life Bo will be relegated to. They’ve done a fine job so far setting it all up to go very smoothly, and in theory the whole thing is supposed to have a bow on it so we can move on to the 18th Communist Party Congress, which is expected to convene next month to formalize who’s going to manage China for the next decade. No exact date has been announced yet, which means that the power plays are still ongoing.
Up until the point that Number Two ratted him out, Bo was a leading candidate for the 9-man committee that ultimately runs China. What will be interesting to see is who exactly will be named to the committee, whether the it stays at 9 members, and if there will be any life left for the ‘Chongqing model’ of development that Bo led during his tenure which, among other things, harks back to the good old days under Mao. Watch this closely.
Very interesting, what is your connection to China?
I think the flare ups regarding territorial disputes are at this point more of an attempt to build up a sense of nationalism among the Chinese people. There is a laundry list of domestic problems, any of which when given a little momentum could cause some major disturbances. However by redirecting national attention and frustration to the interlopers, the Chinese people have something they can coalesce around that in a certain sense puts the Party in a positive light because it is fighting for the people so to speak.
Its not just the price of labor, but also the price of land. Factories can still acquire land for cheap from local governments who sieze the land from the farmers/current occupants. Eventually though there will be a critical mass of people saying "enough is enough" when it comes to having their land taken away. That's when you'll really see serious consideration given to relocation.China has a lot of challenges to face within this decade.
China has territorial issues in the South China Sea with Vietnam and Philippine, East China Sea with Japan, Taiwan (althought not as serious as it used to), regions that border with India that led to a war in 1963 that they never got over, and even Russia (Not known very much, but anyone with a bit of Chinese history knows Russia took a shit load of land in North-East China for the past 300 years.
To make matters worse, their reliance on export for GDP growth is not doing so well given the economic crisis. Eventually, they will have to find a better way like focusing more on local consumer market and transition into it. Their population is getting older and older, there will be an unbalanced social structure in years to come; ridiculous housing bubble; the salaries at factories are getting higher and higher, sooner or later companies will all just relocated somewhere in Vietname/Thailand where the labour is still cheap.
How will this impact US? Only time can tell
Oh so mysterious, the Chinese.
Drama aside, I doubt there'd be much, if any change in the regime and policies, whoever those 9 guys are.
Same can be said about our election, "change" my ass
I think saying what happens during this trial and the upcoming CCP power change is more important than the presidential election is a little bold, but other than that it was a good read.
The reason I say this is because power changes in China happen only once in a decade. Things in the US can be turned on their heads in as little as two years- consider the Democratic thwomping in 2008 and the Republican resurgence in 2010. Also the President is only one part of the picture- there's the House and Senate, state legislatures and governorships, and even the Supreme Court. There isn't anybody in China that can realistically challenge what the nine guys in black suits with red ties say.
Intriguing post. Hi I'm from RENMIN University of China, please PM me and I'm looking forward to having a conversation with you.
Thanks for the post, olafenizer. I'm only somewhat familiar with the 9 person committee you mentioned and the mechanics of the Chinese government. Can you give us a rough overview of how the committee is set up and how it interacts with the other major players in chinese government?
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