A new book methodically peels back the layers of China's statistical machine to provide new insights into the nation's burgeoning economy
For some, wading through Chinese economic data is like wrapping your head around the Talmud. The credibility of the data itself often invites skepticism from observers both inside and outside China. Yet there's little choice but to rely on the official numbers. And China's regular data dump in the middle of each month moves markets in a way that few countries can. If the market has little faith in Chinese statistics, then why all the focused attention? How does one make sense of Chinese data and its idiosyncrasies?
Many of the answers can be found in the eminently useful Understanding China's Economic Indicators, a new book from Tom Orlik, economic journalist/columnist for the Wall Street Journal. (According to his bio, Orlik has earned the unique distinction of having one of his essays on Chinese statistics be required reading by the National Bureau of Statistics staff.) This is not a "big argument" book on China, but one that methodically peels back the layers of the Chinese statistical machine to yield insights on what the data mean, how they're collected, and what the current shortcomings are. You want to know how the Chinese calculates GDP and fiscal revenue, that's chapter two. You want to know about the country's gold and foreign exchange reserves accumulation, flip to chapter five. Still don't quite understand the composition of China's consumer price index? Don't feel bad, no one really does, as you'll discover in chapter seven. This book is the story of a year with Chinese economic data.
I particularly liked the opening vignette that described a gaggle of Chinese and foreign journalists awaiting the announcement of the 2009 fourth quarter GDP. The anticipation was palpable, torturous seconds ticked by as each reporter is poised to pounce on the final revelation of the figure to phone back to their editors--the economic press in China is all cut-throat competition. And hallelujah, it's 10.7% year-over-year growth, which put the annual growth at 8.7%. Yes! China got the 8% it promised it would deliver at the beginning of the year. In Zhongnanahi, Wen Jiabao smiled and sipped some oolong tea (OK, I made up this last part). Sure, it is admittedly a tad bit nerdy, but in just the right way, especially if you're someone who's really into Chinese economic data (like moi).
So what of the credibility of Chinese data? Orlik takes a similar view to what I argued in response to Megan McArdle's dispatch last year that appeared more about highlighting Hayek than understanding how the Chinese stats system actually functioned. Orlik concludes:
The reality of China's economic data today is not the crude controlling hand of the Politburo dictating the GDP growth figure. It is an increasingly reliable and comprehensive set of economic indicators that remain compromised in some areas by the difficulty of measuring a rapidly changing economy, imperfect surveying methods, a recalcitrant sample set, and continued political sensitivity surrounding some numbers. The system is not perfect. Some data points are more reliable than others. But neither is it a farce. As shown by the mad scramble for the GDP data in the State Council Information Office and the bilions of dollars that are traded instantly on its release, the shortcomings in the data are no impediment to the market reaction.
China has certainly come a long way since the Great Leap Forward days, when complete fabrication of grain production volumes to serve political goals resulted in one of the worst man-made famines in modern history--a point that Orlik discusses at some length. Top policymakers and leaders now rely on numerous data to assess the economy and determine the best course for policy. The very realities of governing a large and dynamic economy requires much less tolerance for outright falsities. Of course, the statistics system still plays catch-up to an economy that is sprinting ahead of it, making the data far from perfect.
Some were surprised by one of the Wikileaks cables that caught Vice Premier Li Keqiang mocking his provincial-level GDP figures as unreliable. It shouldn't have been a surprise. Since the late 1990s, using electricity consumption as a proxy for economic activity has remained a fairly normal practice at both the central and local levels. Relying on "proxy indicators" for GDP growth is one way by which the central leaders counter what they know to be potential local-level doctoring--or "add water" (加水) in Chinese parlance--of their stats, leading to inflated GDP and other growth metrics. Orlik explains some of these proxies in detail.
One reason that electricity consumption has correlated relatively well with economic growth is because industry is by far the largest consumer of power, at perhaps 70 or 75%. As the last decade has been basically defined by China's hyper industrialization phase, capturing a large enough slice of industries--which are massive energy guzzlers--meant you had a rough, but imprecise, picture of the broader economy. The key question over the next decade is whether this correlation breaks down, as China aspires to restructure its economy toward a less industry-led growth model. That is indeed a major pillar of the 12th Five-Year Plan.
If China succeeds in the transition, I suspect Orlik will have to publish an updated edition of his guide to Chinese economic data.
Damien Ma is a fellow at the Paulson Institute, where he focuses on investment and policy programs, and on the Institute's research and think-tank activities. Previously, he was a lead China analyst at Eurasia Group, a political risk research and advisory firm.
Thicker ink, fewer smudges, and more strained hands: an Object Lesson
Recently, Bic launched acampaign to “save handwriting.” Named “Fight for Your Write,” it includes a pledge to “encourage the act of handwriting” in the pledge-taker’s home and community, and emphasizes putting more of the company’s ballpoints into classrooms.
As a teacher, I couldn’t help but wonder how anyone could think there’s a shortage. I find ballpoint pens all over the place: on classroom floors, behind desks. Dozens of castaways collect in cups on every teacher’s desk. They’re so ubiquitous that the word “ballpoint” is rarely used; they’re just “pens.” But despite its popularity, the ballpoint pen is relatively new in the history of handwriting, and its influence on popular handwriting is more complicated than the Bic campaign would imply.
Even in big cities like Tokyo, small children take the subway and run errands by themselves. The reason has a lot to do with group dynamics.
It’s a common sight on Japanese mass transit: Children troop through train cars, singly or in small groups, looking for seats.
They wear knee socks, polished patent-leather shoes, and plaid jumpers, with wide-brimmed hats fastened under the chin and train passes pinned to their backpacks. The kids are as young as 6 or 7, on their way to and from school, and there is nary a guardian in sight.
A popular television show called Hajimete no Otsukai, or My First Errand, features children as young as two or three being sent out to do a task for their family. As they tentatively make their way to the greengrocer or bakery, their progress is secretly filmed by a camera crew. The show has been running for more than 25 years.
The Texas senator’s about-face risks undermining his political brand and alienating the supporters who hailed his defiant stand in Cleveland.
Ted Cruz set aside his many differences with Donald Trump on Friday to endorse for president a man whom he once called a “serial philanderer,” a “pathological liar,” “utterly amoral,” and a “sniveling coward”; who insulted his wife’s looks; who insinuated Cruz’s father was involved in the assassination of John F. Kennedy; who said he wouldn’t even accept his endorsement; and who for months mocked him mercilessly with a schoolyard taunt, “Lyin’ Ted.”
The Texas senator announced his support for the Republican nominee late Friday afternoon in a Facebook post, writing that the possibility of a Hillary Clinton presidency was “wholly unacceptable” and that he was keeping his year-old commitment to back the party’s choice. Cruz listed six policy-focused reasons why he was backing Trump, beginning with the importance of appointing conservatives to the Supreme Court and citing Trump’s recently expanded list of potential nominees. Other reasons included Obamacare—which Trump has vowed to repeal—immigration, national security, and Trump’s newfound support for Cruz’s push against an Obama administration move to relinquish U.S. oversight of an internet master directory of web addresses.
Most campaign ads, like most billboards or commercials, are unimaginative and formulaic. Our candidate is great! Their candidate is terrible! Choose us!
With the huge majority of political ads, you would look back on them long after the campaign only for time-warp curio purposes—Look at the clothes they wore in the 80s! Look how corny “I like Ike!” was as a slogan! Look how young [Mitch McConnell / Bill Clinton / Al Gore] once was!—or to find archeological samples of the political mood of a given era.
The few national-campaign ads that are remembered earn their place either because they were so effective in shifting the tone of the campaign, as with George H. W. Bush’s race-baiting “Willie Horton” ad against Michael Dukakis in 1988; or because they so clearly presented the candidate in the desired light, as with Ronald Reagan’s famous “Morning in America” ad in 1984. Perhaps the most effective campaign advertisement ever, especially considering that it was aired only one time, was Lyndon Johnson’s devastating “Daisy Girl” ad, from his campaign against Barry Goldwater in 1964. The power of the Daisy Girl ad was of course its dramatizing the warning that Goldwater might recklessly bring on a nuclear war.
Early photographs of the architecture and culture of Peking in the 1870s
In May of 1870, Thomas Child was hired by the Imperial Maritime Customs Service to be a gas engineer in Peking (Beijing). The 29-year-old Englishman left behind his wife and three children to become one of roughly 100 foreigners living in the late Qing dynasty's capital, taking his camera along with him. Over the course of the next 20 years, he took some 200 photographs, capturing the earliest comprehensive catalog of the customs, architecture, and people during China's last dynasty. On Thursday, an exhibition of his images will open at the Sidney Mishkin Gallery in New York, curated by Stacey Lambrow. In addition, descendants of the subjects of one of his most famous images, Bride and Bridegroom (1870s), will be in attendance.
Who will win the debates? Trump’s approach was an important part of his strength in the primaries. But will it work when he faces Clinton onstage?
The most famous story about modern presidential campaigning now has a quaint old-world tone. It’s about the showdown between Richard Nixon and John F. Kennedy in the first debate of their 1960 campaign, which was also the very first nationally televised general-election debate in the United States.
The story is that Kennedy looked great, which is true, and Nixon looked terrible, which is also true—and that this visual difference had an unexpected electoral effect. As Theodore H. White described it in his hugely influential book The Making of the President 1960, which has set the model for campaign coverage ever since, “sample surveys” after the debate found that people who had only heard Kennedy and Nixon talking, over the radio, thought that the debate had been a tie. But those who saw the two men on television were much more likely to think that Kennedy—handsome, tanned, non-sweaty, poised—had won.
The Republican candidate took his case to a shale-industry gathering, and found a welcoming crowd.
PITTSBURGH—“Running for president is a very important endeavor,” Donald Trump said. “What is more important, right?”
He leaned forward on his chair, separated by a heavy black curtain in a makeshift green room from the crowd waiting to hear him speak at the Shale Insight Conference.
“I am running because, number one, I think I will do a very good job. Number two, it’s really about making American great again.” He paused, as if realizing that repeating his campaign slogan might not seem genuine.
“I mean that; I really do want to make America great again,” he said. “That is what it is all about.”
The 70-year-old Republican nominee took his time walking from the green room toward the stage. He stopped to chat with the waiters, service workers, police officers, and other convention staffers facilitating the event. There were no selfies, no glad-handing for votes, no trailing television cameras. Out of view of the press, Trump warmly greets everyone he sees, asks how they are, and, when he can, asks for their names and what they do.
“Consumers are jaded about advertising in a way they weren’t several decades ago.”
MasterCard unveiled its new logo earlier this summer, and as far as rebrandings go, the tweaks were subtle: The company kept its overlapping red and yellow balls intact, and moved its name, which was previously front and center, to beneath the balls, while making the text lowercase. With increasing frequency, MasterCard said, it would do away with using its name in the logo entirely. The focus would be more on the symbol than the words.
MasterCard’s move reflects a wider shift among some of the most widely recognized global brands to de-emphasize the text in their logos, or remove it altogether. Nike was among the first brands to do this, in 1995, when its swoosh began to appear with the words “Just Do It,” and then without any words at all. Apple, McDonald’s, and other brands followed a similar trajectory, gravitating toward entirely textless symbols after a period of transition with logos that had taglines like “Think Different” or “I’m lovin’ it.”
How Washington men working in national security dress—for better or for worse
In 2017, shortly after the next president is inaugurated, thousands of newly appointed federal officials will struggle with the same existential question: What do I wear to my first day of work? I understand their anxiety, having languished over wardrobe during eight years of federal service and pondered the fashion choices of my male colleagues during the interminable meetings that are the hallmark of government work. It’s hard to point to a solid “real world” professional competency that I learned during those years of meetings and memo writing, but one skill I developed is an uncanny ability to tell you where any man in the national security community works based on his apparel. But first, to understand the fashion choices these professionals make, you must understand the culture—and keep in mind that not every employee falls into these stereotyped camps. (I’m also leaving a thorough assessment of female fashion to other writers more qualified.)
In Greenwich, Darien, and New Canaan, Connecticut, bankers are earning astonishing amounts. Does that have anything to do with the poverty in Bridgeport, just a few exits away?
BRIDGEPORT, Conn.—Few places in the country illustrate the divide between the haves and the have-nots more than the county of Fairfield, Connecticut. Drive around the city of Bridgeport and, amid the tracts of middle-class homes, you’ll see burned-out houses, empty factories, and abandoned buildings that line the main street. Nearby, in the wealthier part of the county, there are towns of mansions with leafy grounds, swimming pools, and big iron gates.
Bridgeport, an old manufacturing town all but abandoned by industry, and Greenwich, a headquarters to hedge funds and billionaires, may be in the same county, and a few exits apart from each other on I-95, but their residents live in different worlds. The average income of the top 1 percent of people in the Bridgeport-Stamford-Norwalk metropolitan area, which consists of all of Fairfield County plus a few towns in neighboring New Haven County, is $6 million dollars—73 times the average of the bottom 99 percent—according to a report released by the Economic Policy Institute (EPI) in June. This makes the area one of the most unequal in the country; nationally, the top 1 percent makes 25 times more than the average of the bottom 99 percent.