Three Sensible Articles About China

What to read when you're not reading the Atlantic...

I feel as if I'm having versions of the same conversation each time I talk about "what's China really like?" with Americans or other Westerners. This may say something bad about me, but it also reflects the challenge of getting across a series of contradictory-sounding thoughts that are all simultaneously true. I think this messy combo is taken for granted by most foreigners who have spent much time traveling through China, but it can sound odd to those who've mainly read awe-struck news articles or been to the fancy hotels and restaurants in the biggest Armani-equipped "Tier 1" cities. A distilled version of this melange is:

  • China is big, exciting, fast growing, absolutely worth taking seriously, and nothing like the house of cards or hollow achievement some skeptics have suggested;
  • BUT ALSO it is chaotic, slapdash, full of poor people and feuding factions, very assured in some ways and nervous in others, and all in all nothing like the nonstop juggernaut or illustration of perfectly effective governance we hear about from people who've taken a quick look; 
  • AND ALSO it has surprisingly few elements of built-in, unavoidable, zero-sum conflict with the United States and is nothing like the looming military menace some people like to fantasize about;
  • BUT THEN AGAIN but it has many obvious differences of values and interests from the United States and unattractive elements (as of course do we) that aren't going away soon.

Here are three recent articles that convey (what I view as) exactly the right complex mixture of "taking China seriously" without being "taken in by China."

"There's a New Red Scare: But is China Really So Scary?" by Steven Mufson and John Pomfret in this weekend's Washington Post. About this I'll simply say: read it.

"What the PBOC Cannot Do With Its Reserves," by Michael Pettis on his web site, China Financial Markets. I've written about Pettis in the magazine and think he has a track record (along with some others) of calling Chinese developments the right way. The PBOC of this item is the People's Bank of China; the reserves are the countless trillions of dollar-dominated assets it holds; the topic is whether China really can push the U.S. around as a result of the holdings. Read this too. Sample paragraph after the jump.

"A Land Without Google," by Jane Qiu at If you've been following the Google/China case, there might not be too many surprises here. I mention it because of its theme about China's own vulnerabilities, as it hopes for a higher-value and higher-tech future, in being cut off from the global flow of high-end intellectual competition and ideas.

Is China strong? Yes. Is it weak? Yes. Is it opening up? In most ways Yes. Is it closing down? In some ways Yes. Is it a friend? In many ways. Is it a potential foe? In some ways. If you read these pieces you'll see what I mean.

From Michael Pettis' recent entry:

It is a real toss-up as to which generates more bizarre comment in the international press: Beijing's long-feared dumping of US Treasuries, or the use and value of the PBoC's central bank reserves.

The revelation last week that Chinese holdings of US Treasury obligations fell in December by $34.2 billion, to $755.4 billion, generated a frisson of fear and excitement, leading one prominent newspaper to worry that "If there is one thing that gets investors twitchy, it is the fear that China is losing its appetite for US government bonds."

After all this reduction in Chinese holdings of Treasury bonds comes from the USG's TIC data, so it must be true that China is dumping dollars, right?

No need to twitch, it means no such thing.  [As he goes on to explain.]