Chairman Mao famously said "Marxism... is less useful than dog shit." So when I read a China watcher worry about "Communist Party competence narrrative" I worry for the watcher:
Circa 1977 the Chinese Communists managed one of the most remarkable transition in history. And ten years earlier they had done so as well. And ten years later they managed the Tien An Men debacle. This crew knows from competence management.
So they let capitalists have enough rope to hang themselves, and the capitalist made a hash of it. So what? Half the party said they would. Nothing that happens will be a threat to the Communist Party. Anyone who moves against the party will end up as body parts for incontinent Americans.
There is no "Chinese government competence narrative" that matters. The government is not the Party. The government can be changed, without affecting the immutability of the Party. The only narrative that matter is the Communist Party narrative: "We saved China. You didn't."
So sure, plenty of changes are coming, but for as long as the mind's eye can see into the future, never bet against the ChiComs. They have the most reliable logo since SPQR.
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I get nervous because the next move in China is going to be a political move, and political moves are never well anticipated by markets. The Beijing regime is going to take steps to defend itself, or at least insulate itself, from the growing Narrative that they are incompetent. Heads will roll. Literally, in all likelihood. But the incompetence genie is very hard to stuff back into the bottle, and depending on whose head is on the chopping block, regime stability can deteriorate very quickly. Now that’s what will make me change my bullish stance on China fundamentals, and that’s what will make the US market swoon of last August look like a gentle spring rain.The ChiComs could care less how the economy goes. They will be in charge. Sure they'd prefer a peaceful, prosperous, just China, but with USA perfidy, they play the hand dealt them. But as to narrative, they saved China, and anyone who contradicts the ChiComs is against saving China. It is really quite simple.
From an Epsilon Theory perspective, a collapse in the Narrative of Chinese Government Competence is the biggest systemic risk out there right now, and that’s where I’m focusing my risk antennae.
Circa 1977 the Chinese Communists managed one of the most remarkable transition in history. And ten years earlier they had done so as well. And ten years later they managed the Tien An Men debacle. This crew knows from competence management.
So they let capitalists have enough rope to hang themselves, and the capitalist made a hash of it. So what? Half the party said they would. Nothing that happens will be a threat to the Communist Party. Anyone who moves against the party will end up as body parts for incontinent Americans.
There is no "Chinese government competence narrative" that matters. The government is not the Party. The government can be changed, without affecting the immutability of the Party. The only narrative that matter is the Communist Party narrative: "We saved China. You didn't."
So sure, plenty of changes are coming, but for as long as the mind's eye can see into the future, never bet against the ChiComs. They have the most reliable logo since SPQR.
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| https://en.wikipedia.org/wiki/National_Emblem_of_the_People%27s_Republic_of_China |
1 comments:
Paradise Stolen
Stefan Verstappen is a survivalist and maybe a bit of a libertarian. He thinks that the government is going to one day use the army against ordinary people when the US crumbles. Still, he's a sensitive and well meaning guy who he has made some superb videos that I really recommend people watching.
In the video below Stefan shows all the money that was wasted in the recent US Middle Eastern wars and what Americans could have had instead. Although he doesn't mention this, the trillions wasted really went straight back into the hands of One Percent, who own the armament industries. And the government borrowed the money from the private banks which are also owned by the One Percent. A double whammy for the mega rich, while the tax payer pays for it all.
I have just watched this again and it is superb and beautiful shot.
Paradise Stolen - DON'T SHOW YOUR CHILDREN
https://www.youtube.com/watch?v=qZM6TJ4Cvb0
In this video below Stefan shows how China had many great civilizations but they all crumbled exactly the same way. First of all primitive people would form simple societies and then towns and villages start to develop and so does trade. This is the start of civilization and then an Emperor takes control after winning over other warlords. At this point society lives in relative peace and the emperor is benign and rules fairly and wisely, keeping law and order and providing public services, national defence, and security. Society then advances and a merchant class starts to develop and at this point a great civilization begins to come into existence. And that's okay for a while but the merchants start to get extremely rich and so can corrupt the government and the emperor. The new merchant class also squeeze more and more profits out of society and get the Emperor to shift all of the tax burden onto ordinary people. In the last stage of civilisation it starts to crumble because ordinary have no money left to spend anymore. Eventually the whole things falls in and every rich person of the merchant class gets hunted down and killed. No one ever escapes, except for one emperor who hid in a monetary and became a monk for the rest of his life.
Despite all the Chinese scholars and academics who knew exactly what caused the breakdown of all the great empires the Chinese could never stop repeating the same mistakes over and over again. Stefan believes the US is going the same way.
Historical Cycles: Are we doomed to repeat the past?
https://www.youtube.com/watch?v=9w6QYPzF2TI
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