“Gentleman, please enter the urn!” (qingjun ruweng in Chinese) means to trap a man with his own trick in China.
This Chinese idiom is based on a true story: once upon in China, it was under reign of Empress Wu Zetian (625 – 705, reign: 690 - 705) in Tang Dynasty. Wu had several formidable secret police officials, two of them were Lai Junchen and Zhou Xing. One day Wu assigned Lai to investigate Zhou because there were secret reports accusing Zhou of having a criminal plot. Having been good friends each other, Lai invited Zhou for a luncheon and asked him how to let the accused confess if he was unwilling to. Zhou replied: “It is easy. Get a big urn and set a char fire underneath it; then take the accused in it and he won’t be unwilling to confess anything”. After setup an urn under fire by Zhou’s instruction, Lai told Zhou: “Please enter the urn! Her Majesty let me investigate you on your criminal plot”. Zhou confessed in fear of torture. There was no evidence left in history about whether Zhou was real guilty on the charges or not, though.
Empress Wu was the only woman in Chinese history to rule China. Based on historic records, such as Zizhi Tongjian (The Comprehensive Mirror for Aid in Government), China was under the Terror with Secret Police in her early reign. In order to secure her power, Wu devised many copper boxes for informers to accuse on others and interviewed those informers who came forward. She gave them ride, ration, and lodge no matter the accusations were true or not, some informers, like Lai, even got promotion. According to the Book of Tang [Dynasty], “[s]oon thereafter, great accusations arose, and many innocent people were falsely accused and stuck their necks out in waiting for execution. Heaven and earth became like a huge cage, and even if one could escape it, where could he go? That was lamentable.”
Now in China, starting from this week, its Supreme People’s Procuratorate (SPP) devises a new hot line and a website for informers to accuse the so-called possible corrupt officials secretly. It was reported that on the first day the hot line was jammed and the website was unreachable because of an extremely huge volume. I cannot fathom how many false accusations among them, but I am sure such things will happen in empiricism-wise. What intrigues me is that China already is a police state, yet it still relies on such unpromising ways to keep its ruling. It appears that either the Chinese government is at its wits’ end or the Chinese Communist wants to play a dirty political game. To resort a secret accusation is the most efficient way to purge a political rival. Yet, the damage is pervasion of fear among people. Who cares justice when fear is loaded in a society? Perhaps the Chinese people feel that it is worthy to let the SPP play “Доверяй, но проверяй” (“Trust, but verify” in English). However, “Trust, but verify” means to distrust, and in western political science “[s]ystems based on distrust simply divide [separate] the responsibility [powers] so that checks and balances can operate.” The game that the SPP plays is subject to “suspect and verify”, which leads to mistrust, even to “guilty by suspicion”.
John Locke (1632 – 1704) said that “[t]he reason why men enter into society, is the preservation of their property; and the end why they chuse and authorize a legislative, is, that there may be laws made, and rules set, as guards and fences to the properties of all the members of the society, to limit the power, and moderate the dominion of every part and member of the society…” When so many Chinese officials are accused for corruptions, does it mean that China has fundamental problems on “laws made, and rules set, as guards and fences”? Why cannot the Chinese government give its people Habeas corpus (a Latin phrase means “that you have the body”)? Why cannot the Chinese government govern by the rule of law? Why cannot the Chinese government implement the trial by jury, even the Japanese can now? What is so terrible for people (both the accuser and the accused) to have the freedom from fear? What is so terrible for people to protect themselves by knowing their rights? What is so terrible for people to “enter into society”, instead of to “enter the urn”, with “the preservation of their property” in a proper way?
Sunday, June 28, 2009
Sunday, June 21, 2009
China’s Showdown with the U.S. Dollar
This week many news relating to China’s currency policy came out: China increased its gold reserves; China reduced buying the U.S. Treasuries; China announced “[to] buy [made in] China”; China renewed its calling for a new “super-sovereign reserve currency” in the BRIC (Brazil, Russia, India and China, respectively) states and other regional summit meetings.
What caused China to make those moves? Having benefited from the neoliberalism, China has had a booming export industry for several decades. The Americans bought Chinese goods and paid with U.S. dollars. China normally needs to exchange the U.S. dollars for the Chinese yuan in its domestic use. When the trading deficit is becoming huge between China and America, China neither supplied enough its currency by importing goods from America nor appreciated the exchange rate of its currency in the currency exchange market. Thus, with low exchange rate to the U.S. dollar and high savings rate in its domestic money, China keeps a strong competency in its exporting trade. To stem the pressure of appreciation on the Chinese yuan, the Chinese government diverts the excess inflowing U.S. dollars to buy the U.S. Treasuries. The consequence is that China possesses nearly $2 trillion of the U.S. Treasuries, compared to $8.3 trillion U.S. M2 money supply. This is one reason some economists believe that China is a currency manipulation country, though American authority does not think so in public. This is one reason some economists believe that China holds some responsibility for this financial crisis in 2008 because China hoards too much money; yet money in this modern globalized world is called currency, and money must mobilize like a current so that the financial market will not lack its liquidity.
While America is entering this economic downturn, the Americans do not need Chinese goods as much as before. It causes a decline in China’s export to America and a decrease in the U.S. dollars inflows into China. It seems China need not have to buy the U.S. Treasuries to keep the Chinese yuan low like it did before, but the reality is not. China has to continue buying the U.S. Treasuries for a while. There is a saying that when a person owes a bank $100, that is a personal problem; but when a person owes a bank $100 million, that is the banker’s problem. The U.S. dollar is a fiat money, which is a paper money authorized by a government and based on faith not on gold. To maintain a fiat money, a government makes payment by taxation. In the near future, without taxation hikes but spending goes on, the U.S. dollar will be under pressure of depreciation. Now, it is in China’s interest to keep buying the U.S. Treasuries in order to avoid Chinese assets in America losing its value.
But the Chinese government wants the American government to guarantee the safety of its assets in America, and the American government re-assures its safety. The problem is that there is an “invisible hand” in a market, according to Adam Smith (1723 – 1790, founder of the classical liberalism). After having seen that the American government is unwilling to assure some big American companies, the Chinese government feels the boat is now too big to sail. Naturally it starts getting anxious and tries to grope every possible option to get rid of this so-called U.S. Treasuries trap. China increases gold reserves, but the entire current amount of gold in the world is less than $4.5 trillion, far from a mean for a new “super-sovereign reserve currency”. China proposes to materialize the Special Drawing Rights (SDR) of the International Monetary Fund (IMF). However, SDR is an ersatz currency with very small capacity ($39.1 billion original plus $250 billion new issues by G-20 in 2009), and it is not practical to make it as a “super-sovereign reserve currency” right now even though it is supposed for every member of IMF in the future. China turns to the BRIC states and hopes these new emerging forces form a new monetary coalition, but this kind of ally could be far from a success, for there is lack of mutual trusts among them; many of them were long-time foes in history. China starts to reduce buying the U.S. Treasuries, but they must keep buying to prevent its assets from losing value. Only China has hoarded huge money in both global and domestic, despite much less U.S. dollar inflow into China. China plans to buy the made in China; China’s export is shrinking, and China never has imported an equivalent amount goods from America before. Now, many Chinese goods that used to be bought by foreigners must be bought by the Chinese, themselves.
Many Chinese feel their government is heroically challenging the financial hegemon of the U.S. dollar. They are talking about G-2 avidly instead of G-20 as if they were already seeing that their G-1 era is near. The U.S. dollar, like any other fiat moneys, including the Chinese yuan, is based on faith; there is no hegemony in U.S. dollar essentially. When the Chinese abandon their faith on the U.S. dollar, it is their choice and a free choice for all. In fact, the Chinese did abandon their faith on their own fiat money in late of 1940s. Faith is based on each free agent, not forced by Americans. In truth, the U.S. dollar is not the only international reserve currency; it has never been before and never will be. It is a fallacy to blame the U.S. dollar for this virtual frozen status of the Chinese assets in America. It is not a sanction under the American government, and it is mismanagement under the Chinese government. Adam Smith understood this American fiat currency deeply. In his An Inquiry into the Nature and Causes of the Wealth of Nations, Smith wrote that:
What caused China to make those moves? Having benefited from the neoliberalism, China has had a booming export industry for several decades. The Americans bought Chinese goods and paid with U.S. dollars. China normally needs to exchange the U.S. dollars for the Chinese yuan in its domestic use. When the trading deficit is becoming huge between China and America, China neither supplied enough its currency by importing goods from America nor appreciated the exchange rate of its currency in the currency exchange market. Thus, with low exchange rate to the U.S. dollar and high savings rate in its domestic money, China keeps a strong competency in its exporting trade. To stem the pressure of appreciation on the Chinese yuan, the Chinese government diverts the excess inflowing U.S. dollars to buy the U.S. Treasuries. The consequence is that China possesses nearly $2 trillion of the U.S. Treasuries, compared to $8.3 trillion U.S. M2 money supply. This is one reason some economists believe that China is a currency manipulation country, though American authority does not think so in public. This is one reason some economists believe that China holds some responsibility for this financial crisis in 2008 because China hoards too much money; yet money in this modern globalized world is called currency, and money must mobilize like a current so that the financial market will not lack its liquidity.
While America is entering this economic downturn, the Americans do not need Chinese goods as much as before. It causes a decline in China’s export to America and a decrease in the U.S. dollars inflows into China. It seems China need not have to buy the U.S. Treasuries to keep the Chinese yuan low like it did before, but the reality is not. China has to continue buying the U.S. Treasuries for a while. There is a saying that when a person owes a bank $100, that is a personal problem; but when a person owes a bank $100 million, that is the banker’s problem. The U.S. dollar is a fiat money, which is a paper money authorized by a government and based on faith not on gold. To maintain a fiat money, a government makes payment by taxation. In the near future, without taxation hikes but spending goes on, the U.S. dollar will be under pressure of depreciation. Now, it is in China’s interest to keep buying the U.S. Treasuries in order to avoid Chinese assets in America losing its value.
But the Chinese government wants the American government to guarantee the safety of its assets in America, and the American government re-assures its safety. The problem is that there is an “invisible hand” in a market, according to Adam Smith (1723 – 1790, founder of the classical liberalism). After having seen that the American government is unwilling to assure some big American companies, the Chinese government feels the boat is now too big to sail. Naturally it starts getting anxious and tries to grope every possible option to get rid of this so-called U.S. Treasuries trap. China increases gold reserves, but the entire current amount of gold in the world is less than $4.5 trillion, far from a mean for a new “super-sovereign reserve currency”. China proposes to materialize the Special Drawing Rights (SDR) of the International Monetary Fund (IMF). However, SDR is an ersatz currency with very small capacity ($39.1 billion original plus $250 billion new issues by G-20 in 2009), and it is not practical to make it as a “super-sovereign reserve currency” right now even though it is supposed for every member of IMF in the future. China turns to the BRIC states and hopes these new emerging forces form a new monetary coalition, but this kind of ally could be far from a success, for there is lack of mutual trusts among them; many of them were long-time foes in history. China starts to reduce buying the U.S. Treasuries, but they must keep buying to prevent its assets from losing value. Only China has hoarded huge money in both global and domestic, despite much less U.S. dollar inflow into China. China plans to buy the made in China; China’s export is shrinking, and China never has imported an equivalent amount goods from America before. Now, many Chinese goods that used to be bought by foreigners must be bought by the Chinese, themselves.
Many Chinese feel their government is heroically challenging the financial hegemon of the U.S. dollar. They are talking about G-2 avidly instead of G-20 as if they were already seeing that their G-1 era is near. The U.S. dollar, like any other fiat moneys, including the Chinese yuan, is based on faith; there is no hegemony in U.S. dollar essentially. When the Chinese abandon their faith on the U.S. dollar, it is their choice and a free choice for all. In fact, the Chinese did abandon their faith on their own fiat money in late of 1940s. Faith is based on each free agent, not forced by Americans. In truth, the U.S. dollar is not the only international reserve currency; it has never been before and never will be. It is a fallacy to blame the U.S. dollar for this virtual frozen status of the Chinese assets in America. It is not a sanction under the American government, and it is mismanagement under the Chinese government. Adam Smith understood this American fiat currency deeply. In his An Inquiry into the Nature and Causes of the Wealth of Nations, Smith wrote that:
The Americans, it has been said, indeed, have no gold or silver money; the interior commerce of the country being carried on by a paper currency, and the gold and silver which occasionally come among them being all sent to Great Britain in return for the commodities which they receive from us. But without gold and silver, it is added, there is no possibility of paying taxes [to Great Britain]. We already get all the gold and silver which they have. How is it possible to draw from them what they have not?It appears to me that the depreciation of the U.S. dollar is an inevitable choice, for it is “convenient for them [Americans]” to recover American economy. Perhaps the Chinese are tilting at windmills or chasing a ghost in their showdown with the U.S. dollar. The Chinese actually should think about: why did China make its fortunes in America but not in the other BRIC states? Why does only China have this grave suffering with the U.S. dollar among the BRIC states? Why can the other three of BRIC states be democratic, but not China?
The present scarcity of gold and silver money in America is not the effect of the poverty of that country, or of the inability of the people there to purchase those metals. In a country where the wages of labour are so much higher, and the price of provisions so much lower than in England, the greater part of the people must surely have wherewithal to purchase a greater quantity if it were either necessary or convenient for them to do so. The scarcity of those metals, therefore, must be the effect of choice, and not of necessity.
Sunday, June 14, 2009
A Cyber-Taboo in China
The Chinese government announced that all PC makers must install its designated anti-porn online filter software starting from July 1st, 2009 (the anniversary date of the Chinese Communist Party). I wonder whether it is a birthday present to the Chinese Communist.
This controversial decision stirs a lot of concerns, mainly on the potential censorship extensively beyond pornography (a word which “is notoriously hard to define” for some semanticists and jurists). The wily decoy is to protect minors, the same claim in the Supreme Court case of Island Trees Schools versus Pico (1982) for banning “filthy” schoolbooks. I do not want to lay my finger on the same claim further since I already have addressed it in my essay “Checks and Balances in a Law”. But I want to talk about some more American experiences.
The American law is set to protect the people, but people still have to keep fighting for their rights. Linus van Pelt, a boy from the comic strip Peanuts, said “Security, like liberty, has to be won and re-won many times.” In the Bill of Rights (ratified in 1791), the First Amendment of the United States Constitution guarantees the quintet of rights to the people. It reads:
The ambiguousness of pornography could easily defile certain philosophies and make them expendable, such as Epicureanism, an ancient Greek philosophy founded by Epicurus (341 BC – 270 BC) and often misunderstood as sensualism. Yet, it is less on bodily pleasure, but more on spiritual happiness. According to Epicureanism, the maximum pleasure is freedom from fear, a claim which was shared by Franklin D. Roosevelt (1882 – 1945, president in 1933 – 1945). Thomas Jefferson (1743 – 1826, president in 1801 – 1809) was a self-claimed Epicurean. Thus, it is understandable why Jefferson substituted “the right of life, liberty, and the pursuit of happiness” in place of John Locke’s (1632 – 1704) “the right of life, liberty, and property” when he wrote the American Declaration of Independence in 1776. It is worth to note that Stoicism, the main opponent of Epicureanism and often mistaken as asceticism and founded by Zeno (around 300 BC), played an important role in Renaissance Humanism (around 14th to 16th century). Francesco Petrarch (1304 – 1374, the father of Renaissance) was the first reviver of Stoic doctrines that believe “virtue is sufficient for happiness”.
There are two kinds of people in China: those political eunuchs who have lost their thinking abilities and fear others to think and to learn; and those political slaves who have been persecuted for thinking and speaking out and wish to think freely. Rene Descartes (1596 – 1650) said that “If you would be a real seeker after truth, it is necessary that at least once in your life you doubt, as far as possible, all things.” The Chinese people deserve the right to doubt and to think freely for it is an entitled natural right for all human beings.
This controversial decision stirs a lot of concerns, mainly on the potential censorship extensively beyond pornography (a word which “is notoriously hard to define” for some semanticists and jurists). The wily decoy is to protect minors, the same claim in the Supreme Court case of Island Trees Schools versus Pico (1982) for banning “filthy” schoolbooks. I do not want to lay my finger on the same claim further since I already have addressed it in my essay “Checks and Balances in a Law”. But I want to talk about some more American experiences.
The American law is set to protect the people, but people still have to keep fighting for their rights. Linus van Pelt, a boy from the comic strip Peanuts, said “Security, like liberty, has to be won and re-won many times.” In the Bill of Rights (ratified in 1791), the First Amendment of the United States Constitution guarantees the quintet of rights to the people. It reads:
Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.Justice Hugo Black (1886 – 1971), one of the most notable justices for civil rights in the United States Supreme Court history, insisted on a literal and absolute interpretation on the First Amendment; the term of “Congress shall make no law…” was unequivocal to him. This is called the “First Amendment Absolutism”, and the majority of America is with his view. Black was against the so-called “First Amendment Balancing”, whose gist is that “the balance between the individual and governmental interests here at stake must be struck in favor of the latter”. Under the First Amendment Absolutism, Black opposed to limiting “subversive” speech, “whether or not such discussion incites to action, legal or illegal”; against controlling “libel” speech; and against punishing “obscene” speech, even “prurient” materials.
The ambiguousness of pornography could easily defile certain philosophies and make them expendable, such as Epicureanism, an ancient Greek philosophy founded by Epicurus (341 BC – 270 BC) and often misunderstood as sensualism. Yet, it is less on bodily pleasure, but more on spiritual happiness. According to Epicureanism, the maximum pleasure is freedom from fear, a claim which was shared by Franklin D. Roosevelt (1882 – 1945, president in 1933 – 1945). Thomas Jefferson (1743 – 1826, president in 1801 – 1809) was a self-claimed Epicurean. Thus, it is understandable why Jefferson substituted “the right of life, liberty, and the pursuit of happiness” in place of John Locke’s (1632 – 1704) “the right of life, liberty, and property” when he wrote the American Declaration of Independence in 1776. It is worth to note that Stoicism, the main opponent of Epicureanism and often mistaken as asceticism and founded by Zeno (around 300 BC), played an important role in Renaissance Humanism (around 14th to 16th century). Francesco Petrarch (1304 – 1374, the father of Renaissance) was the first reviver of Stoic doctrines that believe “virtue is sufficient for happiness”.
There are two kinds of people in China: those political eunuchs who have lost their thinking abilities and fear others to think and to learn; and those political slaves who have been persecuted for thinking and speaking out and wish to think freely. Rene Descartes (1596 – 1650) said that “If you would be a real seeker after truth, it is necessary that at least once in your life you doubt, as far as possible, all things.” The Chinese people deserve the right to doubt and to think freely for it is an entitled natural right for all human beings.
Sunday, June 7, 2009
China’s Umbrella
I noticed the reports that on the day that marked the 20th anniversary of the June Fourth Massacre, the plain-clothes policemen used the umbrellas to shun the reporters in Tiananmen Square.
The Chinese government then declared that “today [June 4th, 2009] like any other day, stable.” But I would say: “Please, not like this. China is my cradle where I was born and grown up, and I feel sick to my stomach by watching this scene.” It shows me that the grip of tyranny is pervading in China. Those umbrellas remind me a Chinese idiom – “a monk under an umbrella”, which means “[to] defy laws human and divine” (wufa wutian in Chinese). How ironic it is, the Chinese government does defy laws human by persecuting “against innocent men [dissidents], whose only crime is that of being of a different opinion” (Voltaire, 1694 – 1780). The Chinese government does defy laws divine by restraining religious activities. The Chinese government blames that the instabilities, the implosions, and the revolutions in China are incurred by those laws human and divine it defies, not those wrongdoings by itself. But John Locke (1632 – 1704) said that “[s]uch revolutions happen not upon every little mismanagement in public affairs. Great mistakes in the ruling part, many wrong and inconvenient laws, and all the slips of human frailty, will be borne by the people without mutiny or murmur.”
These umbrellas show that the Chinese Communist does not want to govern by law. These umbrellas show that the Chinese Communist does not want to get China out of the rut that the society implodes during the social transition. These umbrellas show that the Chinese Communist does fear its own people to gain power. These umbrellas show that the Chinese Communist does feel its lack of stamina for its ruling with legitimacy. The Chinese Communist wishes that length begets forgetting for the June Fourth Massacre. But length usually begets loathing. Leonardo Bruni (1369 – 1444), the first modern historian and a leading civic humanist, once on learning and said that “[f]irst amongst such studies I place History: a subject which must not on any account be neglected by one who aspires to true cultivation. For it is our duty to understand the origins of our own history and its development; and the achievements of Peoples and of Kings.” When the Chinese Communist does not want to face its own history, others will.
I urge the Chinese government to reform its political system. Not only because few regimes are despotic now, but also because a truly Republic with Checks and Balances will have the resilience and stability.
The Chinese government then declared that “today [June 4th, 2009] like any other day, stable.” But I would say: “Please, not like this. China is my cradle where I was born and grown up, and I feel sick to my stomach by watching this scene.” It shows me that the grip of tyranny is pervading in China. Those umbrellas remind me a Chinese idiom – “a monk under an umbrella”, which means “[to] defy laws human and divine” (wufa wutian in Chinese). How ironic it is, the Chinese government does defy laws human by persecuting “against innocent men [dissidents], whose only crime is that of being of a different opinion” (Voltaire, 1694 – 1780). The Chinese government does defy laws divine by restraining religious activities. The Chinese government blames that the instabilities, the implosions, and the revolutions in China are incurred by those laws human and divine it defies, not those wrongdoings by itself. But John Locke (1632 – 1704) said that “[s]uch revolutions happen not upon every little mismanagement in public affairs. Great mistakes in the ruling part, many wrong and inconvenient laws, and all the slips of human frailty, will be borne by the people without mutiny or murmur.”
These umbrellas show that the Chinese Communist does not want to govern by law. These umbrellas show that the Chinese Communist does not want to get China out of the rut that the society implodes during the social transition. These umbrellas show that the Chinese Communist does fear its own people to gain power. These umbrellas show that the Chinese Communist does feel its lack of stamina for its ruling with legitimacy. The Chinese Communist wishes that length begets forgetting for the June Fourth Massacre. But length usually begets loathing. Leonardo Bruni (1369 – 1444), the first modern historian and a leading civic humanist, once on learning and said that “[f]irst amongst such studies I place History: a subject which must not on any account be neglected by one who aspires to true cultivation. For it is our duty to understand the origins of our own history and its development; and the achievements of Peoples and of Kings.” When the Chinese Communist does not want to face its own history, others will.
I urge the Chinese government to reform its political system. Not only because few regimes are despotic now, but also because a truly Republic with Checks and Balances will have the resilience and stability.
Subscribe to:
Posts (Atom)