{"id":10846,"date":"2015-08-09T17:12:37","date_gmt":"2015-08-09T22:12:37","guid":{"rendered":"http:\/\/olduvai.ca\/?p=10846"},"modified":"2015-08-09T17:12:37","modified_gmt":"2015-08-09T22:12:37","slug":"is-chinas-black-box-economy-about-to-come-apart","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=10846","title":{"rendered":"Is China\u2019s \u201cBlack Box\u201d Economy About to Come Apart?"},"content":{"rendered":"

Is China\u2019s \u201cBlack Box\u201d Economy About to Come Apart?<\/a><\/h3>\n
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A China crisis will de-stabilize the world<\/strong><\/div>\n<\/div>\n<\/div>\n<\/div>\n

After 30 years of torrid expansion, perhaps the single most consequential factor in China\u2019s economy is how much of it is a \u201cblack box\u201d: a system with visible inputs and outputs whose internal workings are opaque.<\/p>\n

There are number of reasons for this lack of transparency:<\/p>\n

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  1. Official statistics reflect what officials want to project, not the unfiltered data.<\/li>\n
  2. Policy decisions are made behind closed doors by a handful of leaders.<\/li>\n
  3. There is little institutional history of transparency.<\/li>\n
  4. Many important statistics are self-reported and prone to distortion.<\/li>\n
  5. Large sectors of the economy are informal and difficult if not impossible to measure accurately.<\/li>\n
  6. Endemic corruption distorts critical economic yardsticks.<\/li>\n
  7. There is little historical precedent to guide policy makers and individual investors.<\/li>\n<\/ol>\n

    None of these is unique to China, of course, with the possible exception of #7: few nations in history (if any) have experienced an equivalent boom in infrastructure, credit, housing and wealth in such a short span of time.<\/p>\n

    Saving Face By Editing Data<\/h2>\n

    As anyone who has lived and worked in Asia can attest, public perception (i.e. “face”) is of paramount concern.\u00a0 There is tremendous pressure to put a positive spin on everything in the public sphere.\u00a0 Negative publicity causes not just the individual to lose face, but his boss, agency, company and family may also be tarnished.<\/p>\n

    For this reason, reporting potentially negative numbers accurately may put careers and hopes for advancement at risk.<\/p>\n

    This accretion of fear of reprisal\/disapproval builds as it moves up the pyramid of command.\u00a0 This process can lead to tragic absurdities being taken as truth.\u00a0 In one famous example in Mao-era China, officials ordered rice planted in thick abundance along a particular stretch of road, so that when Chairman Mao was driven along this roadway, he would see evidence of a spectacular rice harvest.<\/p>\n

    …click on the above link to read the rest of the article…<\/p>\n

     <\/p>\n

     <\/p>\n

     <\/p>\n","protected":false},"excerpt":{"rendered":"

    Is China\u2019s \u201cBlack Box\u201d Economy About to Come Apart? A China crisis will de-stabilize the world After 30 years of torrid expansion, perhaps the single most consequential factor in China\u2019s economy is how much of it is a \u201cblack box\u201d: a system with visible inputs and outputs whose internal workings are opaque. There are number […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[127,130,7861,191,2218,655,2084],"class_list":["post-10846","post","type-post","status-publish","format-standard","hentry","category-economics","tag-charles-hugh-smith","tag-china","tag-chinese-economy","tag-data-manipulation","tag-peak-prosperity","tag-propaganda","tag-statistics"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/10846","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=10846"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/10846\/revisions"}],"predecessor-version":[{"id":10847,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/10846\/revisions\/10847"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=10846"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=10846"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=10846"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}