More toy recalls announced and a reminder of how easily China could crack. I can't believe how much is hinged on these fragile markets.
Crash is going to jolt the the world economy into a standstill.
GE frantically trying to offer reassurance. "Growth all over."
They know what's coming
Just saw FXI being bid up 5
Hope it stays til after noon. Funds clearing then.
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Hu Invokes Confucius to Appease Masses, Save Communist Party
By Allen T. Cheng
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Oct. 12 (Bloomberg) -- As Mao Zedong's Communists completed their takeover of China in 1949, a 6-year-old Hu Jintao studied classical Confucianism with his tea-merchant father in the courtyard of their home in the eastern city of Taizhou.
The Confucian principles of filial piety and respect for social order now inform Hu's strategy for avoiding upheaval in the countryside, where China's relentless pursuit of economic growth has polluted the environment, corrupted local officials and left a quarter of the nation's people in poverty.
Hu, the first Chinese leader in six decades who didn't participate in Mao's revolution, is searching for a new national myth after the Communist ideas that once held China together unraveled. He will try to impose his ``Harmonious Society'' agenda at next week's party congress in Beijing. If he fails, the army is waiting to quell protests that may threaten the regime.
```Harmonious Society' is an effort to ensure the survival of the Communist Party,'' said Laurence Brahm, author of ``China's Century: The Awakening of the Next Economic Powerhouse'' (Wiley 2001). ``Communist ideology is dead and there is a huge spiritual vacuum. Hu is trying to fill the void by returning the party to China's cultural values and beliefs.''
The 64-year-old president has spent his first five years in office shaking off the influence of predecessor Jiang Zemin, substituting university-trained technocrats like himself for revolutionary cadres. During the weeklong congress, he will attempt to complete the process, anointing a successor as vice president and stacking the party's ruling council with allies who will implement his policies.
Hu is believed to favor Li Keqiang, Communist Party chief in Liaoning province, for the vice presidency, said Willy Wo-Lap Lam, adjunct professor of history at the Chinese University of Hong Kong. Li, 52, has a Ph.D. in economics from Peking University.
`Eliminate Censorship'
Hu's agenda is an empty slogan, said Gordon Chang, author of ``The Coming Collapse of China'' (Arrow 2003).
``Hu wants harmony, which means he wants everyone to agree with him,'' Chang said. ``If he really wanted a society that is harmonious, he would hold elections, eliminate censorship and allow judges to decide cases without party interference.''
The president, who also heads the Communist Party and is chairman of the central military commission, didn't respond to faxed requests to the Foreign Ministry for an interview.
Hu's policies are the product of the political and economic forces that have shaped China since World War II.
Mao harnessed unrest in the countryside by recruiting impoverished peasants to defeat the Nationalists led by Chiang Kai-Shek. He then devastated the economy with his ``Great Leap Forward'' and subsequent ``Cultural Revolution,'' a decade-long power struggle that killed at least 500,000 people and pushed the nation to the brink of civil war.
Booming Growth
Deng Xiaoping, who took over after Mao died in 1976, sparked China's economic turnaround with the exhortation: ``To Get Rich is Glorious.'' The changes unleashed by Deng and championed by Jiang have powered a 10-fold expansion of China's economy. Since 2003, gross domestic product has grown 58 percent to $2.6 trillion, and China likely will pass Germany this year to become the world's third-largest economy.
Yet China's leaders are once again concerned about unrest in the countryside, where every uprising in the nation's 5,000-year history began. In 2005, there were a record 87,000 mass protests in China, according to the latest government statistics.
While the boom has created 320,000 U.S.-dollar millionaires, according to New York-based Merrill Lynch Cap Gemini, rural areas have been left behind. The World Bank estimates that more than 300 million Chinese live on less than $2 a day.
Per capita income in urban areas rose to 10,493 yuan in 2005, compared with 3,254 yuan in rural areas, according to data compiled by Bloomberg. By contrast, city incomes averaged 607 yuan in 1978, less than the 624 yuan earned by people in the countryside.
`Social Contradictions'
``Chaos like what occurred in the Cultural Revolution could happen again if social contradictions are not addressed,'' said Fang Ning, a political scientist at the Chinese Academy of Social Sciences in Beijing.
Hu is trying to address discontent by refocusing society away from money and toward traditional values, said Guan Anping, a former trade official and legal aide to Vice Premier Wu Yi.
The ethical guidelines of Confucianism, founded in 500 B.C., include moral government, correctness of social relationships, justice and sincerity.
Hu's slogan may be rooted in his childhood studies at No. 12 Liujiaqiao St. in Taizhou, a three-hour drive east of Shanghai.
``The value of education, especially a classically trained Confucian education, was a major priority in all people in our area going back centuries,'' said Xu Jianzhong, deputy mayor of Jiangyan, the Taizhou suburb where Hu was born in 1942.
Hard Labor
Hu comes from a family of tea merchants. His father, Hu Zhengyu, once owned as many as seven teahouses, though he lost much of his wealth when Japan invaded China in 1937. Hu's mother died when he was born, and his stepmother died seven years later.
Hu earned a degree in hydraulic engineering at Tsinghua University, China's equivalent of the Massachusetts Institute of Technology, in 1965. He later married classmate Liu Yongqing, with whom he has two grown children.
After graduation, Hu remained at the university as a Marxism instructor. In 1968, during the Cultural Revolution, the Red Guards accused him of being too close to the ``counter- revolutionary'' school president and disobeying orders to rebel against all authority except Mao's.
Hu was sent to join 30,000 others building Liujia Gorge Dam on the Yellow River, just south of the Gobi Desert. He carried baskets of gravel and bent iron bars for a year, earning 54 yuan a month, said Yin Weide, Hu's first party supervisor.
Yin, now 76, says he recommended Hu be promoted to office work, starting his advancement through the party hierarchy. By 1982, Hu was secretary of the Communist Youth League in Beijing.
Tibet Crackdown
It was in Tibet, where he served as party secretary from 1988 to 1992, that Hu showed a willingness to use force to achieve harmony.
During an independence uprising in Lhasa in March 1989, Hu told the police chief not to fire on demonstrators until he gave the command. Hu then cut the phone line, forcing the chief to give the order to open fire, said history professor Lam, who interviewed senior party officials about the incident.
Hu then imposed martial law. His strategy ensured that he received credit for putting down the riot while escaping blame for instigating the violence, Lam said.
The government said 12 people were killed in the riots. The International Campaign for Tibet cites estimates of 40 to 130 deaths on its Web site.
Hu ``will certainly not hesitate calling in riot police,'' said Guan, the former aide to Vice Premier Wu. ``His priority is to maintain the supremacy of the Communist Party.''
Backing Deng
Three months after the Tibet riots, Deng ordered troops to clear thousands of students from Tiananmen Square.
Hu was among the first to praise Deng's move, Lam said. In 1992, Deng recruited Hu into the halls of Zhongnanhai, the party leadership compound, and made him Jiang's successor, Lam said.
While Jiang embraced capitalism, his policies exacerbated the pollution and corruption that are feeding unrest in the countryside.
In July, Premier Wen Jiabao said the state of China's environment was ``grim,'' and the official Xinhua News Agency reported that pollution had fueled a rise in ``mass incidents.''
International Olympic Committee President Jacques Rogge has said some events at next year's Summer Olympics in Beijing may be postponed if air quality doesn't improve.
Video Evidence
Party rule also is threatened by public anger over officials who steal state funds and take bribes. A total of $3.6 billion was ``misused'' in the first quarter, state-controlled China Daily reported Sept. 20.
The Communist Party punished 97,000 members last year, according to the National Audit Office. In July, chief drug regulator Zheng Xiaoyu was executed for accepting bribes and approving fake medicines, Xinhua reported.
The situation confronting Hu is crystallized in a jumpy video shot in June 2005 that shows men in hard hats attacking protesting farmers an hour's drive from Beijing. The riot, triggered by land seizures for a power plant, left six farmers dead and 48 wounded.
The regime reacted after the tape was broadcast worldwide. Within a month, police had arrested more than 100 people connected with the attackers, who were hired by developers, Xinhua reported.
`Prevent Chaos'
``This event definitely got the attention of the leaders, including President Hu Jintao, and is a warning to them that they must do something to prevent chaos from spreading,'' said Li Ping, Beijing-based chief representative of Rural Development Institute, which tracks such disputes.
Hu's approach may be showing results. The number of mass protests fell to 17,900 in the first nine months of 2006, Xinhua said April 18.
```Harmonious Society' is his effort to take China back to its cultural traditions, to Confucianism, which give Chinese a code of ethical values focused on social harmony and order,'' said Ma Ling, who co-wrote ``Hu Jintao: Where He Came From and Where He is Going'' (Ming Pao 2002).
``Hu wants to make sure chaos never happens again.''
To contact the reporter on this story: Allen T. Cheng in Beijing at acheng13@bloomberg.net .
Last Updated: October 11, 2007 18:14 EDT |
