Tuesday, July 1, 2014

The running away of the bulls

China is facing an epidemic of overwork, to hear the state-controlled press and Chinese social media tell it. About 600,000 Chinese a year die from working too hard, according to the China Youth Daily. China Radio International in April reported a toll of 1,600 every day.

In America in the late '80s, stories like these appeared, only they concerned Japan. The American narrative about China surpassing the US has been similar to the narrative about Japan's. The narrative moves in stages:
1)            Everyone starts mentioning everything they own is from that country.
2)            Everyone starts complaining that country is taking American jobs.

3)            Politicians start pretending they’re going to do something about it. People believe them.
4)            All the pundits and business leaders start saying in public that the Japanese/Chinese way is better (in the ‘80s Japanese conformity/homogeneity was seen as a positive). Before the 2008 Crash everyone in the West was saying China had a smarter command economy and a much smarter citizenry (hence their explosion); post-crisis they said China’s system could better react because they didn’t have to answer to voters (even the NYT got on board with this).

5)            Cracks start showing, and suddenly people stop viewing the country's system as a monochrome positive (even my mother now knows about Chinese ghost cities). 

6)            The top-down bulls capitulate and the country that couldn’t be stopped stops hard.

The question is whether China will crash like Japan or just slow down significantly. My guess is the latter.

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