Stimulate this

To the thrill and excitement of all, the National People's Congress began its annual pooh-bah Parliamentary get-together this week.

Of course, this year's conference is more than a CCP rubber-stamping love-in: The jinrong weiji has ensured the world was watching to see what Hu, Wen & Co. have to offer, hoping whatever life raft they offer China will be big and bouyant enough for the rest of the global economy to hang on for dear life.

Or, you know, whatever.

To be honest, I don't know nearly enough about economics to make an educated assessment of the mechanics of China's economic outlook. Then again, there isn't really much to go on, given Wen Jiabao's speil:

“The external economic environment has become more serious, and uncertainties have increased significantly. ... Continuous drop in economic growth rate due to the impact of the global financial crisis has become a major problem affecting the overall situation. This has resulted in excess production capacity in some industries, caused some enterprises to experience operating difficulties and exerted severe pressure on employment”

OK, so that isn't a newsflash for anyone, nor is his declaration that the government will do its best to keep people employed, diversity export markets and somehow convince consumers to buy stuff.

It isn't surprising that China's trying to gloss over any suggestion its economy is tanking with the same craptacular spluttering as the rest of the world; nor is it a shock that Wen's reassurances are short on details and long on platitudes. This is how the NCP rolls, promises of transparency be damned.

What is clear, however, is that there won't be any more mammon manna from heaven--at least not from Beijing's pocketbook. Despite hints last week the previous stimulus package could as much as double in size (that'd make a honkin 8 trillion yuan, if you're counting), it looks like the economy is going to have to cope with a measly 4 trillion--most of it dedicated to infrastructure and the like, and much of it coming from local governments and private sources (as opposed to the central government responsible for all these cash-rich promises).

Will this be enough to keep China's economy steaming along at a pace to satisfy anxious consumers, panicky unemployed migrants and the freaked-out and freakily volatile financial markets?

Maybe. But I'm going to guess no.

Hey, big spender

It ain't for nothing the Chinese term for "financial crisis" (金融危机; jinrong weiji) contains the word ji 机--opportunity.

As corporate titans around the world scramble for cash to avoid going belly up, China is becoming an unlikely sugar daddy.

As the Christian Science Monitor reports, Chinese companies are on an "international spending spree," buying up stakes in everything from U.S. auto manufacturers to Canadian oil firms to Australian mining companies.

Massive loans to Russia and Brazil--to the tune of $25 billion and $10 billion, respectively--has China swimming in oil.

It seems odd: Local exporters, especially smaller factories, are struggling to stay afloat as foreign demand dives. But both state-owned enterprises, surprisingly flush for cash and with the government's directive to secure massive amounts of commodities and natural resources, and opportunistic private companies are getting in on the game.

It's an exciting time for a country unused to acquiring foreign assets--a bit of a coming-out party for Chinese titans and a welcome reversal of that "century of humiliation" when European and American commercial interests plundered the Middle Kingdom for all it was worth.

Needless to say, becoming everyone's favourite bailout provider (well, maybe after the U.S. Fed. But whatever) has its pitfalls: Australia has yet to approve the Rio Tinto/Chinalco deal and some fear foreign ownership of national industries, especially given the involvement of government and government-backed companies in these high-rolling deals. And China has its own troubled manufacturing sector and ballooning unemployment rate to worry about.

But for now, Chinese firms seem happy to troll the globe's bargain basements. And I doubt the companies on the receiving end of the cash are going to complain.

"We will get along very well"

She came. She saw. She schmoozed it up with some Chinese dignitaries.

Secretary of State Hillary Rodham Clinton seems to have hit all the right notes during her whirlwind trip to the Middle Kingdom.

She emphasized China's vital role in helping the global economy back onto its feet, while aggressively downplaying any suggestions of protectionism brought on by the watered-down-to-the-point-of-irrelevance "Buy American" clause in the latest stimulus package. Her suggestion that Americans and Chinese could trade financial traits, with the former saving more and the latter spending more, would be funny if it weren't kind of sad.

She urged the Chinese government to take a leading role in combating climate change, tackling head-on the claim that China's just industrializing the same way the U.S. and Europe did way back on the late 19th century--in an extremely unsustainable manner.

“When we were industrializing and growing, we didn’t know any better; neither did Europe,” she said during a visit to a geothermal power plant. “Now we’re smart enough to figure out how to have the right kind of growth.”

Well, uh, I might debate that last point. But whatever; I'm sure the people giving Hillary her tour were just glad she wasn't touring nearby Tianjin's factories, or testing Beijing's air quality.

China has been under a lot of pressure to clean up its environmental act, and despite continuing protestations that the rest of the world is just a big bully and should pay attention to its own dirty power and overflowing landfills, the government until recently had been doing a lot to highlight its any and all attempts to "green" construction, manufacturing and transportation. Of course that all has changed thanks to the jinrong weiji, which took environmental concerns off the table to replace them with the overarching, panicked imperative to keep the economy churning at as fast a pace as possible.

Although stimulus plans in Canada and the U.S. have made environmental initiatives a priority, China's government has focused on infrastructure, lending and gettings its population to buy something--anything. Less reusing and recycling, more consumption, dammit!

But anyway.

More significant is what wasn't mentioned during Clinton's visit--namely, human rights concerns. A hypersensitive issue in China at the best of times, the minggan factor grew exponentially given the timing--months before the 20th anniversary of the infamous Tian'anmen Square massacre and a few short weeks before the 50th anniversary of a massive uprising in Tibet.

Recently, China underwent its first UN Human Rights Council review. It was awkward.

China got kudos for its success in reducing poverty, and breathless requests for advice from the Philippines, Algeria, Vietnam and Malaysia as to how they could do the same.

But Zhongguo's dignitaries were unimpressed by persnickety questions from the Canuck and Aussie camps: What about those alleged arbitrary detentions of Tibetans, Uyghurs, Mongols and Falun Gong? When is China going to publish a list of annual executions and set up an independent human rights institution?

Requests like these "did not enjoy the support of China."

Oh, snap.

The U.S. didn't say much then, and its emissary didn't say much this weekend.

Phew.




Clip courtesy of AP and China TV. Not YouTube because mYouTube here is a stinking pile of melamine.