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Monday, June 26, 2006


China’s Coming Collapse A Danger To Us All

-By Warner Todd Huston

It is no exaggeration to say that we won the Cold War by forcing the U.S.S.R. to spend itself into despair. They did so to gain power and expansion was the means to that power yet, the U.S.A. stood square in the path of that expansion. Consequently, the U.S.S.R. continued to put good money after bad into its military to the detriment of every other aspect of Soviet life.

One of the things that added to the collapse of the Soviet Union, though, was internal corruption, something that the U.S.A. had nothing to do with. The long lines that Soviet citizens stood in daily just to find necessities like bread and toilet paper should never be forgotten. Yet, as the lines lengthened, Party bigwigs spent their days idling away the hours at seaside resorts and gouging themselves on caviar and fine wines while the rest starved and did without. This was an intolerable situation in a society that claimed total “equality”. Apparently, some were more “equal” than others in the “worker’s paradise”.

Corruption, bribery, and chronic inefficiency all added to the collapse of the Soviets. But Soviet corruption was bush league compared to the level that Chinese corruption has reached. And that corruption will lead to China’s implosion.

But, will that implosion occur before China launches a war against the US? That is the question that is difficult to answer. But one thing is sure, China cannot advance, China will never join the rest of the world with democratic inspired government, nor will China be a healthy nation for its endemic corruption.


Conservatives today seem to have two prevailing concepts about how to treat the communist colossus, China. 1) Trade with them enough and those close ties and their subsequent commitment to capitalism will ruin China’s communist system, or at least moderate it to meaninglessness and, 2) stop dealing with them and implement an encirclement and containment strategy making friends with those countries surrounding China.

No single, simple policy will work, of course and for sure following only one of these two will never work as both must be employed. But, just as surely following only the first policy is doomed to failure. The reason that capitalism will never drag Communist China into a western style system is its internal corruption. The massive corruption that exists in China will swallow every social or economic advance occurring that might be traced to its dabbling in capitalist ventures.


The main benefit of capitalism, of course, is the fact that its pursuit improves the standard of living of the citizenry, usually even of its most poor members. But this cannot occur if government is so corrupt that such benefits never trickle down, to use that much benighted phrase, to the people. And that logjam is precisely the situation in which China stands.

One of the most important aspects of the government of a capitalist society is its role as “protector” of the people, whether from external threat utilizing military means or internal threats via regulation and health codes.

For instance, in the USA we have the Federal Drug Administration one of whose many roles is to assure the safety of new drugs and medical treatments. Certainly this organization has its flaws, but it is successful in its quest to safeguard the public’s health, for the most part. In fact, it is often too zealous in its duties. We also have so many environmental laws that even places once thought polluted beyond recovery have long since become revitalized. Not to mention the many construction regulations and work place safety rules put into place that adds to the safety and health of the people.

China, on the other hand, repeatedly fails to safeguard public health in a myriad of ways. For instance, recently, a snake-oil beauty treatment that is supposed to enlarge women’s breasts has been causing havoc among China’s women. A product called “Amazing Gel”, one that the government has claimed to have outlawed due to the danger it poses, has been causing thousands of Chinese women to suffer double mastectomies after its injection. But, due to rampant bribery this product has been allowed to proliferate among an uninformed public.

According to the report cited, this putatively illegal product is everywhere.

Beijing Union Hospital plastic surgeon Dr. Qiao Qun said she performs 12 operations a week to remove Amazing Gel implants -- many of which also require breast removal.

She also criticized China's system that allowed quick -- and some have claimed illegal -- approval of the product. She also objected to beauticians lacking medical training selling and injecting the product.

"In no other country in the world is there a problem like this on such a scale," Qiao told the Times. "The numbers of people who may have medical problems are simply enormous."

Worse still, China’s pollution problem is fast becoming one affecting the entire world and not just the people that live in China.

The superheated growth that China has experienced in industry has far outstripped any attempts to safeguard the environment. China is claimed to be the second biggest polluter after the U.S.A. This fact, though, is entirely misleading as the U.S.A. also cleans up after itself at a rate that far outshines China’s poor -- nearly non-existent -- attempts to do so.

In 2002, for instance, China reported that its pollution output was only 3.2 tons per person to America’s 19.4 tons making it a distant 2nd place by that reading. But, this ignores the fact that China had 1,276 million inhabitants on the mainland whereas the U.S. had just over 281 million. This makes the average amount of pollution per person in China nearly the same as that of the USA. Then add the fact that China has almost no enforcement of laws that support a clean environment and you get a recipe for disaster, a recipe that is causing the environmental stew for the rest of the world to boil.

Researchers and climate watchers are seeing the results of China’s heavy usage of coal and its subsequent lack of environmental measures, for instance. A huge cloud of coal pollutants is drifting across the globe and governments the world over are becoming alarmed. It has even reached the United States.

Researchers in California, Oregon and Washington noticed specks of sulfur compounds, carbon and other byproducts of coal combustion coating the silvery surfaces of their mountaintop detectors. These microscopic particles can work their way deep into the lungs, contributing to respiratory damage, heart disease and cancer.

Again, this is due to China’s lack of concern about anything other than powering her growth.

Careless coal mining is also destroying great swaths of China’s landscape. As New York Times writer, David Barboza reports, whole villages are being destroyed by this unsafe mining and the pollution resulting from the mines is reaching dangerous proportions.

While Shanxi provides the fuel that powers China's economy, thousands of hectares of land are sinking because of the ravages of coal mining. Moreover, coal fires are burning uncontrollably below ground here and through much of northern China, adding to global warming by releasing huge amounts of carbon dioxide into the atmosphere.

Each year, scientists say, about 200 million tons of coal - more than was burned in all of Japan last year - is consumed by raging underground fires that are sometimes started by lightning and sometimes ignited by mining accidents.

As a result, China creates twice the sulfur dioxide as America does and some scientists say this will soon more than double.

According to Nathan Nankivell, Senior Researcher at the Office of the Special Advisor Policy, Maritime Forces Pacific Headquarters, Canadian Department of National Defense, China is quickly spiraling out of control.

China now boasts five of the ten most polluted cities in the world; 70% of the water that flows through China's urban areas is unfit for drinking or fishing; and severely degraded land or desert, which now claims 1/4 of China's land, is advancing at a rate of 1300 sq. miles per year.

According to USA Today:

China's pollution problems cost the country more than $200 billion a year, a top official said Monday as he called for better legal protection for grassroots groups so they can help clean up the environment.

Damage to China's environment is costing the government roughly 10% of the country's gross domestic product, estimated Zhu Guangyao, deputy chief of the State Environmental Protection Agency. China's GDP for 2005 was $2.26 trillion.

Despite the efforts of half a million environmental officials in his agency and other organizations, China's environmental picture is worsening and "allows for no optimism," he said as he released a report that described China's environmental situation as "grave."

"Water, land and soil pollution is serious," the report said. "The Chinese government will mobilize all forces available to solve the pollution problems that are causing serious harm to people's health."

Again, most of this is due to corruption that ranges from top Party officials to local Party bosses. Bribery and personal enrichment is the system that China has followed for thousands of years. The onset of Communism did not alter this traditional practice. In fact, it made it easier.


Trials and executions for corruption are becoming commonplace in China today, but these show trials are only for western consumption, to show that the government is “doing something”, as no efforts have yet been made to materially demolish the ages old practice of bribery that has characterized Chinese life for generations.

Any quick perusal of an internet search engine can turn up reports of these corruption trials. Here are just a very few examples spanning the decade so far:

Merrill, Lynch Today -- China: Corruption and the Economy

Corruption has rarely been worse in modern China, or reached higher. A Vice Chairman of Congress is under investigation for what China calls economic crimes. The Minister of land has been fired and investigation of a $10 billion smuggling racket has implicated the wife of Beijing's party chief, a man close to President Jiang Zemin. And that's only senior levels. Further down, the money may not be as great, but the graft cuts all across society.

CNN -- Seven sentenced to die in China corruption case --China has executed scores of officials in its fight to end graft

China has sentenced seven people to death for tax fraud in connection with what could be the biggest corruption case of the Communist era.

New York Times -- China: Corruption Arrests

The head of the asset management department at Shanghai's state-owned Jinjiang Group has been charged with corruption, company officials said. Chen Yanning, 46, the son of a senior military officer in the Sichuan-Chengdu Military Region, is being held in a case that has already led to the detention of Chen Bangke, a patron of the arts and opera producer.

Times On-Line, UK -- Chinese bank aims to be global giant

Chinese banks are still not investments for widows and orphans. The list of frauds, fugitive managers and brazen corruption — of which ICBC has had its share — would stretch from one end of the Great Wall to the other.

Fitch Ratings, in its most recent assessment, had this to say: “All Chinese banks, to varying degrees, continue to demonstrate thin profit margins, relatively low capital, weak asset quality and underdeveloped risk-management systems.”

It is so common that tourist attractions are being created over them…

CNN -- China turns corruption into tourist attraction

Tour guides were scrambling for tickets to a government-sponsored exhibition in Xiamen that opened Monday displaying evidence of the "Yuanhua smuggling scandal", according to China's state media.

The scandal involved Xiamen Yuanhua Group, accused of smuggling $6 billion worth of cars, oil, luxury goods and cigarettes.

Seven senior local communist officials, including a former deputy mayor and a former police chief were executed earlier this year for their involvement in the case. About a hundred people were tried on fraud and embezzlement charges.

Of course, China’s sloppy and unprofitable banking industry is another danger for the economies of western nations as too many investors clamor to place money there imagining that China is a good investment. Due to the rosy reports of its growth without a subsequent and sober assessment of its unsuitable infrastructure and true profitability, China seems an attractive investment.


So, what is the upshot of all this? Can China overcome this systemic corruption, a way of life that has always bedeviled the Chinese people for as long as anyone can remember?

I say it cannot. It cannot because there is no incentive and no internal mechanics to address it. This corruption will continue to grow until the economy collapses upon itself.

After all, China is not a democracy and it has never made a priority of serving its people so the benefits of its capitalistic ventures will not lift up the common people nearly as easily as it does in western nations. It is a totalitarian system that cannot exist without top down control. And with no local input to address the trials and tribulations of common life, corruption is the only way to get anything done.

People know there is no trusting government to address problems, so they take matters into their own hands. And, since the government claims ownership of most everything, bribery is the best way to assure a future nest egg for retirement.

This leaves the poor in a no win situation for they have nothing with which to bargain. And this fact lends itself to the ever-greater numbers of protests that we are seeing hit China today.


The reaction of China’s government to the growing unrest is tighter control and more militant enforcement. A benchmark of this enforcement is the growth in the number of state sponsored executions.

Last year, China executed more than four times the number of convicts executed by any other country with nearly 2,000 Chinese were executed. By contrast, the US executed only about 60. Amnesty International -- admittedly an organization prone to sometimes absurd exaggerations -- claims that the number could be as high as 8,000. The actual number, though, is unknown as it is deemed a state secret and is not publicized.

To process this horrid number of state executions, the Chinese government has actually created a fleet of execution vans invented specially to roam about the country carrying out the sentence on a daily basis.

There are also suspicions that prisoner’s organs are being harvested for sale on the black market adding to the inhumanity of the practice.

In any case, it is obvious that China feels it needs to eliminate as many problematic citizens as it can to keep tight control over a populace of over a billion souls. And this leads to a further problem.

How long can the communist dictatorship continue to control this mass of unhappy and agitated people? Can it rely on the traditional meekness to government that characterizes the Chinese mentality for too much longer? And, if these protests continue to grow what will the government do to keep control and power?

Will China turn its face to the west, raising the boogy man of western aggression to give its restless populace an outside enemy upon which to focus their anger? And will they be able to present this boogy man to the public early enough to forestall their loss of control and collapse?

I have no direct answer for that. Suffice to say, it is something that we must take into account as a distinct possibility. We cannot blithely sit by and assume that our business ties will prevent them from these measures, that those ties will stop a Chinese government flailing blindly to keep its power from lashing out at the US, its best customer.

We cannot turn a blind eye to China’s impending collapse and imagine it cannot affect us. China is the most dangerous threat the US and the west faces in the long term. No concept of MAD (Mutually Assured Destruction) will suffice to stop China if it sees war as a last ditch effort to stay in control of its own, vast population.

And if we are to take China’s military establishment for granted, it plans to do just that.
Wow! Great commentary! I agree that we keep acting as if China is our friend but it is not.
I am a little shocked that China has not already collapsed. On second thought they may already have and are using a smoke screen to hide it. In less than a decade we will see it but I hope it is not too late.
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