John Bruton

Opinions & Ideas

Category: China (Page 2 of 2)

NAPLES

I have just spent an enjoyable day and a half in Naples, capital of the Italian south
It is a beautifully situated city, near Pompeii and the Amalfi coast, and endowed with some of the most remarkable churches in the world.
In one of these I discovered the tomb of an Irishman I had never heard of before, Luke Concannon born in Kilbegnet in Co Roscommon in 1747, and a Dominican priest, who was the first ever Catholic bishop of New York. He died in Naples in 1810, presumably on his way back to New York after a visit to Rome.  
I was struck by how clean and well kept Naples was, contrary to its reputation, and by the number of young people and small children on the crowded streets of the old city.

THE ITALIAN ECONOMY

Italy is facing many economic problems at the moment and I saw signs calling for demonstrations against the policies of the Monti Government.
Economic growth has been lagging in Italy since the 1990’s, and Italy has been hit particularly hard by Chinese competition, particularly in fashion goods. Meanwhile pay has increased far faster than productivity.
 Italy had the same balance of payments situation as Germany in 2000, whereas in 2010 Germany has a large surplus and Italy a large deficit.

THE IMPACT OF CHINA ON THE EURO ZONE HAS BEEN DIFFERENT IN ITALY THAN IT HAS  BEEN IN GERMANY

This is because Germany has been able to export engineering goods to the expanding Chinese market, while Italy has lost market share to China in its speciality, fashion goods.
 In a way, the opening up of China has created unanticipated new imbalances in the euro zone that have arisen since the currency was launched. Some of the German commentary on the euro crisis has ignored this fact.

UNLIKE IRELAND, ITALY ALMOST HAS A PRIMARY SURPLUS

Italy has a big Government debt, but most of this debt dates back to the 1990s, when services expanded while revenues were contracting. Today, Italy almost has a primary surplus on its Government accounts, in other words, it is collecting as much in tax, as it is spending on all Government services apart from interest on past debt. In this regard, it is in a much better situation that the rest of the euro zone.
In contrast, Ireland has a smaller government debt as a proportion of GDP, but has a substantial primary deficit….Ireland’s day to day spending on all services, apart from debt interest, still exceeds its day to day revenue by one of the largest margins in Europe.
Italians have a much lower level of private debt, 130% of GDP, as against 350% in Ireland, and 250% in Spain, Sweden and the Netherlands. There was no property bubble in Italy, in sharp contrast to Spain, something that needs to be explained.
Italy’s problem is that its medium term growth potential is less than that of either Ireland or Spain . This is partly because Italy has an older population, and partly because Ireland has a more modern industrial economy. 
Italy has a large black economy (15% of GDP), and it takes ages to enforce a contract or set up a business in Italy. A judicial process that would take 52 days in the Netherlands, 49 days in the US, or 183 days in Spain, would take 630 days in Italy!

ITALIAN BOYS LOSE OUT

Italy’s educational system is open to criticism.
A large number of students, particularly boys, drop out of school with no qualification at all, and its universities fail to prepare students for the jobs that actually exist. This is strange for a country, so many of whose prominent politicians are university professors! 
Only 15% of men, and 24% of women, in the 30 to 34 age group have a university education. 
As in other countries, the educational system is failing boys more than it is failing girls. Similarly, in Ireland, the unemployment rate among boys is higher than it is for girls.  

SOME OF THE BOOKS I ENJOYED IN 2011

I have been travelling a lot during 2011, and  that has given me time to read  some good books.
I find that it is only when one has a limited choice of things to do, that one can concentrate on reading a book  and enjoy it fully, and there is a limited choice of things to do on a airplane.
The best book I read in 2011 was “Napoleon in Egypt” by Paul Strathern.
It is about the invasion, in 1798, of an Egypt that was then nominally part of the Ottoman Empire, by an army of Revolutionary France, led by General  Napoleon  Bonaparte.
 Napoleon brought with him a large number of French academics and scientists, and his plan was to bring the benefits of the European enlightenment to this part of the world and, in his own mind at least, he intended to use Egypt as a jumping off point for an invasion of India,  and the eventual  establishment of a global empire.  He modelled himself on Alexander the Great.
 Napoleon was an atheist, in the French revolutionary tradition, but he put himself forward  to the Egyptians as a friend of Islam. He wanted  to make the invasion acceptable to the locals, some of whom initially welcomed the overthrow of the previous Mameluke military regime.
He told them that the “French are true Moslems”.  But, as time wore on, the main local support for the French came from the Christian and Jewish minorities, who suffered most when the expedition eventually failed.  As is the case today, there was a wide divergence of values between French secularists and devout  Muslims, and for all his efforts Napoleon never bridged that gap.
The Mamelukes, who Napoleon initially defeated, were  a military caste who had  been created by the Ottomans  from  among people they  enslaved in European  parts of their Empire. The Mameluke  system of administration had been  corrupt and unpredictable.  Napoleon tried to modernise it,   and, to assist in the process, he brought the first ever printing press to Egypt.  The French also opened first  shops in Egypt  where prices were fixed , rather than to be bargained.
Napoleon’s soldiers were the first Europeans to travel to the upper reaches of the Nile, and to see some of the glories of ancient Egypt, like Luxor and Thebes. The French also discovered the Rosetta Stone, which eventually explained the ancient Egyptian language.  They assiduously mapped the plant and animal life of Egypt.
 Militarily, the expedition was doomed, when Nelson defeated the French navy at the battle of the Nile and thereby cut Napoleon off from supplies from home. His communications with France were haphazard after that, and most of his reports back to Paris were captured by the British Navy.
In an attempt to break out of this situation, Napoleon invaded Palestine and Syria in the hope of getting  back to Europe by fighting his way through Turkey to the Balkans.  But, as in Russia in 1812, he overextended himself and lost many soldiers from exposure to harsh weather conditions. While in Palestine, he issued a proclamation describing the Jews as the “rightful heirs of Palestine”. It is not recorded what the locals living there at the time thought of that.  He certainly felt he could remake the world without too much concern for the views of local inhabitants.  Napoleon eventually abandoned his army in Egypt to return to France, and insert himself successfully into French politics. About 15,000 Frenchmen were killed or died of disease during the two year occupation.
I read “Earthly Powers” by Michael Burleigh. It deals with the clash of religion and politics from the French Revolution to the Great War.
The French Revolution was strongly opposed to Christianity.   By 1794, masses were only being celebrated in 150 of France’ s 40,000 pre Revolutionary parishes , and  monasteries had all been broken up. In the suppression of the Catholic  anti Revolutionary risings in western Franc e, up to a third of the population in some areas were put to death.  I saw a monument to some of these people on a visit to Angers during 2011.
The Revolution’s rejection of religion removed  restraints on human behaviour, and contributed to disorder. One of Napoleons first initiatives  to restore order when getting power was to  negotiate a Concordat with the Catholic Church . Under it the Concordat, a new episcopacy was formed, some of whom included bishops who had cooperated with the Revolution and some bishops who  had remained loyal to the Pope. Clergy were obliged not to marry couples without a prior civil ceremony, something that remains the case in France this day.
Burleigh argues that the Concordat reduced the pre existing role of the laity in the French church, a role that they had been forced  take on while the church was being actively persecuted by the Revolutionary authorities.
In Britain, socialism and Christianity were frequently allied, whereas on the continent Christianity was more frequently allied with conservatism, perhaps in reaction to the excesses of the French Revolution.  In working class areas of London in 1900, 15% of the population still went to church on Sundays,  whereas only 1% did so in similar areas of Berlin.
I found the subject fascinating, but the book to be a bit too long, and diffuse.
I read “China, the Fall and Rise of a Great Power, 1850-2009” by Jonathan Fenby.  I strongly recommend it to anyone visiting China, as I did during 2011. When one reads of the chaotic conditions that existed for much of China’s recent history, one comes reluctantly to understand why authoritarianism has a certain appeal.
“The Quants ,”  by Scott Patterson who shows how some of the financial innovators, who devised the  innovative financial products that helped bring about the  2008 crash,  had stated their lives as mathematicians applying Maths  to professional gambling in  Las Vegas.
In fiction , I enjoyed  two books that explore human relationships and keep the readers interest right to  the last page, by Irish author , Deirdre Madden,  “One by one in the Darkness”,  and “Molly Fox’s Birthday”.  I also greatly enjoyed “The Help” by Kathryn Stockett.

DUST BOWLS AND DESERTS —- HAVE WE ANYTHING TO LEARN FROM CHINA?

I am going to China this week to take part in a conference in Ordos, in Inner Mongolia, on desertification.  Desertification happens when land, that was previously capable of supporting life, is turned into infertile sand.  This   is a problem in all  the continents of the world, except Antarctica.
Deserts , worldwide,   expand by about 50.000 square kilometres  per  year, and desertification threatens the livelihoods of a billion people in  110 countries.  In Europe, Spain is particularly affected.
Desertification is a particular problem in China.
During the 1990s, the Gobi desert grew by an area equivalent to  half the size of Pennsylvania.  The immediate cause is wind eroding a soil that has become so dry that it is prone to be blown away.   Sandstorms from Northern China reach as far as Korea and Japan.  Ironically, flooding can also lead to desertification by loosening soil.
One Chinese study suggests that soil becomes prone to erosion for the following reasons
  •    Overgrazing (30%)
  •    Excess land reclamation of unsuitable soil (27%)
  •    The collection of firewood (33%)
  •    Water misuse (10%).   Excessive irrigation can make soil salty and infertile.
The pressure of providing food and fuel for an increasing population can lead people to overuse land in a way that eventually leads to the  destruction of its fertility.
The solution is to be found by 
  •       planting trees,
  •       managing grassland better and
  •       conserving water in river basins.
Curbing bad practices and initiating good practices requires effective political organisation.  In the past ten years, China has begun to  reverse the process  of  desertification.
The world population is now 7 billion and will eventually reach 9 billion. We cannot afford to lose fertile food producing land if we are to avoid famine. 

We have also got to conserve water, because water demand is increasing rapidly. Urban societies consume more water than rural ones.  Meat production requires much more water than grain production, but as people get richer they  eat more meat.

A week in China

I spent the last week in China. It was the first time I had been there since 1978. The change is dramatic.

Then, everybody seemed to be wearing the same colour boiler suit and the roads were thronged with bicycles . Now , high fashion is on display and the sound of bicycles bells has been replaced with that of accelerating cars and trucks.

Some things did remain the same. In the fields of southern China one could still see farmers doing their backbreaking work, under the eyes of their ancestors. In rural China, the bones of the deceased are buried under tombstones in midst of the land they once tilled, rather than in graveyards .

But ,even in the remotest areas of China, change is under way. We met a young man in Guilin , in the south west. He approached us and asked in good English where we were from. When we said we were from Ireland, he immediately responded “O , Yes, Riverdance!” .

It emerged that he himself was a student of Chinese calligraphy, and was the first person from his village ever to go to college. His village was up in the mountains, three hours walk from the nearest road and six more hours by road from the university.

He said he was almost a celebrity at home because he had gone to college. His parents were tea planters and neither could read. He said his mother still could not believe him when he told her he had learned English. He said he would love to travel outside China, but that his main ambition was to return to his village and help the children there to learn English.

There are still big gaps between income levels within China. Incomes range from a GDP of 72000 RMB per head in Shanghai ,down to just 12000 RMB in Kansu.

In Guangxi, the province where we met the student, GDP per head is 15500 RMB. These gaps in income are no wider than those found within the European Union between, for example, London and Latvia.

Labour shortages will eventually become a problem in China. Honda is facing a strike by workers demanding higher wages in their plant in Guangdong. Food prices will also come under pressure as arable land is taken over for development and water shortages affect irrigation.

We visited some tourist sites, like the Great Wall and the tomb of Confucius. What was striking was that the overwhelming majority of the other tourists there were the Chinese themselves. They are able now to afford to enjoy their own country. It is a remarkable contrast to the situation that existed in China throughout the nineteenth, and most of the twentieth centuries.

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