Years of Poems and Spirits

I have fell in love with the Diane Rehm Show. Although at first I was put off by her voice (little did I know that she had undergone a throat cancer operation before), soon I was hook because she has the uncunny ability to pick the right subjects and to get the right guests on her show. For example, couple of month ago, she did a piece on the French youth’s protests. It appeared as a typical French-are-whiners story in the mainstream but her guests were able to put the story in a context so I understood better why the protests were so vehement and that the whole thing did not start from nowhere.

Anyway, the recent developments about the war between Israel and Lebanon. For a long while, I thought it was the Iranians trying to divert attentions on their nuke program. My friend Arif told me something quite different:
1. There has been cross-border raids before. This is NOT the first time Hezbollah kidnapped/killed Israeli soilders before.
2. Israel’s previous reactions were much more restrained.
3. There was even a large scale prisoner exchange in early 2004 between the two sides.
4. There is a significant secterian dimension (in Arif’s word, disrupted previous Shia-Sunni equilibrium) Some Muslims apparently see this re-configuration of power as the source of current disturbance in the region and the result of the invasion of Iraq.

With those storeis in mind, it is now easy to understand why the Lebanonese are crying faul: why so harsh this time? Or why the leaders of Hezbollah confessed they were surprised by the attacks too.

Now that is something even Diane did not mention.

Follow up on Aug. 27:
Hezbollah chief Sheikh Hassan Nasrallah … said that he would not have ordered the capture of two Israeli soldiers - the event on 12 July which sparked an Israeli offensive - had he known it would lead to such unrest.

Some public criticism is finally being heard of Hezbollah for triggering the conflict and that is no doubt why the Hezbollah leader has now spoken of a miscalculation, our correspondent says.
–BBC

A recent article indicates that rates among nonofficial banking outlets in WenZhou, China has lowered by 30% (温州民间利率大跌：400亿浙资撤出上海楼市)

I have been interested in alternative banking in China, knowing that the stage of economic development needs more fluid capital flow but the official banks cannot provide that. The alternative banking, I thought, would be an interesting specimen to study: in it, one could see some of the “capitalist sprouts” Chinese historians have been talking about. Also, it would be interesting to see whether it could pose a challenge to the central authority, or change social economic behaviors (e.g. civic association, credit-trust system, etc.)

At the recommendation of Christine Wong, I bought a book called Back-Alley Banking: Private Entreprenuers in China . It is an interesting book because the author did extensive field work in China (23 month). It is probably the best resource in this field. However, the author has a rather strange view point: in the introduction, she mentioned how her study could prove the institutional economy (or state-directed economy) wrong (e.g. Douglas North). But her research has not proven private banking could fund large scale capital adventures. Buying houses or coal mines, as the WenZhou capitalists have done, needs mainly financial capital. But financial capital alone is not enough to catapult a national economy to a different stratosphere, or the Saudis would have been king of the world now.

In other words, had her study been how backalley banking changed Korean economy–the one most used as an example of state-directed development, her conclusion would be much more relevant.

Now back to the recent WenZhou article. It was poorly written: full of information, little knowledge. The author did not try to speculate whether the regression was temporary or an indication of a new trend. But one interesting thing I found was:
“这些地区以个人为贷款主体的生产经营性贷款产品层出不穷 … 甚至，一些银行已着手适当简化贷款流程，或可不经贷款审批委员会审议办理某些业务，以更好地适应小企业贷款“短、频、快”的特点”

It looks like the official banking system is improving: more products, better/more efficient services. But is it because the competition or administrative directive from the central government? As Yoda said, “Hard to see.”

Yang Dali: Economic Transformation and State Building in China

Compared China today to the US after the Civil War: “a managerial and regulatory state arose to taskcle problems …”

Zhu Rongji traveled 17 provinces to bargain for the 94 Tax/Budget Reform (123)

Banking reform in the 1990s: local branches re-orged, central office retain personnel right. (127-128)

Mini financial crisis in China: Guangdong International Trust and Investment Corporation (131)

—The author seems to be a fan of direct, vertical control from the center. Gave profuse praises to such a scheme in Quality Control, piracy, etc. Has the problems gone away? Or are they just less attention-grabbing? (141)

Dorothy Solinger: Policy Consistency in the Midst of the AFC
–The most confusing article. She thinks market reform, economic forces shapes policy making at all levels.

However, she has an article “Why We Cannot Count the Unemployed” (China Quarterly, No. 167 2001) discussing why official numbers cannot be trusted. (161)

The inequality of Chinese as seen from hiring policy: urbanites before rualites, locals before outsiders, etc. (179)
–Reminded on of the immigration policy.

Huang Yanzhong: Population Control and State Coercion in China
The evolution of population policy (194)
A good history review. Strict policy enforcement only starts in early 80s. (196, 207)

Asked the question: how government can intrude into people’s bedrooms and monitor reproduction? (201)
Answer: through the combination of institutionalization and mobilization, the post-Mao Chinese state obtains high infrastructural power to implement its … program on a recalcitrant society. (205)

Underfunding, Peng Peiyun’s complain (204)

The validity of the birth control theory: notes about Johnson 1999 (205)

Cognitive coercion: (204-205) “many people have come to accept, internalize, and reproduce the hegemonic view of the state in their daily lives”

Discussion of Birth Control in the context of civic culture (206)

Enforcement methods: provider-controlled (IUD, sterilization) vs. client-controlled methods (condoms). Rural women knowledge of choices (209)

Su Fubing: Political Economy of Industrial Restructuring in China Coal Industry
Mutual distrust and monitoring:
In order to enforce mine closure, “officials from rival provinces have been recruited to cross-inspect the implementation of the policy. (246)

Closing mines … has also been factored in to the cadre evaluation system … whether or not the cadres have accomplished their targets would carry a heavy weight in cadres overall (rating). (247)

Barry Naughton: The Western Development Program
Naughton break the Western region into Northwest and Southwest (278)
His main point: different characters, different needs, different endowments, etc.

Sharp criticism of WDP:
Highly pulic, visible coverup of systematic inequality in resource, budgetary transfer. (286-287) Refered to C. Wong’s argument (”intergovernmental transfers tend to favor more developed provinces”) … “But in a sense, the WDP represents an alternative to an effort to reconstruct the fiscal system more thoroughly in a way that provides more resources to less developed provinces reliably and over the long term.”

The WDP is a highly visible, symbolically charged policy that sends messages to political audiences about the leadership’s commitment … (287)

The single factor most likely to reduce poverty in the West is outmigration (291)
–Has he proved that resources and/or capital endowment is not enough to support population?

Moral hazard problem: “As a result, it tends to solve resource problems but … not incentive” ones. Local governments in the West have much stronger incentives now to plead poverty. (292)

The more the WDP degeneratees into a pure patronage-type program, the greater is the danger that the scope of the program will become inflated. (293)