Society

“We need to get that many visitors to the Expo to outdo Japan… You know how Chinese feel about the Japanese, don’t you?”

I heard this comment yesterday from a cab driver in Shanghai, who chuckled when he said it, sounding more bemused than virulently nationalistic, as I chatted with him about the curious obsession in the Chinese press with whether or not the proclaimed target of 70 million visitors to the country’s first World’s Fair would be reached.

Yesterday I bought a copy of Li Delin’s (李德林) latest book: “高盛阴谋” (Goldman Sachs Conspiracy). Li is a well-known financial journalist and author who has written several other books, including the November 2009’s “干掉一切对手——看高盛如何算赢世界 (Eliminate All Competitors–How Goldman Sachs Wins Over the World”. You can read Li’s blog (in Chinese) on Caijing here.

According to the promotional sleeve around “高盛阴谋” (Goldman Sachs Conspiracy), the book has sold 100,000 copies since its June 1 publication; that counts as a bestseller in China.

In just a brief skim through the book I can tell it is ugly, driven by not just all the expected conspiracy theories, including an undercurrent of anti-Semitism, but also by a provocative nationalist theme. The first chapter, which declares that Goldman’s “ultimate goal is hunting and killing China,”,sets the stage. In a possible, but failed, attempt to outdo Matt Taibbi and his vampire squid, Chapter 1 concludes in part with the author saying the company “has the IQ of an Israeli Shar Pei Dog and the cruel nature of a Manchurian Tiger (这个有着以色列沙皮狗智商和东北虎残忍性格..” To Taibbi’s credit, the book’s cover does refer to Goldman as “bloodsucking.”

I have written about Goldman in China previously here and here. Goldman may be taking a PR battering in China (the 21st Century Business Herald has a story today on a developer complaining about Goldman “cheating him” with a high interest loan), but it got the mandate for the Agricultural Bank of China IPO, the company made 200x or so on paper in their 2007 investment in Hepalink, and it still generates decent business in the country. Probably the clearest sign that Goldman is in trouble in China would be if it can no longer hire or retain children of some of the more influential people here. So far that does not seem to be an issue. So far.

As a consultant in software product development, I have followed trends not only in software development, but in other businesses as well. Software is one of those businesses which changes fairly quickly, since its main output is code. When software engineers decide to retire code or a standard, that code is said to be deprecated. In short, it is no longer supported in the current version, though it may be in previous versions. One of the major reasons for poor performance in consumer software is the support for deprecated systems and code; this causes a performance hit.

The intrinsic problem is that China has become too dependent on its own state-owned enterprises to maintain growth and employment at all costs following the events of September 2008. Because they were so huge and had ready access to capital from the state-owned banks, they were able to keep China’s economy growing, even while the rest of the world headed into a funk. Nearly two years later though, cracks in the dike are beginning to appear.

For one thing, China’s economy has become too dependent on the large corporate enterprise. Both the U.S. and China have been trying to do the same thing: save large corporations at a time when they should be deprecated. This article from the Wall Street Journal, “The End of Management,” says it best:

Photo taken on 17th Apr. 2009

As a 60-mile-long traffic jam on a Beijing-bound “expressway” snails along into its 10th day — either easing up now or destined to drag on into September, depending on which report you read — it is worth taking a second to note how this can happen. Road construction is one of the immediate causes, but that in turn is necessary because of increased cargo traffic on the roadway, reports Global Times. What’s that cargo? Coal, in a country where the vast majority of electricity still comes from coal.