Hi all! My family and I took a trip to China this summer for three weeks. Needless to say, it was incredible! I will be posting photos over the next few days with captions to add context, but to start here are a few big takeaways from the trip.

In Beijing, we met one of my Dad's former graduate students, Yu. Over lunch, he made some interesting points about the Chinese people's attitude towards its government and its economy as he sees it.

He mentioned the fact that, within China, China is not thought of as a major superpower in the global stage, the way the United States and most areas of the world seem to think of it.

He talked about the drawbacks of quick periods of growth such as the one in China that now seems to be drawing to an end: for example, the speed at which many large-scale housing developments were put up, the drawback of which was relatively shoddy construction. They were built to be short-lived, so all of these houses that were put up five or so years ago are going to have to be rebuilt in another 10 years, and maybe that will create a lot of jobs, but it will also be a giant drain on the Chinese economy.

Another thing that came up pretty often was the multifaceted nature of the Chinese government. We tend to think of governments' actions as black-and-white, right or wrong, but there is always a trade-off that occurs, even with the invasion of Tibet, which many outside China regard as purely bad.

Our guide, a Tibetan, despite what he could and couldn't say is a state-controlled tour guide, clearly did not view the Chinese government completely favorably, yet was still able to see the value in the contributions that it had made. For instance, he claimed that rural Tibetan farmers used to bathe approximately once every year before the Chinese invasion and that now it's around once or twice a month. In the sanitation department, that's still not amazing, but it's a clear sign of improvement and is also representative of the giant growth in infrastructure since the beginning of the Chinese occupation. Tibet is covered in new roadways, bridges, tunnels, hotels, housing systems, and schools that owe their existence to the Central Government. But we also learned that, after a large protest in Lhasa over the Chinese government's treatment of Tibetans in 2008, The government confiscated all Tibetans' passports. Many temples, though they appeared old, were actually built in the 1980s and 1990s, or rather they were rebuilt after being destroyed in 1959 during the Cultural Revolution and the invasion of Tibet. On the other hand, their reconstruction was state-funded.

My conclusion is that the Chinese government was very good for China as a developing nation. In Grapes of Wrath, Steinbeck comments on the trade-off between the large scale corruption and greed within the railroad building companies and the fact they built the railroads, I think that's a very good analogy for the Chinese government. They were necessary when China was still developing, and it is still developing (but not nearly as much), so now they've been forced to change. They will continue to be forced to change because there's no longer an end so vital that it can fully justify the means. So the people are calling for change, an end to corruption, a greater amount of freedom and the upholding of their civil liberties. China just isn't doing enough good for its people anymore to justify the bad.

I also found myself thinking about the Chinese economy, and I was very fascinated by the government's artificial stabilization of the RMB. For those unfamiliar with macro economics, like myself, I offer my self-concocted, little-researched, somewhat unsubstantial explanation:

Countries' economies, in theory and according to international economic guidelines, work kind of like a sine curve. When their currency is valued relatively low, they're attractive exporters, so more people buy from them, but, as more people buy from them, their exchange rate increases, so they're not as attractive anymore, so less people buy from them, so their currency falls, and then they're attractive again.

What China has done is essentially break the rules. They keep their currency valued low so that they remain attractive exporters, so, instead of a sine curve, their economy grows as a linear function.

And, while many countries protest because China is essentially cheating, other countries keep buying from China because at the end of the day it's cheaper.

So it remains attractive because it exports basic goods for low prices and gains wealth. But as it gains wealth, it moves from a developing country to a developed country, and developed countries are expected to treat their workers better, and treating their workers better means paying them more, which creates national standards that raise prices, which means it's less attractive to foreign markets. For that reason and since they haven't specialized their industries, IE producing things in a unique way rather than just a cheaper way, foreign markets will just move to other nations once China becomes too expensive. China's function is no longer linear, but sloping worryingly toward m=0. In other words, if China does not specialize, its economy might fail. So just specialize, right? Easier said than done.

According to Yu, the slow in Chinese growth, not a recession but a move toward stasis, has caused a lot of panic among Chinese people. That fear, combined with the average middle to upper class Chinese person's purported lack of involvement in the stock market in comparison to the average middle class American's (many have 401k's or some interest-earning investment system), means that, while there exists a perceived need for specialization, for China to find its economic niche, there is little time and even less capital with which to do so. This looming issue, plus the housing problem, means that China's economy, thought by the average American to be strong and getting stronger, may actually be fairly precariously perched.