I've been horrified, like everyone else, by the global financial crisis---but also delighted by headlines in major business journals about capitalism being at a turning point. This is crazy stuff! I remember how radical socialists in college would hand out papers with editorials demanding that the government nationalize the banking sector... done, sort of.
How China rides this storm out will be interesting. I am worried that the country's belated efforts to strengthen implementation of its environmental and labor regulations and to reform its tattered social safety net will be pushed aside by short-term thinkers who advocate getting the worst parts of the export sector back online as a solution to slowing growth.
In other words, rather than continue to lay the basis for more domestic consumption---and, ideally, lower Gini coefficients---southern manufacturers may get a boost in the form of tax benefits and lax labor law enforcement (the new implementation guidelines for the Labor Contract Law have been somewhat of a disappointment, watering down the original legislation). Efforts at creating an integrated social security network, where migrant workers can bring their benefits back to their home provinces, will go on the back burner. And the whole thing will have to start over.
China was a level-headed player during the previous East Asian financial crisis. But I think more than level-headed-ness is needed now. These times require a comprehensive vision of what a fair, prosperous future will look like. And, unfortunately, neither the U.S. nor China nor even the EU seem at the right place politically to conceive such a vision.
Tangentially---I'm trying to get caught up on topics, so I'm throwing them all together in one post---I've been going back and forth with myself about China's recent announcement of a semi-land-reform for farmers. Perhaps readers can give me their opinions?
On the one hand, as I have stated before, I am nervous about land being bought and sold before there's a strong rural (and, importantly, periurban) court system in place. It just seems like a recipe for dispossesion and proletarianization possibly worse than the government land seizures of today.
Yu Jianrong makes a typically nuanced but forceful argument for a balanced approach that is focused on farmers' agency in an interview translated by Danwei. I'd like to hear more of what he has to say.
Finally, on an entirely unrelated topic, I'm glad to see that Americans have not been thrown off course by the McCain campaigns increasingly desperate attempts to make the election about race. It shows that people can be serious when they want to.