China's Government Secret

Bigger is Better

China's macro-economy is conceived afresh each day by a group of financial geniuses (China has 30 million of them) who are free to suggest any policy and regulatory tweak that will help keep the economy on schedule. That's job 1 every morning. The evidence of their genius, flexibility, and agility is renewed daily, before our eyes.

It's time we acknowledged their accomplishment, not just grudgingly, but stand-up-and-cheeringly. They're the best economy-managers the world has ever seen. We're observing a marathon being run at a sprinter's pace.

Those smart people are the passengers in those big black government Audis, and that's the way the Chinese people like it. Because, over thousands of years of continuous, archived history they've learned to put the smartest people in charge of the country then cooperate with them. Those smart people are modestly paid by international standards (a matter which Lee Kwan Yew has frequently criticized because he says it leaves them open to corruption) but their exalted social status is beyond our Western imagination. The Audis are a sop to their status.

Their top 7 guys are probably the most honest men in China (take that as you will). It would be dumb to put smart, dishonest people in charge of your country as we do. Ask a Chinese friend to explain the role of moral leadership in their history of – obsession with? – governance.

The corruption involved here seems mild (at least to me, living in a SE Asian country). Res ipsa loquitur: China's economic results speak for themselves, and they don't say "corruption".

All relatives of high officials in all times in all Confucian cultures have and continue to become wealthy. As you read these words thousands of them are getting wealthier for a reason we can't quite grasp.  They're elected to prestigious boards and slathered with stock options simply because they're the Premier's brother, father, cousin, son, cousin-in-law's neighbor. They don't have to "talk to their brother" on the company's behalf. The relatives mostly don't have to do anything. The company simply points with pride to the relative as a badge of honor.

Only the title has changed.  The culture, however, has sailed serenely on. Xi is no longer called The Emperor of China. Now he's called The President of China. But he is regarded with the same awe as his imperial predecessors and given the same benefit of the doubt" "If the Emperor only knew".

Hard for us Westerners to figure out, given the b.s. that China reportage dishes out daily.

And the high-priced cars? The smart guys riding in them know that maintaining high prices on ridiculously wasteful cars provides re-deployable taxes to spend on stuff like...high speed rail, whose earlier intercity lines are already operating cash-positive.

If I were Chinese I'd vote for bigger Audis for those smart guys and higher taxes on my next luxomobile. Wouldn't you?