Economic tide is turning
In my line of work as chief executive of Expert Communications, I frequently see documents in English; translated from Chinese, they need a retranslation into English.
Investors following the “red market” in China might have been amused by a recent “confession” from fourth estate stalwart Wang Xiaolu (王曉璐), who said:
“I shouldn’t have published the report at such a sensitive time, especially when it could have great adverse impact on the market. I shouldn’t have caused our country and shareholders such great losses just for the sake of sensationalism and eye-catchiness.”
Since I am so good at translating, let me help you out:
“I shouldn’t have yelled ‘fire’ in a crowded theater with my last gasp of breath as I was standing at the door. I should have just flagrantly lied and reported that markets were going up forever.”
Reporting the Truth with a capital T is an act of incredible courage along with great talent and diligence, and the Truth about China is expected to be be far worse than anyone imagined.
Black Swan author Nassim Taleb wrote an article listing the five factors for “instability,” and they are: centralized decisionmaking, lack of economic diversity, high debt/leverage, absence of political variability and lack of a track record surviving shocks.
China has all these things in spades! Overcapacity and “ghost cities” everywhere, borrowing for impractical investments, the one-party state, and the track record they have includes former Chinese leader Mao Zedong’s (毛澤東) “great leap forward.”
So how would Taleb analyze Taiwan’s economy?
Yes, but it is coming down; oh, there is plenty of that; not so much; and not at all. Fifth? Taiwan is the Olympic marathon runner of surviving colonization by foreign powers — we have been doing it for 400 years!
Taiwan needs to become “anti-fragile” to survive the coming crisis, and I do not see any politicians warning Taiwanese just how serious the danger is.
The world is amid a deleveraging and deflationary phase where “growth” will be extremely slow. Taiwan’s “business leaders” you read about in the news all read the same papers, showing an up-up-up cycle everywhere.
The global oil and commodities crash should send a massive wake-up call to investors to get out of debt, stop playing with real-estate and risk assets, and buy something tangible that stores wealth over time: gold.
I have suggested in many Taipei Times letters creative ways to diversify Taiwan’s economy, promote renewables and thorium, renew stranded assets and reduce air pollution. Unless wannabe “leaders” face up to the facts and admit our challenges, no politician will be able to come up with a comprehensive plan for the post-crisis and climate-changed environment.
If Taiwan’s preposterous bipartisan clown circus continues for much longer, there will be no hope of reforming the budget, tax code, equal marriage laws and a bunch of other “constitutional” stuff amid a severe and worldwide economic downturn.
No Taiwanese voted to install the current Republic of China Constitution anyway, and it needs a complete rewrite. Many stupid laws are hampering solar, for example.
The tide is turning.
Torch Pratt
Yonghe, New Taipei City
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