China 2012

China is important to the US because China is not only one of our major economic partners, it is also one of our strategic competitors. Of course, that doesn’t mean we will go to war with China, but it does mean we need to recognize that reality, that simply put, there are vital Chinese interests that are at odds with our some of our vital interests and vice versa. And, being an American, I insist that we win. Again, it doesn’t require warfare, but it does require thought and effort and action.

Thought begins with collecting information. And some important information came to light yesterday. Yesterday, Bo Xilai, the communist party chief of Chongqing (the largest metropolitan area in China) was fired following a scandal with his police chief and close associate apparently seeking asylum in the US. This is significant because Bo Xilai was been the darling of the new China for the last several years and considered a virtual ‘shoe-in’ to the ‘Standing Committee of the Politburo’ at the Party Convention this coming fall. The nine members of the Standing Committee are the real power in China, and there are seven spots opening up this year.

Despite what some might think, all is not sweetness and light in China, which suffers from several very dramatic problems: a huge real estate and credit bubble that is the result of trying to maintain 10% growth for 20 years, a growing demand for energy (they are net importers of oil (and energy), to the tune of 7 million barrels of oil per day, a growing demand for food (net importers of food – to include rice), and a serious unemployment/underemployment problem that includes perhaps 100 million young men. Add to this a central government that has tried to manage the economy and in so doing has not allowed market forces to balance demands for land and water for urban development with the needs of farmers for land and water for rice and other crops and you end up with some very serious problems.

These are the issues that the Chinese leadership is ‘dropping’ on the Standing Committee and the need for continued exceptional talent in the committee is obvious. Of course, everyone is free to believe that the Chinese can continue to successfully ‘manage’ an economy, though history is not on their side. There are signs (see above) that it is already getting out of control. In any case, the need for talented people is obvious. But whether they can actually get such talent remains to be seen. Some of the likely candidates are:

Wang Yang - turns 57 this month, party chief of Guangdong, protégé of President Hu

Wang Qishan - currently the most junior of four vice premiers

Liu Yunshan – 64 - propaganda minister, has tried to control China’s internet

Li Yuanchao – 61 – Head of the party’s ‘organization department’ which oversees appointments of senior party, government and military positions

Zhang Dejiang - 65 – Vice Premier, chosen on Thursday to replace Bo Xilai

Zhang Gaoli – 65 - party chief of Tianjin

Yu Zhengsheng – party chief Shanghai