Why Chinese workers seem on the verge of rioting - The Daily Reckoning
The Daily Reckoning by Bill Bonner
On This Day - 11 June 2012
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Baltimore, Maryland

What did we learn last week? Nothing. Expect that investors are morons. And we already knew that.

They sold stocks when they saw the world economy headed into a slump. And then, they bought them when they thought the Bernanke team would come to the rescue.

And when the Bernanke team made it clear it was going to sit this one out, investors went blue again.

But at least the Chinese came through.

The European Central Bank played it cool. It neither raised rates nor lowered them. Mr. Bernanke played it cool too. He warned that "monetary policy is not a panacea." Then, he went on to say that he might have to use it anyway, if things got rough.

China's problem has been described in terms a heating engineer would appreciate. At 10.4% per year growth in 2010, the economy was running "too hot," said the experts. So, the policymakers decided to cool things down by cutting off the flow of fuel. They tried to curb the availability of credit, especially to the housing and construction industry. Whether this had any effect or not, we don't know, but growth slowed. From 9.2% in 2011 it fell to 8.1% this year.

Are those figures accurate? Probably not. People who watch China's use of electricity...or diesel fuel - two critical elements of a manufacturing economy - say growth has slowed a lot more than that.

Which is probably why Chinese workers seem on the verge of widespread rioting.

Here's a report from Reuters:

Though protests have become relatively common over anything from corruption to abuse of power, the ruling Communist Party is sensitive to any possible threat to its hold on power in the wake of the protests that have swept the Arab world.

Guangdong is also a pillar of China's export industries, and persistent unrest there could unnerve buyers and investors.

Witnesses said more than 1,000 protesters had besieged at least one government office in Zengcheng. "People were running around like crazy," a shop owner in the area told the South China Morning Post. "I had to shut the shop by 7 p.m. and dared not come out."

News reports said the incident was sparked Friday night when security personnel in nearby Dadun village pushed pregnant hawker Wang, 20, to the ground while trying to clear her from the streets.

"The case was just an ordinary clash between street vendors and local public security people, but was used by a handful of people who wanted to cause trouble," Zengcheng Mayor Ye Niuping was quoted as saying by the China Daily newspaper.

Other clashes have erupted in southern China in recent weeks, including in Chaozhou, where hundreds of migrant workers demanding payment of their wages at a ceramics factory attacked government buildings and set vehicles ablaze.

Last week, protests erupted in central China at the death under interrogation of an official. Over the weekend, state media said that two people were slightly injured in an explosion in Beijing's neighbouring city Tianjin, set off by a man bent on "revenge against society."

Despite pervasive censorship and government controls, word of protests, along with often dramatic pictures, spreads fast in China on mobile telephones and the Internet, especially on popular microblogging sites.

In 2007, China had over 80,000 "mass incidents," up from over 60,000 in 2006, according to the Chinese Academy of Social Sciences. Many involved no more than dozens protesting against local officials over complaints about corruption, abuse of power, pollution or poor wages.

No authoritative estimates of the number of protests, riots and mass petitions since then have been released. Guangdong's Communist Party boss, Wang Yang, is one of the ambitious provincial leaders who may win a place in China's next central leadership, after President Hu Jintao and Premier Wen Jiabao retire from power from late next year. In past months, Wang has sought to cast himself as a moderate leader willing to heed ordinary citizens' gripes, and has said his priority is improving the public sense of wellbeing -- a gentler message than the hardline one that domestic security officials have pushed.

"Use rule of law to protect and realise people's democratic rights," Wang told a meeting in April, according to the official Xinhua news agency. "People don't fear poverty; what they fear is not having the market conditions for fair competition so that they can achieve prosperity."

Also in April, the Communist Party committee of Guangdong heard a lecture from Sun Liping, a sociologist from Tsinghua University in Beijing who has bluntly warned that corruption, inequality and divisions threaten to "rupture" Chinese society.


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*** Coming soon...a Zombie Apocalypse...

You must be getting tired of hearing us talk about zombies. And maybe we are getting a little obsessed by them. But we see them all around us. And they're getting bold...brazen. They're coming out in broad daylight.

Here's an article that appeared last week in the Wall Street Journal:

The recipient of the Obama administration's biggest loan guarantee for solar energy won federal money after an intense push in early 2011 that included hiring a former chief of staff to Vice President Joe Biden to lobby the administration, according to federal records and people involved in the approval process.

The lobbying blitz came as the $1.6 billion loan to BrightSource Energy Inc.-a centerpiece of the administration's program to promote nascent green-energy projects-faced a do-or-die moment, and the company called on its Democratic connections to help push the deal forward, according to emails, records and those familiar with the loan.

The $16 billion federal loan-guarantee program became headline news in September when a recipient of a $535 million guarantee, solar-panel maker Solyndra LLC, declared bankruptcy. Solyndra's chief backer was an Oklahoma industrialist who had bundled contributions for Mr. Obama's 2008 campaign. The White House said there was no connection between the donations and the loan.

President Barack Obama has said the loan program was run fairly and that some failures were inevitable in the business of backing new energy systems.

Mr. Obama lauded BrightSource in a weekly radio address in 2010. The company, which is building a 392-megawatt solar-power plant called Ivanpah in the Mojave Desert, had several other Democratic connections, including its then-chairman, John Bryson, a longtime green-energy proponent whom Mr. Obama later named commerce secretary.

BrightSource spent more than $500,000 on lobbying in the third quarter of 2010 through the second quarter of 2011, according to federal records, on behalf of the loan program and its own loan. The records show that $40,000 of the BrightSource lobbying money went to Bernie Toon, who was chief of staff to Mr. Biden, then a U.S. senator, in the 1990s.

Yes, dear reader, the zombies are everywhere. Lobbying. Spending. Getting disability and bailouts. Every US government program is full of zombies.

Why so many zombies? What you pay for is what you get. And with the "new" dollar after 1971, the feds could buy a lot of zombies.

Remember, zombies are people who take money from the productive sector of the economy and transfer it to themselves. As they grow more numerous and more powerful - thanks to the resources that go their way - the productive part of the economy is less and less able to support them.

Fewer and fewer workers...more and more zombies.

Fewer and fewer people producing things...while more and more people just consume them.

Everything is okay as long as the resources keep flowing. But the productive sector of society can only support so many zombies. Yes, the producers can be bamboozled into supporting more "education" and more "defense" when they are flush. But when times get tough, the zombies and the producers head for a showdown. .

Scott Walker won a battle in Wisconsin. But the zombies' power still grows - funded by cheap credit and government spending. A larger war lies ahead.

*** Poor Mr. Obama. We warned George W. Bush and his henchmen that they would be held accountable for torturing people. It's clearly against the law. It violates treaties and conventions that the US signed. And sooner or later some ambitious, gutsy or naive judge is going issue a warrant for their arrest.

"Stay in Texas," we told the ex-president, or he is likely to fall into a judicial trap, like Chile's former head of state, Pinochet.

Now, Mr. Obama better put his passport away too.

Is Obama committing crimes? He might someday be prosecuted for ordering drone attacks

By Dan Simpson / Pittsburgh Post-Gazette

The coincidence in time of an international court sentencing former Liberian President Charles G. Taylor to 50 years in prison for war crimes and the detailed account in The New York Times of how President Barack Obama decides which foreign and U.S. citizens to kill with drones, without trial, makes me nervous.

Mr. Taylor was not the first major political leader tried for crimes in an international court. Former Yugoslav President Slobodan Milosevic was on trial when he died in 2006. Former Bosnian Serb leaders Radovan Karadjic and Ratko Mladic are currently on trial. Former Chad President Hissene Habre and Sudanese President Omar al-Bashir are candidates for such trials.

Any prosecutor involved in international law is fully aware of one of the major difficulties of bringing off successful war crimes prosecutions -- tying the actions of the accused directly to the crimes committed.

Now, putting aside whether it is legal for Mr. Obama to order the death by drone of al-Qaida and other figures, numbering now around 2,000 in Afghanistan, Pakistan, Somalia and Yemen, plus whoever happens to be nearby when a rocket hits -- associates, friends, wives, children -- he is clearly responsible for doing so. The president is described in the Times piece as personally choosing the targets.

Few have said yet that these killings are war crimes, but one day someone is likely to deem them so and Mr. Obama may even be charged in an international court, probably after he has left office. He clearly is taking direct responsibility because he sees the drone killings as something that only a president can order.

Bill Bonner is the President & Founder of Agora Inc, an international publisher of financial and special interest books and newsletters.

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The views mentioned above are of the author only. Data and charts, if used, in the article have been sourced from available information and have not been authenticated by any statutory authority. The author and Equitymaster do not claim it to be accurate nor accept any responsibility for the same. The views constitute only the opinions and do not constitute any guidelines or recommendation on any course of action to be followed by the reader. Please read the detailed Terms of Use of the web site.

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2 Responses to "Why Chinese workers seem on the verge of rioting"

Hasit Hemani

Jun 18, 2012

Prosecuting President Obama seems to be a little far fetched. When two nations are at war they fight with each other to defeat each other and if one of them is hell bent to finish the opponent, the adversary has every right to finish him too. I am not a die hard supporter of President Obama but I feel that he is acting with lot of restraint. You seems to be a Obama hater. I like your commentary and agree with a lot with your views but not this one.

Like (1)

ANSAR

Jun 11, 2012

ARE YOU KIDDING BILLY BONNER? AN AMERICAN PRESIDENT TO BE TRIED AS WAR CRIMINAL?? THEY ARE THE ZOMBIES AND ABOVE THE LAW, THEY CREATE THE LAW,EXECUTE THE LAW AND HOW THEY CAN PROSECUTE THEMSELVES?

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