Thursday, April 10, 2008

Dollar Alert

I posted on the decline of the dollar abroad a little while back and wanted to follow up on that. Today the dollar passed a historic mark as it fell under 7 RMB to the dollar for the very first time. One dollar is now worth approximately 6.996 RMB and the Yuan is expected to continue to gain on the dollar.

I recall seeing in the papers a month or two ago the White House unveiling plans for the fiscal year 2009 budget. The budget called for 3.1 trillion dollars of spending but did not anticipate taking in that much money in revenue (though if you are I were to forcibly collect "revenue" from our neighbors, it would almost certainly be called by a different name...). This staggering amount does not include the emergency spending bills that will continue to be passed to fund the ongoing war in Iraq. I remember a story of President Kennedy who set his budget at $99 billion because he refused to be the first president to pass the $100 billion mark. In just over four decades, the budget has increased thirtyfold.

What does this have to do with my post on the dollar? Simple, there are only two ways for a government to spend more money than it has at a given time, inflation and debt. Currently, China has bought up a large amount of our debt, which gives them some influence over our economy and politics (if they threaten to stop buying debt, we would have to find someone else willing to do so to sustain our current spending levels) and also means my generation and the next will be paying this off in the future with increased taxes. Inflation, a hidden tax, is the government printing extra dollar bills to make up for the shortfall in the budget. These extra dollars decrease the value of existing dollars and prices rise (inflation) at home and the dollar gets weaker abroad.

The good news, I'm up to nearly $572 a month. Unfortunately, prices here are only in RMB and China is also having troubles of its own with inflation...

Censors Staying Busy

Janet and I were watching TV earlier tonight, which we rarely do, and were reminded that free speech is still a foreign concept here. We pick up two English language channels, both broadcasting from Hong Kong, where there are fewer restrictions on what may be said.

Watching the 7:30 news (who knows why 7:30 here?), we caught a segment of the Olympic torch being carried through the streets of San Francisco. One commenter mentioned the Olympics as a celebration of athleticism and that he was excited to see the torch. A second spectator said, "human rights" and our TV immediately cut to commercial. About ten seconds later, the commercial abruptly ended and we were back to watching the torch make its way through San Francisco.

We were both still laughing when just a moment later the news anchor introduced the next story as being about the Dalai Lama and we went to commercial again until we had been safely prevented from seeing the story. Maybe there was a reason I don't often watch TV...

Wednesday, April 09, 2008

The Flame Fiasco

The 2008 Beijing Olympics are supposed to be a coming out party for China and a great source of nationalism. With just a few months left until the games, things seem to be quickly falling apart. What was supposed to proudly launch China into the worldwide spotlight is now becoming a public relations nightmare.

In response to recent crackdowns in Tibet, the Olympic torch was met in London and Paris by large protests. Today, the torch is set to run through San Francisco and will certainly be met with another wave of protestors. Fearing the worst, the city has tried to keep the exact route a secret and made provisions to change mid-route if needed. What should be a celebration of athleticism and unity is now being shrouded in secrecy and marked by protest along with cheers.

Many years ago, I remember seeing the Olympic torch pass by on its way to Atlanta for the 1996 Olympic games. I don't recall to many details other than seeing a guy run by with torch in hand, but I don't remember there being a large security detail or anything but enthusiastic spectators.

In fairness, there were many cheering people greeting the torch in both London and Paris and there seemed to be a number of Chinese flags waving in the background from the pictures I've seen. However, the fact that others in the crowd are willing to be arrested to try and steal or extinguish the torch seems to highlight the fact that not all is well.

Our local source of news, the People's Daily, mentioned minor disruptions along the torch routes and blamed it on very " a small number of "Tibet independence" secessionists and a handful of so-called human rights-minded NGO activists (harsh words there)."

Tonight, for the first time since the Tibetan unrest, a student briefly mentioned the incidents. I've been thankful not to hear about it from them actually as I find the local propaganda somewhat infuriating. She mentioned that many people had been killed in Tibet and I played ignorant, stating simply, "that's terrible, why would people do something like that?" She asked me if I was familiar with the "Dalai Clique" and I said, "yes." "They want to separate from China," she explained. Again, a simple "why?" was my response. "I don't know," she said, confused. I then mentioned something about America wanting to separate from Great Britain many years ago and how people on both sides died during the struggle. After that, I figured it was time to change subjects.

Being here is tough in many ways, but one of the things that bothers me most is the blatant propaganda spewed out by the news and the fact that people seem to buy it. If you ask, people will tell you that they don't always believe the news they hear. In reality, it seems they accept a good bit of it. I always try to encourage my students to question the news and authority, a strange concept, no doubt. The newspapers here only show certain pictures and tell certain stories, but at the same time, the news at home often adds it own twists as well.

Long before the recent Tibetan unrest, Janet and I discussed how major news outlets at home (the Times, CNN, etc.) would often spin stories to make China look bad. Following the coverage of the riots in Tibet, it was discovered that some sources cropped pictures they published in order to perhaps generate more sympathy for the Tibetans, which seemed to be the slant of the stories. A Chinese website was created to protest the "western media bias" and seemed to have some merit to its points. The website seems to be currently blocked here, but you may be able to view it at - (if so, avoid the infuriating message board filled with angry Chinese and a few sycophant westerners). Here, the opposite occurs and some pictures and videos (You Tube) are blocked so that only stories that portray rioters in violent and negative terms are run.

To me, neither side seems to be completely right. I expect things may get a bit uglier before they get better. Come August, all eyes will be on Beijing as athletes and reporters descend on the city by the thousands. Those who want to get a message out, will certainly try to seize the opportunity. I personally think some of the talk that is floating around of boycotting the opening ceremony is dangerous and wrong. As I mentioned, the Olympics are a huge source of national pride and the government has done a good job of promoting this feeling and personalizing any questions aimed its way. Any slight will almost certainly be taken as a huge insult by the rank and file Chinese (the media and government will be sure to fuel the fire) and would be a diplomatic mistake. At the same time, the Chinese need to start trying to answer the "why" question and consider why people are protesting. It is erroneous and simple-minded to just blame "separatists" and not really consider why it is they want to separate if conditions are so good...

Let's hope that the Olympics can help to bring us all a bit closer together while also forcing participant countries to take a good, long look at the rights of their own citizens.