Some years ago, I lived for a time in Tianjin in the People’s Republic of China. Once, on a trip to Shanghai, my then boyfriend and I boarded the wrong bus and got lost. My boyfriend, an American with shoulder-length, curly blonde hair who spoke fluent Mandarin, stopped a passer-by and asked her for directions. Horror-struck, she stared at him for a moment before running away at some speed. Such was the currency of Westerners in China at that time.
How things change. Recently, I was walking by the River Kelvin in Glasgow. Ahead of me were two young men of the parish. Everything about their dress and manner indicated that they fitted into the local socio-economic category of ‘ned’. Bytimes, a young Chinese student came jogging past. ‘Huh, ni hao,’ the neds shouted after him, clearly in the grip of a terrible delusion as to their comic genius. ‘NI HAO!’
That Glasgow neds know the Mandarin for ‘hiya’ tells us more about the interconnectedness of our dissolute old continent and the Middle Kingdom than a million ‘made in China’ labels – or a blizzard of press emails from investment managers delving into the reasons why the Chinese economy ain’t doing so great.
Of course, China has been an important investment theme for years and much commented on. But never have I seen that great nation of 1.3 billion souls discussed as much as now. China is under scrutiny because its economy and stock market are doing what they ain’t supposed to. Slowing, crashing, plunging 7% in the first day of trading after the New Year.
In fact, China has been a worry for a while. It’s stopped being a kind of Bacchus’s wine goblet of juicy investment returns, the great white hope of investors, which, coupled with a few other zingy emerging markets, was going to save us decadent Europeans from our self-inflicted, debt-laden stagnation and ensure that perennial rock ’n’ rock goal of a comfortable retirement. As a Jane Austen heroine might say, ‘How provoking!’
The tone of much of the recent commentary has been soothing: don’t panic. A hard landing can be avoided. ‘Policy makers’, meaning the Chinese Communist Party, can turn this around.
Or there’s the stuff-’em tack. Maybe the Chinese economy is going down the toilet, but it won’t affect us that much, so never mind. Put on a happy face. The US is doing OK.
Every economy has its and downs, every market its bulls and bears. But as China assumes the presidency of the G20, isn’t it time to delve a bit deeper into what’s happening in the most populous country?
CONSPIRACY OF SILENCE
Perhaps a hard landing in China is just what is needed. Not because it would create a buying opportunity or constitute a necessary correction, but because it might shake things up a bit – shake us, China’s foreign investors up a bit, and end what is starting to feel a bit like a conspiracy of silence on China’s human rights record.
China has made progress in all kinds of areas, from tackling pollution to fighting corruption to extending social security benefits, and should be commended for that. However, it has not made progress in the area of freedom of speech.
On December 8 last year, the Nobel Laureate Liu Xiaobo marked his seventh year in prison for ‘inciting subversion of state power’, otherwise known as telling it like it is. Until such injustices are overturned, there can be no real growth in China. As Liu Xiaobo has said: “To kill free speech is to insult human rights, to stifle human nature and to suppress truth.” Cutting interest rates or allowing the renminbi to depreciate won’t fix that – and we forget this at our peril.
The woman who ran away from my boyfriend and me in Shanghai was scared. We have no such excuse.
Fiona Rintoul is editorial director at Funds Europe
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