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Yuan as Reserve Currency less important than Economic and Political Reform
By Chris Harry
In theory, the addition of the RMB as a top-reserve currency would further diversify the world's exchange reserves. It also would draw China further into the world economy, which might also be a positive force for encouraging China to move toward a stable economic model based on greater transparency and not-so-minor adjustments such as the rule of law. On the other hand, Chinese banks would have to sink and park huge sums of money as deposit insurance, which could further weaken its already fragile debt-to-GDP ratio imbalance.
The fact that China is a maverick economic player that relies on artificial growth which is willing to use any and all means to continue the growth bubble for the sake of social stability and the perpetuation of the party-state, also means that China could potentially become a hugely disruptive and destabilising force in the world economy.
Party interests will always remain paramount and unchecked under the current system, so only when China makes a fundamental political and economic shift, can we expect the Yuan to make a positive contribution to global economic stability. China will also need to follow international rules and regulations in order to make a positive contribution to international economic stability. Again, under the current system in place in China, we cannot expect that it is willing to follow international norms, practices and rules.
The lack of a domestic rule of law clearly indicates China unwillingness to abide by international treaties and conventions. China's approach in the South China Sea shows a total disregard for the sovereignty of its own neighbours and is a breach of the treaties it signed, took part in drafting, and pledged to uphold.
Xi's administration has been emboldened to further apply the no-rules bully approach toward domestic politics and foreign policy. At the same time, the domestic economy has been tanking ever since Xi took power.
The stock market debacle also shows a total lack of transparency and honesty in dealing with internal domestic issues. In the end, the government relied on a command-driven and heavy-handed approach to force a recovery of the stock market. In the process, billions in individual investors' earnings evaporated, along with one-fourth of its crucial monetary reserves to support China's state retirement funds.
Beijing took a huge gamble by creating a false bull market in order to orchestrate state-led insider trading, so as to prop up Zombie SOEs that are bleeding out huge losses daily and are kept alive by state-controlled banks that can barely handle the pressure of giving out free money to keep these SOEs afloat.
When China gets its political and economic house in order, then we might expect the RMB to play a positive role in the world economy.
刁皇：我要真独裁 （他的独裁梦）
Emperor Xi: I want True Dictatorship
Pictured here with a fake yellow umbrella, an homage to the Umbrella Revolution where Hong Kong students bravely demonstrated and protested in their demand for true elections. Emperor Xi's make-believe response is depicted above as, "I want true dictatorship".
The yellow colour of the umbrella also represents a colour that was reserved only for the Emperor in ancient China. In the past, any subject discovered wearing fabric dyed in Imperial yellow could be subject to the death penalty.
This is symbolic of how human rights have been further eroded and weakened just as party Emperor Xi has been concentrating more and more dictatorial powers in his own hands since his rise to power.
草泥马戈壁－不跟你玩儿！
Graffiti-style activism or playful art?
Dedicated to artist Ai Weiwei and writer Bei Feng
Graffiti Stencil Art by BOBBBB
Photo: Chris Harry
Written by Chris Harry
I discovered this small graffiti artwork stencilled on an alleyway wall next to Houhai in Beijing. I thought I'd put this up in honour of Ai Weiwei, Bei Feng and all of the other brave Chinese citizens and activists who openly challenge the Communist Party of China in their demands for artistic freedom, pluralism and the protection of human and legal rights. As I walked around Houhai, which is part of the core of the traditional city of Beijing, I started to notice an increase in the presence of street art. Though it may not be everyone's cup of tea, it does seem to hint at the effects of globalisation, a more defiant youth demographic and perhaps even the eventual rise of pluralism to the mainstream in Chinese society; so whether or not you may think that street artists deface or beautify the urban landscape, I personally feel that the spread of graffiti in Beijing foreshadows a political sea change in a positive, more vibrant cultural direction. For many westerners, graffiti might be viewed as a form of vandalism, a vestige of gang culture or simply something you take for granted or even appreciate. In China, graffiti was almost non-existent until very recently, so it’s growing presence seems to presage a more globally-connected, less parochial and insular socio-political environment taking root, one that begins to admire the ideals of civil disobedience, or at the very least, just plain disobedience for the fun of it. Of course, for many Chinese sprayers it’s probably just seen as hip western culture to be emulated, but I can’t help thinking it has broader ramifications.
The first part of the Chinese title I chose to impose on this piece of Chinese street art refers to a verbal insult directed at the government/Internet censors and often used by the famous Chinese artist and outspoken critic of the government, Ai Weiwei. This expletive verbal phrase originally refers to words in English that begin with the letters F Y M and C. Let’s just say that it’s a pretty graphic phrase about someone's mother which I can't repeat here and used in Chinese as a rather biting insult. But the interesting thing is that, in order to get around the censors, Chinese Internet users changed all of the characters from the original swear words into other characters which still sounded the same, so the result (the same as the title here) is something like "Grass mud horse Gobi", which is a code phrase for the original verbal insult that could get past the censors and still carry the same impact and meaning - the effect of which is not unlike the refrain in Rage Against the Machine’s famous anti-establishment anthem, “F*** you I won’t do what you tell me”.
The second part of the title literally means, "Not going to play with you!” in reference to a campaign started by blog writer, Bei Feng, who promoted an icon of a person sticking their tongue out (in protest). The writer suggested that everyone should place this icon on their Sina microblog sites (China's largest blog/twitter site) as a show of solidarity in support of the universal values of democracy and human rights. He then explained that this campaign would expose those who were working for the interests of the party, as they would be afraid to participate in this campaign and endanger the privileges and personal gains they enjoy as lackeys under the party's control (N.B. not his exact words, my paraphrasing).
One of the great ironies of this is that many forms of direct political expression in the form of graffiti promoting, say, the boycotting of Japanese goods or any other such expressions of anti-Japanese sentiment spray-painted on public property by politically-inspired individuals in recent years almost always get painted over. At the same time, the government spares no expense to produce a seemingly endless stream of television serials depicting the evil-doings of the Japanese in China during the Pacific War and the invasion of China. It’s as though Chinese television was stuck in a permanent time warp of Japanese invasion! Nor does the government miss a single opportunity to criticize the Japanese whenever it arises. Yet, at the same time, the average citizen is not allowed to express his anger or hatred toward Japanese through graffiti, even though such nationalistic sentiments are in large part stoked and painstakingly nurtured by the government’s own perpetual and overtly anti-Japanese propaganda campaign which has been ongoing for the last 62 years.
While I would agree that expressions of hatred toward other peoples or countries spray-painted on public property should be erased, this example shows the hypocrisy of the government. If the government were brutally honest about outlining a policy to this effect, it might read something like this: “Only officially-sanctioned communist hatred of Japanese is allowed! The Communist Party of China has sole rights on any form of political expression in any way, shape or form. All other forms of political expression or thought - explicit or implicit - are a direct and punishable infringement of the intellectual propaganda rights of the People’s Fascist (Oops, I meant Communist!) Republic of China!”
Graffiti appears not to be officially banned, but in the past it always seemed to be painted over immediately. Perhaps the fact that there is more of it means it is harder to keep up with painting it over. It also may be an indication that the party has much bigger concerns, such as extinguishing the flames of protest across the country occurring at an increasing rate, year by year, as well as ensuring a smooth transition of power to the next group of leaders without further widening the open rifts between different factions in the party. Even my wife, who is proud of her country and culture, and who generally steers away from political discourse, last night questioned whether the Communist Party of China could even last for another ten years without at least the emergence of one or more real opposition parties. This is the kind of question even normally apolitical citizens are asking themselves more and more these days. I give it between twenty to thirty years myself.
While no sensible person would want to see China slide into anarchy and chaos, something has to give. Hopefully, it can start from the top and take the shape of positive political reform. In the long term, there really is no other viable alternative.
