CHINA’S THREE NO’S

Chinese are fond of compressing a social, political, or economic issue into a set of bullet points designated by the number of them. One of the most famous was “The Three Rounds,” encapsulating Chinese material dreams as they began emerging from the horror of Mao Tse Tung.

You were wealthy in post-Mao China if you possessed a watch, a bicycle, and a sewing machine — the three “rounds.”

That was a quarter-century ago. Comparing the dream of having The Three Rounds to China’s economy today gives you an idea of how amazingly far China has traveled in that period. China has been speeding along a highway of wealth creation that has few parallels in history – yet now it looks like it is going to drive right off a cliff.

What is transforming the Chinese economy from a dream to a nightmare are The Three No’s: No Water, No Wives, and No Banks.

Northern China is becoming a Dust Bowl. Southern China is green, with rivers all over the place. Northern China is brown and the rivers are drying up. Xinhua, the China News Agency, revealed in a story datelined April 23 that 600 Chinese cities are suffering water shortages. Most of these are in the north, but big cities in the south, such as Shanghai, Nanjing, Suzhou and Wuxi, are also included.

China’s population and economy have simply outstripped water supply, and what water remains is increasingly polluted. Urban water prices are skyrocketing, gigantic water reclamation and river diversion projects costing countless billions are planned.

Professor Liu Yonggong of China Agricultural University in Beijing reports that the water table beneath much of the North China Plain, a region that produces some 40 percent of China’s grain, has been falling an average of 1.5 meters (roughly 5 feet) per year over the past decade. A joint Sino-Japanese analysis of China’s agricultural prospects reports that water tables are falling almost everywhere in China that the land is flat.

Growing an economy, growing enough food to eat, is hard to do when you’re running out of water. It’s even harder if men are running out of women to marry.

China’s “one child per family” law has had disastrous demographic consequences, grossly compounded by the Chinese pathology for wanting only sons and resultant mass female infanticide. There are already scores of millions of young men in China who will never get married, with tens of millions more added every year.

Marriage civilizes men, causing them to devote their energies to productive work and raising a family. Vast swarms of unmarried males can be lethally dangerous to social stability and economic growth. There are few things worse than no wives — or no water. One of them would be… no money.

One of the world’s worst kept financial secrets is that Chinese banks are broke, because the government forces them to prop up SOEs (state-owned-enterprises) with loans that will never be paid back. The entire global financial community is in desperate denial over this – which was made more difficult when China’s Regulatory Banking Commission (CRBC) briefly suspended all bank lending last month.

The CRBC withdrew the suspension three days later then denied it was ever issued. The very next day (April 28), the CRBC sent out a report that Chinese banks were enjoying “surging profits” – with first quarter 2004 profits “soaring” 54 percent over a year earlier!

This, like most all economic stats produced by the Chicoms, is a lie – a classic Chinese lie, which is a lie told straight to your face when everyone from issuer to recipients knows it isn’t true. In this case, the profit stats are totally phony because they don’t include non-performing loans.

How much longer can the Chicom Mandarins continue to live in Oz and demand the world pay no attention to the bankrupt banks behind the curtain?

The Chinese look upon the concept of reality as a group hallucination. Facts, truth, reality, are whatever you can get everyone to believe them to be. Sooner or later, as Abraham Lincoln explained in his famous quote of whom one can fool, this stops working.

When it does, The Three No’s are going to precipitate at the very least a major economic contraction of the Chinese economy. Then the real problems start…

The most likely reaction of the Chicom government will be to create hysterias of jingoistic nationalism among the Chinese people. We got a glimpse of how easy this would be to do last March, when a group of Chinese landed on the tiny uninhabited island of Uotsuri Shima in the Sea of Japan, claiming it and the entire Senkaku Islands chain belonged not to Japan but to China. The stunt generated a frenzy among the Chinese and seriously ticked off Japan.

Such teapot-tempests are but a prelude to major maelstroms the Chicoms could easy generate in the South China Sea (they claim the whole thing as their territorial waters), Taiwan, or Far Eastern Russia (the region that wraps around and landlocks Chinese Manchuria, which Czar Alexander I stole from China in 1860).

In other words, the consequences of China’s Three No’s will most likely be war. Not a small little war, but a big war. One fifth of humanity may be about to see its economic hopes and dreams vanish, and their Communist rulers redirect the resultant anger and frustration away from them and towards foreign devils.

Thus it is quite unwise for us to become fixated on Iraq, or think that the threat of Moslem Terrorism is the only thing in the world to worry about. We must begin preparing now for the impending danger that is China.