On the anniversary of the CCP seizing power

It is 70 years today since one of the dark days of the 20th century, when the Communist Party seized power in China, and renamed the country the People’s Republic of China –  rather better surely would have been Party’s Republic of China?

Of course, there were a fair number of dark 20th century days, mostly associated with one or another of the totalitarian regimes.  But when thinks of the CCP one can combine (a) the number of people in China, (b) the length of time the regime has persisted, and (c) the very great evils the regime has visited on its own people (and others).  I’m not going to argue it was necessarily worse than when the Nazis came to power in Germany: tens of millions then lost their lives, but the regime was gone again in little more than 12 years.  Or than the Communist Party coming to power in Russia, which opened the way to all manner of Communist regimes, including in China, as well as the brutality and depraved indifference (mass starvation) and loss of freedom visited on its own people and others.   On a smaller (but still large) scale the Rape of Nanking and the Japanese invasion of China would be up there.  But as a marker of evil in our world, 20th century (and now 21st) style it is a low that is hard to beat.    Absolutely dreadful as Rwanda in the 90s, Cambodia in the 70s, various other ethnic cleansings, and even the dropping of the atomic bomb. were, those were all shortlived (mercifully) and affected a handful of people by comparison with the PRC and the Party that controls it.  After all, almost 20 per cent of the world’s population lives under this particular longrunning tyranny.

And yet among too many of the “elites” in our society – whether elected or not –  that doesn’t seem to be the take on the PRC at all.     The PRC model might not be the one they’d want for their own children, but the fact that hundreds of millions of others live under such a regime (tens of millions more either starved by the depraved indifference of the regime, or murdered by the forced abortion policies of the regime) bothers them not in the least.    It isn’t just New Zealand, of course, although all indications are that our “elites” have lost of any sort of moral or values-based perspective on the PRC regime to at least as great an extent, probably more so, than so-called leaders in many other Western countries.  After all –  and not the worst of it – they tolerate a Communist Party member and (former?) member of the PRC military intelligence system in our Parliament, not as some rogue independent, but as a (recently-promoted) member of our largest political party.  And worse, so we are told by a well-connected person, they are so lacking in any decency or moral seriousness, they make light of the fact.

spy

Meanwhile, other parties in Parliament make nothing of this, and so become complicit.

Around the world, all manner of well-known, powerful or influential people in recent weeks will have been invited to functions, hosted by PRC embassies, to mark the beginning of the CCP tyranny.  Others –  people in embassies in Beijing –  will no doubt have been invited to this afternoon’s lavish military parade.   You’d suppose that decent, honourable, people would simply say no.  I’m not suggesting our authorities should have no relations with the PRC but an invitation to such an event in New Zealand might have been met by sending along, for as short a period as decently possible, a mid-ranked MFAT official.

Somewhat to their credit, the PRC Embassy in New Zealand maintains quite a useful website, with speeches and articles that typically tell one more than would ever be secured from the New Zealand side of such exchanges.    Last week there was a big reception, hosted by the Ambassador, at Te Papa to mark the Communist takeover.   The “great and the good” (well, I’ll use the label, even if there is no substance to it) seem to have flocked to it.

On September 24th, the Chinese Embassy in New Zealand held a reception to celebrate the 70th anniversary of the founding of the People’s Republic of China at the Museum of New Zealand Te Papa Tongarewa. Over 500 people attended the reception, including the Acting Prime Minister and Foreign Minister Rt. Hon Winston Peters, the Minister for Ethnic Communities Hon Jenny Salesa, the Acting Secretary and Deputy Chief Executive of MFAT Bede Corry, the Deputy Secretary of the Americas and Asia Group of MFAT Ben King, heads of major government departments and members of parliament, well-known members of the wider community in New Zealand, members of Diplomatic Corps, overseas Chinese, representatives from Chinese institutions and international students.

I’m not holding it against resident PRC citizens that they would attend such an event –  it might not have gone well for them or their families had they declined.  But what of all those prominent New Zealanders, from the acting Prime Minister on down?  Not one of them had to attend.  Every one of them made a choice to do so, a choice that said that what the regime stands for – and has stood for over the decades – didn’t matter to them one bit.    Perhaps the PM herself would have gone if she hadn’t been extolling –  emptily, as this occasion demonstrates –  the idea of a values-driven approach to policy and international affairs?  The acting Prime Minister is photographed standing with the Ambassador, unbothered (apparently) that she represents the latter day manifestation of something like the Nazi Party ca 1938.

(There was another such function in Auckland, with only a slightly less ‘distinguished’ attendance list, including such people as the National Party president, the Mayor of Auckland, and Don McKinnon, all known for their deference to the regime in Beijing.)

We are told that a Deputy Secretary of MFAT gave a speech on behalf of the New Zealand government (less bad than the Minister I suppose).    According to the embassy

MFAT’s Deputy Secretary of the Americas and Asia Group Ben King delivered a speech on behalf of the New Zealand Government, extending warm congratulations on the 70th anniversary of the founding of the People’s Republic of China.

How many tens of millions of dead would it have taken for Mr King to have found a conscience and either refused to speak or spoken out (career-limiting of course) to regret the founding of any tyrannical regime and this one in particular?  King’s speech doesn’t appear on the MFAT website, but I have requested a copy. I’m sure it will have been cleverly drafted, but not in the way that will avoid the clear immoral choice successive New Zealand governments have made around the PRC in recent times.  Values are things that have a cost, and when it comes to the PRC it isn’t clear that our politicians or officials have any values at all.  There is no sign any price is worth paying ever.  Some, of course, are particular craven in their pandering, their praise, and their lack of interest in the character of the regime (Simon Bridges as just the most recent egregious example).

Communist Party regimes around the world have proved fairly economically disappointing.   In whatever precise form the regime takes, Communism hasn’t proved incompatible with improving material living standards.   The USSR in 1991 had substantially higher material living standards than Russia had had in 1917.   The same goes for the eastern-bloc countries the Soviet Union controlled for several decades –  wealthier at the end than at the start.   Data on Laos is scarce, but no doubt material living standards are higher than they were several decades ago.  Even Cuba, for all it failures, has GDP per capita higher than when Castro took power.      Quite possible, material living standards even in North Korea (which now eschews the Communist label) are better than in 1950.  But what of it?  Almost every country in the world is richer than it was, and yet useful idiots all round the West rush to use the CCP line about how somehow the regime has “lifted out of poverty” many hundreds of millions.

The best simple test of the economic value-add of Communist regime might be to compare the economic performance of Communist countries with non-Communist one with similar cultural backgrounds, similar geographies etc.   The simplest examples, of course, being East and West Germany, and North and South Korea (the north have once been the more advanced part of the peninsula).    But we could, say, compare Austria with Czechoslovakia (until 1918 they were all part of one polity): in 1937 GDP per capita in two countries was roughly similar  but after 40 years of Communism Czechoslovakia (richer than it was 1937) had about half the per capita GDP of Austria.   Or Cuba and Costa Rica –  with pretty similar levels of GDP per capita in the 1950s, Cuba at about 75 per cent of Spain’s GDP per capita, Cuba now lags badly behind.  Or contrast Laos with neighbouring Thailand.  Vietnam with Malaysia.

And, of course, the PRC with Taiwan, Japan, Singapore, South Korea…..well, even with today’s Russia.    Sure over 70 years the material lot of PRC citizens is generally better than it was, but the level of income now lags far behind those other countries.    China once led the world economically, but now –  even after decades of catch-up growth (and some doubts about their data), their average GDP per capita (in PPP terms) is still only just reaching the world average.  Almost certainly, the Communist Party has materially held back the economic development of China and thus the income prospects of the the citizens of the PRC.

Perhaps it would be a little different if Communist rule –  anywhere, let alone China –  had been some staggering economic success.  Then an honest representative of the CCP (is there such a thing?) might reasonably ask whether materially higher living standards than were on offer in comparable, but freer, societies was not a trade-off worth making.  That is, implicitly at least, the situation in Singapore –  not free (although not PRC unfree either) but really rather prosperous, almost up at the global productivity frontiers.  But this is the PRC we are talking about.  It might buy a lot of stuff, including from New Zealand, but it has crippled the economic prospects of its own people, and taken their freedoms in the process.

Yet this is the actual regime ministers, head of departments, and other “leading” citizens have been celebrating:

  •  one where citizens don’t have the vote,
  •  one where citizens have little or no effective freedom of expression,
  •  one where the surveillance state becomes more intrusive by the year,
  •  one that holds Canadian citizens hostage, not for any real crimes, but as leverage against the Canadian government,
  •  one that engages in forced organ transplants,
  •  one that has unilaterally seized and militarised much of the South China Sea, in defiance of international agreements to which the PRC was a party,
  •  one that holds a million or more Uighur people in concentration camps,
  •  one that remains openly determined to absorb free and democratic Taiwan into the PRC, if necessary by invading it,
  •  one that increasingly deprives citizens of any freedom of religion, which might be seen as a threat to the pre-eminence of the Party

and so we would go on, barely mentioning Tibet, state-sponsored intellectual property theft, the absence of the rule of law, or the activities abroad of the likes of Jian Yang, Yikun Zhang, and their counterparts in numerous countries around the world. And it is not as if the regime is getting less tyrannical, more willing to limit the Party’s pre-eminence.

But never mind, there are drinks and canapes to consume, deals to do, donations to secure…….against which the sort of traditional values of New Zealand citizens (including many ethnic Chinese who came here to escape the regime) are set at naught and dishonoured every day, but this day perhaps more than most.

How will history judge these people – our politicians, our prominent business leaders, our journalists who take trips to China and then write PRC-favourable stories, the government-funded propagandists at the China Council, and so on?  Not well, one hopes.  No doubt, they all manage to tell themselves that somehow they have the ‘best interests of New Zealand” at heart and perhaps they even believe it, but they are deluding themselves, and dishonouring all those who value freedom, whether here, in China, or anywhere else around the world.

They shame us:

Jacinda Ardern

Simon Bridges

Winston Peters

James Shaw

Todd McClay

Gerry Brownlee

David Parker

Don McKinnon

Stephen Jacobi

Peter Goodfellow

and so on, including the galaxy of MFAT officials, other senior officials, university vice-chancellors, private business people, much of the mainstream media.

But if it is 70 years today since the CCP tyranny was established, it is also 30 years next month since the Berlin Wall fell and way was opened decisively for the end of Communism in Europe.      Evil regimes don’t last forever.  For the sake of the world, and for the 1.4 billion people in China, we should hope this one ends soon, and give no aid and succour –  or simple encouragement by turning up to share celebratory drinks – to the evil regime and its leaders while they last.

Not doing very well at all

I heard the Prime Minister on Radio New Zealand this morning running (again) the same spin that seems to go with the job, that somehow if New Zealand’s economic performance is perhaps not all we might hope for, it is at least as good –  better is the typical claim –  than other advanced countries.     Almost always such claims seem to rest exclusively on the rapid and policy-driven population growth New Zealand governments have chosen –  which boost the headline numbers, regardless of whether they leave the average New Zealander better off (in New Zealand’s case, experience increasingly suggests not).

But any meaningful comparison of economic growth across countries needs to adjust for differences in population growth rates.  Per capita statistics aren’t a radical innovation.  They have long existed for exactly that sort of purpose.

It used to be quite hard to get a reasonable sample of countries’ quarterly real GDP numbers.  But the OECD now routinely publishes such numbers.   A few countries seem to be a bit slow at providing the numbers the OECD uses, but when I checked there were 32 OECD countries with quarterly real GDP numbers up to and including the June quarter of 2019 (our most recent data).

This chart shows the latest annual growth rates for those countries, using national agency data for Australia and New Zealand and the OECD data for the rest.  There are two measures: the annual percentage change is the increase from the June quarter 2018 to the June quarter 2019, and the annual average percentage change is the increase from the year to June 2018 to the year to June 2019.   The latter series is a bit less noisy, but also a bit less timely.  As it happens, this time New Zealand’s rank is exactly the same on both measures.

Growth in real pc GDP

There are countries that have done worse than New Zealand: if one broke the group into thirds we’d be close to the bottom third of countries.  But that shouldn’t be much consolation, since we have much lower starting levels of GDP per capita (and GDP per hour worked) than most of the countries to the left of the chart.  The vision was (once) supposed to be that we might once again catch up with them.

Instead, at best we’ve been roughly matching the countries that are much richer and more productive than New Zealand, while the countries that are increasingly similar to us in productive levels rack up really strong growth rates (see seven of the eight countries to the right of the chart –  and the Irish numbers are generally best discounted because of the corporate tax distortions).       Here are the respective productivity levels

east europe GDP phw

Over the last year, these countries averaged growth in real GDP per capita of just over 3.5 per cent per annum.  New Zealand?   About 0.8 per cent.     And yes growth rates are slowing around the world, but over the last three years, those eastern European successful economies averaged 4.3 per cent per capita growth, while New Zealand averaged 1 per cent (in the bottom third of OECD countries).  That is the sort of catch-up that can be achieved.

Are there potential caveats to all this?  In respect of comparisons with the older advanced economies (those now mostly materially richer and more productive than we are), yes.   GDP numbers are revised and with the added imponderable of the new results of the flawed census there will be changes to data over the next few months (SNZ is releasing some new labour market estimates later this morning). But nothing is likely to change the pattern I illustrated the other day

pc GDP growth

Growth in real per capita GDP – never good at the best of times this decade (compared to previous cycles) – has been tailing off, and that conclusion is most unlikely to be changed by any revisions.

Even more certainly, no conceivable revisions are going to change those huge gaps between the growth rates (per capita) of the rapidly emerging eastern European countries –  every single one of which was until now poorer and less productive than New Zealand for at least the last 160 years –  and the pitifully poor growth rates –  per capita GDP or productivity –  managed by New Zealand.  It is a bi-partisan failure, but Labour, Greens, and New Zealand First are now in government.  It is their responsibility, but they seem clueless, careless (ie many just don’t seem to care much if at all), and determined to do whatever possible to try to pretend there isn’t a problem, a failure, and that all is really pretty rosy in the economic garden, and if there are any issues they are all the fault of others.

The problem, the failure, starts at the top, with a Prime Minister and Minister of Finance who continue to simply repeat the spin, which bears little or no relation to the dismal reality of New Zealand’s multi-decade productivity underperformance.  But they are aided and abetted by the Governor of the Reserve Bank, who simply makes things up (he was yesterday out claiming that “The New Zealand economy has proved resilient through a period of weakening global growth and heightened global uncertainty”) and the situation won’t be helped by a Secretary to the Treasury who knows almost nothing about New Zealand or about managing a national economy.  Our economic and political institutions, and their key individuals, are failing us.  New Zealanders –  not those key decisionmakers and advisers –  pay the price of failure.