China: a Trade War is "like a drinking contest at a fraternity"

Excerpt:

China is beginning to realize that trade war isn’t really war. It’s more like a drinking contest at a fraternity: the game is less inflicting harm on your opponent than inflicting it on yourself, turn by turn. In trade wars, nations impose burdensome import tariffs on themselves in the hope that they’ll be able to stomach the pain longer than their competitor.

Why play such a game? Because a carefully chosen act of self-harm can be an investment toward a worthy goal. For example, President Reagan’s arms race against the Soviet Union in the 1980s was in some sense a costly self-imposed tax. But it turned out the U.S. could bear the burden better than the Soviets could—Uncle Sam eventually out-drank the Russian bear and won the Cold War.

The U.S. will win the trade war with China in the same way. The PBOC’s statements show that the Chinese understand they are too vulnerable to take very many more drinks. The only question is what they will be willing to offer Mr. Trump to get him to take yes for an answer. No wonder Beijing has ordered its state-influenced media to stop demonizing Mr. Trump—officials are desperate to minimize the pain when President Xi Jinping has to cut the inevitable deal.

The drinking-contest metaphor takes us only so far. The wonderful thing about reciprocal trade is that it is a positive-sum game in which all contestants are made better off. If the conflict forces China to accept more foreign investors and goods, comply with World Trade Organization rules, and respect foreign intellectual property, it may feel it has lost but will in fact be better off. With this openness, both economic and political, China could spur a decades long second wave of growth that would bring hundreds of millions still living in rural poverty into glittering new cities.It took Nixon to go to China and show it the way to the 20th century. Now, through the unlikely method of trade war, Donald Trump is ushering China into the 21st century.

Comment: Images: Karen Allen as Marion Ravenwood in Raiders of the Lost Ark - in that character's own drinking contest!

Understanding "the market": a "cacophony of exogenous events"

How long the stock selling stampede may last

 Excerpt:

On Thursday, Saut blamed a "cacophony of exogenous events" for derailing the traditional year-end rally and leading to the worst start to a new year on Wall Street since 2008.

It all began with "the $1.2 trillion options and futures expiration" on quadruple-witching Friday on Dec. 18, Saut said. "That upset the rhythm of the rally. But we gathered our strength and came back the next week.

And then you've been hit by this potential war between Saudi Arabia and Iran, the Chinese slowdown, and the 'H-bomb' of North Korea." "The markets look like they're in a free fall right here," he said. "It feels like we're in one of those selling stampedes, and they typically last 17 to 25 sessions. And this would be only session six. I would be more cautious here."

Comments:

• Who could blame the Saudis for having nuke ambitions?! Imagine the Middle - East with Muslims with Nukes!!! 
• On the China slowdown: The market is soft because of fears the Chinese economy has slipped or will slip into recession. My take is that it will! WSJ has more on this here. Image above is capture from this article.
• On DPRK and the H-Bomb: doubt it but  Kim Jong-un is the bad boy brat of the region
• Updated: 3rd photo from this article. See also

Perspective:

More: 

The stock selloff is happening in a parallel universe

Do we all live in China now? Investors could be excused for thinking that, given that arcane indicators such as a Chinese manufacturing index and the value of the Chinese yuan are inducing nauseating drops in the U.S. stock market. And the surprise halt to trading in the latest Chinese session, a mere 30 minutes after markets opened, has thrown U.S. and European markets into a tailspin.

Last we checked, however, the Dow Jones and S&P 500 indexes were composed of U.S. companies that might do some business in China, but still earn the vast majority of their revenue elsewhere. And elsewhere, economic fundamentals are looking way better than the gloomy start to this year’s trading would suggest. The U.S. economy will probably grow around 2.5% this year, which isn’t great, but is a sustainable pace that seems nowhere near overheating. The economy can progress at that measured pace for a long time before the next downturn occurs.

Another perspective chart:

China's rubber alien brings to memory the Cardiff Giant

Chinese farmer jailed for making a rubber alien

Excerpt:

Shortly after he proudly posted photographs of his alien on the internet, he was arrested by the police for five days for "fabrications" that "disturbed the public order". Mr Li was forced to admit that he had indeed sought to use his model, held together with chicken wire and glue, to mislead his fellow Chinese about the existence of celestial creatures.

Comment: The Cardiff Giant (image below). The Chinese government has no sense of humor!

Siwei is Caterpillar's Autonomy

Caterpillar writes off most of China deal after fraud
Excerpt:

Caterpillar Inc uncovered "deliberate, multi-year, coordinated accounting misconduct" at a subsidiary of a Chinese company it acquired last summer, leading it to write off most of the value of the deal and wipe out half a quarter's profits.

Caterpillar, the world's largest maker of tractors and excavators, said on Friday it would take a noncash goodwill impairment charge of $580 million, or 87 cents per share, in the fourth quarter of 2012.

Analysts had expected the company to earn $1.70 per share in the fourth quarter, according to Thomson Reuters.

Caterpillar closed the purchase of ERA Mining Machinery Ltd and its subsidiary Siwei last June, paying HK$5.06 billion, or $653.4 million at current exchange rates.

A member of the Caterpillar board during the course of the Siwei deal told Reuters the board was distracted at the time by a larger transaction and paid relatively little attention to the Siwei acquisition.

"It came as a complete surprise to us," the former board member said of the fraud, speaking on condition of anonymity because of the sensitivity of the situation. "It was presented to us as a pretty straightforward transaction. It's a shame. It should have been investigated further."

In a statement, Caterpillar said an ongoing investigation launched after the deal closed "determined several Siwei senior managers engaged in deliberate misconduct beginning several years prior to Caterpillar's acquisition of Siwei."

Comment: HP's Autonomy mess.

The Chinese understand the vacuousness of Barbie

Home Depot Learns Chinese Prefer 'Do-It-for-Me'

 Excerpt:

Mattel Inc. shut its China-based Barbie flagship store in March of last year after it learned that Chinese parents would rather have their children read books than take a doll for a spin in her plastic Corvette.

Comment: Good article (may be behind paywall) on subject of "knowing your market". Mentions McDonalds offering "bubble tea" (tea with tapioca balls in the bottom). Article calls it "localization strategy". In case of Home Depot, labor is so cheap in China that consumers don't want to "do it themselves"

Say What!? Chinese "saving frenzy" responsible for the Great Recession

China - Not Wall Street - Caused 2008 Crisis: Study

Excerpt:

Thought the global financial crisis in 2008 was caused by subprime bonds, collateralized debt obligations (CDOs) and other Wall Street engineering? Think again.

According to a new study, China, not Wall Street bankers, was responsible for the global crisis and the ensuing recession.

The study from the Erasmus Research Institute of Management says the saving frenzy of the Chinese created the cheap money, which fueled the U.S. housing bubble and its collapse.

Heleen Mees, writer of the study and assistant economics professor at Tilburg University in the Netherlands, says that exotic mortgage products could hardly have been the cause of the U.S. housing market bubble and the its ultimate collapse.

According to the study, mortgages with those special features -- like mortgage-backed securities and CDOs -- accounted for less than five percent of the total number of new mortgages from 2000 to 2006.

Comment: Blaming Chinese "saving frenzy" strikes me as way off! Image above from Wiki "Yellow Peril" article.  Compare also Stereotypes of East Asians in the United States.

A graph of this would be interesting

Beer Drinking and What It Says About China’s Economy

Excerpt:

The average Chinese adult drank about a third of a bottle of beer in 1961, less than the average resident of Iran. By 1991, consumption topped a bottle a year, but still lagged behind 117 other nations, according to the World Health Organization.

By 2007, the Chinese were drinking almost a six pack a year. While that’s still considerably less per capita than in beer gardens like the Czech Republic (where the average adult drinks about 24 beers a year) it’s enough to make China by far the world’s largest market for beer.

That story can be repeated for any number of consumer goods, of course. But what’s interesting about beer is that the trend is not likely to last. A paper by two economists at the University of Leuven, in beer-loving Belgium, finds that people drink more beer as their incomes rise, until they make about $22,000 a year.

Then they start drinking less beer.

Comment: Interesting. By the way ... not an investment for everyone but beer stocks and liquor stocks always seem to do well. Eg TAP and DEO

Darlie Toothpaste

Back to the Days of Blackface

Excerpt:

Of all the unfamiliar products in a Chinese supermarket, one of the most shocking to American visitors is a toothpaste featuring the logo of a minstrel singer in a top hat, flashing a white smile. Even more shocking: the paste, known as Darlie in English and as Black People Toothpaste in Chinese, is a product of the Hawley & Hazel Group, a Hong Kong–based company established in 1933, which is now owned in part by the Colgate-Palmolive Co.

Darlie used to be called Darkie. According to the book America Brushes Up: The Uses and Marketing of Toothpaste and Toothbrushes in the Twentieth Century, the CEO of Hawley & Hazel saw blackface performer Al Jolson in the U.S. and thought, “Jolson’s wide smile and bright teeth would make an excellent toothpaste logo.” He was right: the firm now claims to be one of the market leaders of toothpaste products in China, Hong Kong, Taiwan, and Southeast Asia.

Comment: Weird!

What does it say when we have to ask China to support us?

Obama Likely Spurned as China Stands by North Korea Ally

Excerpt:

resident Barack Obama’s call for China to put more pressure on North Korea to stop military attacks on South Korea may go unheeded in Beijing, where officials refuse to pin any blame on their ally, analysts say.

Obama, Japanese Prime Minister Naoto Kan and South Korean President Lee Myung Bak called for China to use its influence to control North Korea’s behavior, following yesterday’s deadly artillery salvo.

Comment: China has our money and now seemingly has our will!

The dollar? Our Problem!

China warns US against making yuan dispute a 'scapegoat' for a flagging economy

Excerpt:

Yao Jian, a Chinese Ministry of Commerce spokesman, rejected US complaints as unfair. “It's totally wrong to blame the yuan for the Sino-U.S. trade imbalance,” he said, “The Chinese yuan shouldn't be a scapegoat for the U.S.' domestic economic problems.”

The artificially weak Chinese currency, which some analysts say is trading up to 25pc below its true market rate, has become a growing political issue in the US where it is blamed for giving Chinese exporters and unfair advantage at the cost of millions of US jobs.

However China has repeatedly said it cannot afford the costs of substantially re-valuing the yuan at a time when global demand for its exports remains weak and the recovery from the global recession remains fragile.

“Job losses would hurt the Chinese economy and domestic consumption. A relatively large yuan appreciation would definitely hurt Chinese exports, so a stable yuan exchange rate is needed for domestic consumption and the stability of the world economy," Mr Yao added.

The dollar? Someone else's problem

Excerpt:

Amid the dollar rout of the 1970s, Treasury Secretary John Connally famously told a group of fretting Europeans that the greenback "is our currency, but your problem." If you read between the lines, that's also more or less what Federal Reserve Chairman Ben Bernanke said yesterday as he made the case for further Fed monetary easing.

Mr. Bernanke broke no new ground in explaining why he believes inflation at less than 2% is too low and why the Fed must encourage greater inflation to reduce the 9.6% jobless rate. "Inflation is running at rates that are too low [his emphasis] relative to the levels that the [Fed Open Market] Committee judges to be most consistent with the Federal Reserve's dual mandate in the longer run," he said. That dual mandate is to maintain stable prices and low unemployment, and Mr. Bernanke's message couldn't be clearer that cutting the U.S. jobless rate is now Job One at the Fed.

We were more struck by what Mr. Bernanke didn't say. In a nearly 4,000-word speech about inflation, the Fed chief never once mentioned the value of the dollar. He never mentioned exchange rates, despite the turmoil in world currency markets as the dollar has fallen in anticipation of further Fed easing. He never mentioned rising commodity prices or soaring gold, and his only reference to the recent increase in the price of oil was by way of dismissing it in the context of overall low inflation.

The chairman's message is that the Fed is focused entirely on the domestic U.S. economy and will print as many dollars as it takes to reflate it. The rest of the world is on its own and can adjust its policies as various countries see fit. If other currencies soar in relation to the dollar, that's someone else's problem.

Comment: Yup! Fix our own economy by cutting government expenses and balancing the budget. Make the $ worth something!

A lesson from Deuteronomy 15:6

you shall lend to many nations, but you shall not borrow; you shall reign over many nations, but they shall not reign over you (Deuteronomy 15:6)

Chinese foreign-exchange reserves hit record US$ 2.5 trillion

Excerpt:

China’s foreign-exchange reserves, the world’s largest, have reached a record US$ 2.5 trillion, adding fuel to complaints that the nation’s currency policy is undermining the global economic recovery because of Beijing’s refusal to revalue the yuan, deemed undervalued by many.

China’s currency holdings rose by about US$ 48 billion in the third quarter, according to the median estimate in a Bloomberg News survey. In a few days, the People's Bank of China is expected to release the actual figure.

Comment: Chinese language studies, anyone?

Life as a cog

A Night at the Electronics Factory

Excerpts:

His task is to help complete 1,600 hard drives — his workshop’s daily quota — and to make sure every one is perfect. Seated in the middle of the assembly line in his black Foxconn sports shirt, cotton slacks and company-mandated white plastic slippers, he waits for the conveyor belt to deliver a partly assembled rectangular hard drive to his station. He places two plastic chips inside the drive’s casing, inserts a device that redirects light in the drive and then fastens four screws with an electric screwdriver before sending the drive down the line. He has exactly one minute to complete the multistep task.

...

Professor Luo says that the pressure can be intense and that workers are treated like machines at some factories. This is the marvel of China’s low-cost manufacturing boom. Factories are known to replace workers with machines that automate a process, but here in China factories often reverse the trend and replace costly machines with workers like Mr. Yuan — slower but sometimes preferable because there is no large upfront capital investment.

...

Mr. Yuan earns about 75 cents an hour. With overtime premiums, he takes home $235 a month. His rent is about $44 a month, plus $7 for water and electricity, and there are quite a few other expenses, but he said he manages to save about 40 percent.

Comment: Next time you think complain about your job think of Mr Yuan!

Health care deform: "bending the curve the wrong way"

China questions costs of U.S. healthcare reform

Excerpt:

... the Chinese are kind of curious about how President Barack Obama’s healthcare reform plans would impact America’s huge fiscal deficit. Government officials are using his Asian trip as an opportunity to ask the White House questions. Detailed questions.

Boilerplate assurances that America won’t default on its debt or inflate the shortfall away are apparently not cutting it. Nor should they, when one owns nearly $2 trillion in assets denominated in the currency of a country about to double its national debt over the next decade.

Nothing happening in Washington today should give Beijing any comfort or confidence about what may happen tomorrow. Healthcare reform was originally promoted as a way to “bend the curve” on escalating entitlement costs, the major part of which is financing Medicare and Medicaid. That is looking more and more like an overpromised deliverable.

For instance, a new study from the U.S. government’s Centers for Medicare and Medicaid Services finds that the healthcare reform bill recently passed in the House of Representatives would increase healthcare spending to 21.3 percent of GDP by 2019 compared with 20.8 percent under current law. That’s bending the curve the wrong way. The study also questions the “long-term viability” of the $500 billion in Medicare cuts meant to help pay for expanded insurance coverage.

Comment: Gotta love it when the communists question the wisdom of our health care reform. Their worry? They have upwards of a $ Trillion in US Treasuries. And they are watching the buck decline!

Maureen Dowd: Obama "cav[ed] to Chinese dictators"

Fie, Fatal Flaw!

Excerpts:

In an interview with Alison Smale in The Times last week, Vaclav Havel sipped Champagne in the middle of the afternoon and pricked Barack Obama’s conscience.

Havel, the 73-year-old former Czech president, who didn’t win a Nobel Peace Prize despite leading the Czechs and the Slovaks from communism to democracy, turned the tables and asked Smale a question about Obama, the latest winner of the peace prize.

Was it true that the president had refused to meet the Dalai Lama on his visit to Washington?

He was told that Obama had indeed tried to curry favor with China by declining to see the Dalai Lama until after the president’s visit to China next month.

...

The tyro American president got the Nobel for the mere anticipation that he would provide bold moral leadership for the world at the very moment he was caving to Chinese dictators. Awkward.

Havel reached out to touch a glass dish given to him by Obama, inscribed with the preamble to the U.S. Constitution. “It is only a minor compromise,” he said. “But exactly with these minor compromises start the big and dangerous ones, the real problems.”

Our president would be well advised to listen. Havel is looking at this not only as a moral champion but as a playwright. Obama (who, as Robert Draper wrote, has read and reread Shakespeare’s tragedies) does not want his fatal flaw to be that he compromises so much that his ideals get blurred out of recognition.

Comment: And she's a friend!

China: Nuke subs ... threat to Taiwan?

China to Unveil Nuclear Submarines

Excerpt:

A senior Chinese naval officer said that China would unveil its nuclear submarines to the public on Thursday as part of an international review of the country’s naval fleet “aimed at promoting understanding about China’s military development,” according to a report by Xinhua, the state news agency.

The appearance of the submarines, in the northeastern port city of Qingdao, would be the first time that China has publicly shown the vessels. They are among the most powerful ships in the Chinese Navy.

...

China’s main military concern, though, is Taiwan, the self-governing democratic island that China says must be reunited with the mainland and that the United States supports with arms sales. Some Taiwanese strongly advocate open independence, and at times China has threatened the island with violence, but relations between Beijing and Taipei have improved since the election last year of Ma Ying-jeou as president of Taiwan. Mr. Ma rejects any notion of declaring independence.

The Pentagon released a study on March 25 that said that the Chinese government is seeking weapons and technology to disrupt the traditional advantages of the American military, and that the veil of secrecy the Chinese government has thrown over its military could lead to a miscalculation or conflict between the two nations. According to the report, a main goal of China’s military buildup is to have sufficient forces on hand in the event of war across the Taiwan Strait.

Comment: More on China's military.

China, Friend or Foe?

China, Friend or Foe?

Excerpt:

The Pentagon views China as the country most likely, at some point down the road, to acquire the capacity to challenge the U.S. military on a global scale. The U.S. in recent years has moved to strengthen its forces in the Pacific and urged its ally Japan to do the same. Washington and Tokyo are working together to boost anti-missile defenses, to defend against threats from both North Korea and China. And some in the Defense Department talk up the "China threat" to justify greater spending on new weapons systems.

This week, Adm. Wu Shengli, the top officer in China's navy -- officially known as the People's Liberation Army Navy -- said the service would move faster to modernize its arsenal and build larger and more capable warships "to boost the ability to fight in regional sea wars" using high-tech weaponry. In an interview with China's official Xinhua news agency ahead of the navy's 60th anniversary next week, he also said the navy would improve its ability to operate on the high seas. Other officials in recent months have talked about China building its first aircraft carrier, adding to U.S. concerns that China wants to project its power.

However, many observers, both in China and the U.S., say that fear of China is exaggerated. China's armed forces are still no match for U.S. firepower at sea, on land or in space. Many American security analysts -- including former senior military officers -- do not believe that China intends to take on the U.S., as the former Soviet Union once did. For now, China's military falls back on a mix of high-tech weaponry, such as its new Jin-class nuclear-missile submarines, and low-tech stealth and cunning.

Comment: My brother and I were talking about this yesterday. If China invaded Taiwan would / should the US defend?

"the poor country lending to the rich.”

Dollar Shift: Chinese Pockets Filled as Americans’ Emptied

Excerpt:

The problem, he said, was not that Americans spend too much, but that foreigners save too much. The Chinese have piled up so much excess savings that they lend money to the United States at low rates, underwriting American consumption.

This colossal credit cycle could not last forever, he said. But in a global economy, the transfer of Chinese money to America was a market phenomenon that would take years, even a decade, to work itself out. For now, he said, “we probably have little choice except to be patient.”

Today, the dependence of the United States on Chinese money looks less benign. And the economist who proposed the theory, Ben S. Bernanke, is dealing with the consequences, having been promoted to chairman of the Fed in 2006, as these cross-border money flows were reaching stratospheric levels.

In the past decade, China has invested upward of $1 trillion, mostly earnings from manufacturing exports, into American government bonds and government-backed mortgage debt. That has lowered interest rates and helped fuel a historic consumption binge and housing bubble in the United States.

China, some economists say, lulled American consumers, and their leaders, into complacency about their spendthrift ways.

Comment: This can't last forever!

Modern cave living in China

Energy efficient home, easy to maintain — and no mortgage

Excerpt:

About 20 million Chinese still reside in caves and dirt-covered dwellings on the Loess Plateau that straddles the middle and upper reaches of the Yellow River in China's northwest.

Some of the caves have been passed down for generations, with hard-packed earthen walls, electrical wiring, piped-in plumbing and other modern conveniences, including cable television.

Longtime cave dwellers are often passionate about their way of life, saying they are shielded from the elements in a practical and efficient fashion, dwelling along hillsides and leaving valuable arable land in valleys for growing crops.

Researchers say economic necessity isn't the only reason so many Chinese continue to reside in caves.

"People from abroad think people who live in caves are very poor. But our research shows that is not always the case," said Wang Jun, a researcher on caves at the Xian University of Architecture and Technology.

Many simply have grown accustomed to a lifestyle that dates back more than a millennium. Caves also have a revolutionary luster. Mao Zedong, the revolutionary founder of modern China, lived in caves that still honeycomb this region after the Long March, plotting the drive to take over the country that succeeded in 1949.

Caves are easily excavated from the silty soil here, requiring only picks and other digging implements. The earth is so hard-packed that caves don't need additional support to prevent collapse. Most have a stone facade, with large lattice windows framing a door and allowing light to pour in during the day.

Generally, the caves are shaped like loaves of bread, 10-to-13 feet wide and anywhere from 20-to-25 feet deep, with arched ceilings. Several caves dug next to each other can have connecting doors, providing for a larger overall dwelling, with flues allowing for ventilation from indoor cooking fires.

Comment: Click link for one picture.

Chinese Communism: "the party stands naked"

Earthquakes and the Mandate of Heaven

Excerpts:

The massive quake that shook China's Sichuan province this week is one of the worst natural disasters – in terms of lives claimed and property destroyed – that the world has seen in some time. But an earthquake, according to Chinese tradition, is not a mere act of nature, nor is it simply a matter of fate. Traditionally, every earthquake announces profound changes that will affect the entire society.

...
Journalists on location, as well as survivors, likewise observe that the buildings first to crumble, and that killed the most victims, were public edifices – schools and hospitals. Everyone in China knows that a common form of corruption in the ranks of the Communist Party consists in economizing on materials and construction standards.

Children crushed by the walls of their school are victims of the corruption of builders, businesses and government officials as much as they are victims of the earthquake. This the people know, and all the gesticulations of aid agencies and national leaders will not be able to eradicate this source of collective hatred of the people towards the party.

So it is with China and with tyrannical regimes: The party is convinced it controls everything. But it is often unexpected events that reveal fault lines in the system, the hypocrisy of public discourse, and the most unbearable injustices. Even as the people of Sichuan attempt to recover from this deadly quake, we learn that scores of children have died from an epidemic of hand, foot and mouth disease that has sickened tens of thousands. All of this reminds us of the panics of recent years provoked by the SARS virus, avian flu and the AIDS epidemic.

Epidemics and natural catastrophes (or not-so-natural catastrophes, if the Three Gorges Dam should also crumble) are more serious threats to the Communist tyranny than democratic pamphlets disseminated on Web sites. The party has resolved to imprison dissidents. But in the face of viruses, popular beliefs and earthquakes, the party stands naked.

Comment: Check out earthquake in the book of Revelation. The coming "BIG ONE": "there was a great earthquake, such a mighty and great earthquake as had not occurred since men were on the earth." (Revelation 16:18)

China: Lax building codes contributed to disaster

An Unnecessary Tragedy

Excerpt:

China's massive earthquake wasn't without precedent. In 1993, a magnitude 7.5 tremor killed about 9,000 people in the northwestern Sichuan Basin. Monday's event happened when, according to the United States Geological Survey, the Earth's crust underlying the high Tibetan Plateau edged west, rubbing up against the crust underlying the Sichuan Basin and southeastern China. It was a shallow event, meaning the collision happened only a few miles below the Earth's surface -- intensifying the destruction. Its tremors were felt even 2,000 kilometers away, in Bangkok.

The Chinese government was aware of this threat and took measures to protect against it. In 2006, Chinese regulators updated the country's building codes and made major changes in regard to new buildings' required "earthquake loads," or the ability of a structure to withstand shaking. China's code is now on par with similar codes in seismically active areas of the world. China has become one of the most active users of modern approaches of structural control and health monitoring of civil infrastructure structures. Virtually all major new civil structures, such as long bridges and athletic stadiums, are heavily instrumented with sensors that can detect and assess rapid changes in the building's condition. Innovation is booming.

As in other countries, however, China's problem is that there are many older structures that do not meet the stricter new codes, or don't maintain it once the building is constructed. From initial reports, the geographical distribution of destruction suggests that near the center of the industrial city of Chengdu, where the damage has been limited, building codes had been enforced. But in the rural areas -- which were hit hardest -- these codes weren't followed. This pattern, where the surrounding, poorer areas of large cities suffer the most casualties, is often observed in the aftermath of natural disasters in developing nations. The types of catastrophic collapses seen in the first news reels from China this week are reminiscent of similar scenes most recently from Bam in Iran in 2003 and Turkey in 1999.

Those earthquakes were of a smaller magnitude but had a similar impact in terms of deaths. And many of those deaths were entirely unnecessary. There is no excuse for the collapse of schools or other public buildings such as hospitals, whether they were built recently or decades ago. If any local authority wanted to use public buildings that did not meet current codes, Beijing could have required local governments to retroactively strengthen those structures. In this regard, the Chinese government can do much better.


Comment: Lindsay T. from 4th Baptist has friends in Dujiangyan