China bad sign #2: young professionals leaving in record numbers

Yes, a brain drain as reported in the NYT.

At 30, Chen Kuo had what many Chinese dream of: her own apartment and a well-paying job at a multinational corporation. But in mid-October, Ms. Chen boarded a midnight flight for Australia to begin a new life with no sure prospects.

Like hundreds of thousands of Chinese who leave each year, she was driven by an overriding sense that she could do better outside China. Despite China’s tremendous economic successes in recent years, she was lured by Australia’s healthier environment, robust social services and the freedom to start a family in a country that guarantees religious freedoms.

“It’s very stressful in China — sometimes I was working 128 hours a week for my auditing company,” Ms. Chen said in her Beijing apartment a few hours before leaving. “And it will be easier raising my children as Christians abroad. It is more free in Australia.”

As China’s Communist Party prepares a momentous leadership change in early November, it is losing skilled professionals like Ms. Chen in record numbers. In 2010, the last year for which complete statistics are available, 508,000 Chinese left for the 34 developed countries that make up the Organization for Economic Cooperation and Development. That is a 45 percent increase over 2000.

Guess who wins this lottery, as usual?

When experts note that China modernized and marketized and opened-up to the world for the past 40 years and the Party still rules, they miss the reality of what happens when a critical mass middle class appears and starts wanting more than just a rising income.

That day has arrived.

So no, it's not a question of "Can China ever go democratic?"  It's only a question of when.

There is nothing unique about Chinese or Asian civilization in this regard.  Modernization is modernization.  People are people.  Democracy isn't achieved because it's fabulous.  It happens because it's the best worst system you can manage when you reach the point of genuine development.

China: big bad sign #1 (money leaks out)

Wealthy Chinese citizens are moving their money abroad: "buying beachfront condos in Cyprus, paying big U.S. tuition bills for their children and stocking up on luxury goods in Singapore, frequently moving cash secretly through a flourishing network of money-transfer agents."

Last 12 months, estimates the WSJ, 3% of China's GDP slips overseas this way.

Two ways of looking at this:

1. When locals move cash, it's because they fear a crash, and who knows the local situation better?
2. The rich fear for their wealth in China.  They know they've amassed "too much" and/or they know the Party won't do what is necessary to protect it with rule of law (see, Bo Xilai).

Either way, not a good sign.

After all these years of do-nothing Hu, Xi is going to be under tremendous pressure to fix things.

How Romney (and the Republicans) are screwed by demographics

Pair of WSJ stories.

Front-pager lead from yesterday notes that "Election May Hinge On Latino Turnout."  Get used to that headline, and get used to it working against the immigration-unfriendly GOP.

Obama is currently polling at 70% (Romney 25%) among the fastest growing segment of the electorate.

The key to Obama's win, we are told, is getting out the vote.

Second story covers that in a way that will infuriate Republicans, but it's their own damn fault:

Thousands of illegal-immigrant youths are at the forefront of national efforts to get immigrant and Latino citizens to the polls next week, the latest demonstration of the increasingly organized and vocal group's power.

In swing states like Florida, Ohio and Colorado, the young people—often referred to as Dreamers after the failed Dream Act legislation that would have offered them a path to citizenship—are running phone banks, going door to door and approaching students on college campuses to encourage voting. They also are active in California, a Democratic stronghold, and Texas, where Republicans have the edge.

The group is targeting Latinos, the fastest-growing electorate in the U.S., whose turnout at the polls is traditionally lower than that of blacks and whites. Polls show an overwhelming advantage for President Barack Obama among Latino voters, but the Dreamers efforts also could boost Democratic support in state and congressional races, supporters and opponents agree.

The revenge of the denied citizens!

We shoot ourselves in the foot regarding Latin America, which, over the long term, is our greatest source of economic growth and ultimately power.

We shoot ourselves in the foot over immigration and drugs.

Immigration is what keeps this country "young."  We are mean age 36 right now, but that will rise to just under 40 at 2050, primarily because of immigration and the high fertility associated with that (for the first 2-3 generations).  By way of contrast, China, which is also 36 years old now, will reach almost 48 by 2050, which will constitute a huge drag on its economy.

But China's long-term advantage is this:  it's surrounded by younger regions poised for lengthy demographic dividends (high proportion of workers to dependents).  First there's SE Asia, which will enjoy a demographic dividend on par with China's of the last 4 decades, and then there's India, which will enjoy an even bigger one through mid-century.

Being surrounded by faster growing economies is a sure way to lift your own as growth tapers off due to modernity, advanced status, slowing demographics, etc.  So, long term, China gets a lot of help.

We could too via Latin America, if we didn't make the drug war the centerpiece of our foreign policy throughout the hemisphere.  Instead, we cede a lot of that growth to others (Europe, Asia) when we should be expanding southward as a center of gravity in free-trade zones and ultimately as a multinational union.

But that will all come with time.  We just don't have any political leaders with genuine vision.

But get us to 2050, when one of three US voters will have some Hispanic blood in them?  Hmm.  Much will change.

Republicans will lose more and more elections until they change their anti-growth tune.  They are swimming against the tide called the future.

You rediscover your past when you plan on making some near-term history

It's that old Winston Churchill bit about how you can't think ahead into the future any further than you can reach back and remember your past.  It's a balancing act.

Neat NYT article on how Turkey is rediscovering its history via film ("As if the Ottoman period never ended.") Nothing says, "growing regional/global ambitions" quite like that.

The Ottoman period, particularly during the 16th and 17th centuries, was marked by geopolitical dominance and cultural prowess, during which the sultans claimed the spiritual leadership of the Muslim world, before the empire’s slow decline culminated in World War I. For years the period was underplayed in the history taught to schoolchildren, as the new Turkish Republic created by Mustafa Kemal Ataturk in 1923 sought to break with a decadent past.

Now, as Turkey is emerging as a leader in the Middle East, buoyed by strong economic growth, a new fascination with history is being reflected in everything from foreign policy to facial hair. In the arts, framed examples of Ottoman-era designs, known as Ebru and associated with the geometric Islamic motifs adorning mosques, have gained in popularity among the country’s growing Islamic bourgeoisie, adorning walls of homes and offices, jewelry and even business cards.

I know a lot of people harbor a lot of fears about Turkey, but I think it's the best thing that's happened to the Middle East in a long time.  If we didn't have a Turkey to play lead goose on the Arab Spring, we'd have to invent one.

Bring on the Gallipoli films (all four of them)!