China, some will tell you, is a land of contradictions, and Shanghai has ample examples. Jalopies piled high with refuse for recycling waiting for a green light next to factory fresh Ferraris, gleaming skyscrapers next to patches of urban decay, and the occasional Starbucks across the street from another Starbucks. (We suppose that last one isn’t a contradiction in the strict sense, but it’s certainly stupid.) After 25 years we’ve tired of such cliches, but sometimes it does feel like there’s a kernel of truth to them, as we noticed this week.
It seems the central bank is keen to fill the hole(s) left by capital outflows, what with imports and exports both falling. This week it injected billions into the financial system for the seventh week straight, one of a growing number of tools it deploys in a quest to keep up the status quo even as the bank upends such sectors as the local government debt market. But other countries need not fret their debt, so long as China has their back–Li Keqiang’s call to Greece’s prime minister to offer investment support was ample evidence of a double standard that would certainly have us crying foul were we local officials serving in a backwater, bond-starved corner of Jiangxi.
Then came word that state-owned enterprises wouldn’t be allowed to raise salaries without setting profit targets higher than last year. Those readers with sharp memories may remember a few weeks back that government officials received pay raises across the board. Even President Xi Jinping’s salary rose a startling 62% to a whopping RMB-equivalent of $1,800 per month.
Not that such conflicts occur solely in China. This week US officials agreed to talks on repatriating Chinese officials who flee to the States with government money, and President Obama gave Xi Jinping a cordial call inviting him for a September visit on the very same day that his administration announced to the US congress it would be filing a case with the WTO against China’s export subsidies.
But perhaps most galling was the blunt trauma we learned had been inflicted on some 70 listed Chinese companies over the course of 2014 by the anti-graft campaign. Meanwhile internal emails from J.P. Morgan revealed that a certain son of a certain current commerce minister of a certain People’s Republic had secured his position not through hard work and smart thinking but thanks to–gasp–the undue influence of his father.
Maybe that’s just politics, we suppose, whether in the corridors of the Capitol or the hallowed Great Hall of the People. Be they elected or selected, politicians simply wouldn’t be doing their jobs if they weren’t busy saying one thing while doing another. Maybe there’s hope, though–it only took the premier’s little brother a little over two years into his elder brother’s term before he resigned from his high-level position with the state tobacco monopoly authorities are attempting to push new regulations on. When it comes to the CCP, we’d say that borders on lightning-fast reform.