Goodbye 2009. Here is another Year-End Special of Chinayouren, the first after a full year of operation. Thanks all for sticking around.

As usual we will start with the popularity of China in the news. This year it is more interesting than ever, because 2010 is a round number, and the early-birds of the China Experts are already chanting the Chinese decade.

As we predicted last time, 2008 was a peak for China related news in the World, and it was going to be difficult to beat that in the short term. Within the general rising trend, 2009 has gone back to reasonable levels of media attention, partly because Xinjiang and the Tiananmen anniversary were no match for Tibet, Sichuan and the Olympics; partly because the US Obamania has stolen the show from the Middle kingdom.

In the first months of the year the crisis did bring some attention to China, but as soon as it became clear that the stimulus package was working and damage was under control, the journalists’ interest waned. Here are the results of my Chinanews-meter, the high precision tracking device I purchased from the Uni of East Anglia:

Occurrences of "China" in LaVanguardia 1881-2009

This year I want to go a bit further, so I add below the statistics from Google Trends for the News references of the term “China”. Note that Google Trends is not more precise than my own original method, because the number of news sources that Google references always grows. To recalibrate the scale we must try neutral words like “when” or “he” and take them as visual zero axis, leaning the whole curve to the right. The result confirms clearly the peak of 08.

Google Trend News for "China" (axis not corrected)

Still, this system is not very accurate, and I would like to find a more reliable way to estimate the impact of China.  I guess the old Chinanews-meter above is as good as I can get for now. As a random mainstream newspaper in Barcelona without any special connection with China, there is no reason why La Vanguardia  shouldn’t replicate roughly the general trend in the West.

Another possible solution (albeit without numbers) is to use the tool “Google Timeline” to compare some occurrences of “China” within particular newspapers. Interestingly, I have seen that the “highbrow” newspapers, such as the NYT or WAPO, tend to have a more stable coverage of China, as they usually have staff dedicated fulltime to this subject:

New York Times occurrences of "China"

Whereas more “lowbrow” papers like USAToday tend to show more the peaks and the valleys, as they follow more closely the trends of popular interest (see the massive peak in 2008 Tibet+Sichuan+Olympics):

USAToday occurrences of "China"

As a temporary conclusion I would say the results from USAToday and similar papers are more significant, because by far that kind of media have the largest number of readers in the World. This confirms again the trend seen in my old Chinanews-meter, and it also confirms the impression of most China bloggers I have spoken to: 2009 was not as hot as 2008.

Your call

I am still not entirely satisfied with these measurements and I am looking to find a better way to estimate “China” and follow it over time. If you have any idea please let me know in comments. Any suggestion welcome.

In the meantime, the bets are open for 2010 predictions, closest guess gets a beer.  Remember there is the Shanghai Expo and the end of the stimulus package, plus the novelty of Obama will be worn out. I go for a safe 4,000 this time (we have to use the Chinanews-meter again as it is the only chart with numbers in it).

In the next part we will see the results of this blog in 09, and I will inflict you with the best of the 2009 collection. While I get that ready, to follow the year end tradition, here’s the green pastures of the Biscay coast:

.

UPDATE: This morning I did a “callibrated” Google trend, taking the word “when” as horizontal reference. “The lower curve is the one representing “China”. The results are far from precise, but they do confirm a strong peak in 08 and return to normal in 09:

Occurrences of "when" (up) and "China"(down) in Google Trends News

UPDATE2: I have found out these days one reason why the Chinanews-meter shows such a sharp fall in 2009: in the beginning of the year the popular correspondent of La Vanguardia, Rafael Poch, was demobilised from Beijing. It is very possible that a few hundred of the articles missing in 09  can be explained by his absence.  Of the charts above, probably the general reality of Western media is somewhere between the USAToday and the NYT charts. I am still looking for a way to put numbers to that, any idea would be welcome.

I enjoyed reading this article by Evelyn Chan on the Carter Center blog.  It is clear and well written and in my opinion it is right on the money. It’s the article I would have liked to write on the stimulus package (h/t  CDT)

When it comes to Chinese economy I have always been a bit of  a pessimist. This year I am getting to understand better the situation of public finance – I recently read the informative Finance and Factions, by Victor Shih-  and now the outlook looks even bleaker. On the surface China is doing well, but the more you look into the details the more unsustainable it looks. Which is exactly how systems look when they are about to snap.

And yet somehow I will not be surprised if in 10 years time we look back and find that we are still in the same situation.  After all, there were experts writing similar predictions already 10 years ago…

From the post left unfinished last week. Some of the main arguments read (or heard) in China Crisis discussions:

The Time

Economies don’t grow indefinitely.  Low cycles follow high cycles and after 30 years it is about time. China cannot break the laws of economics, so the recession must necessarily come in the next X years. The country hasn’t prepared itself politically and psicologically to face this period. In the end, we are sure to have trouble.

Of course, this argument is of little value without the X, and many proponents of a time limit have failed in the past. This is the field of technical analysts and other mystical thinkers. Mythology also plays a role:  In Chinese history, cataclysms mark the end of a cycle. An earthquake preceded this crisis, and a solar eclipse is coming in July, the dynasty has lost its virtue. These arguments tend to work better with a bit of hindsight.

The Markets

The World’s economies are interdependent today. China’s economy is largely dependent on exports and FDI. The weight of these external factors in China’s growth has been much discussed, but regardless of the exact numbers, few doubt that it is a significant motor of the economy. External motors failing, China turns to internal ones: investment and consumption. Today, strong public investment, mostly in infrastructure and energy, is making up for the loss. Click to continue »

It’s been half a year since the first announcement of the Chinese stimulus package, and the time has come to look back and ask ourselves: how is the Crisis doing to-day? Well, we don’t need to surf very far to find some hints. Judging by the attention she gets  in the media, the Crisis is still in tip top form, barely upstaged by a drove of sneezing pigs, and plotting her next move in the People’s Republic.

And in the meantime, we have read so much about her that the debate gets old, the initial guessing game we merrily joined some months ago giving way to a phase of weary expectation.

So, finally, is there going to be trouble in China or not – Will the Wall Fall? I have my own opinions about this, but I’ll keep them clear off this post. Instead, I want to  summarize some ideas appeared in the sinosphere, list the main arguments from each side, and let the reader choose which make sense.  Luckily, this is the kind of discussion where the same arguments are fluently used to support all views, so the list can be made manageable.

But first of all, let’s examine the parties. In this business of Chinese Crisis Watching there are 3 main schools of thought,  which can be roughly classified as follows:

A. The Optimistic Executives:  Old China hands with long memories, bullish consultants with short ones. Optimistic people with or without a stake in the optimism of their clients. Just to list some recent ones.

B. The Academics of Doom:  Everybody knows the highest fulfilment of a dismal scientist is to announce doom and then have doom come. On the other hand, there might be something in what they say…  some examples.

C. The Rosy Men of the Republic: This 3rd group is endemic to China. It consists of a set of highly prepared bureaucrats who resolutely believe in the Feelings of the Motherland, in Santa Claus and in the Theory of Scientific Development. You can see here some of their latest achievements.

The English-speaking sinosphere is a little world, and we rarely see the big names that populate other provinces of the internet. But we do have a great advantage: debate here is relatively free from partisan politics.  There is not much in the way of left-wing China blogs, for instance, and American republicans don’t go about throwing  green tea parties just because grandpa Wen announced a healthcare plan. 

In fact, the left and the right in China are conveniently concealed behind the red walls of Zhongnanhai. There are few leaks, and the real data which analysts use is pretty much available to anyone with an internet connection and some notions of mandarin. This is a level field where you can browse around, draw your own conclusions, and enjoy your tea leave reading with Armstrong’s great cover of  ”La vie en rosy“.

But enough if the rosy chit-chat. Here’s the points.