The Next Trend?

Samuel P Huntington wrote the following in his 1996 book Clash of Civilizations:

“In the early 1990s, Chinese made up 1% of the Philippine population but were responsible for 35% of the sales of domestically owned firms. In Indonesia in the mid-1980s, the Chinese were 2-3% of the population but owned roughly 70% of the private domestic capital. Seventeen of the twenty-five largest businesses were Chinese-controlled, and one Chinese conglomerate was responsible for 5% of Indonesia’s GDP. In the early 1990s, the Chinese were 10% of Thailand’s population but owned 9 of the 10 largest business groups and were responsible for 50% of its GDP. Chinese are about one third of the population in Malaysia but completely dominate the economy.”

The US is going Pacific and the UK is pondering Europe. David Cameron is talking about a “networked Europe” rather than a block Europe. The Germans, however, wants “more Europe” which probably means a more German Europe, if Angela Merkel is going to get full support from the Germans. Thus the new trend is that the US is facing stiff competition from the Chinese in East Asia and the Pacific and the UK in Continental Europe.

Another new trend might be the language question. Mandarin Chinese might take over much of the English dominance in East Asia and German might have a renaissance on the Continent. Culture follows power! Before World War II Swedish children learned German as their first foreign language.

Anglo-Americans and also other Europeans might though find comfort in the following statistic:

“If demographic trends continue, well over 50% of the world’s Christians will be in Africa, Latin America, and parts of Asia within 25 years—a clear shift from Christianity’s traditional home in Europe and North America.”

It is from the 2010 book Religion and Politics in America: Faith, Culture, and Strategic Choices by Robert Booth Fowler et al. Perhaps we should let the Chinese dominate East Asia and focus on South America and Africa which even lies in our time zones and where we are more likely to find hearts and minds than in the assertive Asia.

This book also tries to explain how a religious America works compared to a secular China. The religious pluralism observed in America functions as a vent for freedom making possible a streamlined collective approach in the economy. People will feel free with maintained integrity as long as they can exercise their faith.

The last 20 or so years in the US feature what could be called the Fifth Great Awakening with an increase especially in evangelical Protestantism. The First Great Awakening in American came before the Revolution in the 18^th century. Periodically America turns spiritual and looks for the next political reform. We have yet to see what lies in stock this time.

Which culture will make the next major move?

Took a walk down to the Ersdal Bay and back via the harbor today again, as I did yesterday. 15 to 17 degrees Celsius, thus perfect. Time to make some plans for the fall. The overall subject that I am researching is which culture should carry mankind into the future. Into the unknown. It is not going to be just one. East and West will probably continue to run parallel. The two party system of the world. The main hypothesis is that the West has found out a path of higher fidelity than the East with a more mature political development. Thus assuming that there are no genetic differences between the two populations. The political system of the West is more mature for the simple reason that people are allowed to think and act politically. From Ian Bremmer’s book The End of the Free Market form 2010 it is possible to extrapolate that there is about 25% state capitalists in the world currently which is offsetting the balance and currently causing a slump in the West. Since the rich in the West are making money in the East as austerity is mandated in the West for ordinary people, notable billionaires are talking about paying more in tax for the sake of stability. Personally I think it is not wise with too progressive tax tables since the rich allocate money better than the state for the performance of the economy. Bremmer brings up this point, while claiming that the state is not that good as the shareholders in allocating funds, why state capitalism risks being less efficient economically.

Although I’m not so sure myself, it seems like most people think the power of science and innovation on all levels is going to play out equally well in the East as in the West. That would remove Joseph Nye’s argument of the higher recruitment of talent to the US than to China and leave Gideon Rachman’s focus on the economy more pertinent. The economy will depend on how people organize themselves in the functioning parts of the world and how areas like the Middle East and North Africa develops from lower levels. The fight on how to build up Libya has started and the obvious question is if it’s going to be free-market or state capitalism which is important since Libya’s development could become a blue-print for the entire area. State capitalism is probably easier to apply to a country of Libya’s type, Algeria is already state capitalist to a certain degree and also runs on oil, but I hope they will convince the Libyans to choose free-market capitalism due to the better harmony possible with the EU in this case. Bremmer has a series of comments in his book as to the prognosis of state capitalism and he seems to think that it represents a dead end, which I tend to agree with. Improvements of free-market capitalism are a more probably path of development. In an era where the economists have problems understanding the economy it is troublesome that we ask politicians to regulate it, understanding it even less, but it seems to be necessary.

My 1,500th post--On China by Henry Kissinger

This is possibly the best book I have read which to a certain degree depends on my current interest in how different cultures solves their state formation. Kissinger goes through the relation of the West and China since 1793 when the British was turned down by the Qing emperor.

The Chinese are apparently back to Confucianism in the "socialism with Chinese characteristics" that Deng Xiaoping built on the embers of what Mao left him with. Chinese characteristics is apparently anything that will make China great.

My problem of a return to Confucianism is that this philosophy placed China at a great disadvantage and that is was individual initative, the market and economical know-how from the West that made China what it is today. Deng was pushing for science and technology but he was very clear about not permitting any creativity in the political arena. He retired 3 years after Tiananmen after a Tour of the southern part of the country where he reiterated his thesis which still seems to be law in China.

Mao was against Confucianism as a class oppressive philosophy. Mao apparently thought Communism was liberative. It is clear from the book that there is no common ground between the West and China on values. Kissinger ends the book with a chapter where he asks, just like Niall Ferguson, if history will repeat itself with China as Germany and the US as Britain around 1900.

He ends the book on a positive note though and hopes that we will be able to build the world together rather than having it being shook by China's rise as predicted by Zhou Enlai when he and Kissinger sent out their 1971 communiqué after the opening up of China by Richard Nixon. Kissinger has a citation by Nixon where he claims the Chinese with a decent government would lead the world. I don't think they have that though and it does not seem like they will get one either. They simply do not have the proper values. Life, liberty and the pursuit of happiness are not respected in China.

The World Financial Order?

S&P, one of the three large credit rating agencies in the US, late on Friday, after the markets closed, downgraded US one notch to AA+ from AAA. In this context it should be noted that a Chinese credit rating agency, Dagong, downgraded the US last week to a level on par with Spain. There seems to be a war on the interpretation of what is important and the reason might be that we are witnessing a clash between two economic cultures. The Chinese being state capitalism.

My own confidence in the US and its people is completely unshaken and it should be mentioned that France, Japan and South Korea don’t see any problems with US creditworthiness according to the Financial Times. China, according to the Chinese news agency Xinhua, makes a lot of noise and seems to disregard the fact that you do take a risk buying state papers. Instead they want to remake the world financial order to secure their investments. It would be interesting to read an initiated Swedish article evaluating the benefits or disadvantages to Sweden if China gets their way?

Technology dependent states--China and the EU?

The first unified China, the Qin Dynasty, lasted only fourteen years, from 221BCE. It was a highly suppressive affair that alienated everyone in society although there was a unification of the spoken and written language. It was replaced by the Han Dynasty, 202BCE to 220CE, where Confucianism came back and the moral of the emperor ruling for the benefit of the ruled moral came back from the Legalist tradition under Qin. In 5BCE there were 60m people in China together with 130,000 bureaucrats.

Today there are 1,350m people in China and it occurred to me that Deng Xiaoping in 1978 would never have embarked on the Chinese miracle if it had not been for the technology that no one dares to speak of. Controlling such an amount of educated Middle Class Chinese the way the party wants to would not have been possible. If I am right in my conjecture, this would mean that the protocol used by the 80m people in the Communist Party is a prerequisite for the state whereas the West is using the technology on preexistant functioning states.

This would mean that governing such large conglomerates as China and the EU needs the technology. Francis Fukuyama discusses how China’s development compared with that of Europe and it is interesting to note that the seemingly blind alley that the Chinese already embarked on in 221BCE with the first modern dictatorship is something they might have cemented with the technology today making it virtually impossible for a democratic development. Fusing Europe in the EU is also something that has reversed democratization.

The frustrating discussion that have been ongoing since the financial crisis in 2008 on the fate of the EU then in all probability to a certain extent revolves around the question if national states are going to let go of their regular governance to the governance aided by the technology and thus emulation of China. Historically Europe never mustered the coercion needed by Qin to unify China. The geography was configured so as to promote different cultures and languages and the brute force of unification never materialized. Furthermore, the Catholic Church induced a social development that never happened in China which lacks the rule of law and an accountable government still today.

The latest gossip on the EU is that a two-speed super-state will form on the Continent with Britain on the side. The question then is if Germany will lead the Continent in the Chinese technology dependent fashion and that democracy with functioning governments using the technology will remain in Anglo-America?

The right of center Allians of Sweden will break up?

Reading today in Svenska Dagbladet about a fragmentation in Swedish politics. The Center party in Sweden wants to break lose from the Allians, a right of center coalition of the Moderaterna, Folkpartiet, Centerpartiet and Kristdemokraterna. Recently the ten year party secretary Maud Olofsson announced that she will leave her post coming a congress in September. She had been instrumental in forming the Allians that initially won the election of 2006.

Small parties like Kristdemokraterna and Centerpartiet have suffered from losing voters being minors in the Allians. People have moved to the largest party Moderaterna to gain influence. They now poll around 4% which is the entrance bar to the Parliament. The finance minister Anders Borg, Moderaterna, have made an invitation at the yearly political gathering in Almedalen to offer collaboration with The Green party. I guess he saw the fragmentation coming. Another reason is that the Alliance is ruling as a minority government, a phenomenon that is common in Swedish politics, and is thus looking for a more stable situation. The Greens are moving forward like in Germany.

Also Jan Björklund, the minister of education, is suggesting that Sweden as the first country in Europe should introduce Chinese at the high school level. He says it will be more important for Sweden than French and Spanish. He did not say German, which gives the general direction of the thinking of government. They are German Chinese in their minds and will combine this with the Anglo-American presence. I have heeard comments that it is easier to collaborate with the Chinese than with neighbors in the EU so I guess it all makes sense. China seems to be successfully ruling by dividing in Europe.

Which brings me to the question of the prospects of the US. Walter Russell Mead, the editor of The American Interest and a professor of foreign policy at Bard College in NY, wrote a very up-beat article about America on wsj.com because of Fourth of July that was nice to read. It all made sense in the gloom given in the press about America at presence. I am a firm believer that the US will work themself out of their current fiscal problems and stand tall again. I even kept my American pension money in New York. Europe on the other hand seems to lean towards Chinese help rather than self-reliance.

Sweden is an engineering country and today there is a debate article in Svenska Dagbladet where people claim they should broaden the engineering education which is overdue. The article is a response to a report issued by Svenskt Näringsliv where the relative role of Natural Science/Technology and Humanistic subjects was discussed. I tried to read most of the main articles in this debacle but did not see the question about what the competition from China and India study. Volumewise they will churn out hundred of thousands, almost a million, engineers per year that work for lower salaries. I guess what Sweden wants to achieve is to produce engineers that can make Swedish companies rather than working for foreign companies in Sweden. This might require a modernization of an earlier successful educuation as Nina Wormbs and Sverker Sörlin argued in their article.

Is it possible to show respect for a country that does not take its citizen's political instincts seriously?

The debate on what you can demand in terms of human rights in China is on since Wen Jiabao is visiting Europe. David Cameron and Guido Westerwelle thinks it is possible to discuss difficult questions at the same time as you trade with each other. I agree fully!

It must be considered difficult to show China respect when treating its citizens in the present way. Wen Jiabao thinks we should show China respect and tolerance. Tolerance OK but treating grown up people like naughty children is not something that is impressive.

The Chinese often brings up their long history. I guess it is a favorite when comparing themself with the US. However, what happened during the last 2-300 years is far more interesting. Also, I have problems with the Mao era where people were severely mistreated during especially The Great Leap Forward and the Culture Revolution. It is what China does now with its new found power that potentially is going to be treated with respect. Will they continue with the first modern dictatorship or invent something new?

Gideon Rachman on FT.com is displeased with David Camerons capabilities in his column today. He thinks you have to treat China as a power and not only as a market. Speaking truth to power does not seem to be a discriminator between Britain and Germany though, even if standing up for freedom in Libya was. The final judgment on Libya will come at the death toll when the debacle is over, though.

Weakly deterministic?

Francis Fukuyama's book The End of History and the Last Man is an interesting book. It constantly provokes the reader. However, I'm a little surprised that Fukuyama in 2006, when he writes the Afterword in the book, still believes in his weak determinism that the world is destined for liberal democracy only. I have said most of this earlier but this is a summary.

Despite that 2006 was the culmination of problems of starting democracy in Iraq, Fukuyama discusses this problem in the Afterword and speculates that the problem of separating state and religion might be a permanent problem for Muslims to endorse democracy. The development of the Muslim communities in Europe will probably cast light on this issue. Will Europe become a Eurabia that plays down democracy for authoritarianism and sharia?

However, the largest problem with the idea that liberal democracy will win out eventually is the success of China the last 30 years. They took ideas from West, worked hard and managed to come out on top. At least temporarily. They claim that once ideas are generated democracy is inefficient. If they are equally strong, authoritarianism and liberal democracy might start to oscillate and thus co-exist peacefully.

There is a problem though. If authoritarians buy a company they will affect the lifestyle of the employees more than if liberal democrats buy a company. This asymmetry will definitely cause problems. There was an article on wsj.com the other day that advocated for letting the Chinese buy companies in the US. The argument went that there are now 700,000 Americans working for Japanese companies in the US and this is working just fine. But then, the Japanese do play baseball. In Sweden the Volvo Cars experiment with Chinese ownership is ongoing with initial positive results.

The main philosophical argument used for the weak determinism for liberal democracy is that its driven by the need for recognition. I'm not sure why the strong determinism of Hegel and Marx are to be taken serious. In retrospect they are ridiculous and why spend time on ideas from thinkers that have proven ridiculous ideas? In my own experience philosophers often have a few gems and then a lot of crazy ideas, which could be such an argument.

It is a great difference between the Anglo-Saxon pursuit of happiness and the need for recognition. I was under the impression that the latter created two world wars and that the former saved the day. Ideas that fascinate the masses can be very dangerous when wrong. Fukuyama is in principle saying that a scientist is working for the recognition he might get rather than out of curiosity when the latter is probably more biologically correct. Money comes to you. So does fame. When a scientist is getting a crazy idea the possible effects on his life comes after the fact, obviously.

The reason for why liberal democracy is more universal would be that the majority of people like being free. However, with 1,3bn Chinese, 1,2bn Muslims and 1,1bn Catholics it is possible to start wondering if this really is true. Part of mankind prefer order and no responsibility. They are natural or cultural followers and thrive in hierarchical systems. Liberal democracy is more demanding. I believe liberal democracy is a higher developmental form and that future improvements will derive from it but perhaps not as a majority system.

A good question is if it is possible to figure out if an idea is wrong even if it is popular. Have Fukuyama's idea led to too much give-aways to China so that they have evolved too fast and therefore will become intoxicated of their own invincibility, which could be a risk. During Mao, 1949 to 1976, China bottomed out in relation to the GDP of the UK. Now they will match the US GDP in 2016. If people start thinking like this, we will probably see more protectionism. A few years ago it was not uncommon to hear that doing business with China will make them change their political system. I remember watching Swedish TV where a commune politician from Karlstad was going to China and changing them.

Is there an end to history?

I'm obviously a little late to the discussion of Francis Fukuyama's book The End of History and the Last Man from 1992. I have seen numerous references to the book over the years and always wondered why he thought there is going to be an end to history. It seems non-biological. Why should evolution stop if you don't count man made catastrophes? The political development is also part of the evolution.

What happened since Fukuyama wrote this book is the ascent of China. It is therefore interesting to find in the above book that Fukuyama writes that market-oriented authoritarian countries should in theory perform better than democracies, when he obviously does not think China would count as such a country at the time and not later in the book Trust either.

I'm not sure I agree but one of the main themes of the book is the Hegelian quest for recognition which says that the Chinese will eventually demand democracy. It is more probable that we will see continuous cycles of empires as Fukuyama writes about in his recent book The Origins of Political Order.

Should we forget about democracy then? Probably not since freedom of thought and living quality might have important effects on the development of science. This is a yet unknown. Do we want to gamble? The last ten years there has been a lot of talk that China would reform due to the contact with the West but I'm beginning to feel that the reverse is taking place on the altar of the economy. My question then is: how stable is China?

Dick Erixon brought up the question the other day if democracy would be needed in the future. He rushed of to a debate but never commented on what he learned. Should the politician re-school themselves to "whack-a-moleians" Chinese style, without any right to political opinions, or should they instead try to inspire people to work towards some goals? There is this game on American fairs where you take a hammer and begin to hit moles as they appear in the holes. It is very hard to inspire without goals and technocratic goals are not particularly intresting for most people.

The First Modern Dictatorship

Reading The Origins of Political Order from 2011 by Francis Fukuyama. I'm not through the book yet but Fukuyama describes China in a fashion that makes it very easy to see what situation they are in today.

The first modern dictatorship in the world was apparently the Han dynasty, approximately 200 BC to 200 AD. This state was formed after a period of intense warfare which could have been the reason for why the Chinese decided to leave their kin-ships and accept the loss of freedom that a strong state meant. Since then there has not been any rule of law or accountability for the people in China. Today they are just operating such a state with modern technology. It has always been a lot of people relatively speaking in China, due to the rice that lets more people live on a given lot of land. The Chinese have learned how to manage large populations. Occasionally these empires breaks down, what Fukuyama calls patrimonialisation, ie the core family and extended family takes precedent again.

I have earlier written that I believe that the Chinese and those who they inspire are on a different track that does not lead towards democracy as we speak of it in Europe and the US. Fukuyama's book seems to confirm this suspicion. We therefore probably have to live with suspicious Russians and infamous Chinese to take over our car industry. If we don't drop it instead.

If I was doing research in ethics, I might wonder if it is possible to work in collaboration with the Chinese? If not corporate culture would be too different? It is one thing to buy things from the Chinese and to sell them our goods. However, it would all depend on where Sweden is heading. I haven't seen that poll but it would interest me to know what the Swedes believe is the future governing system on Earth. Europe, by the way, according to Fukuyama, developed socially before they developed politically which is unique and which contributed to our modern liberal democracy. We treasure rule of law and accountability.

Trust

"As this book should have indicated by now, the more one is familiar with different cultures, the more one understands that they are not all created equal. An honest multiculturalism would recognize that some cultural traits are not helpful in the sustenance of a healthy democratic political system and capitalist economy."

The above citation comes from the 1995 book Trust by Francis Fukuyama. Fukuyama says the neoclassical economy is to 80% correct. The rest is culture dependent. All individuals are created equal with human rights to match but then they end up in various cultures with different potentials.

I found this book when I arrived at the conclusion that I did not know how to increase trust in societies that lacked this. Fukuyama's book does not mention the Middle East as low-trust but well France and Italy that aspires to good relations with the low-trust North Africa and Middle East in the Club Med association. He does not have a recipe for increasing trust either.

The main message of the book is that familiarism countries, with low-trust to people outside the family, like China or Italy, does not produce such large corporations like high-trust countries like Japan, Germany and the US. These countries would then not have the same potential economically. China today seems to defy this rule, however. Perhaps they are compensating for high-trust outside the family with "systems" of people held together by fear?

Leading by example is in my opinion much superior to leading by fear. Protestantism offered a more individualistic situation for people that then could relate to each other rather than to an authority like the parish priest. The fear of God was not used as a motivation. God became someone you related to directly on a more equal basis than Catholics and Muslims.

If the high-trust outside the family has not passed the North/South divide in Europe it is not likely that it will spread to North Africa and the Middle East. Today we have a situation in Europe where Southern European countries are in worse economic shape than Northern states. It should be remembered in this context that the Western Civilization started in the Netherlands and England. Cultural factors then important for breaking the Malthusian ceiling could still be in operation.

As Fukuyama points out, the melting pot America have managed to unite around common values and principles but have recently performed worse in this context. Fukuyama speaks about individualism taking precedence. The EU project is in actuality not even trying with its divisive motto "united in diversity". Is this good or bad? Perhaps it all depends on how large the optimal size of a nation is.

Obama might be trying a neo-Rawlsian approach to the world

G. John Ikenberry wrote in the January/February 2008 number of Foreign Affairs, The Rise of China and the Future of the West, prior to the financial crisis and Barack Obama's presidency, about the need of letting China into the Western Order. Gideon Rachman, at the Financial Times thinks this is getting less probable in his recent book Zero-Sum World. Since Ikenberry is a leading ideologue in Obama's administration, Rachman then seems to challenge the modus operandum of Obama's foreign policy.

Ikenberry suggests that the US takes a breath and positions itself behind a "veil of ignorance" to find out where they want to be now when they are relatively less powerful. He says: "The United States cannot thwart China's rise, but it can help ensure that China's power is exercised within the rules and institutions that the United States and its partners have crafted over the last century, rules and institutions that can protect the interests of all states in the more crowded world of the future."

Thus, the question how the Eastern authoritative ruling system can be economically integrated in the Western Order is an important one. To what extent can rules be shared, especially now when asymmetries have arisen in world trade. Japan's development affords an interesting example. Under a democratic, almost one party system, they have risen to nearly the same GDP per capita as the US. Still their society is very Japanese, even if they actually play little league baseball. If China does a similar journey they will be gigantic but there will still be Japan, India, the US and Europe. The rise of Japan, by the way, caused quite a stir in the US at the time.

It should be noted, however, that Ikenberry also brings up the similarity to the rise of Germany prior to World War I and refers to Niall Ferguson's discussion of the topic. This is a hurdle we have to pass. I guess what the debate in reality is about is if the liberals system can survive which is a question Ikenberry asks. He does not see America winning over China but sees the West winning over China. My idea of why this is the case is the scientific revolution which is exported successfully to the East. It might actually be the only thing they are impressed by.

Fragmentation to the better?

I speculated the other day about the potential need for China to fragment. Apparently there is a precedent in India. According to Fareed Zakaria's book The Post-American World from pre-Lehman 2008, Winston Churchill is supposed to have said that India is just a geographical term with no more personality than Europe.

Zakaria says "This diversity and division has many advantages. It adds to India's variety and societal energy and it prevents the country from succumbing to dictatorship. When Indira Gandhi tried to run the government in an authoritarian and centralized manner in the 1970s, it simply did not work, provoking violent revolts in six of its regions. Over the last two decades, Indian regionalism has flourished, and the country has found its natural order."

According to Chinese governmental statistics, there were 74,000 protests of some kind in 2004, up from 10,000 ten years earlier.

The Financial Times run an article today about the internet in China where they claim that China has 420m internet users 2010, up from 111m in 2005. Most run their contact from home. Heavily censored, although there are more internet users than people in the US, it affords both societal information spread as well as indoctrination from the government. One would hope that this gargantuan state would regionalize according to fault lines drawn by internet usage.

However, Zakaria did not say that China is a term with different personalities? The question is which is more likely: European federalization or Chinese fragmentation?

A so called "scandal" involving the US

Helle Kleins blogg: "Jag lyssnade till Göran Greider (Dalademokraten) och Roland Poirier Martinsson (Timbro) på radion i morse. De debatterade den senaste säkerhetspolitiska skandalen - misstankarna att USA och även Israel bedrivit spaning på svensk mark utan att svenska myndigheter skulle varit informerade. Enligt Poirier Martinson är USA "den goda kraften" så det eventuella illegala spionaget är inget problem. En häpnadsväckande hållning med tanke på de folkrättsvidriga krig USA bedriver, svarade Greider"

Helle Klein, a priest and former political editor of Aftonbladet, a tabloid, listened to the radio and concluded with a fellow barricade man Göran Greider, editor Dalademokraten, that the US is a villain in the world. Roland Poirier Martinsson, a conservative philosopher counters with pointing out, what I also think is obvious, that the US is a force for good and that this in effect means they cannot spy on Sweden.

Actually I listened to the radio as well, Studio Ett yesterday, where it was clear that even Lars Ohly, the party chairman of the Left, does not even think the US was to blame for the "scandal" but seemed to want a pick a fight with the government for lying and not saying they knew about the US protecting their embassy.

Now, why is this happening right now in Sweden? Why does the left want to pick a fight with the US and the government calling it a pet dog to the US. Is it because a country that threatens other peaceful countries from going to the Nobel Peace Prize fest in Oslo needs some "pekinesers"?

"Peaceful China" is active lately in harassing Japan over islands and has cut of sale of rare earth metals as a retaliation (Financial Times). Apparently China wants Japan to build factories in China instead for making it possible to transfer technology and skills. As they point out, however, the world is more complicated than ganging up with either the US or China but I wonder about Europe, China's largest export market, Germany seems to be on China's side at the upcoming G20. Wolfgang Schäuble, the German finance minister, is criticizing the US for lowering the dollar as a retaliation for China's undervaluation of the renminbi. China started this fight, however.

I have no idea why Sweden would want to pick a fight with the US about protecting their embassy. It has though become increasingly clear that we are going to face a choice between democracy and human rights and authoritarian government and perhaps a different economic system. I often read about Swedish complaints on violations of international law. That is usually OK as long as you stay independent of all power in the world.

China's next leader will again be an engineer

In Sweden and in the US politicians are rarely engineers whereas Hu Jintao and Xi Jinping, who is likely to take over after Mr Hu in 2012, both are. Engineers make things and calculate things but are not generally known to be social agents. Xi Jinping is not as young either as the current leaders seem to be in the US, Britain and Sweden. One would rather think that lawyers and political scientists, if anything, would make political careers now and then.

Mr Xi ended up on the country side during the Culture Revolution and had to do physical work. With this experience he is probably a person that is all set for at least part of the Western paradigm of developing technology and science. As a Communist Party member since 1979 he is probably steeped in one-party lore, however. There is nothing as refreshing as healthy opposition.

I'm trying to get a feeling for if China will have as a goal the next 15 years or so to catch up with the US economically or if they rather want to develop their country and get rid of all the poverty. After all, it is quite a feat to have gotten rid of so much poverty already as they have. Europe would have to have developed Africa for mobilizing an equal number of people. It would be nice if they incorporated themselves into the world economy by floating their currency as today's column in The Financial Times points out. They are not that poor any longer.

I think this is the problem with China right now. It is difficult to see what they are up to internationally. Will they try to export state capitalism or will they move towards democracy. I can't help thinking about what is required of a Western democratic state. General virtues like courage, law-abidingness, and loyalty. Social virtues like independence, open-mindedness. Economic virtues like work ethic, capacity to delay self-gratification and adaptability to economic and technological change. Political virtues like the capacity to discern and respect the rights of other's, willingness to demand only what can be paid for, ability to evaluate the performance of those in office and a willingness to engage in public discourse.

What they seem to lack most is the ability to question authority which is important for monitoring elected officials and perhaps to elect them in the first place. They might be low on the social virtues as well. The question then is how important this difference is? Will the difference just mean that the Chinese will not reach so high salaries, something that will make state capitalism competitive relative the West?

The Western society evolves thanks to individualism that all the time reaches into the unknown and casts old ways to the side. China has imported a lot of know how over the last decades but will they stagnate relative the West due to lack of individualism? Or has individualism had its day in the history of man and that nowadays "armies" move on each problem like building a computer inexpensively. I don't think so. Focus on the individual with due respect for his or hers collective will still win the day in search for the unknown. While I'm at it, I would also vouch for freedom of thought.

More than 40 percent of the former East Germans believe that differences outweigh the similarities

Dagens Nyheter has an editorial today for the 20 year celebration of the reunification of Germany. It is up-beat. The Financial Times ran an article the other day which was more to the point and perhaps more true to the actual picture. The communist ghost is not dead and there are nostalgic people left. In a generation or two the rift might be mended though.

Personally I'm pleased with the fact of a reunited Germany. A strong Germany is good for the EU and very important for northern Europe. I especially like the Germans that with the US think in terms of checking Russia. Yes, I'm old enough to remember the Soviet Union and that abominable socialism that cause former East Germany to have only 70% of the GDP of West Germany after 20 years and over a trillion Euros invested.

So what is a strong Germany going to do in Europe? There has not been much written lately since the debt crisis in the spring about the future of the EU, if you discount the talk about "economic governance". A few articles flashed by where there was a call for further political union as the means of saving the Euro so that seems to be the current trend.

If that trend holds up, it is waving in the wind, I don't think Turkey should enter the EU. Their democracy is different from that of northern Europe and would not fit in. They are probably fine on their own as a neighbor of the EU and Russia which they according to Carl Bildt are going to dwarf economically in not too distant future. If the EU stays as it is today, Turkey could probably join without problems. This is apparently the position of AngloAmerica and of the Swedish government although France and Germany are skeptical.

A development that I find interesting is the interest China shows in helping Greece out by even buying bonds if necessary. They apparently want to score some European points for their prosperous state capitalism being nice in the hour of need to the desolate Greeks which the German public was not. They are going to lease part of the port in Piraeus for €3.3bn. Are they giving back for all the talk about human rights and being nice to the poor? I don't think the Greeks mind though.

It was also nice to see that the Latvians chose a center-right governance that continues the reform policy and that the Russian inspired opposition did not complicate matters. They are complicated enough with the 18% drop in GDP that Latvia suffered as a result of the financial crisis. The Harmony Centre containing three parties The Harmony Party, The Socialist Party and The New Centre. It is led by the Mayor of Riga and consists mostly of the Russian speaking minority. According to The Financial Times the ruling coalition got 59% of the vote and The Harmony Centre got 25%. In other words, all things well in the Baltic Sea area.

The number two and the number three in the world

I have been following the row between China and Japan for a while now. Apparently a Chinese fishing boat captain rammed a Japanese coast guard vessel outside the Senkaku islands that are disputed by not only China and Japan but also by Taiwan, and got arrested according to Gideon Rachman's weekly pod cast.

The situation headed up daily and after rumors of blocked shipments of rare earth metals to Japan from China the captain was released. It is of course not clear if there was a causality between the two events. However, people in Japan took to the streets and complained over giving in to the Chinese.

Why is the situation so tense? The Financial Times runs an analysis today about the Chinese catch up game in high-speed trains that offers one possible irritation item. The Chinese are now after some years becoming a low-cost competitor to the Japanese Kawasaki Heavy Industries, the German Siemens and the French Alstom on these trains after having "digested" the technology in question for a while.

Arnold Schwarzenegger, the Governator, is asking the Chinese to compete for the planned trains in California. They can get trains more inexpensively in this way but have not lost any technology in this case. In any case, the Chinese are building an extensive high-speed train network that according to some is a prestige project that is not going to pay off and is more and more preventing foreign competition by legal means, although it is a green project.

Fighting to get out of a recession is apparently a cut throat game where the ones with cash siphon off technological know-how. Will the Swedes follow the lead of the Governator if they are going to build high-speed trains?

New Statesman - The spark rises in the east

New Statesman - The spark rises in the east: "More widely, most of the research budget is focused on delivering advances that will increase the productivity of China's industrial and manufacturing base. 'A much smaller proportion of funds is allocated to basic research than in most other countries,'"

If this article is correct, China has added an amount of scientists that equals the US or the EU. There are no Nobel Prizes yet but they will come, even if the share of basic research is lower. China's prosperity is therefore increasing the scientific potential of the world considerably.

If India is going the same way this might mean that this century will see a doubling of the research effort. The Chinese seem fascinated about their space program. Despite their late coming to the scientific revolution.

Stanford Encyclopedia of Philosophy discusses differences and similarities between Chinese and Western philosophy. I get the impression that there are no qualitative differences, only gradual. The Chinese are more context dependent partly due to their writing system. This would mean that they think differently since there is a difference in their treatment of language although some aspects of thinking are language independent. It would be interesting if the Chinese, and the Indians on their end, would complement Westerners in science.

Another question is whether there will be collaboration between the continents, or whether they will tighten up. Unfortunately, science have become more "in house" during the last decades.

Germany is accused of being mercantilistic. They gained from the fall of the Euro.

Op-ed: The G-20 and "Chermany": "It was easy to rail against mercantilism that, regardless of its intellectual pedigree, has doubtful moral connotations: mercantilism involves doing well but at someone else's expense. Fiscal consolidation, on the other hand, has the aura of moral correctness and virtue."

It is strange. The world does not care much for Midsummer in Sweden and has placed the G8 and G20 meetings this weekend. The US advocates spend now, save later, be mindful of growth. They are worried that Germany's fiscal austerity will cause a recession in Europe. Angela Merkel has defended Germany's position: it is foolish to spend money you don't have in a crisis. It causes bad vibrations among the people. Balanced budget on the other hand causes good vibrations and will cause people to spend to revive the economy. As usual lay people, have to make up their mind by non economical means when the schools clash. Most probably for political reasons?

So, the lucky Germans with their lowly valued Euro, boosting their exports, preach fiscal austerity to further boost their mecantilistic approach? As Christine Lagarde, the French Minister of Finance, said: "there is no Euro crisis"? China, apparently, decides to loose more than they have done on the lower Euro and raised the value of the renminbi. This could according to the article above depend on the fact that the discussion has moved from a bilateral "Chimerica" problem to a multipolar affair involving countries like Brazil and India as well. Some form of responsibility for balancing the world economy that would not in fact warrant the connotation "Chermany", a dual mercantilistic approach? Is China out picking easy public relation points among the world poor like during the COP15 conference?

I have heard people saying that the US is bankrupt and that they would default on their debt. I guess some US billionaires recently gave evidence to the opposite. There are apparently 403 billionaires in the US. If they lent the government 2-3bn each on average, the US would be saved. Angela Merkel probably have many good economical advisors. However, if it boiled down to who to believe, President Obama or Chancellor Merkel, it might be good to remember that Merkel was born and raised in East Germany. It is funny though that both Obama and Merkel currently flirts with Russia.

Dramatizing Europe

EUobserver / Barroso says German calls for treaty change are 'naive': "Referring to the German trade surplus of €134 billion, the commission president asked: 'Does the German public know that nearly 86 percent of these 134 billion, i.e., 115 billion, comes from trade in the EU?'"

This an interesting piece of information, if true, it seems a little high. It seems like this can be interpreted to mean that Germany's export is generating the deficits and debts of Southern Europe? These countries borrow to their public expenses while they consume German products. Now Germany wants these countries to cut their public expenses to be able to maintain their import of German goods? Barroso is against hard measures for Southern Europe.

Another interesting parameter of the debt crisis is that France's finance minister Christine Lagarde and a prominent German economist that I overheard on the Swedish radio says that there is no euro crisis. Because the lowering of the Euro value relative the US dollar and the Chinese renminbe facilitates German export to these countries. China exports more to EU than the US and is apparently worried about decreased competitiveness because of this.

Perhaps Obama that called Merkel that €750bn night for her to make up her mind also was worried that US competitiveness in Europe would go down. The US has longstanding claims on China for running an overvalued currency. Barroso says that the crisis has been good for Germany and I guess this is an additional reason to those delineated in his interview in Frankfurter Allgemeine Zeitung today.

Germany is Sweden's largest export nation and we would not like an euro that falls relative the krona either. However, Sweden would probably benefit from a strong and 'free' Germany that checks Russian power in the North East of Europe. If the moral from the above is that this development now rest on bleeding Southern Europe dry and suffering, causing undue societal unrest and tensions, such a wish might not be optimal.