The sin of pride is alive and well in my person, but I am still able – now and again – to acknowledge someone whose abilities far exceed my own, particularly when it comes to the area I know the most about, finance. As such, I’m going on the record: I love David Webb.
His website (webb-site.com – already exceptional) has trenchant analysis of Hong Kong markets and politics, written in an concise but deeply informative way I have only seen a few others manage. If I was in Hong Kong, I would instantly ask to become his apprentice, and would happily negotiate down to typist if need be. His Enigma Network post in 2017 was what initially led me to him, and I have explored most of the back catalog as well as keeping up with his ongoing work. I commend his writing to anyone interested in the particularities of Hong Kong finance and politics, or anyone who likes sharply-written reports on short ideas.
In particular, the text of his recent address to the University of Hong Kong provided an interesting counterpoint to the (very) light analysis of China by the New York Times I objected to in my last post. As a Western resident of Hong Kong for over 25 years and demonstrably strong researcher, Webb argues that the foundation of Chinese growth over the past 10 years has been credit-fueled and accordingly dooms it to bouncing off the barrier to reaching “high income” status. This isn’t necessarily a new argument, but his boardroom and market-based approach makes it fresh. His points on Singapore and the Greater Bay Area are brief but convincing. Overall, he thinks that China will move towards democracy, but that in lieu of top-down reforms, it will take a crisis and corresponding bottom-up protests and changes to make the Chinese Spring blossom.
The speech stands on its own two feet, but it reminded my of a recent London Review of Books post on declinism in Great Britain. Going through the piece that was looser, albeit more emotionally affective, than it perhaps should have been, I was struck by the references to British companies and their demise at the hands of professional managers or far-removed peers. I think the argument gets lost in its attempts to define decline as both absolute and relative, as relating to social, industrial, and military matters, but seemed to me that declinism essentially came back to keeping up with the Joneses. It’s easy to do better when you are a global empire, or you’ve just won a war, but much harder when decades of peace allow the rest of the world to catch up and find new ways to compete. Especially when you become the hare rather than the tortoise and let your lead lull you into taking a nap (the 1980s, anyone?).
As one of my old professor’s pointed out, it’s easy to complain that China and the like have incredible infrastructure and companies, but keep in mind they’ve only had them for two decades! If you were given the chance to watch decades of global economic development and start from scratch, wouldn’t you have planned to copy the best methods currently available? Philadelphia was the sight of the 1876 World Expo, and widely agreed to be the manufacturing capital – or at least one of them – of the planet. It had only been a few decades since the Industrial Revolution entered full swing, and it so happened that a number of forces concentrated the results of those developments here. Almost 150 years later, no one would argue that the city has maintained that position – frankly, it would be amazing if it did. The cast iron sewage system that was cutting-edge and worked marvelously then is now crumbling and nothing like what a modern system would resemble. Similarly, I would be willing to bet that 150 years from now, the Pearl River Delta will not be the manufacturing hub it is today. I don’t view that as a decline in and of itself – certainly, it’s possible there will be a decline, but equally possible is simply that some other geography has surpassed it due to a new set of economic and political forces. Will the Chinese historian of 2160 be gnashing his or her teeth in frustration, having experienced 50 years of relative decline? Perhaps. But hopefully they – as all proponents of decline – also have the wisdom to consider their absolute place in history and reserve their sharpest criticisms for when they are truly stepping backwards, rather than watching others pull ahead.
smq.world 