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Bottom Up Works Best But The Top Needs To Show Who Is Boss

As mentioned in an earlier post, “The Real Damage to China,” one of the biggest stories to go relatively uncovered, was the cancellation of the Initial Public Offering (IPO) of Ant Financial Group (“Ant”). The story was overshadowed by the results of the US election, and while the identity of the US President and his (they’ve always been men) policies are significant to the Asia-Pacific region, the story of the cancellation of Ant’s IPO was perhaps more so for the region’s wellbeing. Not only does the Ant IPO involve the world’s second (and according to Purchasing Parity, the largest) economy in the world, the story also underlines the type of economic models for countries in Asia-Pacific should pursue.

How does Singapore fit into this debate? Well, while Singapore has been held up in the Western world as the great beacon of stability and safety for Western free market capitalism, Singapore has also been a role model for countries in the Asia-Pacific region that looked forward to getting rich quickly without giving up political control. The biggest fans of the Singapore model were non other than China’s Communist Party (CCP). Singapore’s founding Prime Minister, Mr. Lee Kuan Yew fondly recalls how Deng Xiaoping, who was then China’s Paramount Leader, visited Singapore and reportedly told him “If only all I had was Shanghai.” Lee Kuan Yew returned the favor and became a groupie of all things China, so much so that he was openly disdainful of the other Asian Giant (in part because he got snubbed by Indira Gandhi, who allegedly asked him “Where is Singapore on the map”)

While the Singapore-China relationship hasn’t worked out as Mr. Lee had hopped for (who can forget the royal screwing Singapore received over the China-Shuzhou Industrial Park Co, Ltd – which only turned a profit when the chaps in Shuzhou became majority shareholders), the CCP has been a keen understudy of Mr. Lee’s PAP and rightly or wrongly, China’ incredible success from changing from an economic minor contributing barely two percent of the world’s economy in 1979 to nine point three in 2010 ( https://www.frbsf.org/economic-research/files/Lin.pdf). To his credit, Deng Xiaoping had perhaps raised more people outside of absolute poverty than anyone else in history.

It goes without saying that the CCP has grabbed the headlines for this transformation, pretty much in the same way that the PAP has done in Singapore. While Deng Xiaoping’s opening has undoubtedly raised millions out of poverty, it has created a slight problem – namely it made the case for strong authoritarian rule. The many Indian business people I’ve dealt with constantly point out that China succeeds because of its’ government, while the bits of India that function, do so despite the government. One of my favourite Indian executives said it best – “When you tell Indian authorities that you have $10,000,000 to invest and will create jobs, they’ll say “why,” but when you go to China, they will say “When”

One only has to compare the 2008 Beijing Olympics to the 2010 Delhi Commonwealth Games. Beijing put up an incredible show, Delhi couldn’t get toilet paper into the Games Village. Communist China gets things done while democratic India does not. The comparison is not lost in this part of the world. It also doesn’t help that the only other big democracy, namely the USA has been, for the last four years, a mess.

I don’t deny that a competent autocrat can do good. I live in Singapore, which, despite being increasingly expensive, remains relatively safe and clean and our currency remains respectable. While we may have a veneer of a democracy (there really is an election every five years), it’s sort of a “guided” one, where things are generally dictated by our founding father from his grave.

However, the problem with autocratic systems is that you have a situation where there’s no guarantee that that the proverbial top dog will remain benevolent forever or that the successors will remain so in perpetuity. In Singapore Lee Kuan Yew argued that he needed to step down because he wanted to prepare the nation for life without him, a matter in which he is correct. However, he didn’t quite let go and fade away and today, Singapore, while functioning well in so many ways, seems to have become a prisoner in its old business model.

Now, take that model and multiply it by many times when it comes to China. Deng Xiaoping had the decency to relinquish his titles and two of his successors (Jiang Zemin and Hu Jintao) did what they needed to do and then gave up the top job after a decade. Sure, they have played politics but they’ve done so from behind the scenes. Now, you have Xi Jinping, who decided that he’s never going to stepdown. While Mr. Xi, has done some reasonable things like reign in corruption (I only describe it as reasonable in as much as it was probably necessary to reign in corruption, but it was probably also an excuse to purge the system of his rivals), Mr. Xi is the one Chinese leader, who bans Winnie the Pooh in China because someone on the internet compared him to Winnie the Pooh. This being the leader of a China that is supposed to be far removed from the dark days of Mao (who, for the record killed more people than the entire Second World War, due to his managerial incompetence).

The other area where the Chinese model appears to be the magnified version of the Singapore one, is in where the heroes are. Here in Singapore, the economic story is either about a multinational pumping lots of money into the country or a government controlled one doing all sorts of things to make Singapore Inc shine. In China the story of great economic success is inevitably about the State-Owned Giants that are competing with their American counterparts to climb up the Fortune 500 rankings.

While the giants have great turnover, the real success of China comes from small private enterprises in places like the Pearl River Delta that don’t have state resources and are starved of capital. As such, they have had to become innovative and creative in order to survive.

Mr. Ma’s Alibaba is what you’d call one of these small enterprises made good and “Ant” is what you’d call the very type of enterprise that China needs. Mr. Ma understood that Chinese banks, despite their size, don’t serve customers well and so he used technology to make life easier. While the State-Owned version of the financial system is generally speaking, awful, the private fintech version of the system founded by the two Mr. Ma’s (Jack Ma of Alibaba and Ma Huateng of Tencent Holdings Limited) works. Not only have China’s natives taken to using QR codes to skip the local financial system (so much so that the beggars in China prefer QR codes to cash), the system pioneered by the two Mr. Ma’s scares the American banking system.

Mr. Ma of Alibaba is the type of ant that China needs. Small and diligent enough to find creative ways to do things. It was of course all very well, when he stuck to building his business and giving folksy talks to the Western world.

However, things got a little different when he accused China’s regulators of running the banking system like a “pawnshop” and stated that “The game in the future is about innovation, not just regulatory skills.”

https://fortune.com/2020/11/07/jack-ma-ant-ipo-suspended-china/

https://www.youtube.com/watch?v=DGzgpArH5AI

Let’s put it this way, good governance is an important element to creating prosperity. China is the prime example. It floundered under Mao but prospered under Deng. However, Mr. Ma has a point when he states that it is not the only element in creating sustainable prosperity and that good governance or good regulators are not much unless you have a culture of innovation and creativity. Entrepreneurs can emerge without good regulators (entrepreneurs for example pop up and get things done in the crappiest of places), while good regulators are pointless if you don’t have the people get things done. To most people, it would be an obvious point. To the CCP it was a point that said that Mr. Ma needed to be taken down a peg and Mr. Xi himself got involved.

The message should be clear to China’s entrepreneurs. No matter how clever you are or how much you create for the nation, you are ultimately subordinate the head of the CCP and this shouldn’t be limited to the CCP but to all authoritarian states who believe that authoritarianism is good for business.

Mr. Ma has made billions in China and let’s remember that his first IPO in 2014 was on the New York Stock Exchange. Did he, a member of the Communist Party, actually trust the Communist Party to protect prosperity?

The third world has plenty of small “Ants” who are hard working and creative. Increasing education means they have the ability to understand new technologies and to be innovative. This means that they have the ability to cut through the power of established enterprises that have a cozy relationship with the government. Is it something that authoritarian states can tolerate in the long run? This an essential part of creating prosperity.

Third World is filled with Ants are an essential part of raising prosperity.

 

Tang Li

*Although I’ve been based mainly in Singapore for nearly two decades, I’ve had the privilege of being able meet people who have crossed borders and cultures. I’ve befriended ministers and ambassadors and worked on projects involving a former head of state. Yet, at the same time, I’ve had the privilege of befriending migrant labourers and former convicts. All of them have a story to tell. All of them add to the fabric of life. I hope to express the stories that inspire us to create life as it should be.

 

 

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20 Responses to “Bottom Up Works Best But The Top Needs To Show Who Is Boss”

  • TUMASIK Patriot:

    Very eloquently written and put forth by Tangfastic…points to PONDER

    1. Deng & Lie were foreign-educated and exposed to Western Culture and system including their “THINKING” one in Britain and the other in FRANCE…there it ends…One is a Nationalists and Commie with Nation & People in MIND…the other an OPPORTUNIST with only a little Island to rule and take charge with Dreams of a greater one to Include Malaya and Failed Miserably when the Malayan Leaders realize he was playing Racial Politics to take CONtrol

    2. Deng was purged but return with help from his Mentor Chou En-Lai while the other became a Mental Mentor bestowed on him by his useless son

    3. Deng visit Singapore to see for himself the changes since the last transit on his way back to China from France AND Singapore WAS THEN A COLONY

    4. The opportunist took that as a Compliment and Praised and Heap Accolades about the visit and put himself in a pedestal so HIGH many especially the West fell for it…Deng??? he sniggered and took it in his Stride and the CON was CONNED @ Soochow and still ongoing…China Always had HONG KONG another Colony to look at for Economic and Industrial progress and he did so by OPENING Shenjen the Border & Coastal City to fulfil his Vision and the rest is History regarding the Success and NOT the ILLUSION created by a Con Artiste who got CONNED

    What happened after Deng retired is Secondary and Like The Nationalist & Patriot he IS…he requested his body be Cremated and the Ashe Scattered over China in a Plane

    Now!!!, can you see the Difference Between a Great Man like Deng and an OPPORTUNISTIC Coward like Lie who Con You???…

    COMMONSENSE tells the TRUTH…CCONditioned & CONviction will accept Lies as truth

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  • Good for nothing but themselve:

    Here, the Pappy white ants are eating up the sheeples socio-economic infrastructure to feed themselves beyond imagination.

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  • xoxo:

    There are all sorts of *ANTS* and there are *ant$*?
    Ants can bite nastily,dont play play.
    Regulators are important or all hell can break lose.
    But over-regulation like insecTICIDE can kill creative n innovative ants like in $in City.
    Cant even chew gum?
    But can COUNT N CHEW $$$ for some,while on DUTY?

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  • Marvellous Article:

    Love this kind of wholesome writing. Very professional.
    Awesome.
    BUT
    nothing compared to the non-legislative Temporary Bustop Ribbon Cutting Act.

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  • Harder Truths:

    You are confusing a communist economy with a free market system. They are completely different. If China did not have western production heavily investing in it the last 30+ years and acted as the world’s cheap goods manufacturer, the communist system would be dead by now. raising more thna 20% off the poverty line was because China was able to piggy back on the cheapo goods craze over this period of time. Enter the US stock market with extremely shady companies with no regulation because of Obama. China has a debt to GDP load of about 250% which will have to come out of the citizen’s pockets to pay for the uplift of the citizens – so at the end the citizens will still pay for what the government did – it is just delayed because the mnney is still being rolled over as debt.

    A communist system will not allow a free market – now that foreign production is moving out from China, what is Xi’s plan? He is killing off all the private enterprises if he cannot control them. Xi has angered many Chinese businessmen who want and need a proper free market in China.

    Authoritarian rulers hate free markets – they have no control over it. But it is the only thing that allows real growth and not real debt. China has posted 2% ‘growth’ this year.

    China is trying to continue its magic via the OBOR and BRI plus TERP and what not. In other words, whoever joins this group will continue to buy stuff from China whether they like it or not. This is the only way Xi’s CCP can continue promising the people they are not liable for the trillions spent on infrastructure – when in fact all he has done is to cover up the fact using rolling debt and an overextended banking sector.

    A strong system allows for a free market economy that does not collapse because one man at the top croaks. China has to choose one or the other. Either way, Xi is probably toast.

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  • PAP had GAME the Nation's $$$$:

    The Government will help locals access to more than 12,000 information and communications technology (ICT) job opportunities through a three-pronged approach, said the Ministry of Manpower (MOM) and the Infocomm Media Development Authority (IMDA).

    Of those, about 95 per cent of the job openings are for PMETs (professionals, managers, executives and technicians), they said on Tuesday (24 November).

    The agencies also stated

    Quote

    If anyone belief the above is going to ” SOLVE ” Jobless ppl,

    YOU ARE HARE BRAIN !!!

    you must be a ” FREAK ” like them PAP ministers.

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  • So many jobs claimed available:

    So many jobs and training position claimed available .
    Apply but not a single reply especially for Seniors PMETs…
    Where are the jobs for Seniors ?

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  • Harimau:

    Don’t take the tiger for a cat.

    When Lau Lee made the President position, it was meant to be a tiger, waiting to pounce on any incoming party.

    But OTC, being a real tiger loyal to the people of Singapore, pounced on the incumbent party.

    Other people who are cat can put on tiger clothing, but nevertheless behave like a cat.

    Don’t hope a cat to be a tiger.

    Harimau meow.

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  • PAP had GAME the Nation:

    London remains a popular international destination for defamation cases, where awards are generally subject to a ceiling of £275,000.

    Press freedom advocates published an open letter last year to draw the British government’s attention to what they called a “growing trend to use strategic litigation against public participation (Slapp) lawsuits as a means of intimidating and silencing journalists working in the public interest”.

    “Such legal threats are designed to inhibit ongoing investigations, and prevent legitimate public interest reporting. Abuse of defamation law, including through Slapp lawsuits, has become a serious threat to press freedom and advocacy rights in a number of countries, including the UK,” the letter said.

    Quote

    You can be assured that our gov is inflicting upon us the max in civil suit.

    TO SILENCE OUR RIGHTS OF FREEDOM OF SPEECH, VOICES OF DISSENT !!!

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  • YourHead:

    Blinded by religion, who couldn’t understand the operations of the wages of Sin(Rom 6:23) AND the law of Sin and death(Rom 8:12) in nations, themselves partake of the wages of Sin, and the law of Sin, with their followers in the “House of the Louse” -  these self appointed preachers build for themselves tens of thousands of the House of the Louse(idolatry)all over the world, in every nation instead of being the salt of the earth and a light to nations.

    Nations have been deceived and misled by the “House of the Louse”.
    The action is in the “House of the Lord” – your Head.

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  • PAP mandate strong:

    @ Deng was purged but return with help from his Mentor Chou En-Lai ….

    No no no no….
    Please dont spare other details.

    After Mao passed away, Deng was purged by gang of 4. Its was subsequently Hua guo feng who succeeded Mao bring him back or pardon him or whatever but as the chinese saying 婦人之仁 or 養虎為患, later Hua was ousted by Deng.

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  • TUMASIK Patriot:

    PAP mandate strong:
    @ Deng was purged but return with help from his Mentor Chou En-Lai ….

    No no no no….
    Please dont spare other details.

    After Mao passed away, Deng was purged by gang of 4. Its was subsequently Hua guo feng who succeeded Mao bring him back or pardon him or whatever but as the chinese saying 婦人之仁 or 養虎為患, later Hua was ousted by Deng.

    Deng was PURGED during the Cultural Revolution with Idiots running around with a little Red Book like our Passport…(ever wonder why our Passport is similar to Moa’s Red Book of Evil???)…Deng’s son was pushed from the window and became a cripple AND do you KNOW that as a Fact or do you NOT KNOW???… Deng, when “rehabilitated” through En-Lai, bide his time and TOOK POWER when it was time and the rest as they say is HISTORY!!!

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  • TUMASIK Patriot:

    PAP mandate strong:
    @ Deng was purged but return with help from his Mentor Chou En-Lai ….

    No no no no….
    Please dont spare other details.

    After Mao passed away, Deng was purged by gang of 4. Its was subsequently Hua guo feng who succeeded Mao bring him back or pardon him or whatever but as the chinese saying 婦人之仁 or 養虎為患, later Hua was ousted by Deng.

    concise COMPARISON btw two persons One A short But Strong and Real Man and the other a supposedly Tall as he claimed when interviewed by Charlie Rose (but Asian standard lah!!!) but a Coward working for the enemy the JAPS during WW2…
    no further details needed simple COMMONSENSE facts not the FAKES as Spin by a Coward and his Newsreel and barking dogs

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  • Dr. Chan:

    Commies are like Sith lords. Apprentice kills Masters, on and on…..
    Darth Sidious kills Darth Plagueis. Then Darth Vader kills Darth Sidious etc.
    Fighting for absolute power and control with suppression and intimidation.

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  • reality:

    ANT has to face reality….who is in control of China.
    The suspension of ANT IPO may be good for China system in the long term.
    Now the distribution of Wealth in the world is crazy…look at Tesla valuation and Elon wealth…recipe for disaster when the wealth gap is too much.

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  • TUMASIK Patriot:

    Dr. Chan:
    Commies are like Sith lords. Apprentice kills Masters, on and on…..
    Darth Sidious kills Darth Plagueis. Then Darth Vader kills Darth Sidious etc.
    Fighting for absolute power and control with suppression and intimidation.

    B*$t**d$ are WORSE they stabbed their friends behind the BACK and locked them up with NO CHARGES btw…3 (three if you renounce under pressure) or 32 years if you Have Integrity and Principles

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  • PAP mandate strong:

    Yes i know but before Hua let Deng loose, Zhou already passed away and for quite some time.

    By the way, you really want sg politics to go thru the savagery stages Mao unleashed just to test a person qualities.

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  • TUMASIK Patriot:

    PAP mandate strong:
    Yes i know but before Hua let Deng loose, Zhou already passed away and for quite some time.

    By the way, you really want sg politics to go thru the savagery stages Mao unleashed just to test a person qualities.

    The CON praised himself and How Great Deng was and his relationship with Deng & China “Kwan Si”…Just to DEMOLISH the Lies& Spin he is an Expert for…and if you read the Bio of Deng you will KNOW more but than it might NOT interest you as little Knowledge is Enough but DANGEROUS!!!…plus the Fact that En Lai knowing his health conditioned took Deng under his wings KNOWING that China will be in good hands with Deng as a Potential successor…Moa by than is Hopelessly under the spell of his actress wife and most likely suffering from dementia more interested in other matters (like young actresses) than China…and the Lie took the opportunity to meet him B4 he (Moa) kick the bucket typical of a Bastard making a Grand Stand

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  • TUMASIK Patriot:

    PAP mandate strong:
    Yes i know but before Hua let Deng loose, Zhou already passed away and for quite some time.

    By the way, you really want sg politics to go thru the savagery stages Mao unleashed just to test a person qualities.

    The CON praised himself and How Great Deng was and his relationship with Deng & China “Kwan Si”…Just to DEMOLISH the Lies& Spin he is an Expert for…and if you read the Bio of Deng you will KNOW more but than it might NOT interest you as little Knowledge is Enough but DANGEROUS!!!…plus the Fact that En Lai knowing his health conditioned took Deng under his wings KNOWING that China will be in good hands with Deng as a Potential successor…Moa by than is Hopelessly under the spell of his actress wife and most likely suffering from dementia more interested in other matters (like young actresses) than China…and the Lie took the opportunity to meet him B4 he (Moa) kick the bucket typical of a Bastard making a Grand Stand

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  • TUMASIK Patriot:

    PAP mandate strong:
    Yes i know but before Hua let Deng loose, Zhou already passed away and for quite some time.

    By the way, you really want sg politics to go thru the savagery stages Mao unleashed just to test a person qualities.

    Singapore a little DOT 14 miles by 17 miles B4 going metric…Easily CONtrolled…and the Gurkhas did a good job at that…what Savageery??? Hock Lee Bus Strike??? & Workers locking arms in protest for better working terms and condition NOT to be CONNED???..

    Get Real!!!

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