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Another great show with Peter Koenig, this one focused on China. This is not the first time, so catch all our work here,
Peter is a prolific writer about a wide variety of subjects. Just go to this article, then click on his hyperlinked name to see it all,
Enjoy a great conversation!
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Jeff J. Brown (host): So, how are you doing?
Peter Koenig (guest): I’m fine. I’m okay. You know what at our age, we must be happy when we wake up.
Jeff: Well, listen, you got a train to catch. Are you ready to get started?
Peter: Sure. You know, it’s just we can talk a little bit. First, I wanted to tell you to congratulate you on what you have done. How long were you there? A month?
Jeff: Yeah, a month, yeah. And almost a month in May. So, two months in the last six months.
Peter: Yeah, in May. We missed each other in May too. I didn’t make it a little louder. Okay. And you were traveling both times?
Jeff: Yeah. Yeah, yeah. I went and traveled more this time. The first time I went to Shenzhen, Changsha, outside of Changsha, in the countryside. Went to Zhuhai. Oh, I forgot to mention Zhuhai. Yeah, I forgot to mention Zhuhai. And then on the second trip, I was in Shenzhen and then Hefei in Anhui, Huaibei in Anhui. Huangshan and Anhui Zhangjiajie in Hunan went out in the countryside in both places and then went down to Guilin in Guangxi and also went out, and drove out into the countryside, too. And then back to Shenzhen. It’s just amazing.
Peter: It is amazing. And to talk about China, I mean, you know everything.
Jeff: No, but you’ve been to Beijing. It’ll be nice to hear what you have to say and just compare and contrast with what you, with. Because I haven’t been to Beijing since 2000 maybe 17. So, it’s been a while.
Peter: When did you fly to?
Jeff: We flew to Hong Kong both times because to fly to Shenzhen back in May was twice as expensive. And you have to go through Shanghai. There are still no direct flights like there were before Covid. And Hong Kong is so cheap. And then you just take the 30-minute ferry directly from the airport. They even transfer your baggage and everything. It’s amazing. You just walk up to the ferry port desk and show your baggage tags from your flight, they replace those baggage tags with their baggage tags, and the bags are transferred from the airplane to the boat automatically. It’s nice.
Peter: And the boat takes you where?
Jeff: Shekou. Shekou Port in Shenzhen, which is 30 minutes away.
Peter: Oh, that’s terrific. From there you take trains?
Jeff: Yeah. Yeah. Well obviously, in Shenzhen taxis and metro and buses. We did fly from Shenzhen to Hefei on October 1st because it was National Day and I was really worried about the trains. But then everything else Hefei-Huaibei, Huaibei-Hefei, Hefei-Huangshan, Huangshan-Zhangjiajie, Zhangjiajie-Guangzhou, Guangzhou-Shenzhen were all, it after for one leg, it was all high-speed trains at 305km an hour. So, it’s just it’s a different world.
Peter: And it’s so cheap. It’s so cheap. I forgot how much I paid from Shanghai to Beijing, which is 1200 kilometers on this super high-speed train. You know, I think the maximum speed it registers was 530. And in 3.5 hours, we were in Beijing.
Jeff: So, they already have the 500-kilometer train going between Shanghai and Beijing?
Peter: Yes, already in 2019, I think in 2019 they opened it. But yeah, we were on that train twice actually, because I had to get back to Shanghai to take the plane. And we have a direct flight, which is not too bad, a direct flight from Geneva to Shanghai.
Jeff: Oh, wow. Yeah, you’re very lucky. I’m looking at flying back in April, and still, there are no direct flights to Shenzhen. You’ve got to go through Shanghai and huge layovers and it’s just Hong Kong is so cheap and it’s so easy. And with the baggage transfer, you don’t do anything, you know. And it does cost 60 bucks. No, no, not 60 bucks about 40, but costs $40 to take the ferry directly from the airport to Shekou Port in Shenzhen. But it’s worth it. It’s hassle-free. And you’re in the country in ten minutes, and it’s just really, really slick. Well, listen, tell us about it. Well, shall we do a quick intro and we’ll get started. Can I give you a quick intro? Can I give you a quick intro to introduce you to the fans?
Peter: I think next time, we should try to coordinate this to be together there. That would be great.
Jeff: I would love it. I would love it. It’d be fantastic.
Peter: Introduce you to our friends.
Jeff: Oh, yeah, Peter. What was his name? Peter and somebody two guys. You copied them on an email, so would love to meet them.
Peter: Paul and Albert.
Jeff: Yeah, Paul and Albert. Yeah, would love to meet them. You know, of course, you know, we lived in Beijing for 13 years. I mean, we’re old Beijingers. I mean, that’s like my second city. I love that place.
Peter: I love it, too. I love it. You’re right. It’s very expensive. And the one where you want to live. I looked it up a little bit. I’ve never been there of course. It’s in the south. Must have a beautiful climate, less expensive. The city looks great.
Jeff: Yeah, today, I could not afford to live in Beijing, Shanghai, Shenzhen, or Chongqing, the bigger cities I could afford to live in today, they’re just too expensive. But the second-tier cities like Xi’an, Xiamen, and maybe, Tianjin are probably pretty expensive too, but some of the second-tier cities are quite reasonable and Kunming is one of them. Chengdu, the capital of Sichuan is a lot cheaper. And so, because they’re away from the coast, you get on the coast and it gets really expensive. So, but it’s still a lot cheaper than France, that’s for sure. I mean, even Beijing and Shenzhen are cheaper than France, that’s for sure.
Peter: And it’s cheaper than Switzerland.
Jeff: Yeah. Switzerland is even more expensive than France, I think.
Peter: I know, maybe not as Paris, but.
Jeff: Yeah. But it’s still I was sitting there, bought a kilo of beef tips just bought a kilo of beef tips, it’s not a great cut of meat. It’s like to make stew beef bourguignon. And €25.
Peter: For a kilo?
Jeff: For a kilo. And so, I went on my WeChat forum because there are a lot of people in that forum who are living in China. I said, how much would a kilo of beef tip? How much would a kilo of beef tips cost you in China? Oh, I even said fillet. I even said fillet. I didn’t even say beef tips. I said fillet meat. You know boneless meat. You know fillet tender. Because it turned out to be as tough as leather. It was not very good. And they came back, oh 50 to 70 renminbi a kilo. That’s like 8 to €10 a kilo. So, it’s like one-third the price. And as I was traveling around, I realized everything in China is about 3 to 7 times cheaper than in France. It’s just unreal.
Peter: Even Beijing.
Jeff: Yeah. Yeah. Yeah, absolutely. Well, listen, comrade, let me introduce you so you can get to where you need to go. And, let’s try to see each other before you get back from Peru. When do you get back?
Peter: I don’t know yet exactly. It’s the whole issue with the residence card and so on. But I think probably at the latest in April, probably earlier.
Jeff: Okay. All right. All right. Well, that’ll be a beautiful time to be there. Of course, I know the countries in turmoil, but in terrible turmoil. But you speak the language, and your wife is from there. So, you’ve got the inside track, right?
Peter: Yeah. Did you travel with you at this time with your wife in China?
Jeff: No, no, the first time in May I was solo, and the second time I was traveling with a business partner who helped form my new company in Shenzhen. So, we’re going to have a company together in Shenzhen.
Peter: Oh, that’s great. What kind of a company?
Jeff: Well, you have to call it it’s a consulting company for education and educational consulting companies. And I had a company back when we were living in Shenzhen from 2016 to 2019. And but unfortunately, it was during Covid I couldn’t go to China. Everything was closed. France was closed and China was closed. So, for three years, I couldn’t go to China. And so of course I couldn’t do anything.
And so, the company was canceled because there was no economic activity. There was no business activity for over a year, so they canceled it. So, when I went back at the end of September and in October, my CPA, I got a CPA in Shenzhen and we went back and got a new company launched. And it’s so easy they’re so business-friendly in China. And so, in one afternoon we had a new LLC company created and I still have a thousand videos and photographs that I need to post on Twitter, but I’m just not finding time to do it.
But one of the pictures I took was of this center, this business development center in Shenzhen. And you go in, there’s 56 windows, and the place is packed with people creating their own companies. And it was just so easy. You know, you just sit down, fill out the forms and everything. And when I did it in 2016, I did it by myself. However, I had time because I was already living there. This time I didn’t have time. So, I asked my CPA to help. But we got it done in one day. We created a new company in Shenzhen in one day.
Jeff: And so, and with that you can get a residence permit, work permits, and all that. Well, listen, let me introduce you so we can tell the crowd what a special guest you are today. Friends, this is Peter Koenig, and he is an old, old friend of mine. And we have known each other for years. He has been on China Rising Radio Sinoland several times. He is a regular contributor to global research. I’ll put all these links on the web page. He has been traveling around the world for 30 or 40 years. His wife is from South America, so he’s got an incredible global perspective. He’s lived in the United States. He’s traveled, I think, probably on every continent in the world except maybe Antarctica. And have you been to Antarctica, Peter?
Peter: No, no.
Jeff: Okay. Every continent. Have you been to Australia?
Jeff: Okay. So, he’s been on several times.
Peter: Several times. Had a residency in Australia.
Jeff: Okay. Every continent except Antarctica. And so, he’s a world traveler. He’s worked for the World Bank for years and years and years. And he just was in China, I think was it the same time I was in May and he was in Shanghai and Beijing, I have not been to Shanghai, for now, for 5 or 6 years. And I just wanted to get him on the show and just tell us about his trip, what he saw, what he thought, and everything else. So, welcome, Peter to China Rising Radio Sinoland again.
Peter: Thanks, Jeff. It’s always a pleasure to talk with you as a friend and to be relaxed and laugh together and of course, share our very positive experiences. And most of them are, as you said, Chinese experiences. I love to go back to China every time. I feel in many ways I feel much more at home in Asia particularly in China than in Europe. Much, much more.
Jeff: When you went this last time in May, how many times have you been in China approximately?
Peter: In earlier times when I was at the World Bank, I worked in China. And so, I went there several times I don’t know, maybe 12, 15 times or so together.
Jeff: Okay, okay. Incredible.
Peter: My first experience, of course, you landed in Beijing, but then my first work experience in China was in Wuhan of all the places. We developed a sanitation project in Wuhan that was in the 90s. If you look at Wuhan today, which I did, I mean, I wouldn’t recognize. You don’t recognize it anymore. The difference is in everything, not just in that city, but also in Beijing. I haven’t been to Beijing for three years because of Covid. And when I came in May, it was a different city almost of course, you had some landmarks which are the same.
They don’t move. But the city has so much developed. Things changed so quickly, especially in the bigger cities, maybe in the smaller ones a little less. But it’s amazing what the Chinese do and how quickly they, how efficient they are, in everything. You know, we just talked before we went on this show, we talked about the superfast train, which I think came on stream, and was inaugurated sometime in 2019.
Jeff: I didn’t even know that. I had no idea. Because of Covid, I had no idea. 530km an hour.
Peter: Right. And I think it could go faster. But it’s one of those magnetic.
Peter: Magnet. Yeah. The distance between Shanghai and Beijing is about 1,200 kilometers. It took us about 3.5 hours, maybe even a little bit less. And the maximum speed. And you can always see it. And it’s so comfortable. It’s so fast, it’s so exact. It’s so punctual. You know, you talk about the punctuality of Swiss trains. Forget it. This has nothing to compare with. And you can always see the speed on top.
Jeff: They posted at the head of each car.
Peter: They posted at the head of each car. So, the maximum that I can remember was 530km/h, but it can go more. But there are lots of cities between Shanghai and Beijing. And of course, then it slows down a little bit. And I think we had even, I think three stops on that stretch. It’s amazing. It’s really fantastic.
Jeff: Yeah. When they first came out with the high-speed trains, I mean it was like Guangzhou to Beijing. And there was no you didn’t stop. It was like a direct airline. And then they made the commitment that they promised to have high-speed train service for every prefectural city, the capital of every prefecture in China, which is like the county in the United States. Well, maybe bigger than a county, like maybe a region like maybe dividing Oklahoma into five different districts.
So, now high-speed trains from Shenzhen to Changsha or Shenzhen to Hefei, they stopped several times. And they’ve just built these hundreds of railroad stations all over China just like mushrooms. It’s just unbelievable. And they stop two minutes and they’re gone again. It’s 305km, 500km an hour on these high-speed trains. I made a comment to someone just from Shenzhen to Changsha which are considered two second-tier cities because they’ve only got 17 million and 14 million people, respectively, their second tier.
When I just got on my phone app, I got my phone in Chinese and I was looking for trains to take from Shenzhen to Changsha, between these two second-tier cities, there were either 53 or 58 trains a day. That’s just like one every 30 minutes. And they’re full. They’re like 300 kilometers an hour bus. They’re like buses. Yeah, it’s just unreal.
Peter: It’s unbelievable. And that’s the same experience I had with the subway, the metro system in Beijing. First of all, even though it’s in Chinese people who do not speak Chinese. Every city has announced it in English too. You can see it on top. It’s in English. That’s one thing. And it’s so easy to understand. It’s very, very simple to get on and off these trains, and if I remember correctly, I think they had about 8 or 10 subway lines in 2019. Now they have 18. And I think the maximum they are planning is 24. That’s the plan right now to have 24 by I think by 2025 if I remember correctly.
So, what the target is and I’m sure they will reach that. And even now it’s almost like that from one metro station, you never have to walk more than a kilometer to your destination within a city that has the inner city, the city itself Beijing has about 21 or 22 million people, but larger Beijing, which has well, you know better than me, which has, I think, three large suburbs around it comes to, I think, more than 40 million people, which is all connected. But even within these 21 million, you have a subway system where you never have to walk more than a kilometer from one station to your destination. It’s amazing.
Jeff: And for people who don’t know Beijing, it is really spread out.
Peter: It’s really spread out.
Jeff: It goes forever.
Peter: There are no mountains that separate them. Yeah. It’s the biggest mountain is probably the Summer Palace.
Jeff: Yeah, Coal Mountain outside of the Forbidden City. Well, what was it like in Shanghai? You know, you hear all these Western MSM oh, the economy’s dying and there’s no one there. And what was it like in Shanghai?
Peter: Well, you don’t see anything from the economy dying. Of course, this is Western propaganda. Either it’s Western propaganda or they don’t know what the economy thinks of China and maybe both. But there’s of course when China had this enormous growth, 12, 13, 14% or 10 and so on, that was one thing that, of course, it was much easier because they started from almost zero. But they could continue like that. But the world, the rest of the world doesn’t keep up with it. That’s one thing. Then I spoke with the professor who has become a friend in the meantime, who was an economist and who was actually at the same time in Washington when I was with the World Bank. He was the executive director for China at the IMF.
Jeff: Oh, wow.
Peter: So, we have so we know what we are talking about. We’re talking the same language. And he explained to me what was actually happening and I think this makes a lot of sense. The number of reasons why the growth rate drops the soon as the growth rate is something very linear and that’s invented by the GDP stuff is invented by the Western economy. And it doesn’t give you any indication of what the distribution of wealth is, who is poor, who is rich, and what produces how much. You can break that down a little bit, but it’s still not really an indication of how the economy, the internal economy works not even the external.
So, what he explained to me is that there’s a huge difference, as you know, between the East Coast, the East Coast is enormously developed all over the place. It reflects it’s also reflected in the cost of living and in the prices. And then you have the interior, particularly the west of China and the center of China, which is much, much less developed. And that, of course, for a country socialist country like China, this doesn’t work in the long run. You know, you need some kind of equality. That’s one thing.
But the other thing is that there is an enormous difference, a social difference which could bring uneasiness among the people. Therefore, now there’s an enormous migration between the inner part of the western part of China and the East Coast for work that is needed on the East Coast and also for people to send back money. So, to put that on a more equal train, they started to develop maybe some five years ago, if I remember correctly, they have started to develop, put the accent of development more on the interior of China.
And when you travel in the interior, you probably saw that on your recent trip, there’s a lot going on with infrastructure, school buildings, housing, roads, and train systems. Transportation is particularly great in China. And so, a lot of that is put into the internal development so that people feel more at ease staying home. They have the same education opportunities as they have in the East, and it’s already tremendously changed particularly the housing that they do in housing, how quickly.
Peter: It’s unbelievable. If you just live in the West and have never been to China, it’s very difficult to understand. So, this is one of the things. And of course, if you do that, if you have internal development rather than export-oriented development, then the growth rate slows. But that doesn’t mean that the economy is not working and probably working even better for the country itself. That’s one thing. The other thing that they have done is reorient their trade, particularly the export trade towards Asia.
And they have recently, I think, at the beginning of 2022, inaugurated what the abbreviation is called the RCEP. That’s the largest free trade agreement in the world. It encompasses ten Asian countries, ASEAN countries, plus four, they call it. The Plus Four includes Japan, South Korea, Australia, and New Zealand, I believe they are part of it. So, you have about 14 countries. And they project. They have already done pretty well in the first year and the second year. This year is even better.
And they project that within the next 3 to 5 years, their trade potential is going to exceed the entire trade of all other trade agreements in the world. That will create an enormous if you could calculate that in Western style GDP, it would be something just enormous. I haven’t done that yet but you could do that. And this works quite well. Now they will have this APEC meeting that started today in San Francisco I believe. They will certainly I’m almost sure they will talk about that and how that is going to affect the rest of the world and how it can be partially integrated and so on.
But what is important, and that’s why I’m saying it makes a difference in the Chinese economy or in the Western indicators of the Chinese economy to say it in those words. It is totally dollarized. You know, all the trade within this huge trade agreement is in either local currencies or in a currency chosen by the countries that trade with each other. It could be very often it’s probably the Chinese yuan, but that can also be local currencies. Actually, China encourages trading in local currencies so each one of these countries has to set up each other swap agreements so that the swap agreement is very simple.
It’s basically a bank account between the different central banks. And so, you avoid the Western payment system. You just deal with each other. I think China had for a while I don’t know whether it still existed. It had for a while, one even with France, a swap agreement, and probably with other Western countries. That’s very possible. So, this is the easiest way. Now eventually what they probably will do to create a virtual currency, something according to similar to the IMF’s.
Peter: But it’s not now of course it’s not. Yeah. It has nothing to do with the IMF, but it applies the same principles where the weight of the different economies is averaged out according to each country that participates and you have a virtual currency with which you trade, and you can even use that virtual currency as many countries do in the West with the SDR. You can use that currency as a reserve currency. And so, this is most likely from the talks. I had many, many interesting talks in Beijing with the Renmin University and the Chung Young Center for Economics.
This is going to be most likely the payment system they will eventually come up with for the new BRICS some sort of it’s not there yet. And probably what they will do is also start out with the swap agreements between the countries and deal with local currencies or with the Yuan, but also not in US dollars. And all of that, of course, affects not only psychologically and sociologically the West and how a church in China, but also, of course, in fact, how to measure growth in China is much, much more different. If you orient your trade much more to Asian countries now to this trade agreement, you kind of reduce your relationship, your trade relationship with the West.
And obviously for good reasons. Although I must say it’s not easy for China to de-dollarize. And the Chinese know that because there is a symbiotic relationship between the United States and China, they depend on each other to a large extent, I think the US and the West much, much more than China on the West. But still, there is a mutual dependence. All of that contributes to what the beginning of this conversation was how does the economy do? And this is true that nothing works. That’s BS. That’s the Western talk.
Jeff: I can verify with you the one thing that stuck out to me as I was traveling like I said, I was in Anhui province, which is supposed to be this poor backwater province in China. And Hefei was it used to be the armpit of China. And now it’s like a model of development and Zhangjiajie, et cetera. And when I was in Changsha in May, the thing that just slaps you in the face is the amount of low-income housing that’s going up. I mean, kilometer after kilometer after kilometer of high-rise apartment buildings just going up like mushrooms.
My family and I, my wife and I, and our daughter actually lived in one of these low-income ghost towns, so-called ghost towns outside of the Fifth Ring Road in Beijing. And, nice 80 to 100 square meter apartments, two bedrooms, one bath kitchen, nice big living room, terrace, utility room for washing machine very nice. So, these are just going up with elevators of course going up 20, 25, 30 floors and very nice and clean.
That’s the one thing that just blew me away. And then the other thing that blew me away is we rented taxis in May of Amir Khan, a member of the China Writers Group. He’s a professor at Hunan University in Changsha, and he and I rented a taxi. We went out about 100km outside of Changsha, which is the capital of Hunan. And actually, we went to Mao Zedong’s second wife’s memorial. You know, she was beheaded by the KMT for not renouncing the Communist Party and the revolution. So, they cut her head off.
So, there’s a memorial for her about 100km away. We got to see the countryside. And I got to see the countryside in Huaibei in Northern Anhui, which is almost to the border of Shandong, and also in Zhangjiajie, went out into the countryside 50, 60km, and in Guilin went out into the countryside 50, 70km. And they are everywhere. They’re building everywhere. I mean, even down to the smallest hamlet they’re building. They’re just building apartments and they’re widening roads and putting in roads and bridges and tourist attractions.
Now, one of the big to replace all the foreigners who are no longer coming to China. Now, the big deal, the big thing is red tourism because the Chinese are starting to get back to their revolutionary roots thanks to XI Jinping really trying to get people to focus on the success of China since 1949. So, there are red tourist sites coming up, you know. Well, this is where Zhou Enlai met somebody, and this is where Hualong a famous general had a battle with the KMT here and or with the Japanese here.
So, there’s all these red. This is where Mao Zedong lived for one week, et cetera. And so now there are hundreds of millions of Chinese traveling around China going to all these red historical sites about the Chinese revolution going back into the Republican period before liberation in 49. So, it’s just it’s stunning. And I was like, where were we? We were like it was a small town. It was like not even a big city. I forgot I took a photograph of it. And eventually, out of those thousand photographs and videos, I’ll get to it.
But they had a bus station in this small town with these short little basically shuttles that went out into the countryside so that every village could be connected, even the smallest village, at least once or twice a day, probably once in the morning and once in the afternoon has little shuttle busses going out into the boondocks to make sure that every village person can get into town, go see a doctor, take care of administrative, whatever it is, do some shopping, take care of business. Where else are you going to see that around the world?
It’s just staggering. So, yeah, what you just told me confirms everything. And I will say one other thing and then ask you another question. I saw it and I will send it to you, Peter. I saw it’s a table from the IMF from 2022. Maybe you’ve seen it and in purchasing power parity terms, not GDP, not exchange rate terms like the West likes but in purchasing power parity terms, they rank the countries in GDP based on productive GDP.
What portion of the economy is productive? And it was staggering. China came in first place ahead of the second-place United States, and China was over $15 trillion in PPP terms, and the United States 5 trillion. So, the Chinese economy is three times more productive than the United States. And then all the other countries after that just fell off the charts. So, what you’re just talking about is all this internal development, and everything I saw that’s exactly what’s going on. They’re beefing up the interior of the country.
Peter: This is exactly the second point I wanted to make in terms of GDP. I think that threshold was passed either in 2020 or 2021 when China became number one in PPP terms surpassing the United States. And what you just mentioned was in absolute terms. Now, if you translate that on a per capita basis, China is also ahead. You know, the difference is, of course, a little bit smaller because of the huge difference in the population of the two countries. But still, I think I forgot exactly when it passed that threshold to bypass the United States.
Jeff: No, no, no, Peter was in 2014. It was 2014 when the IMF came out and quietly announced that in PPP terms China was the biggest economy and even the Economist Magazine had to say something. It was 2014.
Peter: That into per capita.
Jeff: Oh yeah.
Peter: It took a little longer. It was, I think in 20 or 21.
Jeff: Okay. I didn’t know that. I didn’t know.
Peter: And I think and I put that most of the time when I write something about that, I make sure that the PPP terms are considered because this is the real indicator of the economy. What can you do with the money? What is the, as you call it, the productivity of the money? That’s really what counts.
Jeff: Well, just like when I told you, I said I paid €25 for a kilo of not very good beef and the same kilo in China costs eight 8 or €10. So, a house and a gallon or a liter of gasoline and a head of lettuce and everything else costs a lot different in Geneva in Switzerland than it does in China. So, we know how that goes.
Peter: Absolutely, absolutely. No, no, there’s a huge difference. And now what counts also in this year is the 10th anniversary of the Belt and Road. And they just had a huge conference in Beijing I think last month I think in the middle of October or something like that. I also wrote something about it to actually not only take a balance of what has happened today but also to somehow project the future in the direction it will go in the future.
And now with the new BRICS, which will be expanded next year, probably again, the orientation of the Belt and Road will not totally, but to some extent reorient itself towards the BRICS because it’s logical. And that’s also something that is a de-dollarization effort, in other words, getting away from the sanctioning program of the West. And another factor that has to be considered, of course, is this it’s very which makes it much more difficult.
If you look at what we used to call convertible currencies in the world there’s the Euro, there are the different Anglo-Saxon currencies, the Yuan, of course, and the Yen, and so on. There are a number of what was called convertible currencies, though, that you usually use for trading. If those together are 100%, 60% or almost 60% of them are in US dollars. So, the world is flooded with US dollars, and therefore it’s difficult to get rid of the US dollar to work outside of reality.
And comparison, we just talked about the size of the economy in PPP terms China’s number one economy in the world has only about 5% of the total of money flow in the world 60% of the US dollar, and less than 5% or just about 5% of the Yuan. But it is a solid currency because it’s based on nothing like the euro and the dollar they’re based on not, they’re not even hot, cold air. So, the Yuan is based on a solid economy and therefore, can be exchanged anytime against anything they want because it’s really a hard currency. Now all of this has to be thrown into the balance.
And it’s a balance that looks, at the surface as not being equal, because you have this strong United States with so many dollars flooding the world, but dollars that are worthless. And then, on the other hand, you have an economy with only about 5% of all this currency floating around. So, you have to see that actually, the measurement of the economy that the West has carved so far is as, has absolutely no meaning in real terms. I think we have to be clear that other indicators are necessary, and the Chinese are working on these other indicators. And that’s what is very, very encouraging.
Jeff: Well, until they get those new indicators, also China does not include crime in their GDP all criminal activity. They don’t include prostitution, drugs, illegal drugs, and all that which the United States does. And then, of course, what portion of the US economy is military with a $1 trillion military budget, you factor all that out. And I think they also include you may know better than I do Wall Street financial activity is also paper activity thrown into the US GDP.
Peter: Administration is the biggest portion of the US GDP. Administration that means legal fees. That means financial fees. That meant financial. Just what you said. That amounts to almost 50%. I think it’s about 40%. So, if the US economy is and a lot of it is war material, war production, the one which is not outsourced, which is still taking place in the US, is close to 50%. Imagine if tomorrow would be peaceful. The economy will collapse.
Peter: And all of that, I think, has to enter somehow into the equation. And the West doesn’t talk about it. So, it’s a good thing that we now do and that this is at least a sort of information for people who listen to it that not all is the way it looks especially not if it’s told by the Western media.
Jeff: Yeah. Hey, Peter, it’s 1130. What time is your train?
Peter: It’s not a train. I can take the car. I can take the train. But I think I probably will take the car because I have a little bit more flexibility.
Jeff: Okay. All right, well, let me know if you need to go. Well, I don’t want to miss the train.
Peter: I wanted to tell you maybe 1 or 2 small social examples that I’ve had. Maybe I’ve told you that or at least I’ve written them which I think is something which is stunning and which you would never find or I don’t think you would find that in the West. I have a niece particularly my wife’s niece is also my niece who lives in Shanghai. She just moved back to Shanghai. She had to leave the country for Covid. And she’s just back in Shanghai. And not too long ago, I think in August or September, she moved back.
She had not too long ago an experience because she used maybe an old banking card and wanted to get some cash out of a cash machine, and it didn’t work. And it was dark and banks were closed and everything was closed. And she was kind of desperate standing there not knowing what to do. And she told us there was a lady passing by, a Chinese lady passing by and saw her desperate and said, well, what do you need? What’s happening?
And she told her what was happening, and said “How much money do you need? I gave it to you. I’ll give it to you. And if you have the money, you can give it back to me if you want to.” This was so natural. Imagine that happens to you and you’re standing at an automat. Your life depends on some cash for the weekend. You think somebody would walk up to you and tell you, here’s my money. If you have it back, you can return it to me. I mean, this is stunning.
And the same experience we had with her. It was also her in 2019 when she was still in Shanghai. And that was then there with my daughter and we met with her a number of times and she had this electric motor these little motorcycles that you cannot hear them. It’s dangerous for them also because you can’t hear them. So, she came to the hotel parked the little motorcycle on the sidewalk with all her bags on it, and said, hey, “What are you doing with the bags?
At least give them to me. I put them up in the room. Or put your motorcycle in the courtyard of the hotel.” “Oh, no, there’s no need. Nobody steals”, she said. Okay if you know better but just for security. “No, no, no it doesn’t. Don’t worry.” She left it there. Maybe 3 or 4 hours later we came back and everything was absolutely untouched in the street, which was not heavily traveled everything was there. And this is not even in Geneva you could do that.
Jeff: Maybe Japan. Japan is very similar in that level of honesty.
Peter: It goes in the same direction. Yeah. It must have something to do.
Jeff: Yeah. In Shenzhen also by the way, I want to tell you to confirm what you were talking about, how people are migrating to the coast, especially after Covid when the economy took a real hit. I was shocked, I was shocked when we left Shenzhen in 2019, the official population was 14 million. And I couldn’t believe it. I was in the metro. In fact, somebody was I was talking, I asked somebody, what’s the population?
I asked a Chinese person, what’s the population of Shenzhen? And they said, 17 million. I said, oh, that can’t I didn’t say anything, but I said, that can’t be possible. It was only 14 million in 2019. And then I get on the metro and there’s this big banner sign selling the promoting people to use the metro. And it shows a guy going like this with the sun creating a silhouette. And he’s like this with the skyline of Shenzhen behind him. And in Chinese it said 17 million plus one.
So, the idea was that he was the 17 million and he was the one. So, it’s true. So, 2019, 2021, 2022, 2023. So, they have added 3 million people in four years. Where else could that happen? And there are no homeless people. It’s spotless. There are apartments going up everywhere. So, anyway, that proves that there are a lot of people migrating to the coast like you talked about. But the same thing in Shenzhen 17 million people.
Nobody locks their electric bikes. Nobody their mobility and motor scooters and stuff. Nobody locks them. They leave their helmets hanging on them. They leave their stuff on the side of things. And then here in France, we’ve got at gas stations and grocery stores, they’ve got the big cages with the bottles of butane and butane to cook for cooking or for heating your house or whatever, although no one can afford it anymore for heating your house, that’s for sure.
But anyway, here in France, they literally the gangs show up with chainsaws even in broad daylight cutting these cages open and stealing the butane bottles or using saws to cut them the little gas station that’s about 300m away from here told me he got robbed. He had cameras, he had a license plate, the license plate and everything gave it all to the police nothing happened. Nothing happened. And in Shenzhen, they leave their butane bottles on their electric bikes all night long, and no one messes with it. No one messes with them. It’s just staggering.
Now, they still do lock their bicycles, I would say I’m talking like just ten-speed bike. Most of those are still locked, I guess maybe the kids find it too tempting to take one, and for younger kids. So, most of those are still locked. But it’s just the level of honesty is just amazing. So, what’s the one thing that that impressed you the most? I mean, so just in general about Beijing. What just impressed you when you took off to fly back from Shanghai to Geneva? What was the one thing that just stayed in your mind?
Peter: From Beijing, there’s a direct flight.
Jeff: Oh, yes from Beijing.
Peter: Well, most everything I think one of the things that is very impressive was very impressive for me is the subway system, the metro system. For me as a foreigner not knowing the language. And I mean, I’ve been to many times in Beijing, but still, Beijing has grown enormously, as I said, and it’s so easy to operate and it’s so efficient, it’s so punctual and secure.
Jeff: And clean.
Peter: Absolutely clean, spotlessly clean.
Jeff: You can eat off the floors.
Peter: Yes, yes, yes. And this is something which impressed me a lot. Also, the way I mean, the Chinese are organized in general. Of course, you have traffic jams like they’re becoming worse and worse, but aside from that, they’re cautious about the way they drive. It’s not the same as ego, ego, ego, in cities of Europe where everybody presses ahead and follows your tailgates on the Autobahn, it doesn’t exist. It’s sort of this type of social thing the honesty as we just talked about impressed me a lot.
And then, of course, on the more professional side, what I just what we just talked about for quite a while is how they measure the economy and what the indicators of the Chinese economies are versus the Western indicators. It’s a different, totally different story. So, yes, I think there are so many things that impress me a lot. Maybe efficiency is one of the things that sticks out the efficiency in a very honest way. Not cheating. It’s its true efficiency. People work hard, and they commit themselves to what they do. They love what they do. You can see it. And that’s why they’re committed to it, the sort of love their lives. This is something that really impressed me.
Jeff: The one thing that impressed me in Shenzhen and Shenzhen is a special city, because there was nothing there 40 years ago, except it was a little fishing village with 20,000 people back in 1978, 1980 before they started to turn it into a special economic zone. So, almost everybody there is from outside of Shenzhen. There’s now a generation of kids who were born there. The first generation of native Shenzhen is coming online, but virtually everybody else is from some always ask, where are you from? And it’s just like, where are you from?
You know, and it’s just they’re from all over. They’re from everywhere. And that’s why in Shenzhen all you hear is Mandarin. You don’t hear Cantonese like you do in Hong Kong, because they have to speak Mandarin because they’re all from different parts of China. So, they can’t speak their local dialects. So, everybody speaks Mandarin, which is nice for us foreigners. What really impresses me in Shenzhen is just the sense of solidarity and community and people trying to help each other and people engaged with each other, the society.
I guess it’s a fancy word, but the socialization of the people on the streets and in restaurants, and it’s very cool. And it must be said, it’s basically the it’s the San Diego of China. You know, in the United States San Diego is known as this very laid-back kind of cool city, while Shenzhen is very laid back. It’s not like Beijing or Shanghai, it’s really kind of kind of slow-paced. And I mean, the people are busy, but the overall ambiance is very sort of calm and subdued, and that’s what struck me the most. And then the honesty just the honesty.
I remember somewhere, I paid somebody too much and they gave me my money back and just stuff like that. Well, listen, my friend, you got to go someplace outside of Geneva, apparently. So, I’m going to let you go and appreciate you getting on this show before you took off. And I’m going to tell everybody, by the way, how does anybody, I can get emails from you when you write articles for global research, is that your own personal email, or is that something global research sends out?
Peter: Well, no, no, what I send you is my personal. I have a list of people on my personal email to whom I sent these articles.
Jeff: So, if you go to global research and people want to follow what you’re writing, can they sign up for your stuff or do they get everything from global research?
Peter: They get everything from global research. But what they can do is do Global research on top of the screen, you can press at the bottom on the author of the article, and you will get a list of everything.
Jeff: I’ve seen, I’ve done that for you. You have all your articles going back for several months. Okay. Well, I will definitely give that link to everybody because your articles are really, really up-to-date. They really speak truth to evil power. And people need to read your stuff. And so, let’s try to get together when you get back in April. And so, I know we’ve been talking about trying to see each other. If you are in Geneva, and I’m in Normandy we should have done it sooner.
Peter: Maybe it will be easier to get together in China.
Jeff: Well, everybody, this is Jeff J. Brown China Rising Radio Sinoland signing out with my good friend and comrade Peter Koenig in Geneva, Switzerland. And I’m going to give him a well-deserved Buddhist bow for the amazing work that he does and for educating people around the world. And thank you so much for taking time out to see me before you drive off into the sunset. All right. We’ll stay in touch.
Do yourself, your friends, family and colleagues a favor, to make sure all of you are Sino-smart:
Google ebooks (Epub) and audiobooks:
44 Days Backpacking in China: The Middle Kingdom in the 21st Century, with the United States, Europe and the Fate of the World in Its Looking Glass https://play.google.com/store/books/details?id=YBKHEAAAQBAJ
China Rising: Capitalist Roads, Socialist Destinations https://play.google.com/store/books/details?id=YNmLEAAAQBAJ
BIG Red Book on China: Chinese History, Culture and Revolution
Amazon print and ebooks (Kindle):
44 Days Backpacking in China: The Middle Kingdom in the 21st Century, with the United States, Europe and the Fate of the World in Its Looking Glass
China Rising: Capitalist Roads, Socialist Destinations
BIG Red Book on China: Chinese History, Culture and Revolution
Praise for The China Trilogy:
Why and How China works: With a Mirror to Our Own History
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