Photo, left:  Weiying Zhang,  economist at BeiDa 
 
JOHN BATCHELOR SHOW
 
Co-hosts: Gordon Chang, Forbes.com & Daily Beast.
 
Hour One
Wednesday   5 October 2016 / Hour 1, Block A: Walter Lohman, director at the Asian Studies Center at The Heritage Foundation, in re:  Duterte
http://ca.reuters.com/article/topNews/idCAKCN1220O4
http://www.cnn.com/2016/10/01/asia/philippines-duterte-hitler-comparison/
Wednesday   5 October 2016 / Hour 1, Block B: Rick Fisher, senior Fellow at the International Assessment and Strategy Center, in re:  India and China.
http://indianexpress.com/article/opinion/web-edits/indias-rafale-deal-is-leaving-china-rattled-heres-why-3061300/
Wednesday   5 October 2016 / Hour 1, Block C: Nitin Gokhale, former anchor at New Delhi Television and now an independent security analyst, in re:  India.   At War in Kashmir, India and Pakistan Wage Lunch in Washington  Bullets are flying in the Himalayan Mountains, but the South Asian rivals are spinning ...    Indian generals eye six-month campaign in Pakistan-controlled Kashmir – report   ;  India builds underground bunkers on Kashmir frontier as border clashes with Pakistan escalate  ;
http://www.ibtimes.com/india-pakistan-conflict-update-war-talk-indian-bishops-call-prayers-peace-2426738
Wednesday   5 October 2016 / Hour 1, Block D: Eric Trager, The Washington Institute for Near East Policy,  in re:  Egyptian Muslim Brotherhood. 
 
Hour Two
Wednesday   5 October 2016 / Hour 2, Block A: Weiying Zhang*,  economist at BeiDa   and author, The Logic of the Market: An Insider's View of Chinese Economic Reform; and Michael Aronstein, president of MarketField Asset Management; in re:  the pocketbooks of China. Retraction of growth in the US, Europe, China, New topic for China: putting money abroad.    A $676 bil or $1 trillion outflow to investments to where they’re guaranteed to get their money back: Vancouver, Sydney, New York City. Legal & political reform in China are essential; only under a rule of law system will people be confident. Prof Zhang has been in a public debate with Prof Lin, who fled Taiwan and is [effectively] a poster boy for Beijing.
The market can play a more useful role than the state can. The state has crowded out both foreigners and Chinese domestic entrepreneurs.  As the govt does less and less, and private sector does more and more, development improves.
Michael Aronstein:  This problem is pandemic. Even the free-markets are what I call impaired: France is heavily impaired & their economy shows it. US and UK are less so but trending in the wrong direction.
Economic performance has been disappointing: regulation makes it very very difficult for entrepreneurs to function, and govts don’t seem to understand . A free market with many fedgling endeavors provides biodiversity to see which little ecosystems thrive. In contrast, govt  is like a giant monoculture.  We see this over and over again.
The political infrastructure dosn’t draw the right inferences from events.  I think the problem in China – intervention – is taking place around the world and the intellectual arguments against it aren’t loud enough.
The Chinese central govt doesn't let companies fall – investment, steel mills, anything.
* Zhang Weiying (张维迎; Zhāng Wéiyíng; born 1959) is a prominent Chinese economist and was head of the Guanghua School of Management at Beijing University. He is known for his advocacy of free markets and his ideas have been influenced by the Austrian School
Wednesday   5 October 2016 / Hour 2, Block B:  Weiying Zhang*,  economist at BeiDa   and author, The Logic of the Market: An Insider's View of Chinese Economic Reform; and Michael Aronstein, president of MarketField Asset Management; in re:  a discussion of economics and markets earlier this evening at the Women’s National Republican Club in New York.
Failure is the engine of American success. Example: NASA is a huge operation that builds; it doesn’t launch.  New competitors launch and fail – and re-emerge in to profit, success.
China needs to understand this. What’s important is: over decades, provinces, cities various governed entities, have built vastly too many coal mines, steel plants, factories of many ilks.  After these turn out to be relatively useless, and any possible domestic or international market has failed to buy enough to keep the operation functioning, localities try to keep these working even without any market: they're called zombie firms, The only ones allowed to go out of bz are the ones the state has labeled as politically inutile.
Because of regulation, and in every sector where the govt overreaches . . . have people do [unproductive work], and to keep a semblance of capital flow,  ask citizens to mortgage their home and take out loans. Then when damage sets in, it’s across the entire nation.  Institutions like the Fed cause the failures to be mammoth.
China believes in protecting everyone all the time in [blanket] guarantees of [politically-useful persons and companies]. State hides problems.   . . .  and they don't even have to worry about elections!  Of course, when you don't have elections, the political class is insecure as it conspicuously lacks legitimacy.
Almost paradoxical, but it’s the weakness of authoritarian systems.
The last yoy contraction in China according to state figures was 1976.  That’s the year Mao died. Figures are wrong, but  . . .   Zhang and Lin have at it – should there be more regulation or shd the mkt determine the economy?
The currently weakening GDP:  China faces a new stage of reform.
Wednesday   5 October 2016 / Hour 2, Block C: Weiying Zhang*,  economist at BeiDa   and author, The Logic of the Market: An Insider's View of Chinese Economic Reform; and Michael Aronstein, president of MarketField Asset Management; in re:  Remedies?  [Cut off the heads of the snake?]  First, China needs to stop printing so much money, which has spoiled the economy and let bad companies survive. If China can downsize this sector, growth because efficiency will be improved. China needs more competitors in intl mkts. Big four state banks control now; not good.  Also make bankruptcies less likely.
Metrics of the dimenson of the problem: China’s economy is a portion of the US’s (half?); M2  in China is 1.9 of the US – most unhealthy. When you try to deflate that, China has passed the point of no return. No solution is politically feasible to [carry]  China past this crisis of historic proportions.
They’re stalling; how long can they?  Needs to prepare for a big bubble. Japan tried the same manoeuver – it began in in 1980s and Japan is still stuck.
The massive capital outflows are an important signal that something is wrong.  China’s foreign reserves, according to official reports, fell by about $800 billion in the last two or so years.   In fact, the decline has probably been larger than that, and the reserves are certainly not as liquid as claimed.
Stock mkt is stable; problem is in real estate/housing mkts:  Shenzhen, Shanghai, Beijing, Kwangchou -  the “tier one” cities.   “Tight credit conditions” in China are tight only by a Chinese standard.
Wednesday   5 October 2016 / Hour 2, Block D:  Sadanand Dhume,  AEI, in re:  India. India’s ‘surgical strike’ on Pakistan territory hints at new era for nuclear-armed rivals   The country had chosen verbal warnings over military action in past dealings with Pakistan. But some said India’s prime minister was under pressure to respond forcefully to attacks.
Pakistan is a terror state: Sanctions won't work as long as it enjoys ...   And as the Wall Street Journal columnist Sadanand Dhume points out, “the list of jihadists not from Pakistan themselves — but whose passage ...
 
Hour Three
Wednesday   5 October 2016 / Hour 3, Block A: Monica Crowley, Fox, & Washington Times Online opinion editor;  in re:  ‪@DataDhrumil‪ ; chart by @RitchieSKing showing #attacks in the #VPDebate 53eig.ht/2drdQtL ;  http://www.nytimes.com/2016/10/06/us/politics/vice-president-transcript.html?partner=rss&emc=rss&smid=tw-nytimes&smtyp=cur&_r=0
Wednesday   5 October 2016 / Hour 3, Block B:  Monica Crowley,  ,  in re: 
Wednesday   5 October 2016 / Hour 3, Block C:  Jonathan Payne, chairman, Geological Sciences, Stanford University, in re: Ecological selectivity of the emerging mass extinction in the oceans  (Jonathan L. Payne, Andrew M. Bush2,  Noel A. Heim1,  Matthew L. Knope3,  Douglas J. McCauley)   Science  16 Sep 2016: Vol. 353, Issue 6305, pp. 1284-1286; DOI: 10.1126/science.aaf2416 http://science.sciencemag.org/content/353/6305/1284  End Permian mass extinction, abt 252 mill YA  Cretaceous mass extinction, at 66 million YA. 
Wednesday   5 October 2016 / Hour 3, Block D: Jonathan Payne, chairman, Geological Sciences, Stanford University, in re: Ecological selectivity of the emerging mass extinction in the oceans  (2 of 2)
 
Hour Four
Wednesday   5 October 2016 / Hour 4, Block A:  James Taranto, WSJ, in re: Vice-presidential debate recap.  (1 of 2)
Wednesday   5 October 2016 / Hour 4, Block B:  James Taranto, WSJ, in re: Vice-presidential debate recap.  (2 of 2)
Wednesday   5 October 2016 / Hour 4, Block C:  Dr Lara M Brown, George Washington University, in re:    Vice-presidential debate: methodology, locutions, et al.  (1 of 2)
Wednesday   5 October 2016 / Hour 4, Block D:   Dr Lara M Brown, George Washington University, in re:    Vice-presidential debate: methodology, locutions, et al.  (2 of 2)