Of sneezing and cold...

I... Not of the medical sort, mind you, but the economic sort. It's been said that when the US sneezes, the rest of the world catches a cold. That's just how important the American economy is. If it slows, it's buys less, and all the factories in the world start to accumulate inventory. This has been true for as long as I understood these things.

But just last week, something rather profound happen. I was even asked by CNA to comment on it: the fact that the US Federal Reserve Bank decided not to raise interest rates despite decent economic data domestically for fear of tipping the emerging markets (read China) further into slow down. The Chinese economy has been slowing the past few years and it is now markedly in a slower growth mode. And it looks like the maxim has found another powerful patient.

I was in Chengdu earlier this week. This city was one of the epicenters of the Three Kingdom Wars. In fact Liu Bei's masuleoum is right there in the middle of the city at WuHou shrine, along with giant statues commemorating him, his grand strategist, ZhuGeLiang and the warrior general, ZhangFei. It was also one of KuoMingTang's last bastion before they ceded control of the Mainland to the Communist Party. For a city that is arguably in the middle of nowhere (sited as it is in the southwest of China), it sure has an illustrious past.

Its recent past, however, proved more difficult. As the communist party mismanaged the country and the economy, all of China started to deteriorate and while the great "capitalism with chinese characteristics" revival worked, it started first with the coastal cities, first Shenzhen, then the rest of the eastern seaboard esp Shanghai. It took a few decades before the effects reached inland. In many cases, the 'build it and they will come' philosophy to create new 2nd and 3rd tier cities left quite a few of these places as ghost towns. Chengdu threatened to be one of them.

But as I spent half a week here, in meetings and some sightseeing (incl pandas!) I remain astounded by the world class infrastructure (6-lane main thoroughfare, with additional side lanes for buses and bicycles) laid out in an organized grid template dotted by efficient square blocks of commercial and residential buildings. It's far from a ghost town but a thriving modern city that somehow still manages to hang on to its traditions of tea and mahjong.