China After Mao

"The Great Transformation

By Odd Arne Westad and Chen Jian

Yale, 424 pages, $38

Mao Zedong died in the early hours of Sept. 9, 1976. He had led the Chinese Communist Party (CCP) for more than four decades and served as head of state since the establishment of the People's Republic of China on Oct. 1, 1949; he was the only leader a significant portion of China's population had ever known. Heralded as "the people's great savior" and "the reddest reddest red sun in our heart," Mao occupied a godlike status that had been fostered for years through propaganda and political campaigns. His death, at the age of 82, was no surprise to Mao's inner circle, who had witnessed his long physical and mental decline, but left a void at the center of China's government. Replacing the legendary founder of the country would be a daunting task.

As Odd Arne Westad and Chen Jian detail in "The Great Transformation: China's Road From Revolution to Reform," Mao's passing posed even greater difficulty because it followed the decade of political upheaval, party infighting and social conflict known as the Cultural Revolution. Launched by Mao in 1966 to purge the CCP of those whom he considered revisionists, the Cultural Revolution also furthered Mao's desire for "the complete transformation of all modes of thinking among China's youth." Students organized into bands of Red Guards and turned against their teachers, destroyed works of art and culture, and terrorized anyone with interests they considered old or feudal. Although Mao brought an end to the most violent period of the Cultural Revolution by 1968, chaos lingered and society remained in disarray into the 1970s.

Messrs. Westad and Chen focus on what they term "the long 1970s" in China, which extends from approximately 1968 to 1984. The first part of their book covers Mao's final decline, as younger cadres began jockeying for position, though they had to do so with caution. "Aspire to too much power," the authors write, "and Mao would turn against you, even from his sickbed, sometimes with fatal results." The second half of the narrative details the power politics that followed Mao's death, as China faced perhaps its greatest pivot point of the 20th century. Would the country continue to follow the pattern that Mao had established, of continuous revolution and politics above all? Or would the next generation of CCP leaders seek a balance, one that emphasized the importance of politics but also pursued economic growth and improved standards of living for China's people?

By choosing to begin with Mao's final years, Messrs. Westad and Chen build a strong case for their account of how and why events played out after the leader's death. As he aged, the authors explain, Mao appeared to take pleasure in toying with the loyalties of those who surrounded him, "setting one group against another, noting his displeasure with someone only to laud the very same person to the skies the next day." He elevated his wife, Jiang Qing, to a leading role in the Cultural Revolution, but at times also refused to see her. Lin Biao, the minister of national defense and Mao's chosen successor in the late 1960s, exhibited signs of what might have been bipolar disorder, and by 1971 was mired in depression and conflict with those around him, including Mao. In September of that year Lin made an apparent attempt to defect to the Soviet Union. His plane crashed in Mongolia, causing "a shock to the Chinese political system even beyond the purges and killings of the Cultural Revolution."

Lin's betrayal of the chairman, who had publicly supported him, invited questions about Mao's ability to identify a proper successor who could lead the CCP and the country after his death. A political seesaw ensued and continued for the five years between Lin's death and Mao's. Cadres on the left, including Jiang, fought for influence against the aging Premier Zhou Enlai and other moderates. Deng Xiaoping, a Mao loyalist who had been purged but not expelled from the party earlier in the Cultural Revolution, enjoyed a brief elevation to the inner circle before once again finding himself on the outside in the final months of Mao's life. Palace politics were constantly in flux, with an increasingly feeble Mao at the center of it all.

Into this high-stakes game of musical chairs entered Hua Guofeng, whom the authors describe as "taciturn but amiable," and who seemed to bridge the two camps by expressing support for Maoist ideology while also laying out plans for the economic growth that China badly needed. Upon Mao's passing, Hua assumed the role of chairman and quickly moved against the most far-left members of the leadership, including Jiang and her Gang of Four colleagues. Like so many others throughout the country, Hua wanted to see the chaos and confusion of the preceding decade brought to an end. It was time to get China back on track.

Hua, however, would not be the person to do so. He had not sufficiently distanced himself from Mao and the disasters of the Cultural Revolution; meanwhile, Deng had generated enough support to enjoy another political resurrection. Bit by bit, he maneuvered himself back into a position of power and by late 1978 had sidelined Hua, bringing the long tail of the Mao era to a conclusion.

After decades of state control and relative isolation under Mao, China was now headed for an era of "reform and opening," the key refrains of Deng's time at the top. While Mao had received U.S. President Richard Nixon in 1972, Deng pressed for formal relations with the United States and, in 1979, embarked on a well-received visit to the country. Chinese officials fanned out on inspection tours around the world, intent on identifying and bringing back ideas that might facilitate China's economic modernization. At home, economic experiments came from below, with ambitious farmers seizing the opportunity to sell excess yields and budding entrepreneurs founding companies that built the private sector at a remarkable rate.

Within five years, the pace and scale of China's "great transformation" had reached a level that must have stunned anyone thinking back on what the country looked like at the end of Mao's rule. Messrs. Westad and Chen credit these changes to "a combination of leadership compromises, security needs, and pressure from below for faster economic growth," as well as the skill of Deng in guiding the CCP back to a position of legitimacy after the chaos and privations of the late Mao years. "By the end of 1984," the authors note, "China had reached a phase in which it would remain for the next generation. It had left the period of revolutionary dislocation and open terror behind and moved into a stage of authoritarianism combined with high economic growth driven by market mechanisms."

Yet looming over the later chapters of "The Great Transformation" is the shadow of what would come in 1989, when Beijing and other cities saw mass protests that provoked a violent crackdown ordered by Deng. Messrs. Westad and Chen mention the protests only briefly, a thorough treatment of those months beyond the scope of their work. Thinking ahead, however, casts the events of this book in a different light. China changed in remarkable ways during the long 1970s, but the upheaval of the late Mao years left a desire for strength and stability that Deng and other party leaders then pursued at a terrible cost. What might be the greatest transformation -- a true reckoning with the past and a thorough re-evaluation of CCP ideology -- is one that has yet to take place.

---

Ms. Cunningham is a writer and historian of modern China in Ann Arbor, Mich." [1]

1. REVIEW --- Books: China After Mao. Cunningham, Maura Elizabeth.  Wall Street Journal, Eastern edition; New York, N.Y.. 16 Nov 2024: C.7

Niekas negali sau leisti parduoti jų būstą --- Dažniausiai vyresni namų savininkai gali pasinaudoti istoriniu būsto kainų kilimu

  „Štai viena ryškiausių tendencijų JAV šiuo metu: namų savininkai turi rekordinį 35 trilijonų dolerių kapitalą, daugiau, nei dvigubai daugiau, nei buvo sukaupta 2008 m. būsto katastrofos išvakarėse.

 

 Sparčiai kylančios nekilnojamojo turto vertės padalija amerikiečius į tris plačias stovyklas: tuos, kuriems dabar yra uždarytas namų pirkimas, tuos, kurie iš tikrųjų yra įstrigę jų dabartiniuose namuose, ir laimingąją mažumą, kuri gali lanksčiai išsigryninti pinigus iki istorinių rekordų.

 

 JAV būsto kopėčių apačioje reikalai niūrūs. Pandemijos metu išaugus būsto kainoms, nekilnojamojo turto vertė toliau didėjo, net jei dėl palūkanų normų kilimo hipotekos tapo mažiau prieinamos.

 

 Tai pakeitė, kas eina pro nekilnojamojo turto agentų duris. Remiantis naujausia Nacionalinės nekilnojamojo turto asociacijos (NAR) ataskaita, pardavimų pirmą kartą pirkėjams dalis sumažėjo iki rekordiškai žemo lygio – 24%.

 

 Ir pirmą kartą pirkėjai, kurie pasirodo, yra labiau pagyvenę beveik dešimtmečiu. Tradiciškai amerikiečiai įsitvirtino nuosavybės kopėčiose, būdami 20-ies metų pabaigoje. Šiandien vidutinis pirmą kartą pirkėjų amžius yra 38 metai. Tuo metu, kai daugelis amerikiečių gali sau leisti įsigyti būstą, jie praleido 10 metų, kai nekūrė gerovę, kuria džiaugėsi vyresnės kartos.

 

 Taip pat yra lyties elementas. Vienišos moterys, perkančios pirmąjį būstą, yra šešeriais metais vyresnės už vienišus vyrus. Mažesnės vidutinės pajamos reiškia, kad joms reikia daugiau laiko sutaupyti pradinį įnašą. Tačiau jos pirmenybę teikia būsto kopėčioms. 20 % vienišų moterų dalis, pirmą kartą įsigyjančių būstą, tarpe išaugo daugiau, nei dvigubai, nei vienišų vyrų.

 

 Būsto nuosavybė – prabanga, kurios daugelis jaunų šeimų nebegali sau leisti. Beveik trys ketvirtadaliai žmonių, įsigijusių būstą nuo 2023 m. liepos mėn. iki 2024 m. birželio mėn., neturėjo su jais gyvenusių vaikų iki 18 metų – tai dar vienas visų laikų žemumas NAR įrašuose. Tiesa, čia turi įtakos mažėjantis gimstamumas ir tai, kad poros vėliau kuria šeimas. Tačiau tai taip pat yra ženklas, kad vis daugiau amerikiečių tėvų įstrigo nuomoti. Negalėdami padengti būsto išlaidų su 30 metų fiksuotos palūkanų normos hipoteka, jie susiduria su būsima nuomos infliacija.

 

 Milijonai namų ūkių, kuriems pasisekė patekti į nuosavybės kopėčias, susiduria su kitokiomis problemomis. Kylant būsto kainoms, esami namų savininkai popieriuje tampa daug turtingesni. „CoreLogic“ duomenys rodo, kad jie turi vidutiniškai 315 000 dolerių nuosavo kapitalo, palyginti su maždaug 186 000 dolerių pandemijos pradžioje.

 

 Tačiau pasinaudoti šia dovana nėra lengva: jei savininkai nuspręstų persikelti, jie turėtų imti daug brangesnę hipoteką. Remiantis Morgan Stanley JAV būsto stratego Jimo Egano analize, beveik septynių iš 10 esamų skolininkų palūkanų norma yra mažesnė, nei 4,5%.

 

 Mažesnė grupė, sudaranti maždaug ketvirtadalį visų hipotekos turėtojų, buvo pakankamai išprususi, kad pirktų ar refinansuotų būstą, kai skolinimosi išlaidos per pandemiją pasiekė visų laikų žemumas ir dabar joms taikomos mažesnės, nei 3 proc.

 

 Ši grupė turi mažiausiai paskatų parduoti ir paaukoti savo istoriškai mažas būsto išlaidas. Tačiau kompromisui - nėra judėjimo laisvės.

 

 Savininkams taip pat nėra pigu pasinaudoti savo turtu kitais būdais. „Bankrate“ duomenimis, vidutinė būstu paremtos paskolos palūkanų norma yra 8,41 proc. Namų nuosavybe remiama kredito linija yra dar brangesnė.

 

 Tačiau šiandieninė būsto rinka yra aukso kasykla kiekvienam, kuriam būstas priklauso visiškai. Šioje grupėje yra beveik 40 % amerikiečių namų savininkų ir visi, kurie yra pakankamai turtingi, kad jiems visiškai nereikėtų finansuoti būsto, taip pat žmonės, kurie savo nuosavybėje gyveno pakankamai ilgai, kad būtų sumokėję didžiąją dalį jų hipotekos arba visiškai ją grąžinę.

 

 Nenuostabu, kad vyresnio amžiaus žmonės yra labai aktyvūs dabartinėje būsto rinkoje. Tipiškas pardavėjų amžius pasiekė visų laikų rekordą – 63 metus. Daugelis šios kartos žmonių turėjo pasistengti, kad įsigytų pirmąjį būstą devintajame dešimtmetyje, kai įperkamumas taip pat buvo prastas. Dabar jie gali finansuoti patogų išėjimą į pensiją, naudodamiesi jų namuose sukauptu turtu. Tačiau savininkai kai kuriose šalies dalyse gali turėti trumpą laikotarpį, kad galėtų išsigryninti rinkos viršuje. Būsto kainos pradeda kristi kai kuriose valstijose, ypač Teksaso ir Floridos srityse.

 

 Namų medžiotojai buvo įstrigę nuošalyje, tikėdamiesi, kad būsto paskolos taps prieinamesnės, nes Federalinis rezervas sumažins palūkanų normas. Tačiau vyksta priešingai. Paskutiniai Freddie Mac duomenys rodo, kad 30 metų paskolos su fiksuota palūkanų norma savaitės vidutinė palūkanų norma dabar yra 6,78 %, palyginti su 6,09 % tą savaitę, kai FED pradėjo mažinti rugsėjo viduryje.

 

 Hipotekos palūkanų normos yra labiau susietos su tuo, kas vyksta su 10 metų iždo pajamingumu, nei su FED nustatytomis trumpalaikėmis palūkanų normomis. Investuotojų susirūpinimas dėl JAV fiskalinio deficito dydžio ir didesnės infliacinės politikos galimybe antrajai Trumpo administracijai 10 metų pajamingumą sumažino iki 4,43%. 

 

Istorijos bėgyje  30 metų hipotekos buvo įkainotos maždaug 2 procentiniais punktais daugiau, palyginus su iždo pajamingumu.

 

 Taigi, ką daryti, jei šiandienos hipotekos palūkanų normos yra nauja norma? 6,78 % vidutinės kainos būsto mėnesinė įmoka suvalgo daugiau, nei ketvirtadalį vidutinių JAV namų ūkio pajamų. Tai daugiau, nei net 2008 m. būsto burbulo viršūnėje.

 

 Nesumažėjus būsto kainoms, gali išsikristalizuoti sudėtinga padėtis, kurioje atsiduria jaunesni namų medžiotojai ir šeimos. Vyresnio amžiaus amerikiečiai mėgaujasi aukso era, kad galėtų išsigryninti pinigus, bet platesnę šio keisto būsto bumo naudą sunku pastebėti bet kam kitam." [1]

 

Gali verkti iki valiai, verkti aimanuoti, užkirsti keliai takeliai, minom užminuoti..."

 

1. EXCHANGE --- Heard on the Street: No One Can Afford To Sell Their Home --- It's mostly older homeowners who are in a position to take advantage of the historic rise in house prices. Ryan, Carol.  Wall Street Journal, Eastern edition; New York, N.Y.. 16 Nov 2024: B.13. 

No One Can Afford To Sell Their Home --- It's mostly older homeowners who are in a position to take advantage of the historic rise in house prices

"Here's one of the most striking trends in the U.S. right now: Homeowners are sitting on a record $35 trillion of equity, more than double what had built up on the eve of the 2008 housing crash.

Skyrocketing property values are dividing Americans into three broad camps: those who are now locked out of homeownership, those who are effectively stuck in their current homes, and a lucky minority who have the flexibility to cash out at a historic high.

Things are bleak at the base of the U.S. housing ladder. After a run-up in home prices during the pandemic, property values continued to increase even as interest-rate hikes made mortgages less affordable.

This has changed who walks through real-estate agents' doors. The share of sales to first-time buyers has dropped to a record low 24%, according to a recent report by the National Association of Realtors, or NAR.

And first-time buyers who do show up have aged almost a decade. Traditionally, Americans got a foothold on the property ladder during their late 20s. Today, the median age of first-time buyers is 38. By the time many Americans can afford a home now, they have missed out on 10 years of wealth creation that older generations enjoyed.

There is a gender element, too. Single women buying their first home are six years older than single men. Lower median incomes mean they need more time to save a down payment. However, they are giving priority to getting on the housing ladder. At 20%, single women's share of first-time home purchases has jumped to more than double that of single men.

Homeownership is a luxury that many young families can no longer afford. Nearly three-quarters of people who bought homes between July 2023 and June 2024 had no children under 18 living with them -- another all-time low in the NAR's records. True, falling birthrates and the fact that couples are starting their families later play a role here. But it is also a sign that more American parents are stuck renting. Unable to lock in their housing costs with a 30-year, fixed-rate mortgage, they are exposed to future rent inflation.

Millions of households lucky enough to be on the property ladder face a different set of issues. Existing homeowners are becoming much wealthier on paper as house prices rise. They are sitting on $315,000 of equity on average, up from about $186,000 at the start of the pandemic, data from CoreLogic shows.

But tapping that bounty isn't easy: If owners decide to move, they would have to take on a much more expensive mortgage. Almost seven in 10 existing borrowers have a rate below 4.5%, based on an analysis by Jim Egan, Morgan Stanley's U.S. housing strategist.

A smaller group representing about a quarter of all mortgage holders were savvy enough to buy or refinance their homes when borrowing costs hit all-time lows during the pandemic and now enjoy a sub-3% rate.

This group has the least incentive of all to sell and sacrifice their historically low housing costs. However, the trade-off is no freedom of movement.

It isn't cheap for owners to tap their equity in other ways either. The average rate on a home-equity loan is 8.41%, according to Bankrate data. A home-equity line of credit is even more expensive.

But today's housing market is a gold mine for anyone who owns outright. This group represents almost 40% of American homeowners and includes anyone wealthy enough to not need home financing at all, as well as people who have lived in their property long enough to have paid down most of their mortgage or cleared it entirely.

Unsurprisingly, older people are very active in the current housing market. The typical age of sellers has reached an all-time high of 63. Many among this generation had to stretch to buy their first home in the 1980s, when affordability was also poor. They are now able to fund a comfortable retirement using the wealth stored in their homes. However, owners in some parts of the country might have a short window to cash out at the top of the market. Home prices are starting to fall in certain states, notably in areas of Texas and Florida.

House hunters have been stuck on the sidelines hoping that mortgages will become more affordable as the Federal Reserve cuts interest rates. But the opposite is happening. The weekly average rate on a 30-year fixed-rate loan is now back at 6.78%, up from 6.09% the week the Fed began loosening in mid-September, Freddie Mac's latest data shows.

Mortgage rates are more closely tied to what is happening with the 10-year Treasury yield than short-term interest rates set by the Fed. Investors' concerns about the size of the U.S. fiscal deficit and the possibility of more inflationary policies under a second Trump administration have pushed the 10-year yield back to 4.43%. Historically, 30-year mortgages have been priced at a roughly 2-percentage-point spread to the Treasury yield.

So what if today's mortgage rates are the new normal? At 6.78%, the monthly repayment on a median-priced home eats up over a quarter of the median U.S. household income. That is more than even the peak of the 2008 housing bubble.

Without lower home prices, the difficult situation that younger home hunters and families find themselves in could crystallize. Older Americans are enjoying a golden era to cash out, but the wider benefits of this strange housing boom are hard to see for anyone else." [1]

1. EXCHANGE --- Heard on the Street: No One Can Afford To Sell Their Home --- It's mostly older homeowners who are in a position to take advantage of the historic rise in house prices. Ryan, Carol.  Wall Street Journal, Eastern edition; New York, N.Y.. 16 Nov 2024: B.13.