Harry Potter must wait for Chairman Mao to weave his tale before Harry can make his magic


China has held back the opening of Harry Potter, the Transformers and the other summer blockbusters from Hollywood until its own “big-budget epic” has gotten its share of the ticket sales. The major studio releases will be delayed until some time in August before they are released in China.  In the meantime, The Beginning of the Great Revival is virtually unchallenged at the box offices.  The film is the second in an epic retelling of the history of modern China and the communist party – the second chapter tells the story of the founding of the party beginning in 1921.  The government spent a great deal of money on the film and wants the Chinese people to see it with being diverted.  The Chinese Global Times says the China does not look at films as simply commercial entertainment ventures, but sees them as basic forces in shaping public opinion; this film is more than propaganda – it is more a celebration of China – today’s China, a country getting ready to take its natural place as a world leader..

In the west, actually in most of the world outside of mainland China a free market  it is an article of faith.  Of course, every country spells free market differently and even different political parties within any one country see it from disparate angles; financial crises and scandals further complicate the issue because they usually lead to addition market restrictions. The recent crises in banking and other major industries lead to increased governmental control and regulation, as had the Savings and Loan crisis in its time – and, the granddaddy of all financial crises, the Great Depression, produced a wealth of new legislation to control banking, stock trading and most other formers of financial activity.   Still, we think of our economy as a free market economy – everyone is free to introduce any product at any price and the consumers are free to purchase any product they wish, at the price they are willing to pay – a free market where the only restrictions are put in place by the consumer.

But of course, that isn’t the real case – a car for example must meet dozens and dozens of government requirements, each of which adds to its final price.  Without those restrictions, it is not likely we would have seat belts, airbags or catalytic converts; some cars might get 50 miles a gallon and cruise safely with a bevy of safety enhancing devices at 55 miles an hour, but others would get 5 miles a gallon, reach speeds of 200 miles an hour and contain nothing that interfered with raw speed and excitement – that is, if the consumers were choosing according to their wishes and not simply choosing from the list of options available after the car manufacturers meet the government requirements.  In nearly every industry one can find comparable examples; however true that might be, it is also true that until something terrible happens the government does not step in with regulations intended to prevent a crisis.  I am not recommending more control, more regulation or more legislation on anything, just pointing out that regulation does comes in time anyway, it only waits for a disaster.

The Chinese too are trying to create a freer, if not free, market – but the government keeps a close eye on things and steps in to prevent a crisis rather than in reaction to one.  It is not a secret to anyone on the planet that China and the Chinese economy is on the move and is moving firmly into second place with first place very much within striking distance.  Personal income and the ensuing consumer speeding is rising at a dramatic rate – and so are the prices of somethings, just as they rise in any country with a growing economy.  That price increase includes real estate – more and more people can afford houses in China and they are buying them.  That boosts construction of new houses, but it also creates a market for secondary sales  and speculation – the buying and flipping that became very famous here in the heady days before the bubble burst and the recession arrived.  Recently there have been a number of editorials on the Chinese real estate market by westerners, using the wisdom we all found in the wake of the bursting of our bubble, the writers have been predicting with absolute certainty, a crash in Chinese real estate.

Possibly the officials that make up the Chinese government read those editorials, but maybe not; in either case the government has recently instituted some price controls and today the Chinese People’s Daily is reporting success of the program, stating that in some regions prices have stabilized and even dropped slightly.  The government now plans on expanding the program.  That is characteristic of the Chinese government, to test social and economic programs in limited areas or circumstance and then if the program works to expand it.  The government has also designated some regions as special test regions, such as Macau; Macau is home to casino gambling for all of China.  In the eleven years since China assumed administrative control over the former Portuguese colony, the government has watched it closely and introduced a number of measures to control the growth of the casinos and to limit the traffic from the mainland.  This month, the government has begun expanding gambling to the mainland – it is starting with horse racing.  Don’t expect this to be the end of the line, this too will be a test, but from this test gambling will continue to expand on the mainland.  In time, 10, 20 or 50 years, to the oldest  human culture on the planet that is not a long time – I suspect that one day Macau will be a museum for tourist who wish to see the beginning of casino gambling in China.  But today, 2011, Macau is the most successful casino destination in the world; a handful of casinos in Macau generate four times as much revenue as the hundreds of casinos in Nevada do.  But we got Harry Potter first!


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