RUSH: Ladies and gentlemen, in August of 2007, I was fortunate enough to be invited to the White House to have dinner with President and Mrs. Bush up in the residence. And for two hours prior to dinner, I was taken into the Treaty Room -- in the residence, just down the hall from the Lincoln Bedroom -- with President Bush and Ed Gillespie, who had replaced Karl Rove. The President took me around the world and told me what was going on and where, and what was being done about it, what the challenges were and so forth. No secrets were divulged. When he got to China, he said, "In the most interesting conversation I've ever had with Hu Jintao, I said, 'Hu, what's your biggest challenge every day when you get up? What is your biggest challenge?'" And the president told me that Hu Jintao's answer was, "I have to create 25 million new jobs a year and I gotta keep them in the countryside, because if those people ran my cities I lose control. I can't handle any more population in the cities," and I remember after that meeting, I came back and shared some of what the president had told me. So you may remember that story.
I have two stories. One is from the Times of India, and it's from Beijing: "Chinese leaders have finally admitted that the country is facing a 'grim' situation on the employment front owing to the global economic crisis. An official survey has shown that demand for labour has fallen 5.5% in the third quarter of this year across 84 different cities. Yin Weimin, head of the ministry of human resources said that labour discontent was a 'top concern' of the government as the employment situation has turned 'grim'," in which case they'll just pull out the tanks, but they don't want people to see that. "The past weeks have seen strikes by taxi drivers in four cities and a workers' riot at the party headquarters in Gansu province. China has nearly 150 million migrant workers, who have left their rural homes in central and west China to work in the factories of South China. The extent of unemployment caused in factories cutting back production following loss of export orders is still not known. But the number might prove to be big enough to cause social tension, sources said." You have to love those words: "social tension." Here we've got millions of people with no job, nothing. This is a powder keg, and they're leaving the countryside (pounding paper).
Here's a companion story from StrategyPage.com, datelined a couple days ago. "Civil unrest in China is a growing problem that the government is trying to hide. Mobs attacking the police, or government buildings, is an increasingly common event. The news gets out via the Internet, not the government controlled media. The cause is corruption in the police and among local government officials. These are all communists, and most Chinese see membership in the Communist Party as a license to steal (because only party members can be government officials, which includes police and military commanders). The government admits that these incidents occur, but refuses to release details. Information gets out via the Internet, and that indicates an increasing boldness, apparently born of desperation, on the part of the protesters. This indicates that many officials at the local level are not listening to the growing government pronouncements about fighting corruption." It goes on.
The whole point of this story is that the ChiCom government is facing this revolt because there is a rural rebellion that Hu Jintao is failing, in his stated necessity to create 25 million new jobs out in the countryside. And one of the reasons is the US collapse. We're not importing as much because the disposable income is down and spending all this money on nothing. Can you imagine if the US consumer was spending some of this money? That's a pipe dream. Nevertheless I just found these two stories interesting because it was just, what, 14 months ago that President Bush told me that this is the biggest challenge that Hu Jintao, the ChiCom leader, has, and here it's coming to pass. The president said that he told Hu Jintao (paraphrasing), "Hu, you've already lost control, buddy. You've already lost control. I mean, you've got your police state and so forth, but you've also got people clamoring for cars and nicer homes, cheaper gasoline and so forth and so on, capitalism has made its way in." Now, they haven't lost total control, but this stuff... When the people in the rural provinces start migrating to the cities, they've got a big problem, and it's starting to manifest itself.