Consider this free post a brief musing about Chinese statistics and our understanding of Chinese data from the Western world. We’ll return to Crypto content this weekend.
If you are a new reader, there are helpful links at the bottom of this post.
Song of the Week - Rae Sremmurd - “This Could be Us”
Table of Contents
Understanding Frame Control
The Great Chinese Firewall
Status Games in China & Famine
What it All Means
Comparing China and the West
Conclusion
Internal References
1. Understanding Frame Control
I used to be a Theater Kid in middle school and high school. My favorite parts of Theater were always when we had improv sessions together. In an improv. session, you’d be tossed on stage and given a character and a prompt or opening sentence alongside another actor with their own character. You toss your opening sentence out there and from then on you‘ve got to put a coherent conversation or scene together on the fly. You make up the dialogue and the blocking (where and when you move on stage), and there were bonus points for being funny or entertaining.
There was only one rule for improv. “Never say no.” The easiest way to keep a scene going was to do some version of “yes and…”; you agree with whatever comes out of the other actor’s mouth and build upon it.
If the other actor points to the corner of the stage and says “Who let the dog into the kitchen?” That phrase has many implicit ideas built into it that you must respond to if you’re going to answer the question. You have to be able to identify and understand these implicit ideas and choose one to agree with and build upon.
We’re in the Kitchen
There’s an animal where they are pointing
The animal is a dog
The dog belongs to one of us or the household
There are normally no dogs in the kitchen
The implicit ideas built into the statement are the frame. This is a good starting bit of dialogue since it has several ideas built into it that you could pivot off of. If I were to respond “We’re not in the kitchen and there’s nothing there.” This would kill the scene since it erases all concepts we could improvise around while not introducing a new concept. If I attempted to answer the question by denying one of these ideas, then I have implicitly accepted the overall concept. To do so is to grant status to the other actor in some form. Even if I were to respond with a denial of claim 3; like “That’s our cat, he’s just really hairy.” I have implicitly admitted that their worldview around claims 1, 2, 4, and 5 is correct. I’m accepting their frame, and building upon it.
If I were to say something to strip all status away from my fellow actor, I might pretend to write on a notepad and then say something like “Still having hallucinations, huh? We’ll adjust your dosage higher until it’s safe to release you from custody.” I have dismissed all 5 of the claims the other actor has tried to make and introduced a new idea that makes them subservient to my worldview if they respond in any way that acknowledges even some of the ideas built into my statement.
Whoever’s worldview is dominating the conversation is the person with the most status at that given time. We’re either talking about animals in the kitchen, or the other actor is a patient in my asylum. Who’s leading the discussion? Who’s worldview is underlying the conversation?
If you touched upon the PUA (Pick-up Artist) circles of the late 2000s or were in the Sales and Life-Coaching spaces of the 2010s, you may be familiar with the above concept of “Frame Control.”
Frame is the lens through which you view life, your goals, and the beliefs you hold of yourself and the world around you. Frame is also how we play status games amongst each other. Status games occur all of the time, but can only be effectively played when you understand the implicit ideas built into the things people say to you and the things they do around you.
2. The Great Chinese Firewall
I say all of this to present the following conclusion. Most of the Western world simply does not understand what status games the CCP has set up for its citizens, and typically misunderstands everything that comes out of China. A common mistake people make when observing others is they presume that other people are thinking about things in the same way that they are. It’s why we anthropomorphize animals. It’s why your grandmother will have some silly story about how her dog “just knows good fashion,” because he rips up her tennis shoes but leaves her heels and dress shoes alone. The truth is that her dog knows Grandma wears her Tennis shoes when it’s time for a walk and he is simply bringing those shoes to her hoping to go for a walk.
She looks at her dog and sees herself, so every time he tries to do something, she asks herself what reason she would have for doing what her dog is doing and then impugns those reasons on her dog.
Similarly, whenever we see a story or statistic coming out of China, we presume that the people making the story and propagating the story have similar motivations to Westerners in the same position. They do not. The internal status games of the CCP are everything to a citizen in mainland China. Many of us do not understand that China has its own internet that is wholly separate from Western internet behind what is colloquially called The Great Firewall.
Google, Twitter, YouTube, Facebook, Instagram, Yahoo, etc. Any website you can think of that you might use regularly is inaccessible from China. The only Chinese citizens you will ever encounter on the internet are either not in China, risking their safety by using a VPN, or working for the CCP to spread propaganda.
They have their own versions of our websites that Chinese citizens use to communicate like Weibo, WeChat, TaoBao, Youku, Douyin, MoMo, KuGou, TanTan, QQ, and others. Most of these sites are just copy-pastes of Western sites. TanTan for instance is almost a direct copy of Tinder (even the color schemes are identical). The point of these sites is so that the CCP has direct moderation control of everything that is posted and so that users’ social credit scores can be managed by the CCP everywhere.
In general, the Chinese content we get in the West is almost exclusively CCP propaganda. You may be familiar with the Tik-Tok being discussed below. The viral video was filmed in China, but uploaded in the US specifically as demoralization propaganda for Western youth.
One must understand that Western citizens and Chinese citizens rarely ever interact. I am in the US, but take a look at where all of you happen to be from.
If you are in most countries in the world, you can read this, you can agree/disagree, comment, and interact with people from several different countries. I’m just a regular citizen, and I suspect many of you are also regular citizens of your own countries. The same is true on Twitter and other social media platforms. You will rarely if ever, genuinely interact with Chinese citizens online.
Because we do interact, there are some forms of shared status games that Americans and Europeans (for instance) will play with each other. Americans are self-conscious about their lack of permanent culture and will often dunk on Europeans about how ubiquitous modern American culture has become (A McDonalds in every Cathedral). Europeans are self-conscious about their lack of productivity and will typically try to dunk on Americans for our lack of a social safety net, paid time off, maternity leave, healthcare, etc. We may disagree on things, but there is at least some form of status game being played between us. As such we can kind of understand each other and have a decent idea of what frame we view the world through and what we value. I rib Europeans often, (because it’s so much fun) but in general, they’re alright people.
But when it comes to China, their citizens are playing a wholly different status game than us.
The Great Firewall means that the only status games they are ever playing are amongst themselves. You can watch a certain national pride emerge among Indians, for instance, whenever someone posts a video of some unsanitary Indian street food, you can see Indians appear in the comments mounting a defense. Real Indian people are on the internet with us.
Everybody is on the internet except for China and a few parts of Africa that do not have widespread high-speed internet. So as the status games that the rest of the world plays with each other begin to emerge and homogenize, the status games that Chinese citizens play amongst themselves will become more alien and misunderstood.
3. Status Games in China & Famine
The only status games that you can play in China against other Chinese citizens are regarding your place within the CCP. When data, statistics, or press releases come out from China, the one thing to understand is that the people who crafted it are not speaking to you at all. They are speaking amongst each other and to each other, that’s it.
When you read a story about China, understand that the source of that story is either releasing it as intentional propaganda or has no conception that anyone outside of China will ever read it. They’re producing stories to gain status within the Chinese internet and the CCP.
~7% of the Chinese population are members of the CCP and entrance is incredibly difficult. Within the Chinese population, consider being a member of the CCP as having the same kind of clout as one saying in 2004 that they had an undergraduate degree from Harvard, Yale, or another Ivy League college. But it’s even more insidious than that if you start a company in China, its growth will be throttled beyond a certain point if it does not have a party branch within it made up of CCP members focused on advancing the CCP.
Regulations require that all state-owned enterprises and private companies operate party branches, and even some foreign-owned companies like Walmart have them.
Imagine not being able to open a second location for your restaurant because you have not hired enough Ivy League grads yet. Gaining party membership, and advancing through the CCP is the highest form of status game anyone in China is ever playing at any given time because of this.
To get an idea of the games being played at the smallest and largest levels of the CCP we can look to an anecdote from the Great Famine in China from 1959-1961. At this point due to policies enacted by the CCP, there was a shortage of grain and food country-wide. But rather than admit this, narratives were spun by prefecture-level officials and pushed to the top as everyone played a status game amongst themselves.
As 40 million people starved, prefecture-level officials who wanted a promotion refused to distribute grain from their granaries to the peasants in their region so that when higher-ups came to inspect the area they could say “Others may be starving, but our prefecture has had a bountiful crop, look at how full our granaries are.” To do so is to appear to be resourceful and worthy of promotion. To be honest about your struggles would make you appear to be incompetent when compared to the other prefecture-level managers. All of the wrong incentives were in place (and still are) for Chinese elites and citizens to lie about the world around them.
Eventually, once the mass starvation deaths of 40 million people became evident (~6% of the population at that time, but concentrated in rural districts), local prefecture officials changed their narrative to one of virtue.
This was also not true, the NW province of Anhui recorded over 1,300 interdictions between their local security forces and peasants attempting to “steal” grain from 1959-1961 (more than one a day).
But the truth is irrelevant. Whenever a statement is made by a Chinese citizen, especially one employed by the CCP, it must be understood that they have no clue what the West thinks about that statement and their only intention is to make themselves look like someone worth promoting within the CCP.
They claim GDP growth, but we know this is almost entirely due to false numbers from construction that is never completed. The lies do not come from the top. The lies start at the provincial level first, and then more lies are added at the county level, and then again at the regional party level, and then when it gets to the country level another layer of lies is added on top. At each level, the party members are acting in their own self-interest.
For similar reasons, even stats about Chinese population numbers are almost entirely falsified.
You may note that the above-linked piece is an opinion piece from 2019, but it happens to be written by one of the foremost experts on Chinese population and fertility who was chased out of China in 2016 after being labeled a traitor to the country for attempting to point out the One-Child policy was doing significant demographic damage and estimating that China’s population would begin falling in 2018. After quite a bit of statistical fuckery from Chinese officials, including pretending China had 0 total deaths in 2020, Chinese officials admitted last year that in 2022 population fell by 850,000.
They have amended the one-child policy to a two-child policy, and then a three-child policy, but it’s just not working. You’ll also note that the main reason the Census figures are so off is because each province-level government is inflating statistics because they are incentivized to lie and no disinterested 3rd party is involved in overseeing the census. The US has a similar problem when it comes to counting illegal immigrants to get additional representation in Congress.
The people doing the counting benefit from miscounting, so most of them miscount.
At every step of the way the CCP incentivizes dishonesty and so members of the CCP are playing status games amongst themselves to get promoted within the party.
4. What it All Means
When a Westerner like me reads stats about Chinese GDP growth and tries to respond to the stats, we fail to recognize the implicit ideas built into those stats.
A statement like “China’s economy grew by 5.2 percent in 2023, hitting the government’s official target,” has very different implicit ideas built into it. We might take these stats at their face value and have Western discussions about if China can maintain this growth, or talk about flagging Chinese exports or massive youth unemployment because we are taking them at their word.
But the people submitting data to the CCP at the lower levels and those assimilating regional data and sending it up to the higher levels are all saying something completely different to the CCP.
It’s been a difficult year
Many are struggling
Our granaries are full due to our resourcefulness and virtue
I am ready for promotion, elevate me
That is the entirety of the message built into most Chinese stats. The citizens generally have little clue what sort of discussions we are having out here on the internet. Chinese citizens and officials are almost exclusively speaking up the pipeline to their superiors within the CCP in a bid to get promoted.
It’s why China has endless, half-built, crumbling cities with nobody living inside of them, and Mongolian nomads on motorcycles setting up yurts in parks as they ride across the endless wastes.
Those constructions probably got a whole host of people promoted within the CCP. But from the outside you had Westerners trying to make sense of Chinese GDP growth that was spurred on almost entirely by the construction sector.
Looking at the above chart you might think that 7% of GDP doesn’t seem like that large of a figure, and when compared to other Western nations, it’s close to normal (Developed nations tend to range from 4-6%).
But pretend you have an economy and in one year this economy’s only economic output is one building. To build it they have to mix and pour concrete, cut 2x4s, smelt steel into nails, make copper wires, make plastic plumbing, turn sand into glass, make iron rebar, etc. Would you say that this economy was 10% construction or 100% construction? Both are correct. If the house doesn’t get built, none of those other activities occur either.
However, even though 100% is also a correct figure when it comes to data, this is recorded as 10% of GDP being construction. According to Caixa Bank, in 2015, the final demand for products in China across all sectors directly or indirectly attributable to construction activities was ~24%. Most developed nations range from 12-19% in this same figure.
The big difference between China and the other countries on this list is that there is very little construction in Western nations that has no intended economic purpose. Our version of this is done in the form of zombie corporations. If the construction sector unwind, collapse, and knock-on wealth effects were accurately reported it’s quite likely that GDP growth in China is negative and has been for a few years.
But that’s not the conversation we have in the West where China is concerned. In general, we don’t have the right conversations when we compare China to the West at all.
5. Comparing China and the West
So what is the right conversation?
I’ll provide an example of one of the key differences that is caused by the Chinese frame as compared to Western Status games when it comes to data at the global level.
For any Chinese mining entity, it behooves them to make exaggerated claims about the size of their finds when exploring for metals. You may recall that not that long ago, most pundits in the West believed that almost all of the Rare Earth Metal supply was in China.
These metals are not rare at all, but calling them “Rare Earth Elements” was great marketing.
They are everywhere, yet most pundits have been sounding the alarm over the past 5 or 6 years that we would run out of them and wouldn’t be able to make magnets, solar panels, batteries, turbines, etc. You’ve also probably seen articles like the one below purporting that a large majority of the reserves are in China.
If you think about this data in status games remember again what game it is CCP members are playing in China. They are incentivized to publish all proven reserves as quickly as they can and to inflate these figures.
I’m resourceful
Promote Me
Look at What I’ve Found
Elevate Me
When it comes to Rare Earth Elements, what status game do you think US citizens in the mining sector are playing? They’re playing the same game De Beers is playing with diamonds. There are undoubtedly hundreds of mining companies sitting on REE reserves and choosing not to announce them until the price is high enough. Last year we saw a single mine in the US announce their reserves, and it is now the single largest REE deposit in the world. They’ve been mining Gold, Silver, and Copper there for decades, they surveyed for REEs several years ago because they were found at the surface in plentiful amounts. And they waited until the price and narrative met their goals for a return on investment before announcing.
The historical samples noted above were collected by U.S. Rare Earths, Inc. (10 samples, 2009, SC series) and U.S. Critical Materials Corp. (41 samples, 2021, #21001-21041).
You only get one shot at maximizing return on investment when it comes to this sort of exploration, so Western companies in general sit on their reserves until the price is attractive enough for them to announce and begin mining. That’s the game America plays.
Look at the quote above, 2009. 15 years ago. They’ve known they had these reserves for at least the last 15 years and they didn’t say shit until last year.
That is how the West plays the resource game, it’s totally and wholly different.
If you ever think we are running out of something, I guarantee you that there is an American company sitting on a metric ass-ton of it, waiting for the price to go up.
This also applies to the military.
In WW2 when the US deployed submarines to the Atlantic and Pacific Theatre their actual design allowed for them to dive to a maximum depth of ~300m. But all of our published documentation showed 150m. We intentionally made our submarines, our planes, our ships, and our artillery look inferior on paper. Because of this, as Axis spies extracted documents about our submarines, they then communicated to the Japanese high command to set their depth charges for 150m thinking that was as low as we could go.
US submarines in the Pacific easily dove below Japanese depth charges and wreaked havoc on the Japanese Navy. This is the American way. We almost always downplay and lie about our capabilities.
Meanwhile, China is boasting about its new Fujian air-craft carrier. It was supposed to launch in 2022, but it still has not launched to this date. They claim to be using a magnetic launcher system, however, the generators they claim will be on this boat cannot generate enough power to make the system work, and the system has numerous other issues that make it unsuitable for an aircraft carrier. Starting at 10 minutes in the video below you can hear some of the major issues with the launcher system.
In general, any data, statistics, or threatening information that comes out of China, has likely been exaggerated in some way by someone trying to get an internal promotion within the CCP. Similarly, any information about the US armed forces and economy is typically understated.
This applies to just about everything.
The frame through which the CCP has forced its citizens to view the world is ultimately hamstringing their ability to function and compete on the global stage over time.
6. Conclusion
Whenever you are trying to understand anything that anyone is saying, you first need to understand the implicit ideas built into their statement. Sometimes people are speaking directly to you and the things they say have nothing to do with you.
Chinese citizens under the CCP have their Frame for the world completely determined by the CCP and as such their participation in the world at large is generally centered around advancing their position within the CCP. They rarely have a complete conception of a Western audience consuming the information they put out. This is mainly due to the Great Chinese Firewall keeping Chinese citizens wholly within their own internet, and separated from the rest of the world.
As such, Chinese statistics, its economy, and its armed forces should be understood through this frame as well.
7. Internal References
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Excellent work! Always a pleasure reading your articles.
Great article Flirt. This might be a stupid question, but despite the firewall, can regular Chinese citizens use popular crypto dapps? (Uniswap, magic eden, etc.)