That seems to be theme behind two recent and excellent pieces by Shai Oster at Bloomberg. Both are a useful reminder that China is not pursuing an existing economic and social model, or even a well-defined ideology, but is inventing its own model as it hurtles along.

First up is a piece on an effort, perhaps quixotic, to predict future acts of terrorism:

The Communist Party has directed one of the country’s largest state-run defense contractors, China Electronics Technology Group, to develop software to collate data on jobs, hobbies, consumption habits, and other behavior of ordinary citizens to predict terrorist acts before they occur. “It’s very crucial to examine the cause after an act of terror,” Wu Manqing, the chief engineer for the military contractor, told reporters at a conference in December. “But what is more important is to predict the upcoming activities.”

He hinted at the scope of the data collection effort when he said the software would be able to draw portraits of suspects by cross-referencing information from bank accounts, jobs, hobbies, consumption patterns, and footage from surveillance cameras. The program would flag unusual behavior, such as a resident of a poor village who suddenly has a lot of money in her bank account or someone with no overseas relatives who makes frequent calls to foreigners. According to Wu, these could be indicators that a person is a terrorist. “We don’t call it a big data platform,” he said, “but a united information environment.”

… Brookings’s Pillar is skeptical. “No system of surveillance and exploitation of intelligence can stop everything,” he says. But Tsui, the Hong Kong professor, says if anyone has a chance of coming up with a workable high-tech Big Brother, it’s the Chinese. The lack of privacy protections means that China’s data sniffers are more practiced than those in the West. “The people who are good at this are good because they have access to a lot of data,” he says. “They can experiment with all kinds of stuff.”

Then there’s the recent and unprecedented expansion of “venture capital” funds sponsored by local governments and other official bodies:

The country’s government-backed venture funds raised about 1.5 trillion yuan ($231 billion) in 2015, tripling the amount under management in a single year to 2.2 trillion yuan, according to data compiled by the consultancy Zero2IPO Group. That’s the biggest pot of money for startups in the world and almost five times the sum raised by other venture firms last year globally, according to London-based consultancy Preqin Ltd.

The money’s in what are known as government guidance funds, where local and central agencies play some role. With 780 such funds nationwide and a lot of experimentation, there’s no set model for how they’re managed or funded. The bulk of their capital comes from tax revenue or state-backed loans.

The money is part of Premier Li Keqiang’s effort to bolster the slowing Chinese economy through innovation and reducing its dependence on heavy industry. The country began a campaign to support entrepreneurship in 2014 and has since opened 1,600 high-tech incubators for startups.

Honestly, I don’t have much analysis to offer on either of these reports, other than, wow.

The Saturday essay in the WSJ this week is an excellent piece by Andy Browne (full disclosure: my former bureau chief) on China’s two-speed economy, a phenomenon that I’ve been exploring both in our Dragonomics research and on this blog. The reporting nicely illustrates both the extremely troubled and the extremely prosperous parts of China’s economy, and also makes a strong argument that how Xi Jinping handles the lagging regions will be crucial for the country’s prospects. Here’s an excerpt:

For international investors, China’s two-speed economy—one dying, the other accelerating—is utterly confusing, and it has produced wildly contrasting strategies. If China keeps subsidizing wasteful investment to keep industrial cities alive, its financial system will eventually blow up: At 260% of gross domestic product, the country’s overall debt is approaching danger levels. Some Wall Street hedge funds are taking huge speculative bets against the Chinese currency. Global markets are bracing for a “hard landing” by the Chinese economy and years of subpar growth. The financier George Soros says China is already crashing.

At the same time, however, some of the world’s smartest investors are making the opposite wager: They are piling in. Last year, China attracted up to $37 billion in venture capital, much of it for technology hubs along the coast. That is more than the U.S. typically draws in a year and multiples of what Europe usually pulls in. …

Who’s right? Politics will largely determine the outcome. … Two years ago, Mr. Xi announced an ambitious 60-point economic reform program to give markets a “decisive role” in allocating resources. Many expected that he would shutter state loss-makers and open protected state industries like telecommunications and banking to entrepreneurs, even as he attacked the patronage networks that weave through local industry and governments.

But Mr. Xi seems to have gotten cold feet. Instead of closing down state enterprises, he is bulking them up. He seems afraid that allowing market forces to prevail will entrench geographically based wealth disparities and that an aggrieved underclass could erode the Communist Party’s legitimacy. As Mr. Xi has made clear during his three years in office, his first priority is to save the party. The economy can wait. Against this political backdrop, Beijing’s usually decisive economic decision-making process has started to look rudderless.

At the least, the Party’s paper certainly seems to have woken up to the fad for infographics. In my admittedly limited experience (it’s not like I read the thing every day), I have never seen an enormous color infographic splashed over the front page of the People’s Daily, in the spot usually reserved for Very Important Personages. But here is one taking pride of place in March 3 edition:

The infographic explains the five slogans that are in the next Five-Year Plan, which will be published at next week’s legislative session, and then picks a statistic and graphic that goes with each one. (For reference, the plan urges that China’s development be “innovative,” “coordinated,” “green,” “open,” and “shared.”) Charming stuff, if a bit tame compared to the amazing cartoon video explaining the Five-Year Plan that blew up the internet a while back.

Still, it is lively by the standards of the People’s Daily. Here is what a more normal day at the Communist Party newspaper looks like, from a couple of days ago–a photograph of Xi Jinping meeting a foreign dignitary, reports of government meetings, etc.

The People’s Daily does have a history of, very slowly, adapting conventions of other newspapers. It started printing the front page in color only in 2004, and these days also breaks up its traditional text-heavy layout with a touch more white space. So even before the infographics, this gray lady had already become a bit more bling. Here’s a front page from late 2003, just before the switch to color, which gives you some of the flavor of the proper old-school style: visiting dignitaries and sturdy industrial equipment.

Update. Clearly I should have waited another couple of days to do this post, as Monday’s issue devoted half of its entire front page to a giant infographic on the Five-Year Plan. At this rate, the People’s Daily should be looking like the USA Today of the late 1980s (of We’re Eating More Beets! fame) sometime in the 2020s…

My favorite part of How Asia Works, the book about Asian development by my old colleague Joe Studwell, is the opening section on agriculture. He emphasizes just how productive small, labor-intensive family farms are–much more productive than big businesses and government planners tend to give them credit for. This high productivity (in terms of output per hectare rather than output per worker) underpins Joe’s argument that successful Asian countries are precisely those that had land reform programs that broke up large landholdings and created a class of entrepreneurial small farmers. Nonetheless, labor-intensive small farms are only the best option when there is a lot of available farm labor; once urbanization takes off and the supply of farm labor shrinks, farms do have to become larger and more mechanized. This shift allows higher output per worker, but does not necessarily mean an increase in output per hectare.

For the last several years, China’s policymakers have been preoccupied with trying to accelerate this process, encouraging family farms to rent their land to larger, more commercial operations. Policies that subsidize large farms and glorify agricultural “modernization” are everywhere. While Joe’s book is mostly history, he does offer an interesting prediction about how this process might play out:

So long as there is no large-scale civil unrest as a result of land redevelopment and conversion, the main concern for central government in the next few years will be that the rise of commercial farming is leading to reduced output of staple foodstuffs. Aside from the fact that scale agriculture substitutes profit for yield, commercial farming in China also does not cultivate core foods like rice and wheat. Instead it concentrates on more value-added, high-margin, specialist crops, such as vegetables, herbs and flowers – sometimes for export. China’s imports of staple foodstuffs are beginning to increase quickly (albeit from a low base) as household farmland disappears. At some point, this will start alarm bells ringing in Beijing about food security – the Chinese Communist Party has a longstanding, and sensible, fear of the country being at the mercy of substantial food imports. There will likely be a clamp-down on household farm land conversions to commercial agriculture.

I thought of Joe’s prediction when I recently came across some interesting research on how farm consolidation is playing out. The passage below is from a long report by the eminent agricultural economist Liu Shouying, which includes a lot of data on the changing patterns of farmland ownership and use (because Chinese farmland cannot legally be sold, his discussion of land consolidation repeatedly refers to the “transfer” of farmers’ land-use rights; this usually means one farmer subletting his land to another, but can also include, for instance, the contribution of land-use rights to a company in exchange for equity). I’ve skipped most of the crunchy bits and gone straight for the closing summary (my translation):

One issue is that land transfers are irregular. The market for land transfers is not yet fully established, and most land transfers are done spontaneously between rural households. Oral agreements are still the majority, so the process of land transfer is not standardized. There is no appropriate and scientific standard for appraising the value of land, so it is difficult for the agreed-upon price to accurately reflect the value of the land. Some land transfers have no written contract, only an oral agreement. And for land transfers that do have a contract, the main party is often the village or a cooperative–but the individual farmers who actually have the land-use rights have not given any written authorization. As a result it is not clear whether the parties to the transfer are qualified to make it. In 2014 there were 91,700 cases of disputes over land transfers, an increase of 42.39% from 2010. …

A second issue is that after being transferred some land is no longer used for producing staple crops. In recent years, as the scale of transfers of land management rights has expanded and accelerated, the objectives and interests in land transfers have become more complex. Gradually there has emerged the phenomenon of the “de-staple-ization” of farmland. This tendency is more obvious in the developed eastern provinces [here the author cities statistics showing that of all farmland that had been leased or otherwise transferred in 2014, 56.82% was used to grow staple crops; the share was only 25.33% in Guangdong]. Looking at the profitability of agricultural operations, staple crops are relatively less profitable products. And because those who have land transfer contracts have to pay rent on the land, they choose high-profit products in order to realize the benefits of the land transfer. Therefore, the shift away from staple crops has become the basic trend and motive for land transfers.

The gist seems pretty clear: the consolidation of farmland has produced an increasing number of social disputes, and the new operators tend to stop producing grain and grow cash crops instead. In other words, the precise issues of “civil unrest” and “reduced output of staple foodstuffs” that Joe warned about are appearing (with the important caveat that nationwide grain output is still rising not falling, as increases in productivity have so far outweighed changes in land use).

While you still see a lot of dramatic rhetoric from the government about overhauling small family farms into larger, more “modern” operations, it is also the case that Xi’s administration seems to be pretty conservative in practice about food security. So I would say that Joe’s prediction–that the natural consequences of farm consolidation will at some point force a rethink of the policy to promote it–is looking pretty good right now.