The Donkey of Guizhou


Every morning, we run the Narrative Machine on the past 24 hours worth of financial media to find the most on-narrative (i.e. interconnected and central) stories in financial media. It’s not a list of best articles or articles we think are most interesting … often far from it. But for whatever reason these are articles that are representative of some chord that has been struck in Narrative-world. And whenever we think there’s a story behind the narrative connectivity of an article … we write about it. That’s The Zeitgeist. Our narrative analysis of the day’s financial media in bite-size form.

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Yes, this is an actual photograph from an actual Chinese zoo, where a live donkey was dropped into a tiger pen.

A Forever Trade War Looms as Trump Deepens Battle With China  [Bloomberg]

China Takes On Trump by Weakening Yuan, Halting Crop Imports  [Bloomberg]

“There were no donkeys in Guizhou until an eccentric took one there by boat; but finding no use for it he set it loose in the hills. A tiger who saw this monstrous-looking beast thought it must be divine. It first surveyed the donkey from under cover, then ventured a little nearer, still keeping a respectful distance.

One day the donkey brayed, and the tiger took flight and fled, for fear of being bitten. It was utterly terrified. But it came back for another look, and decided this creature was not so formidable after all. Then, growing used to the braying, it drew nearer, though it still dared not attack. Coming nearer still, it began to take liberties, shoving, jostling, and charging roughly, till the donkey lost its temper and kicked out.

“So that is all it can do!” thought the tiger, greatly pleased.

Then it leaped on the donkey and sank its teeth into it, severing its throat and devouring it before going on its way.

Poor donkey! Its size made it look powerful, and its bray made it sound redoubtable. Had it not shown all it could do, even the fierce tiger might not have dared to attack.

– Liu Zongyuan (773-819 AD)

The fable of the Donkey of Guizhou is as well known in China as any of Aesop’s fables are known in the West, even to the point of reenacting the tiger murder scene for the “entertainment” of visitors to certain zoos. It’s a fable that every Chinese Politburo member knows just as surely as every American Cabinet member knows the fable of the Ant and the Grasshopper.

My point in relating the fable of the Donkey of Guizhou is not that I believe China is the tiger and the United States is the donkey in our current trade-war-going-to-currency-war.

My point in relating the fable of the Donkey of Guizhou is not that I believe the current United States president is a braying donkey in his “easy to win” trade-war-going-to-currency-war.

I mean … I do, but that’s not my point.

My point is that Chinese political leadership believes that they are the tiger and the current United States president is a braying donkey.

This sort of fabular narrative – this sort of meme – is every bit as strong and “real” as our fabular narratives and memes.

Our political leadership believes they have “leverage” and are playing the stronger hand. Chinese political leadership believes that, too.

That’s what makes a Game of Chicken. That’s what makes a game that is decided by political will, not by resources or starting positions.

This will get worse before it gets better.

This is the Second Horseman.


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Interesting……increasingly, as we protest here in HK, and the government responds by condemning the public, its evolving into an ‘in your face’ challenge to the authorities….. “you think you intimidate us ? go ahead, lets see what you got”…..
Younger Chinese here are wise to their culture, and the traditional ‘ death by a thousand cuts’ of the Communist party’s slow takeover/corruption of our institutions.…..
The youngsters want to force the issue…..


I think the CIA/fill in the blank is helping to stir up the good people of HK, as part of the Donkey-in-Chief’s policy,so to speak. They will be crushed and there’s nothing anybody can or will do see, e.g., Crimea. The ambassador from the PRC was visiting France while it was still France, Under Pompidou, and was asked: “What do you think of the French Revolution?” The answer? “Too soon to tell…” They play the long game and the government can force much more hardship than the US could ever bear. Of course, I know about the Middle-class and their Oligarchs like”Jack” Ma. They differ from people like Mikhail Khodorkovsky, once worth $15 billion, in that Ma and his ilk know not to buck the political system and the regime depends on them for generating jobs and lots of payola. As opposed to say Bo Xilai. PRC will win by crushing their own people and economy if need be. This IS a game of chicken. Thelma and Louise style

Peter Perez
Peter Perez

New meaning to…”don’t be an ass”!

Barry Rose
Barry Rose

“Pride goes before destruction, a haughty spirit before a fall.” ~ Proverbs 16:18


The question is how long can the CCP allow the insurrection in HK to go on before they would begin to lose face and it would start to spread? Surely they’d want to act decisively before that happens. Red team this out a bit. Can Beijing wait for the US election and risk the spirit of insurrection to spread? Or do they make a military incursion into HK maybe? What would be the NATO response to that? I’m betting Beijing thinks that’s unlikely, as Crimea/Ukraine was a big tell. US direct military response? Does the US draw the line at HK or Taiwan? Maybe the US abandons HK, and stages troops at Taiwan for negotiating leverage to negotiate a better trade deal in exchange for the abandonment of both? Interesting times!


The issues in HK have been on the boil for a while, it’s a classic case of what Ben calls the Nudging oligarchy in collusion with the Government. Slowly the government has given in to increasing encroachment by the communists…..
The extradition bill was the trigger.
For China, HK is one of the two key conduits to convert soft currency RMB into hard currency [the other being parking their dollars from export sales overseas, without remitting to China]
Communists do not know how to make money
They are brilliant, and quite ruthless, at taking your money.
So the dilemma for the communists is this : a lot of the money they get comes from HK.
With the US trade and further sanctions coming, HK is the only conduit to the outer world of trade and finance. Shanghai is nowhere close, and with the communist resurgence, isn’t likely to get there anytime in the foreseeable future either.
A military incursion into HK would destroy its value as this conduit. It would also put the final nail in the coffin to attempt any reunification with Taiwan under the “one China two systems” policy.
As an example, Alibaba’s hurried attempts to create a 2nd listing in HK is a part of this. With the Trump war set to expand, they can no longer count on not being messed up in some future sanctions activity against Chinese ADRs on Wall St .


DB did some analysis on market reaction to last couple of spats. US market fell more than the Chinese market (though it was seen to be due to official Chinese support). The difference is not statistically significant in my opinion, but it lends some credence to Ben’s who is the donkey and who is the tiger…


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