The Weekly Quill — The Black Box of Chinese Credit

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Divining the Mysteries of Middle Kingdom Debt

You know what goes in. And you know the outcome. But you’re in the dark as to what transpired on the inside. On March 17, 1953, Australian researcher David Warren took the first step to discovering the truth. At first, due to privacy concerns, Warren’s “Flight Memory Unit,” was rejected. The prototype, conceived at Melbourne’s Aeronautical Research Laboratories, could record up to four hours of voice and instrument data on a steel foil. While the British were early adopters, it wasn’t until a 1960 crash in Queensland, where no cause could be discerned, that the Australian government required all cockpits be outfitted with flight recorders.

Today’s black boxes are actually orange in color and can record multitudes more parameters including throttle and flight-control positions allowing investigators to recreate accidents using the last minutes and seconds leading to the crash. Resistance to fire, punctures, and pressure exerted 20,000 feet below the ocean is now a feature along with withstanding a 3,400-g crash-impact. Beacons are emitted for up to 30 days to assist in recovery. The next generation of the black box will give investigators real-time access to the cockpit. The hope is to unravel such mysteries as the crashes of 2009’s Air France Flight 447, which disappeared over the Atlantic, and 2014’s Malaysia Airlines Flight 370 over the Indian Ocean. In both cases, the black box was never recovered.

Another sort of black box is torturing health officials worldwide. The Coronavirus is manifesting in locales with no obvious ties to Chinese travelers frustrating efforts to pinpoint its origin and thus fully contain the highly contagious and lethal menace. And though the reaction in recent days in markets has rattled investors, true disruption has yet to be seen. Much of the calm owes to the working assumption that Chinese officials will contain the damage, come what may. Seeing this theory through to practice may not be what official policymakers have planned. If a measured Chinese economic decline in 2020 was the formal goal before the Coronavirus hit, what dry powder there was on hand will now have to be doled out that much more judiciously.

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Danielle DiMartino Booth is CEO and Director of Intelligence at Quill Intelligence

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