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China: Defying the Economic Odds
The World Melts Down, China Grows
In the midst of the worst economic crisis since the Great Depression, a new world order is emerging -- with its center gravitating towards China. The statistics speak for themselves. The International Monetary Fund (IMF) predicts the world's gross domestic product (GDP) will shrink by an alarming 1.3% this year. Yet, defying this global trend, China expects an annual economic growth rate of 6.5% to 8.5%. During the first quarter of 2009, the world's leading stock markets combined fell by 4.5%. In contrast, the Shanghai stock exchange index leapt by a whopping 38%. In March, car sales in China hit a record 1.1 million, surpassing the U.S. for the third month in a row.
"Despite its severe impact on China's economy," said Chinese President Hu Jintao, "the current financial crisis also creates opportunity for the country." It can be argued that the present fiscal tsunami has, in fact, provided China with a chance to discard its pioneering reformer's leading guideline. "Hide your capability and bide your time" was the way former head of the Communist Party Deng Xiaoping once put it. No longer.
Recognizing that its time has indeed come, Beijing has decided to play an active, interventionist role in the international financial arena. Backed by China's $2 trillion in foreign exchange reserves, its industrialists have gone on a global buying spree in Africa and Latin America, as well as in neighboring Russia and Kazakhstan, to lock up future energy supplies for its ravenous economy. At home, the government is investing heavily not only in major infrastructure, but also in its much neglected social safety net, its health care system, and long overlooked rural development projects -- partly to bridge the increasingly wide gap between rural and urban living standards.
Among those impressed by the strides Beijing has made since launching its $585 billion stimulus package in September is the Obama administration. It views the continuing rise in China's GDP as an effective corrective to the contracting GDP of almost every other major economy on the planet, except India's. So it has stopped arguing that, by undervaluing its currency -- the yuan -- with respect to the U.S. dollar, China is making its products too cheap, thus putting competing American goods at a disadvantage in foreign markets.
The Secret of China's Success
What is the secret of China's continuing success in the worst of times? As a start, its banking system -- state-controlled and flush with cash -- has opened its lending spigots to the full, while bank credit in the U.S. and the European Union (EU) still remains clogged up, if not choked off. Therefore, consumer spending and capital investment have risen sharply.
Ever since China embarked on economic liberalization under the leadership of Deng Xiaoping in 1978, it has experienced economic ups and downs, including high inflation, deflation, recessions, uneven development of its regions, and a widening gap between the rich and the poor, as well as between the urban and the rural -- all characteristics associated with capitalism.
While China's Communist leaders have responded with a familiar range of fiscal and monetary tools like adjusting interest rates and money supply, they have achieved the desired results faster than their capitalist counterparts. This is primarily because of the state-controlled banking system where, for instance, government-owned banks act as depositories for the compulsory savings of all employees.
In
addition, the "one couple, one child" law, enacted in 1980 to control
China's exploding population, and a sharp decline in the state's
social-support network for employees in state-owned enterprises,
compelled parents to save. Add to this the earlier collapse of a rural
cooperative health insurance program run by agricultural cooperatives
and communes -- and many Chinese parents were left without a guarantee
of being cared for in their declining years. This proved an additional
incentive to set aside cash. The resulting rise in savings filled the
coffers of the state-controlled banks.
On top of that came China's admission to the World Trade Organization (WTO) in 2001, which led to a dramatic jump in its exports. An average economic expansion of 12% a year became the norm.
When the credit crash in North America and the EU caused a powerful drop in China's exports, throwing millions of migrant workers in the industrialized coastal cities out of work, the authorities in Beijing focused on controlling the unemployment rate and maintaining the wages of the employed. They can now claim an urban unemployment rate of a mere 4.2% because many of the laid-off factory workers returned to their home villages. Those who did not were encouraged to enroll in government-sponsored retraining programs to acquire higher skills for better jobs in the future.
Whereas most Western leaders could do nothing more than castigate bankers filling their pockets with bonuses as the balance sheets of their companies went crimson red, the Chinese government compelled top managers at major state-owned companies to cut their salaries by 15% to 40% before tinkering with the remuneration of their workforce.
To ensure the continued rapid expansion of China's economy, which is directly related to the country's level of energy consumption, its leaders are inking many contracts for future supplies of oil and natural gas with foreign corporations.
Energy Security
Once China became an oil importer in 1993, it proved voracious. Its imports doubled every three years. This made it vulnerable to the vagaries of the international oil market and led the government to embed energy security in its foreign policy. It decided to actively participate in hydrocarbon prospecting and energy production projects abroad as well as in transnational pipeline construction. By now, the diversification of China's foreign sources of oil and gas (and their transportation) has become a cardinal principle of its foreign ministry.
Conscious of the volatility of the Middle East, the leading source of oil exports, China has scoured Africa, Australia, and Latin America for petroleum and natural gas deposits, along with other minerals needed for industry and construction. In Africa, it focused on Angola, Congo, Nigeria, and Sudan. By 2004, China's oil imports from these nations were three-fifths the size of those from the Persian Gulf region.
Nearer home, China began locking up energy deals with Russia and the Central Asian republic of Kazakhstan long before the current collapse in oil prices and the global credit crunch hit. Now, reeling from the double whammy of low energy prices and the credit squeeze, Russia's leading oil company and pipeline operator recently agreed to provide 300,000 barrels per day (bpd) in additional oil to China over 25 years for a $25 billion loan from the state-controlled China Development Bank. Likewise, a subsidiary of the China National Petroleum Corp agreed to lend Kazakhstan $10 billion as part of a joint venture to develop its hydrocarbon reserves.
Similarly, Beijing continued to make inroads into the oil and gas regions of South America. As relations between Hugo Chavez's Venezuela and the Bush administration worsened, ties with China strengthened. In 2006, during his fourth visit to Beijing since becoming president in 1999, Chavez revealed that Venezuela's oil exports to China would treble in three years to 500,000 bpd. Along with a joint refinery project to handle Venezuelan oil in China, the Chinese companies contracted to build a dozen oil-drilling platforms, supply 18 oil tankers, and collaborate with PdVSA, the state-owned Venezuelan oil company, to explore new oilfields in Venezuela.
During Chinese Vice President Xi Jinping's tour of South America in January 2009, the China Development Bank agreed to loan PdVSA $6 billion for oil to be supplied to China over the next 20 years. Since then China has agreed to double its development fund to $12 billion, in return for which Venezuela is to increase its oil shipments from the current 380,000 bpd to one million bpd.
The China Development Bank recently decided to lend Brazil's petroleum company $10 billion to be repaid in oil supplies in the coming years. This figure is almost as large as the $11.2 billion that the Inter-American Development Bank lent to various South American countries last year. China had established its commercial presence in Brazil earlier by offering lucrative prices for iron ore and soybeans, the export commodities that have fuelled Brazil's recent economic growth.
Similarly, Beijing broke new ground in the region by giving Buenos Aires access to more than $10 billion in yuans. Argentina was one of three major trading partners of China given this option, the others being Indonesia and South Korea.
Will the Yuan Become an International Currency?
Without much fanfare, China has started internationalizing the role of its currency. It is in the process of increasing the yuan's role in Hong Kong. Though part of China, Hong Kong has its own currency, the Hong Kong Dollar. Since Hong Kong is one of the world's freest financial markets, the projected arrangement will aid internationalization of the yuan.
In retrospect, an important aspect of the G-20 Summit in London in early April centered around what China did. It aired its in-depth analysis of the current fiscal crisis publicly and offered a bold solution.
In a striking on-line article, Zhou Xiaochuan, governor of China's central bank, referred to the "increasingly frequent global financial crises" that have embroiled the world. The problem could be traced to August 1971, when President Richard Nixon took the dollar off the gold standard. Until then, $35 bought one ounce of gold stored in bars in Fort Knox, Kentucky -- the rate having been fixed in 1944 during World War II by the Allies at a conference in Bretton Woods, New Hampshire. At that time, the greenback was also named as the globe's reserve currency. Since 1971, however, it has been backed by nothing more tangible than the credit of the United States.
A glance at the past decade and a half shows that, between 1994 and 2000 alone, there were economic crises in nine major countries which impacted the global economy: Mexico (1994), Thailand-Indonesia-Malaysia-South Korea-the Philippines (1997-98), Russia and Brazil (1998), and Argentina (2000).
According to Zhou, financial crises resulted when the domestic needs of the country issuing a reserve currency clashed with international fiscal requirements. For instance, responding to the demoralization caused by the 9/11 attacks, the U.S. Federal Reserve Board drastically reduced interest rates to an almost-record low of 1% to boost domestic consumption at a time when rapidly expanding economies outside the United States needed higher interest rates to cool their growth rates.
"The [present] crisis called again for creative reform of the existing international reserve currency," Zhou wrote. "A super-sovereign reserve currency managed by a global institution could be used to both create and control global liquidity. This will significantly reduce the risks of a future crisis and enhance crisis management capability."
He then alluded to the Special Drawing Rights (SDR) of the International Monetary Fund. The SDR is a virtual currency whose value is set by a currency "basket" made up of the U.S. dollar, the European euro, the British pound, and the Japanese yen, all of which qualify as reserve currencies, with the greenback being the leader. Ever since the SDR was devised in 1969, the IMF has maintained its accounts in that currency.
Zhou noted that the SDR has not yet been allowed to play its full role. If its role was enhanced, he argued, it might someday become the global reserve currency.
Zhou's idea received a positive response from the Kremlin, which suggested adding gold to the IMF's currency basket as a stabilizing element. Its own currency, the ruble, is already pegged to a basket that is 55% the euro and 45% the dollar. Within a decade of its launch, the euro has become the second most held reserve currency in the world, garnering nearly 30% of the total compared to the dollar's 67%.
Treasury Secretary Timothy Geithner's immediate reaction to Zhou's article was: "China's suggestion deserves some consideration." Nervous financial markets in the U.S. took this as a sign from the Treasury Secretary that the dollar was losing its primacy. Geithner retreated post-haste. And President Obama quickly joined the fray, saying: "I don't think there is need for a global currency. The dollar is extraordinarily strong right now."
Actually, maintaining the customary Chinese discretion, Zhou never mentioned the state of the U.S. dollar in his article, nor did he even imply that the yuan should be included in the super-sovereign currency he proposed. Yet it was clear to all that at a crucial moment -- with world leaders about to meet in London to devise a way to defuse the most severe fiscal crisis since the Great Depression -- that a China which had bided its time, even though it had the third largest economy on the planet, was now showing its strong hand.
All signs are that Washington will be unable to restore the status quo ante after the present "great recession" has finally given way to recovery. In the coming years, its leaders will have to face reality and concede, however reluctantly, that the economic tectonic plates are shifting -- and that it is losing financial power to the thriving regions of the Earth, the foremost of which is China.
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83 Comments so far
Show AllRegardless of what one thinks about the two countries' political/economic systems, China appears to be evolving into a somewhat harmonious, civilized, cultured, affluent society as the US is descending into a chaotic, violent, vulgar, impoverished hellhole.
My wife (who is Chinese) and I spend most of every summer in even-numbered years in China and the changes appear dramatic every time.
Perhaps a dictatorship can put off the problems a bit longer than Democracies. But I would expect an economy built on export will experience the same problems as the rest of the world.
I also believe your accessment of our decent may be a bit to harsh. This could easily be the beginning of a reformation rather than a disaster.
Maybe, but the US is not looking too good right now.
Right! But we have been in trouble before. Hopefully we can leave the kids something better than we have now.
you are already too late in saying that.
the policies of the USA - generations long -- have simply arrived at the point where it is more OBVIOUS that these are policies of "growth" and 'wealth creation' that were based on
what have essentially been FRAUDULENT banking practices for at least 90 years.
few people know that.
what it means is -- even THESE much discussed and known matters as the "federal bank interest rates" etc...are just PART of an american system of PRIVATE BANKING run amok
which for at least 90 years were really secretly, or hidden from the public through opaque public pronouncements about "dividends" stocks, etc...--
in which the actual value of what banks (and therefore the US economy) REALLY owned as REAL wealth were FAR LESS than they showed up in paper -- for "approval" by the US congress -- and as a Public Theatre to show how "vibrant" the US economy has been.
what is happening is - the recent implosion, being a BIGGER and even DEEPER repeat of the depression-era implosion, ALSO CAUSED by that same banking ACCOUNTING FRAUDULENCE perpetuated as "responsible economics" - - the DEBT that the USA REALLY owes in order to "maintain" and "promote" its "growth" -- backed up by nothing MORE than "US CREDITWORTHINESS to PAY BACK"
represented as MORE PAPER PRINTED OUT OF THIN AIR - (not backed up by REAL wealth produced by the USA , such as in MORE productive workers, better consumption ability WITHOUT indebtedness based on RISING wages and high employment, etc) --
that these sick policies for generations are simply coming around to bite the USA back......
and the ONLY response EVEN the obama adminstration does or CAN do - at this late date in the GIANT BUBBLE PONZI game that IS the US ECONOMY in its very core --
is to create MORE DEBT through printing TRILLIONS more of actuallY WORTHLESS DOLLARS
while HOPING that the world continues to SWALLOW this Fantasy of a "CREDIT WORTHY USA" based on a "sound economy" based
on
FALLING WAGES , rising unemployment, bad debt, unpayable loans (both private and public) - bad health programs, etc. etc. etc.
so -- when YOU say "hopefully we will leave our children a better world" --
it's NOT going to happen -- because ALREADY -- before the GRAND children are even BORN -- THEY , along with THEIR parents who are the "children" today --
are ALREADY SADDLED WITH DEBT THIS and past generations LEFT THEM to pick up !!
adn THAT"s the time when places LIKE CHINA -- which had just done what their "reformer" Deng Zhao Ping 30 years ago suggested to the country "HIDE YOUR STRENGTH and BIDE YOUR TIME"
while the USA went on Militaristic, Boastful, Hectoring Adventures of Empire abroad BASED ON BORROWING froM ITSELF and ITS own future and foreigners
--- would come REALLY DEMANDING REPAYMENT!
and your children and THEIRS will wake up having a "cash counter" STAMP on their heads :"OWNED BY CHINA"!
and you know what america WON"T be able to be in any position to DO , as barack obama ALREADY realized recently concerning the "usual complaint by the usa about china's low-rate yuan?" ...........
the USA WON"T BE ABLE to POINT FINGERS AT china as the CAUSE of the usa's OWN economic fall...
you see -- americans DID THAT ALL TO THEMSELVES!
including trying to run the world's economic system and order through its dollar hegemony to gain and "unearned and unjustified" imperial rule as an Asiatimesonline writer, Henry CK Liu says in detailing the long, complex history of global finance and dollar hegemony --
and in trying to MAKE OTHER countries PAY for the "building of the US empire" .
except that it NOW gets TRAPPED in ITS own orgy of "money making" substituting for real EARNED wealth -- which is WHAT the US BANKING SYSTEM is really about -- FRAUDULENT WEALTH creation -imposed on the rest of the world to make the USA "the dominant player".
you WON'T be able to BLAME china for "cheap labor" EITHER -- because THAT was JUST part of the SYSTEm the USA and england and western powers IMPOSED on the globe thinking they could forever KEEP china and other nations with VAST RESOURCES and HUGE markets --
SUBMISSIVE!
as for china_
it has ALREADY begun to USE is power to INCREASE its DOMESTIC market POWER for ITS own goods that can't be sold outside due to the collapsed "export market"
you know what THAT is GOOD for china and the neighborhing asian countries ANYWAY?
THEY NEVER NEEDED the Western countries - to begin with!!
if it really comes down to SURVIVAL and EVEN prosperity.
they ALWAYS were prosperous UNTIL the western powers colonized and imposed , backed with more advanced militarism , a system of exploitation
OUT OF WHICH CHINA has in recent decades DECIDED to REVIVE its TRUE destiny and HISTORY :
as one of the most , even the most, PROSPEROUS and harmonious nations in the history of the planet for close to 5,000 continuous years!
until marco polo disovered what PEASANTS the europeans were in comparison!
what you are seeing is the difference between the west and east.
the old saying goes:
the "west thinks in terms of years , decades, hundreds of years...the east thinks in thousands of years".
they can bide and HAVE bided their time and husbanded their strengths while watching the "fast rabbit" USA ....
BURN ITSELF OUT! THAT's what you are seeing , in slow motion.
So........you don't want to leave the kids something better?
We have to first get anything good back before we can even think of leaving our kids something better than we had. Unfortunately, the current system is forcing the elderly to be economically choked to the point of having to borrow from their kids and grandkids against their own will and heart.
"This could easily be the beginning of a reformation rather than a disaster."
Thomas my friend.
I am with you on that one. You summed up my feelings in one sentence....
Well Mr. Dante Sir....I hope our feelings are right. I certainly hope it is the beginning.
As long as Obama continues Bush's foreign policy a 'beginning' will be an illusion. Thus far it looks like the 'beginning' of a 'continuation'...
As for the Chinese, well, they've been around for 5000 years. I guesstimate they'll be around for another...
"may you live in interesting times"
you have to realize, as an american, thomas more,
while the USA WILL remain as the primary nation for years to come....
it can NO LONGER dictate everything in the world. the sooner it comes to THAT reality -- the BETTEr for americans and everyone else.
and there is one other TRUTH:
300 million americans do NOT constitute what the favorite american song says:
"we are the world".
no -- 300 million americans are ONLY a SMALL percentage of the world -- and it is the americans that NEED the world MORE than the world NEEDS america.
and certainly , where it comes to CHINA - with its 1.3 billion people, with MORE of them MORE educated than the ENTIRE population of the USA --
but STILL a LARGELY UNTAPPED DOMESTIC MARKET - which China is NOW paying attention TO CULTIVATING - as well as cultivating ITS market and trade WITH its neighbors more fully
you are talking here about a trade region that CAN STAND ON ITS OWN
-- a full 4 BILLION people -- with vast resources and diversities and potentials
that DOES NOT NEED the USA in order to EXIST OR PROSPER!
but -- cut off the USA from THAT -- what do you GET?
a country that is and WOULD be POORER than its fraudulent accounting and banking practices PORTRAY!
put that in your brain.
You underestimate Americans ole Teddy. Its a common failing. But don't bet your house on the Chinese just yet. They have a multitude of problems. I have respect for what they have accomplished, but my state cold almost match their economy.
You might be surprised which bunch could get along better without the other.
don't go on your high horse yet or -- at all.
what "prosperity" or power your state has - as part of what prosperity or power the USA HAS is dependent ON and was BUILT UPON THIS:
"WE AMERICANS - VERY FEW OF US truly understand and know that WE are ONLY living our lifestyles and our prosperity -- because it is JUST PART of a very VERY VICIOUS system of exploitation that Dehumanizes and Enslaves people elsewhere and everywhere....our REAL debt to other nations is BEYOND what we can POSSIBLY every repay".
John Perkins -- Former CIA "economic hitman" doing the work EXACTLY that allowed the USA to manipulate its way towards what YOU call "my state" and "prosperity".
in harsher language that would be called PREDATION and it's NOT about HONEST earning !
evne if YOU are NOT aware of how YOU came around to "live" in a prosperous nation .
as general smedley butler of the US marines said from the 1930's -- in fact the periods of when the USA really SOLIDIFIED THIS predatory behavior upon which YOU stand and boast about :
"Our Foreign Policy has always been geared towards gathering as much of the worl'ds resources unto ourselves at the expense of other nations....the TRUE purpose of our Military and armed forces is to be the BIG MUSCLE and eNforcer of the Will of our Chamber of Commerce, Big Banks, big Corporations, Big Finance upon other countries....I was its chief Enforcer....
"you wanted to pacify nicaragua for our big farm industries? i'd pacify it for you...you wanted to be sure Dominican republic didn't complain about our Big Banks running their economy? i'd do it for you...you wanted to have our BIG OIL run unmolested in China ? i'd do it for you...it has nothing to do with freedom or justice.....it is all about our Almighty Dollar...where the Dollar goes, the flag follows, where the flag goes, our troops follow....
I will have nothing more to do with it , after 30 years of suppressing my own conscience as their enforcer...all of us in service of our BIG BOSS our supernationalistic Capitalism....
the trouble with US americans is, if we can't raise our dollar at home to buy 6% worth of treasure -- we go abroad so it can buy 100 percent worth more...even if we didn't earn it...we are TRULY a PREDATOR NATION".
THAT"S what you are REALLY talking about , thomas more - even IF you THINK you did it all out of good 'ol american hard work!
THOMAS MORE -- in THIS account, hoping IT IS the time for american TRANSFORMATION and betterment for not JUSt the USA but the rest of the world -- i AM WITH YOU, heart and soul!!
The Chinese elite are doing what is good for China. The US elite are doing what is good for themselves (i.e. taking as much money out of the US and into their Swiss/Abu Dhabi bank accounts as possible).
EXACTLY!
brilliant summation.
And China makes stuff (lots of crappy stuff, but hey). US moves money around.
And don't forget Japan - now makes lots of machines (which it sells to China to make all their stuff). Go East young man (er people).
of course a lot of that crappy stuff is based on US DESIGNS by US companies......so....
and it turns out that a lot of that crappy stuff is STILL better than LOTS of crappy stuff PRODUCED in america anyway.....
we can even start with the CRAPPY stuff called the GIANT PONZI SCHEME called WALL STREET and the US BANKING and FINANCIAL SYSTEM.......responsible for ALL the crappy stuff being sold in the world to operate under the US FRAUDULENT DOLLAR HEGEMONY "invention".
Well, at least the Chinese didn't make the crappy Ponzi financial scheme the americans fell for...
And, yes, I suspect that many young people are already heading East (China, that is...)
"may you live in interesting times"
Well said! And that difference is what the US media would never admit!
"may you live in interesting times"
It should not be forgotten that during the 1930s, while the rest of the world languished in depression, the Soviet Union entered an unprecedented boom that continued until achieving stagnation in the 1970s – at about the same time that wages became stagnant in the US.
Dilip Hiro omits one important factor that is a constant of Chinese history: corruption. The inability of various dynasties to mitigate its' effects enough has caused more than one dynasty to lose "the mandate of heaven." For the current one, the Communists (whom only differ from prior dynasties in the manner which they choose their figurehead) have yet to get a realistic handle on it.
Additionally, while their might is formidable, their Confucian based governing philosophy is at odds with the rule of law, which is how the rest of the First World (which China aspires to join) generally governs itself. If the Chinese expect to impose their method of doing things by fait accompli, they may very well be in for quite a rude shock.
Following the rule of law would be a nice change in the US, but I do not see it happening anytime soon.
A great change indeed. Though I believe over the next few years Americans are going to insist on it.
Obamas surprising support for the silly Democrats insistence on trying top shove Amnesty down Americans throats will jump start it I believe. If this law is suborned sucessfully however, watch out.
it's america that needs PLENTY of AMNESTY for SO MANY uncountable ILLEGAL , CRIMINAL actions in the world.....
such as toppling governments that try to protect THEIR countries from US rape.
or INVADING countries illegaly and criminally under bald-faced lies in order to STEAL their resources and lands and render their people SUBJECTS to the american empire...
"our foreign policy has always been designed to render other , especially weaker nations PERMANENTLY SUBJUGATED to the will of OUR Chamber of Commerce" -- John Perkins, Former CIA "economic hitman" - specializing in South america middle east and southeast asia for 30 years.
"the TRUE purpose of our military is to Make the World Safe for our Big Boss , our supernationalistic Capitalism and our cultural and Economic Assault...our foreign policy has always been geared towards gathering as much of the world's resources unto ourselves at the expense of other nations"...General Smedley Butler, US MARINE GENERAL, 30 year veteran of "i was doing the bidding of our Big Banks, Big Corporations, Big Finance -- basically to subjugate other countries and make THEM pay for OUR empire building..so you can fairly say -- i was its chief enforcer...we are really a Predator Nation and a Nation of Racketeers...it is all about our Almight Dollar...where the dollar goes, our flag follows, where the flag goes, our troops go".
NateW
Nice comment.
this is of course if one assumes that China -- a civilization that has existed for at least 5,ooo years continuously -- in fact the only one prosperous enough to have existed unbroken -
is going to obey "the rule of law" as the west SEES it .
there is a reason why the current adjustment of china to the modern realities -- as part ONLY of its adjustments through the eons that made it a SUCCESSFUL continuous civilization which the USA and the west are in NO position to lecture about "continuity" and "survival" --
is called "capitalism with a chinese characteristic".
the chinese will find a way -- the way THEY always HAVE.
they absorb and change things as they find FIT - just as they always have.
it is the USA that is entering the ENDGAME of its own boasted "primacy"
which china is merely taking the USEFUL parts from to adjust to ITS own needs and intents.......
just as it always has. for five thousand years.
what is the US and western philosophy of "order" and "accountabilty" and "rule of law"
compared to THAT?
it is like some teenager trying to teach a grand master how to do fencing!
as an ancient asian saying goes -- in response to some boasting englishman in visiting the east about how "backward" the east was:
"we were here LONG before you were even TRIBEs in the west...we shall still be here long after your empires are no more".
and speaking of Corruption.
excuse one -- but what is ONE to say about the GIANT CORRUPTION SYSTEM that is the ENTIRE US ECONOMY anyway?
lots of big talk about 'accountability" eh?
but people DON"T really know WHERE all that money they send to PROP UP the FRAUDULENT BANKSTERS and wall street are going.....
except that it's down a BLACK HOLE.
what about the MILITARY industrial congressional complex with all the pretense of "LAW and ORDER?"
as General Smedley Butler, US marine, 1933 speeches said:
"i have for 30 years worked as the Chief Enforcer of our Big Muscles == our military - doing the bidding of our Big Finance, Corporations and Big Banks....there is NO MONEY CORRUPTION that our military is blind to...we are truly a Predator Nation".
before americans lecture or talk about "corruption" in other countries due to their "culture"
americans should FIRST LOOK AT THE MIRROR....with the GIANT PONZI SCHEME ECONOMY of a corruption --
and know the line by the old cartoon character POGO that said:
:"I have met the enemy -- and he is US".
the greatest "threat to national security"
of americans is AMERICANS themselves ..not due to ":terrorist acts" or anything like that.
it is due to their OWN hubris and DELUSIONS about being "exceptional".
the greatest threat of MASS poverty in the usa -- is NOT "the chinese communists" or the "socialist vietnamese who want to destroy our way of life".......
it is the BANKING system of the USA and WALL STREET and their enablers, and the CHAMBER of COMMERCE that makes americans think they have a "choice" when in reality they are conscripted and brought up to be "proud americans" but in reality are
DOCILE SLAVES to their OWN corporatocracy!
When commenting on China, particularly claiming that China represents the future great economic power, one important caveat is omitted. This caveat applies to all of Asia. China is developing by trying to emulate western civilization in its present form. It can not be done, because western civilization is too resource intensive. China developed this far by presenting 100-200 million landless subsistence peasants as a workforce that will, for the most part, work for food. Such workforce used to be called proletariat. Unlike in the history of the west, this proletariat can not be emancipated into middle class prosperity just by political reform. This is, thus, a prescription for social instability. You can not compare mainland China to Japan, which a cohesive culture of "only" 100 million people. My personal view of the chinese future, is prolonged period of social instability, until the technology catches up to provide some measure of prosperity at a lower cost to the environment. I would not exclude a breakup either.
The peasants improved their position by working at the factories rather than trying to continue make a living on the land. The difference between what they were getting by working on the farm and what labor receives in the industrialized world is so vast that the Chinese leadership and the Western corporate exploiters had a lot of room to work with and still do. The Chinese leadership is made up of very capable individuals who rose through the ranks mostly based on ability and knowledge. I suspect that they understand the risks, environmental and human, internal and external, and so far have balanced the risks quite capably.
Is it true that only a few hundred million Chinese actually benefit today and the vast majority, almost a billion live in abject poverty?
More peasants move to the cities each year, but my best guess is that about 500 million live in cities today, with the remaining 800 million still living in villages and in the countryside. The economic progress has almost entirely been in the cities, and a large middle class is growing there. The old shacks and dilapidated buildings in the urban areas have largely been removed and replaced with modern high-rises for residences and businesses. In the countryside, little has changed so far and the people are as poor as ever (as they have been for centuries), though it looks like the government is about to make an effort there to significantly improve the quality of life.
Something many do not appreciate is that the West and Japan dominated and exploited China throughout much of the 19th Century and in the first half of the 20th. The Chinese were so humiliated by their complete subjugation at the hands of hostile foreign powers that they are determined for it to never happen again (there is the history of Mongol control as well). And that is why they are so focused on industrialization and the development of Chinese wealth and technology. They understand the environmental problems, but they believe that all other problems must be secondary until they ensure that they will be masters of their own fate.
kivals
Thanks very much for the insight in this area. Its extremely interesting. China is the popular prediction to take our place, but I don't think it will happen. (not sure they really want it anyway), but any government that is smart enough to evolve and adapt, to not strangle on ideology is a friend worth having. And so far they have been quite smart. But of coourse the looming problems of water and an aging population will have an impact, wouldn't you say?
"They understand the environmental problems, but they believe that all other problems must be secondary until they ensure that they will be masters of their own fate."
Frankly thats what I thought their attitude was, which makes them smarter than we are.
There is one area America did better in, at least we didn't get the territorial concessions the rest did. Not that that would make a difference to most Chinese. Mongol,Japanese, Westerners....all same, same like in the Sand Pebbles.
Really appreciate the unfiltered insight my friend.
this is a well-known fact of history among asians..of which i AM one.
for asians - part of our educational background is to have courses in - separately:
world history, ASIAN history, as well as european history , and even in some regions - AMERICAN history.
we know about what really happened. and that's one reason the usual western press, especially the kind pretending to be "truth and complete" telling while lecturing about other media in other countries, such as is the case for the USA "press"...
is seen largely as more propaganda - no different from that of the governments the americans consider as "propoganda".
after all -- where ELSE would the american exceptionalism come from iF NOT for american's OWN self-delusions? while hardly knowing much about what imperial japan did to china and WITH backing and encouragement from teh british and USA late in teh 19th century?
asians have always been aware of such things.
are americans aware, for example that the FIRST true concentration slave camps ever built by any country in another country -- was built BY the USA in the philippines - in order to impose ITS rule after RENEGING on its promise that US troops and personnel would leave after "helping" the natives to remove the Spanish empire? .
are americans aware that america was PART of the western imperialist attempts to CARVE UP CHINA into "regions of influence" along with england, france, netherlands, portuguese (leaving its imprint in Macao's portuguese/chines language) along with japan? and that it was THESE foreign imperalist intrusions - long ago ALREADY defined by the wilsonian and other administrations as "the great chinese MARKET for capitalism". --
that REALLY sparked the nationalism in china against foreign intrusions -- which led to the split of the nationalists between "right and left" out of which the Kuomintang of chang-kai-shek and mao-zedong arose?.
they were REACTIONS to foreign imperialist intrusions.
what china is doing TODAY and since the last 30 years is ONLY RECLAIMING its rightful place as one of the world's most prosperous nations and as the "center kingdom" in asia
which westerners have NO complete understanding of but which , to asians, is ENTIRELY logical.
Your history is a bit off there ole Teddy.
Since I have been married to a Chinese woman for many years, have been to China many times, and in connection with that have read a fair share of Chinese history, I have been aware of what you mentioned about the history of subjugation. But I do admit that before meeting her and before going to China I was blissfully unaware. I was really shocked, especially, to learn the details of the Opium Wars.
But I would quibble a little about your history. The first concentration camps I believe were in South Africa, built by the English for the Boers during the Second Boer war (1899-1902), predating the US camps in the Philippines only slightly. However, the English never treated the Boer population in any manner resembling the way the Americans treated the Filipinos.
And though the Chinese Nationalists were originally anti-imperialist, the right wing of the Nationalists under Chiang Kai-shek was more than willing to work with Westerners to defeat Mao. The lack of effective support for Chiang Kai-shek led to a slew of recriminations in the US political and media world and spawned McCarthyism.
Sioux Rose
KIVALS: Having made friends with highly intelligent and industrious Chinese persons in Singapore, and studying the I ching (Ancient Chinese book of changes, an inordinately insightful oracle) along with a bit of Chinese medicine, it's clear to me that the Chinese mind has a capacity to think in terms of the long-run. The average Western mind, particularly those influenced by MSM, focuses on short-term "solutions." Thus the Chinese are better equipped "chess players" in the world of international commerce and economics. Working against them are the ecological limits of their land; however, as the article relates, their shrewd trade deals with other regions may provide a compensation for what is lacking in natural assets.
It's fascinating to watch the tidal fluxes impact nations. No entity is immune to the law of cycles. One waxes and another wanes. The greatest becomes emptied and must learn to fill again, perhaps this time remembering what hunger felt like so as not to condemn too many others to that state.
Yes, Sioux Rose, I believe the knowledge that one is part of a continuous flow of civilization of several millennia in duration helps to focus one's mind more on the long term. Also, the power of the Chinese government allows it to conduct economic experiments in various locales in the country and to change approaches accordingly. Also, with regard to the environmental degradation, a powerful central government can reverse direction and mitigate damages far more quickly and comprehensively than a government more subject to a wide range of forces and pressures.
teh funny thing , SiouxRose - about some comments about how "backward" china STILL is -- in contrast to the CURRENT "advanced" stage of the USA as an economy which ITSELF LED the world to the "competition" rat race for ITS benefit to become the world's "perpetual empire" --
is:
these folks or criticisms are dealt out DURING a time when china is challenged with BOTH its development according to ITS TRUE destiny as a large nation -- towards its rightful prosperity, which WESTERN IMPERIALISM and isolation THAT imperialism CAUSED , tried to prevent from happening to render china a SUBJECT nation "divided into regions of influence AMONG western imperialists" .
and the funny thing is :
whiel china is INDEED saddled with HUGE challenges such as developing quickly to take its rightful place as a prosperous nation in keeping with its HUGE population - AND also finding ways to do that WHILE coping with global and environmental problems
CHINA in the space of 3 decades or even less has actually been AHEAD of the USA in using its power of government to tackle global warming, pollution etc.
BECAUSE it has seen the effects of these things from development WITHIN its own borders.
as of NOW -- as of TODAY -- CHINA ALREADY is "marketing" IN ITS OWN domestic market
the equivalent of the ENTIRE US population's market power -- with CARS that are environmentally conscious!! with its population FULLY aware and much more READY to cooperate than americans EVER HAVE BEEN on their own account.
put it this way:
there are PLENTY of things the american "capitalist" system has produced that china has LEARNED FROM - including what to AVOID or CORRECT - such as the resulting POLLUTION or WEALTH GAPs, or loss of social security and health care (which china is paying attention TO which was PART of what President Obama LAST WEEK gave admiring comments on saying: china is doing things to correct social problems FASTER than WE are doing")
as PART ONLY of China's 5,000 year old EXISTENCE!
what is the USA compared to THAT? and americans are going to criticize china for being "backward?"
on the contrary -- where china is ABSORBING things that and CHOOSING the ones that are USEFUL and SUSTAINABLE in the long run --
the USA is the ONE that has MUCH TO LEARN from a 5,000 year old civilization that has been WISE enough to say:
":we have always been UNINTERESTED in global empire...our interest is to remain CHINA".
time will tell how capably. However, the chinese simply can not emulate western civilization "as is". It is a matter of numbers, not opinion. The world oil production will not double, or triple, as it would have to even with modest improvements in energy efficiency of present day technologies.
Peasants do improve their lot by becoming migrant workers. However, once they become migrant workers, they expect their lives, or at least the lives of their children, to continue improving. Once it is clear that this is impossible, they seek change more forcefully. It is the marxist thing.
I grew up in socialist Poland. Somehow I doubt that the chinese aparatchiks are so much better than polish aparatchiks were. And the last thing they were selected on was competence. The first thing was always loyalty, which was usually orthogonal to competence.
"And the last thing they were selected on was competence. The first thing was always loyalty, which was usually orthogonal to competence."
That is where our opinions diverge. My wife's family members who live in China, and who have always been generally critical of the regime, do acknowledge that the party leaders of recent years have been very competent and capable. I am aware that competency was always a problem with Russian and Eastern European leadership, but the Chinese have either been lucky or have found a better way to promote individuals through the ranks. Their leaders appear to be far more competent than US political leaders, and are quite aware of the environmental and diminishing resources problems. As I wrote, they are managing risks, with the greatest risk, in their minds, being that of domination by the West, particularly the US. To them allowing US domination would be worse than death. And I have to agree with them on that.
"Their leaders appear to be far more competent than US political leaders"
That, these days, is faint praise indeed!
Thomas, I am afraid you are right about that. US political leaders have not been much to speak of in recent decades, but they are what we are all familiar with and so offer some basis for comparison.
this will prove to be more correct.
in fact -- as of today -- the chinese authorities have ALREADY succeeded - leaving obama basically in awe at how quickly they managed it in contrast to the usa --
to "manage" the incipient or imminent "social unrest" due to the at least 20 million out of work people when the export economy collapsed ./
what china DID -- is what the USA is NOT doing --
and that is -- it USED its money to MAINTAIN existing wages - and create new jobs AND industries as well as refocus eastern area industries to service innerland economies and bring those gradually up to par with the eastern seaboard economies
and in other words "spread the wealth around" and DELIVER to the people what the government is supposed to deliver -- their hopes at the very least to have a prosperous future
rather than MAKE THEM PAY for the mistakes of the "Lords of the Universe" the way the USA does!
what china is doing, in contrast to the USA is lay the foundations FOR a stable society based on
RISING WAGES at FULL EMPLOYMENT. which is ANATHEMA to the USA capitalist system which is at the HEART of the global economic collapse.
CHINA is doing what the USA FAILED to do!
roflmao!
well - the problem in your assessment rests on equating china's adopting, a natural trait of any country for its own survival and sovereignty and viability, to MODERNITY - such as in technology etc -- with "being LIKE" the western social order or society.
you are forgetting that whatever ELSE the western nations or societies THINK of what is "proper" and "desirable" order
they ARE THEMSELVES merely JUNIORS in comparison to thousands of years of continuous civilization in china-- which is TODAY -- almost exactly the SAME geographical shape as it WAS over 4,ooo years ago.
HOW OLD is the USA as a "nation"?
since WHEN did ENGLAND become EVEN a civilized society worth talking about seriously?
france? italy? germany?
these were mere BARBARIAN TRIBES without any sense of nationhood
long AFTER china was ALREADY a highly ordered Kingdom and empire within ITS present borders.
do you REALLY think that China SEES its DESTINY as "being like the west?"
that would be the most LAUGHABLE thing for a chinese worth his salt.
on the contrary -- as chinese leaders have emphasized - so there is NO confusion about what they INTEND and what their people KNOW is their rightful destiny as a nation:
"we shall NEVER become like the west".
it is time for westerners to DISABUSE themselves of the notion that the chinese or others are , by necessity or desirability 'supposed' to be LIKE the west -- and "might fail, because it will never work" as a way of saying "they AREn"T good enough to be LIKE US"
THEREFORE they must be RULED
which is another form of saying that the "WHITE MAN's BURDEN" should continue to "order the world" .
the chinese, are MORE CLEVER than THAT. believe you me.
Are you suggesting that China revert's to a time when it was more civilzed? Or that China has a civilization that is superior to western civilization?
China does have a lot of Eastern beliefs that we Americans could badly learn from. Unfortunately, watching China throw a lot of those helpful beliefs out the window and falling for the unfettered yuppie capitalism temptation will make it easier for the American people to view those beliefs as somehow not needed. I still cannot for the life of me digest why people in China and India to name a couple of places in the Far East are proudly falling for unfettered capitalism and going so yuppie about it despite the obvious consequences on the West. Usually those people are smarter and more conservative than us. And even more than the American people, those people cannot afford to take that risk. I sure as hell don't want to be living in those countries when the economic crash is severe. The crash in this country is already bad enough.
I have to laugh at these comments bemoaning China's "corruption". When Chinese business executives break the law or steal, they get executed. When Amerian CEOs steal and run their companies into the ground, they bail with $100 million packages.
PERFECTLY stated Katyc.
there is much that every country has to improve in ethics, governance, wealth distribution, national infrastructures, etc....china is NO exception.
but to talk about corruption - coming from america?
that is - for americans, if they haven't YET opened their eyes --ALREADY CLEAR and even a laughingstock throughout the world or WILL BE soon enough , that the us system is RIFE with GIANT corruption - sanctioned BY the state !! calling them fancy legal terms in finance, court proceedings, congressional policies and TITLES of programs
but through and through CORRUPT!
i mean -- my goodness -- that is like a DOZEN KETTLES calling one POT "black".
i mean -- whether it's the at least 90 year old banking and accounting system of the USA that is FRAUDULENT accounting (there are articles tracing the real history of how that fraudulence has been perpetrated as "honest" and TODAY accepted as the "norm") -- \
or it's the current economic "policies" - or the party-election and nomination system...or the USA monetary policies placing the dollar , unjustifiably as the world's "hegemon" tool of imperialism to cheapen OTHER nations and render them subject to US demands, or the way the USA , under WIlson ENTERED the first world war in order to POSITION itself as the "next empire" as england was needing help to maintain itself as ITS empire was unravelling- and what it led to -- the SECOND world war - GUARANTEEING the demise of the "big british empire" BEING TRANSFERED to the "Empire in waiting" USA --
they are ALL ABOUT the GRANDEST CORRUPTION SCHEME ever perpetrated on humanity.
that's your wonderful US Of A!
so - you know, let's not be so quick about pointing fingers about ":corruption":
This almost purely economic analysis leaves aside the rising significance of climate change and the sustainability of growth. What impacts lie ahead for human civilization remain to be seen, but I cringe at the prospect of ambitious efforts to seize control of world economic leadership.