While American voters were finally giving President George Bush and his southern-fried Republican Party a richly-deserved, long-overdue drubbing last week, I was off in China observing a nation that, while rigidly authoritarian, is at least governed by capable, intelligent people rather than the bungling politicians and crackpot ideologues that have run America onto the rocks.

Here in Beijing for my umpteenth visit since 1975, I’ve seen the future, and it still says “made in China.”

This gigantic metropolis of 25 million seemed destined to become the world’s new capital city — provided China’s economy, still surging at over 10% per annum, remains strong, and political stability continues. Beijing’s massive new skyscrapers, huge government blocks, broad, traffic-clogged avenues and miasma of smog and dust give it the look of an imperial capital in a science fiction film.

Last week Beijing staged a grandiose summit for 48 African leaders who received $10 billion in aid from China’s new leader, President Hu Jintao.

Energy-voracious China now gets 30% of its oil from Africa. Angola just passed Saudi Arabia as China’s leading oil supplier. China is bent on securing the lion’s share of Africa’s supplies of oil and other strategic resources. China-Africa trade has surged 30% to $50 billion in 2003.

China’s non-interference policy means its trade and aid come without strings, a major plus for authoritarian African regimes. At least China is not hypocritical. While Washington boycotts Sudan and Zimbabwe over human rights, it cozies up to other major violators like Egypt, Morocco, Algeria and Tunisia.

The summit was a lavish spectacle, with convoys of bigwigs in limousines racing down the avenues, dancers, drummers, acrobats, small armies of tough security details, and regiments of China’s feared paramilitary police, the Wujing, scowling at everyone.

China announced a third-quarter trade surplus of $102 billion (US). Beijing’s monetary reserves have finally topped $1 trillion US, surpassing the former cash king, Japan.

Beijing continues to finance America’s spending binge by lending it billions.

China’s mammoth trade surplus, and a rising flood of foreign investment, has swamped the nation’s banks with cash.

This, in turn, has fueled indiscriminate speculative investments, particularly in real estate, and a gold-rush frenzy that often obscures China’s solid economic development.

This flood of hot money poses a serious danger. Indiscriminate investment leads to overproduction, which then causes a deflationary crisis that could end in financial meltdown. Japan experienced similar phenomena in the 1990s.

China’s government has been struggling without much success to restrain this investment dragon. Beijing refuses, however, to allow its controlled, seriously undervalued currency, the yuan, to float, as its trade partners demand.

The undervalued yuan has given China its huge surplus, the motor of growth that has pulled the nation out of poverty. China still needs to deal with hundreds of millions of struggling farmers, state industry workers, and unemployed. So it refuses to allow the yuan to inch up by more than 5%.

If the yuan were allowed to float, say Chinese bankers, people would rush to convert to dollars, causing a dire financial crisis.

Too much cash

Anyway, argue Chinese officials, why should China pay the price for America’s profligacy in refusing to save and running huge government deficits by revaluing the yuan? The U.S. Treasury is printing too much money in order to keep America’s debt-ridden economy growing.

Since 60% of all U.S. dollars end up abroad, the Bush administration’s reckless spending and over-stimulative money policies have caused a dangerous world-wide cash flood and serious imbalances to the global economy.

U.S. Republicans would do well to take pointers on capitalism from China’s Communists, who have beaten the Western devils at their own game.