Is China going to become more like the West or are we going to become more like China?
It has been our arrogant assumption that China will, of course, become more like us. Western politicians and pundits seem to be constantly telling China how it needs to open its markets in order to be more ‘Free market’, let the value of its currency float free of government intervention and to pay more heed to ‘Human Rights’.
Why do we say these things?
We tell the Chinese it is because we wish to see them become more affluent and we are sure that the best, perhaps only, way of doing so is to follow the path towards representative democracy, an independent judiciary safeguarding the rule of law, and individual freedoms. We just love to piously tell the world that we are the champions of universal betterment of all people, and seek no reward save the liberation and enfranchisement of the poor and oppressed. Some simpletons might even believe it.
If we are honest, however, we also want China to change because we think that a less authoritarian and less centrally controlled China will be more open to exploitation by, sorry, having a valuable partnership with us.
We see ourselves as the top of the cultural evolutionary ladder. We have an un-reconstructed Victorian notion of a linear ascent, where, naturally, our form of government and economics is assumed to be the apogee of human development. We see China as being a few rungs below us and we urge them, for their own good and the common good, to climb closer beneath us and learn to sit proudly and patiently at our feet, learning and trading and generally being content to play second fiddle to us.
I think another part of what makes us think China is destined to become like us, is that we see China as a character in our world. We see ourselves, the West, and our values, power and economic system as being the context in which China, however powerful, is contained. But I begin to wonder if this situation is at a tipping point. What if we think, as I am tempted to do, that China’s economic power and importance as well as the extent of her global economic presence, is beginning to reverse our roles? What if we begin to think that it is no longer China evolving in our world, but China beginning to re-define the world we are in? What if China begins to define the context in which we will evolve and not the other way round?
At this moment our financial system is still deeply mired in crippling debts and our sovereign states are flinging themselves into the same paralyzing mess. We are weakened. China, on the other hand, is in the ascendant. It owns over 800 billion dollars worth of US debt which it has already used to put pressure on the US. It was widely rumoured at the time and I think it likely, that part of the decision to nationalize Freddie and Fannie was because China threatened the US if it didn’t guarantee the debt that China had bought so much of.
Now China is buying up, or at least saying it will buy up, as a ‘saviour’, Greek, and Portuguese debt. China has said it will stand ready to help the euro zone in general. We should remember there is no such thing as a free Chinese meal.
China has also spent much of the last few years buying up resources throughout Africa and South America. It has bought into several oil and gas projects in South America as well as buying up tracts of land for growing food for China in S. America and Africa.
I am not saying China should not be allowed to share in the rape and pillage of the planet I am just noting that we no longer have the monopoly. And the Chinese will be every bit at cruel and arrogant in their dominance as we have been in ours.
If I am in any way correct then we should stop paying attention to our leaders lecturing China on how it must change to fit into a ‘our’ world and start to consider how our leaders may actually be beginning to groom us for fitting into theirs.
China is a country where workers have no ‘rights’. We will have to have fewer. There are no unions to fight for the rights of Chinese workers other than those official unions controlled by the government. Our union laws will have to be curbed. Their wages are low and kept that way. Ours will have to be ‘restrained’ in the name of global competition. Businesses can hire, fire and relocate as and when they wish in China. Our labour laws will have to ‘liberalized’ to match.
For me, this puts a fresh light on the recent IMF paper, which I have written about already, detailing measures the IMF thinks are those necessary to make Europe competitive in a global economy. Those measures included reducing collective bargaining, lowering the minimum wage and making it easier to hire and fire. In the UK our government has said recently it is considering changes to strike laws to make it more difficult to call strikes.
Is this China becoming more like us or us more like China? Are we going to be the ones who find our governments’ and our Über class will happy to have us adapt and change to meet a world context influenced far more by China than by us? And who if anyone will be there to protect us? Well certainly not the IMF and not our financial elite. Take Jim Rogers for example. He has moved to Asia and said many times he thinks China is the future. Has anyone ever heard him protest about human rights? I think we will find our own financial elite and super wealthy will be only too happy to have the world forced into becoming more Chinese.
I think we will find in a contest between profits and votes, productivity and human rights those who govern and own us will opt for the latter every time. Western values though much touted in public will be quickly traded for Eastern profit. We will be told, conform to the new ‘reality’ or ‘we’, the banks, corporations and wealthy, will leave you and take the bail out money you gave us and invest it in countries where people work harder for less and don’t have ideas and ideals above their station.
My point is not to say let’s all fear and loath China. My point is rather to understand that our leaders will have us become more Chinese before they persuade China to become more like us. If we do not relish such a future we MUST change our leaders and soon. We must then take issue with the entire neo-liberal, globalization project.
ireland is printing euros !!
http://www.independent.ie/business/irish/central-bank-steps-up-its-cash-support-to-irish-banks-financed-by-institution-printing-own-money-2497212.html
I'm watching it. First Ireland then who?
it was just an idle thought when i suggested that italy would be the first to print it's own euro's, they will all be at it soon
the weekend after the euro was introduced, i was at my local market in a paris suburb, and an old woman in the queue in front of me, fiddling with her change, said " it's just monopoly money. They didnt make it for us"
It doesn't get much press, but Chinese workers are beginning to fight back & not without some success. Wages are slowly rising in some areas after organized protests, and due to the fact that the Chinese govt wants their people to be able to afford the goods they're producing.
And of course, while Chinese workers may be paid less, they also receive free medical care — a not insubstantial cost many of us in the US pay largely by ourselves, or go without if can't afford it — and education.
While China is no longer "cradle to the grave," if it ever was, it's a lot closer than we are, and we're moving away from that at a rapid pace.
Going on about how Chinese workers have no 'rights' misses the fairly important point that many of these workers didn't even have enough food in their belly ten years ago.
These days, when most of us in the relatively affluent west don't have to worry about such things, it's easy to forget that the right to eat completely out-trumps the right to say whatever you want and China has done brilliantly at improving the lives of hundreds of millions(!!!) of its citizens over the last twenty years.
None of which is say I want chinese working practices to happen here or to deny your points that the Chinese won't want to play 'the game' according to our rigged rules and probably will end up having more influence over our lives, but that's our western governments' faults not theirs.
… the "post limit" monster chewed my comment for the second time… this time saying I do not "own" this identity… mmmmmmphhhh…
Once more in bullet point format.
As shown by Tobin's Q or by the Money Multiplier, there is such a thing as the efficiency of money.
Debt Based Fiat Money (DBFM) is predicated on inflation.
DBFM has a diminishing marginal utility which must necessarily result in gradually waning economic and political power. Thus DBFM within an open society based on democratic principles must mathematically result in a statism with a heavy corporatist component. Call it the China Syndrome if you will.
The reason is that each new round of inflation has less economic effect thus less political and social clout requiring the authorities to intervene ever more directly and deeply.
Society only begins to feel the tangible effects of this transition when credit markets begin to shrink. Shrinking credit markets mean shrinking social expenditure which must necessarily be accompanied by a curtailment in personal economic and personal freedoms.
This is when social unrest and, eventually, revolution ensue.
But social unrest and revolution are dangerous because, at least initially, the state will respond in kind.
Luckily for us, when the efficiency of DBFM is next to zero and due to the magic of fractional reserve banking, we, the little people, have infinite leverage against the establishment. Leverage that is thoroughly legal thus safe… although if the dutch have anything to do with it, even this avenue may not be legal or safe for long:
http://www.zerohedge.com/article/guest-post-legislation-proposed-criminalise-calls-run-bank
Our plan should consist in crashing the monetary system thus paralyzing the political establishment.
Legal, elegant, quiet but devastatingly effective.
Withdraw all savings from major banks. Open accounts in small local banks or cooperatives if you must or just hold on to the cash. Close all credit lines. Pay off all debts. If you really want to push the boat out, invest US$50 (fifty Dollars US) to buy one coin and one ingot each of gold and silver.
Of course. This course of action does not come without consequences. But these are consequences that impact your life style rather than your life or that of the more excitable segments of society such as students.
Crash the banks and paralyze the political class.
Incidentally, if we don't do that, the likely outcome is a war of global proportions. Not because there is some foreign evil that resents our life style but because our leaders know that this is the end of the road and the money (credit) is finished. If anyone is threatening our life style, it is our leaders.
Lets crash the banks and make our politicians accountable.
This morning's news (front page on the FT, but limited web-access), here is the BBC version:
China banks lend more than World Bank –
"Two Chinese state controlled banks have lent more to developing countries than the World Bank, according to a report.
The China Development Bank and the China Export Import Bank offered loans of at least $110 bn (£69.2 bn) to governments and firms in developing countries in 2009 and 2010.
The research was undertaken by the Financial Times newspaper.
Between mid-2008 and mid-2010, the World Bank's lending arm issued loans of just over $100 billion(£63bn).
The two Chinese banks do not publish a detailed breakdown of their overseas loans, so this research is based on public announcements about specific deals from them, their borrowers or the Chinese government.
That means the figure arrived at for the amount of Chinese lending is more likely an underestimate than an overestimate because some – more sensitive – loans will not have been made public.
The Chinese lenders are so-called policy banks – they have a mandate to further whatever Beijing sees as its national interest.
One of China Development Bank's specific tasks is to try to alleviate and, where possible, eliminate bottlenecks in supplies of raw materials or land for China's economy.
…The Chinese government, which is sitting on $2 trillion (£1.26 trillion) of foreign exchange reserves, has ample amounts of cash to fund loans which help promote its strategic objectives."
http://www.bbc.co.uk/news/world-asia-pacific-12212936
http://www.ft.com/cms/s/0/488c60f4-2281-11e0-b6a2-00144feab49a.html
Regards,
http://whistleblowerirl.blogspot.com/
Guido,
I agree with you about the vulnerability of the banks due to leverage and fiat money. Moving money from those banks is exactly where they are most vulnerable.
Whistleblowerirl,
I didn't know that about the Chinese policy banks comparison with World Bank lending. Thanks.
It is exaclty what you would expect them to be doing. China has all that US debt – why not put it to use US debt to undermine US influence? Perfect policy. 800 billion dollars of debt bought by the Chinese is now being used to undermine America's power and influence. The same will go for our debt too.
Tam,
'These days, when most of us in the relatively affluent west don't have to worry about such things, it's easy to forget that the right to eat completely out-trumps the right to say whatever you want'
Absolutely agree, there are many reasons for China/India to tell rightly tell us to eff off if we act all high and mightly about human rights:
Europe built up substantial wealth and funded its many colonial adventures off the backs of child labour and sweatshops – so why shouldn' they?
We weren't exactly saintly in our dealing with them either – didn't Eng/US go to War with China to basically force drugs on them in the 1800s? Why should they feel the slightest compunction about selling us dodgy toys etc?
And many chinese workers may feel its ok to suffer through appalling work practices for the idea that their own children will not have to.
The problem is if as Jim Rogers says they are looking at the American way of life and saying I want that – someone else is going to have to be them now? I don't want it to be MY grandchildren. I do not beleive there are sufficient resources on the planet for us all to live like 'the girl next door' of Amercian movies. I do however beleive that there are enough resources for most of the worlds population to live healthy dignified lives.
This is not a problem that can be solved at the state level. State to State interference gets interpreted, quite understandably as colonial paternalism part II.
Howdever, for now, most manufacturing in China is outsourced from Western Co.s – these companies cannot cry paternalism, nor can they invoke an oppressed past. While we still can we must shame and use every means to coerce these Companies into the humanity – the personhood they wish to claim for their legal advantage.
So many science fiction novels got it wrong – they thought robots would be the soulless but sentient monsters able to wreak havoc – wrong – that would be the Megacorp. But we, each one of us controls part of the Megacorps food supply. We have to train them like the beasts they are, play nice and you get your dinner, shit on the carpet and you get ignored in the corner.
So many times we are threatened and coerced by the spectre of MARKET FORCES, as if they are some inate inhuman thing. We need to take back the notion that we are the market and the market can only be as unhumane as we can be ourselves.
End of homily. Go now in peace from the Church of Fair trade of St Rebecca and spread the word.
W
However
PS this link relates indirectly to one of the links in Golems post above. It is a campaign to make Western Companies account for where they get their (largely African) raw materials from- in particular in relation to the Congo. They have had some regulatory succ`ess already, please if you have a chance, take a look and join in.
And it is at the very least a step in the right direction. http://www.raisehopeforcongo.org/content/initiatives/our-initiatives
China is the game changer.
They doubled their land in the fifties through annexation of Tibet and Sinkiang etc. They are therefore the winner of WWII!
Confucianism is already making itself felt and will destroy all gwailo influences. They remember the Opium Wars!
China's military Academy commandant warned the USA, in 2005, of massive nuclear retaliation after Aceh, if the Chinese eastern seaboard was devastated by tsunami!
India, China and Pakistan have more in common than with the USA.
Excellent post, as usual!
On a happier note, usually in a depression, those at the bottom actually improve relative to those at the top. All relative, of course and in measured income terms only and as those who survive the financial cull buy assets at firesale prices ……
I see the current debacle as affecting many of the rich more so than the poor like us! They have borrowed heavily and will suffer massively. Those who sold to them, however!!!