- (November 2006)
Towards the new Chinese empire.
As China's economy continues to grow and desperately needs to find
new sources of raw materials, China is beginning to replace
the West as the main trading partner of some developing countries.
The effect of Soviet ascendancy in the developing world between
1945 and 1989 was to install a number
of ruthless totalitarian regimes that caused both massacres and
famine to their subjects. The principle behind Soviet
imperialism was, after all, an ideal, the ideal of spreading
communism to the whole world.
Chinese ascendancy in today's developing world is different
both in its effects and its principle.
The effect is to support regimes and processes that are corrupt
and inefficient. Mainland China does not care what happens to the
regions that it exploits. This is not all that different from what
the European powers did to the developing world, but China does
not even pretend to care for human rights or democratization.
It only cares for the natural resources that it needs.
(For example, China protects Sudan from U.N. sanctions over the genocide in Darfur).
That is the other difference from the old Soviet imperialism:
the Chinese principle is not to spread some
Chinese-born ideology to the entire world or to establish a political
empire. The principle is to sustain China's economy.
(In a sense the Soviet Union did exactly the opposite: it helped sustain
its satellite's economy).
In order to appreciate the difference between the Soviet ideology
and the modern Chinese ideology one has to realize the different
views that the Russians and the Chinese hold of the rest of the
world. The Russians do not feel superior. In fact, they traditionally
felt inferior. Their Soviet leaders felt that they had come up with
a better system and that finally Russia had caught up, if not passed,
the Western powers. While proud of their achievements, the Soviet
leaders maintained the vision of a world with many strong nations.
There are Russians and there are other civilized nations.
The Chinese, on the contrary, have never seen foreigners as peers.
The traditional Chinese view of the world is that China is the
"Middle Kingdom" (the literal translation of China's name in Chinese)
and all other nations are barbaric. There are mainland Chinese and there are
barbarians. The very revolutions that abolished the empire and
created the republic (and later the communist state) were feeding
on dismay at the fact that China had fallen below the barbarians
(both the Western powers and Japan). The current Chinese leaders were not raised
to think of a group of civilized nations, but of one civilized
nation, China, amid a group of barbaric nations (that only the old
imperial stupidity had allowed to become more powerful and richer
than China). No surprise then that today's mainland China shows little
compassion for the developing countries that sell it their natural
resources. China has no short or long-term plan to help those
countries develop any kind of better system: China merely wants
their resources for its own purposes. The European powers at least
recognized each other as civilized nations, and eventually they
developed an ideology of helping those developing nations.
Today the Western powers (or at least many Western-based organizations),
have matured. It proclaims
an ideology of spreading democracy
and fighting corruption and protecting ordinary citizens throughout
the world. Mainland China is totally alien to this ideology.
As China becomes richer and more powerful, it is also becoming
a force of reaction against the "humanitarian" ideology of the West.
China has no interest in overthrowing a dictator who is selling
China mineral resources at favorable conditions. The dictator,
in turn, welcomes the new partners: the Chinese are far more
tolerant of his policies than the West.
China's effect on developing nations is less brutal than the effect
of Soviet domination: there is no Menghitsu causing the starvation
of millions, and there is no Pol Pot exterminating millions.
But China's effect can be damaging in its own way at a time when
the West was becoming sincere about helping poor countries to
develop. For example, trade with China has reduced the motivation
for developing countries to improve their own industrial infrastructure:
why bother if trade with China brings in plenty of cash (especially
when the regime is corrupt and "only" cares for the cash flow)?
Mines and oil rigs create very few jobs in countries with high
population growth.
Chinese traders are even able to sell goods that are cheaper than
the goods sold by local traders. Thus trade with China is even
causing local businesses to shrink or go out of business.
No healthy middle class is being created in this process.
When USA and European companies are forced by their governments
to reduce their involvement into countries run by totalitarian
regimes, Chinese companies are happy to step in. This encourages
totalitarian regimes to continue their policies.
It is hard to see the benefits for ordinary Nigerians or Zambians
of the sudden flowering of commercial ties with China.
TM, ®, Copyright © 2005 Piero Scaruffi All rights reserved.
Back to the world news | Top of this page
- (February 2006)
Beijing uses USA technology to suppress dissent.
The USA Congress has finally spoken up against the practice of
four evil USA corporations (Google, Yahoo, Microsoft, Cisco) that
are helping the government of Beijing to suppress dissent.
(See China using USA technology to suppress dissent (New York Times).
Beijing is happy to let its citizens use the Internet and therefore
get a feeling that they are "free", but wants to make sure that their
freedom is curtailed not by the government itself but by the tools
that Chinese people use. This is a very intelligent move, that proves
how much more intelligent dictatorial regimes have become in the 21st century.
Those four USA corporations, on the other hand, are proving how stupid
democratic societies have become. They are helping a dictatorship tighten
its grip on a billion people. It used to be that the USA would help
oppressed people by broadcasting western-style news to them.
Now the USA helps the oppressing regime by broadcasting news "for" the regime.
TM, ®, Copyright © 2005 Piero Scaruffi All rights reserved.
Back to the world news | Top of this page
- (JAnuary 2006)
China becomes the fourth world power.
They used to be three: the USA, Germany and Japan were the three pillars
of the capitalist world.
Now mailand China has officially passed the trio of Italy,
France and Britain to become the fourth economy in the world, after the USA,
Japan and Germany. Since the growth rate in 2005 may have been the highest
of all times (as high as 15%), while the European economies are barely growing,
there is little doubt that China is here to stay. Economically speaking, we
do not live in a tripolar world anymore, but in a quadripolar world.
But not all that glitters is gold in mainland China. The Beijing regime has done
an excellent job of boosting growth (and, recently, a much better job of
spreading wealth to at least the urban middle class), but so far it has not
addressed some fundamental problems within its own financial system.
(A simple rule of thumb is: if you want to be a capitalist, make sure you study
capitalism first.)
It appears that a large share of economic growth is due to investments that are
not really driven by the market: companies are borrowing cheap money from banks
to expand and improve factories that are not really working at full capacity.
They are basically gambling that tomorrow's growth will justify today's
investment.
Mainland China is also experiencing its own "real estate bubble", with thousands
of high-rise apartment and office buildings sprouting up all over the country.
Many of them will not find tenants, unless they are offered at very low prices
(in which case the builders will not get a return on their investments).
Japan is familiar with this kind of spirals: eventually bubbles burst, and
the economy implodes.
Mainland China has been a capitalist system driven by the state, which is a
different way to say that its growth has been engineered by Beijing rather
than by the market. It is still more driven by investments than by
consumption, a fact that leaves its economy very vulnerable.
Last but not least, the economy of mainland China remains awfully dependent
on 1. exports of cheap goods to the West, and 2. imports of natural resources
(from oil to metals)
from developing countries. Chinese goods will not be cheap forever
(See Why Beijing needs Taiwan),
and its own appetite for foreign natural resources will make those resources
more and more expensive on the international markets. Will the Chinese economy
survive if it can't afford to buy the resources it needs and it can't afford
to sell at low prices anymore?
Thus the economy of mailand China is booming, but it may not be as healthy as
it appears. The probability of a sudden implosion has increased, not decreased.
The USA would be largely indifferent to an implosion of the Chinese economy,
since there are dozens of countries that manufacture the same goods at the
same prices (and an implosion of the Chinese economy may even lower the price of
oil and other resources).
Japan and Germany would pay a dear price, since mainland China has
become one of the main customers for their high-tech equipment
(from power plants to high-speed trains).
But the biggest price would be paid by the Chinese people, who are just
beginning to benefit from the wealth created by the economic boom of the last
twenty years. They are still poor by the standards of the western world, but
they got used to see an ever expanding economy. Chinese men and women who are
under 30 probably do not remember a year when their city did not grow
dramatically over the year before. They now take it for granted that
this is the normal way of the (Chinese) world. A sudden awakening to the reality
of a world that goes in cycles may have very destabilizing effects,
especially if it comes before the masses can fully benefit from the economic
boom.
Thus mainland China is a lot less stable as a 15% growth rate should make it.
TM, ®, Copyright © 2005 Piero Scaruffi All rights reserved.
Back to the world news | Top of this page
- (JAnuary 2006)
How not to read statistics.
It was widely reported by the world press that
Beijing's trade surplus tripled in one year to a record $102 billion.
Beijing has become the world's third-largest foreign trader after the USA and Germany with trade of $1.4 trillion.
The second news is unquestionably correct. The first one is actually totally
incorrent.
Beijing enjoys a trade surplus with the USA of about $114.7 billion.
This means that Beijing actually has a trade deficit towards the rest of the world
(not including the USA) of a few billion dollars.
That trade deficit is increasing, not decreasing, because mainland China needs
to import more and more resources from the rest of the world, and has little
to export to the rest of the world (most Asian, Latin American and African
countries produce their own version of Chinese cheap goods).
If this were the situation, Beijing would not look like the economic superpower
that it is. It actually looks quite vulnerable: the world can live without
Chinese shoes and toys, but mainland China cannot live without the oil,
minerals and wood that it has to import from other countries.
The exception to the rule is the USA: the USA exports virtually no resources
to mainland China, but imports a lot of goods from mainland China.
(To some extent this is also true of the European Union, the USA's closest
ally).
Therefore it is the USA that is creating the new Chinese superpower.
The real news is not that Beijing posted a record trade surplus. The real news
is that the USA helped China post a trade surplus instead of a trade deficit.
See How the USA funds the dictatorships of Iran and China
TM, ®, Copyright © 2005 Piero Scaruffi All rights reserved.
Back to the world news | Top of this page
- Articles published before 2006
|