China's political mindset about international politics is at a turning point and it could mark the beginning of a new role of China in global affairs. On December 27, the Chinese press reported on a speech by Vice Premier Wang Yang with the title "The United States is the guide of the world; China is willing to join this system." In the text, Wang Yang reportedly said, "China and United States are global economic partners, but America is the guide of the world. America already has the leading system and its rules; China is willing to join the system and respect those rules and hopes to play a constructive role." [1]
These statements mark a stark contrast from the times when China was extremely suspicious of America's hegemonic role in the world. Implicitly, China now appears to admit that America has the leading role in the world and to be willing to work with it.…
The rest of the post is speculative, since there was no elaboration. The neocons will, of course, regard this as a trap. And they may right. Unless the Chinese Communist Party believes strongly that it can stay on top in a neoliberal oligarchic democracy. It will be pretty easy to judge by the relationship they form with Goldman Sachs.
China Starting to Realize America Isn't Necessarily in Decline
Francesco Sisci, Asia Times
7 comments:
Perhaps China has realized that participating in a global system of rules in which the US has a leading say is better than watching the US spiral down further into unilateralism and knee-jerk nationalism.
Maybe being the hegemonic leader isn't all that it's cracked up to be. There are benefits to be sure but I'm not sure China wants the responsibility and costs of it. There are broad expectations and with their industrial base in freefall, their financial system in turmoil, their political system cracking under the weight of corruption, pollution, nepotism and cronyism beyond the wildest imagination of the most cynical westerner, they may want to tackle some of their issues and grow slowly and naturally into their place of leadership from a position of strength rather than bluster and weakness.
Ryan,
China's financial system isn't in turmoil, and their political system isn't cracking under anything. They are mollifying the US in public while they quietly go about the business of setting up exchanges for Australia, Russia, Chile and Brazil to trade in other currencies, like theirs. Pollution they got. Their industrial base isn't in freefall. They are not working on that now. They are building infrastructure, and one other thing that Frank Newman described that I can't remember. Can't remember where I heard him say it. Could have been at the Columbia Univ luncheon presentation with Rowan's MMT group there. Maybe on the UMKC blog. Newman described this phase that they started putting in place in 2013.
Their industrial base is in great shape. They took all US vendors' secret and quality control tech from 1998 to 2003 (five year plan), then refused to re-up the contracts, walked across the road and opened their own factories with our tech, and lists of our customers and suppliers. Look up Frank N Newman..
Don't forget they announced in 1979/1980 Christmas meeting (Steve Keen reported this, he was there) that their long term plan was to destroy the manufacturing prowess of the USA. They did it. They've just figured out how unstrategic Obama is, and have assessed the strength of his advisors, which is nil.
Beware these statements of humility. They know exactly what they're doing.
The Chinese call the blustery, loud American businessmen who tout their own importance in China: "Tai Ren." It means big man. 'Oh, you Tai Ren, you Tai Ren, you such a big man.' And these New Yorkers eat it up, saying (in print about two/three years ago) they recognize our power, they admire us for what we can accomplish. Little do these putzes know that the Chinese are laughing at them. The Chinese revere humility, not people who display their wealth and beat their chests.
"Their industrial base isn't in freefall":
Chinese industry slowed to a 13 year low. The five year plan calls for growth in consumer service industries and contraction in unproductive & dirty industries. It's what they are doing.
"China's financial system isn't in turmoil"
Almost 50 percent of their commercial real estate is vacant. About 1/3 of residential real estate is empty. About $12 trillion worth of real estate and business investment was financed with foreign denominated debt out of loans made by domestic companies and banks during the last decade. That is multiples of their GDP and wasn't considered "sustainable". Many of the buildings built in the early 90s-00s were done with cement of such low grade that the buildings have to be torn down after 25-30 years anyway because they are cracking up! Their government wants more private directed investment to alleviate these sorts of mal-investment problems so they are opening their capital markets.
"They are building infrastructure"
Past tense. In the inland areas infrastructure goes on at a rapid clip, elsewhere, they are trying to wean themselves off of un-needed and excess infrastructure investment just to create jobs. They want better jobs for more people not just low wage construction and export jobs.
It seems like there is a cautionary tale in here somewhere for the MMT JG prescription that shouldn't be glossed over.
"Beware"
They've setup yuan clearing here in the US as well as the places you mention, MRW, my broker for example sells onshore and offshore yuan, they sell mainland chinese stocks through the new linkage between hong-kong and mainland. There are even Chinese banks that let us keep our deposits or savings in Yuan, here in the united states! Opening capital markets.
Just as the Chinese government makes policy that helps Chinese people, The US needs to worry less about losing hegemony to China and stopping their progress and instead do what is best for American citizens domestically. The Chinese did target US industries for looting and US economists told politicians that it was for the best, it was inevitable, that it would raise all boats and make everyone richer. It made the Chinese richer, a handful of Americans insanely rich and lowered the wages for the rest of us. But look at the upshot, walmart and hope depot are filled with cheap affordable imports now. so we make less but we can afford more in real terms, or so the economists say. Except China is raising the price of labor at 10-20% per year to decrease export dependence. Oh well, No sense in crying over spilt milk. Fix the economists, right?
Ryan,
If Warren is to be belived, their biggest problem is that they're sending their smartest kids to learn economics at the University of Chicago.
Frank Newman's got a different take on it.
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