Relativizing the myth of China as future overlord

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Re: Relativizing the myth of China as future overlord

Postby JackRiddler » Fri Apr 06, 2012 7:31 pm

Interesting article but the author is absurdly optimistic with regard to the Chinese regime. They sold themselves on Manchester Capitalism some 30 years ago.



http://www.counterpunch.org/2012/04/06/ ... nomy/print

Weekend Edition April 6-8, 2012

The Frog and the Scorpion

China’s Economy


by CONN HALLINAN



Behind the political crisis that saw the recent fall of powerful Communist Party leader Bo Xiali is an internal battle over how to handle China’s slowing economy and growing income disparity, while shifting from a cheap labor export driven model to one built around internal consumption. Since China is the second largest economy on the planet—and likely to become the first in the next 20 to 30 years—getting it wrong could have serious consequences, from Beijing to Brasilia, and from Washington to Mumbai.

China’s current major economic challenges include a dangerous housing bubble, indebted local governments, and a widening wealth gap, problems replicated in most of the major economies in the world. Worldwide capitalism—despite China’s self-description as “socialism with Chinese characteristics”—is in the most severe crisis since the great crash of the 1930s.

The question is: can any country make a system with serious built in flaws function for all its people? While capitalism was the first economic system to effectively harness the productive capacity of humanity, it is also characterized by periodic crises, vast inequities, and a self-destructive profit motive that lays waste to everything from culture to the environment.

Can capitalism be made to work without smashing up the landscape? China has already made enormous strides in using its version of the system to lift hundreds of millions of people out of poverty and create the most dynamic economy on the planet, no small accomplishment in an enormous country with more than a billion people. Over the past 30 years, China has gone from a poor, largely rural nation, to an economic juggernaut that has tripled urban income and increased life expectancy by six years.

But trying to make a system like capitalism work for all is a little like playing whack-a-mole.

For instance, China’s overbuilding has produced tens of millions of empty apartments. “If we blindly develop the housing market [a] bubble will emerge in the sector. When it bursts more than just the housing market will be affected, it will weigh on the Chinese economy,” said China’s Premier, Wen Jiabao. And, indeed, by controlling the banks—and thus credit and financing—real estate prices have recently fallen in most mainland cities.

But since 13 percent of China’s Gross Domestic Product is residential construction, a sharp drop in building will produce unemployment at the very time that a new five-year plan (2011-2015) projects downshifting the economy from a 9 percent growth rate to 7.5 percent.

What worries China’s leaders is that one of capitalism’s engines of self-destruction—economic injustice and inequality—is increasing. According to Li Shu, an economist at Beijing Normal University, from 1988 to 2007, the average income of the top 12 percent went from 10 times the bottom 10 percent, to 23 times the bottom 10 percent. According to the Financial Times, it is estimated that China’s richest 1 percent control 40 to 60 percent of total household wealth.

Wealth disparity and economic injustice have fueled “incidents,” ranging from industrial strikes to riots by farmers over inadequate compensation for confiscated land. Endemic local corruption feeds much of the anger.

The government is trying to address this issue by raising taxes on the wealthy, lowering them on the poor, and including more “poor” in a category that makes them eligible for subsidies. Wen said last year that China aims to “basically eradicate poverty by 2020.” According to the United Nations, some 245 million Chinese still live in extreme poverty.

Beijing has also reined in the sale of land by local municipalities. But since the major way that cities and provinces generate money is through land sales, this has made it difficult for local areas to pay off their debts, maintain their infrastructures, and provide services.

Whack one mole, up pops another.

There is a growing willingness by the average Chinese citizen to confront problems like pollution, corruption, and even nuclear power. Part of the current debate in the Communist Party leadership is over how to respond to such increased political activity. Bo had a reputation as a “populist” and campaigned against economic injustice and corruption. But he was also opposed to revisiting the issue of Tiananmen Square, where in 1989 the People’s Liberation Army fired on demonstrators.

Tiananmen has considerable relevance in the current situation, since the main demands of the demonstrators were not democracy but an end to corruption and high food prices. It is no accident that, when food prices began rising two years ago, the government moved to cut inflation from 6.5 percent to 3.2 percent this past February.

While the government generally responds to demonstrations with crackdowns, that policy has somewhat moderated over the past year. When farmers ran local leaders and Communist Party officials out of the town of Wutan, the provincial government sent in negotiators, not police. Anti-pollution protests forced authorities to shut down several factories. At the same time, the government has tightened its grip on the Internet, still arrests people at will, and is not shy about resorting to force.

It is clear the possibility of major political upheaval worries the current leadership and explains why Premier Wen recently called up the furies of the past. The current economic growth is “unbalanced and unsustainable” he said. “Without successful political structural reform, it is impossible for us to fully institute economic structural reform and the gain we made in this area may be lost,” and said that “such a historical tragedy as the Cultural Revolution may happen again.”

Changing course in a country like China is akin to turning an aircraft carrier: start a long time in advance and give yourself plenty of sea room. If China is to shift its economy in the direction of its potentially huge home market, it will have to improve the lives of its citizens. Wages have gone up between 15 and 20 percent over the past two years and are scheduled to rise another 15 percent.

But social services will also have to be improved. Health care, once free, has become a major burden for many Chinese, a problem the government will have to address.

There are some in the Chinese government whose definition of “reform” is ending government involvement in the economy and shifting to a wide-open free market system. It is not clear that the bulk of China’s people would support such a move. All they have to do is look around them to the see the wreckage such an economic model inflicts in other parts of the world.

Can capitalism work without all the collateral damage? Karl Marx, the system’s great critic, thought it could not. Can China figure out a way to overcome’s system’s flaws, or is this the tale of the frog and the scorpion?

The scorpion asked the frog to ferry it across a river, but the frog feared the scorpion would sting him. The scorpion protested: “If I sting you, than I die as well.” So the frog put the scorpion on his back and began to swim. When he reached mid-stream, the scorpion stung him. The dying frog asked “Why?” and the scorpion replied, “Because it is my nature.”

Can China swim the scorpion across the river and avoid the sting? Stay tuned.


CONN HALLINAN can be read at dispatchesfromtheedgeblog.wordpress.com and middleempireseries.wordpress.com. He is a contributor to Hopeless: Barack Obama and the Politics of Illusion

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Re: Relativizing the myth of China as future overlord

Postby 8bitagent » Fri Apr 06, 2012 9:59 pm

News last year reported US military planners were largely moving away from the war on terror(decreeing 'al qaeda is essentially dead') and focusing tech/intel/training/readyness on Asia. And we all know that means China and North Korea.

You have to think how tired they must be of ten years of chasing desert and mountain phantoms, when the big dream for Strangeloves has always been China and Russia.

David Icke made a famous radio interview on September 19th 2001 talking about how the eventual goal is war with China down the road. I remember before 9/11, relations with China werent so hot(US bombing Chinese embassy in Serbia, the war games tussles, etc) Then it appeared Beijing and Washington became bestest pals, and by 2005 China had skyrocketed on all fronts while glimpsing a preview of their brave new world of the future as well as their oil ambitions.

China's likely next leader Xi Jinping warned the United States against plans to boost its military strength in Asia as he prepared for a closely watched visit to Washington starting Monday.

China's vice president, who is tipped to rule the rising Asian power until 2023, called on the United States to prioritize economic growth and promised anew that Beijing would address foreign concerns about its currency's value.

In a written interview with The Washington Post, Xi said the Pacific Ocean had "ample space" for both China and the United States but insisted that Asian countries were concerned foremost with "economic prosperity."


http://timesofindia.indiatimes.com/worl ... 872602.cms
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Re: Relativizing the myth of China as future overlord

Postby JackRiddler » Fri Mar 01, 2013 1:47 am

Just ran into this searching for something else.

Wonder when the Chinese recession will start? Another factor that should make things interesting everywhere, in a bad way.

What the hell, here's a relevant article:


http://www.counterpunch.org/2013/02/05/ ... bait/print



This copy is for your personal, non-commercial use only.

February 05, 2013

U.S. Goading Japan into Confrontation with China
Will Japan Take the Bait?


by JOHN V. WALSH


“………..Their defeat
Doth by their own insinuation grow.
‘Tis dangerous when the baser nature comes
Between the pass and fell incensèd points
Of mighty opposites.”

– Hamlet on the deaths of Rosencrantz and Guildenstern.


At the height of the 2012 election campaign in late October, a U.S. delegation tiptoed into Japan and then China with scant media coverage. It was “unofficial,” but Hillary Clinton gave it her blessing. And it was headed by two figures high in the imperial firmament, Richard L. Armitage, who served as Deputy Secretary of State for George W. Bush; and Joseph S. Nye Jr., a former Pentagon and intelligence official in the Clinton administration and Dean Emeritus of Harvard’s Kennedy School of Government. The delegation also included James B. Steinberg, who served as the Deputy Secretary of State in the Obama administration and Stephen J. Hadley, Bush Two’s national security adviser.

The delegation was billed as an attempt by the U.S. to defuse tensions between Japan and China over a number of small islands both claim. But was it? What is the outlook of these influential figures? Interestingly, Armitage and Nye provide us with a partial answer in a brief paper published the preceding August by the Center for International and Strategic Studies (CSIS), entitled “The Japan-U.S. Alliance. Anchoring Stability in Asia,” the carefully crafted fruit of a CSIS Study Group they chaired. The strategy proposed therein, as outlined below, should be very distressing to the Chinese – as well as to the Japanese and Americans.

The Armitage/Nye paper addresses itself to the Japanese themselves, the target audience, in the Introduction as follows:

“Together, we face the re-rise of China and its attendant uncertainties…..

Tier-one nations have significant economic weight, capable military forces global vision, and demonstrated leadership on international concerns. Although there are areas in which the United States can better support the (Japan-U.S.) alliance, we have no doubt of the United States’ continuing tier-one status. For Japan, however, there is a decision to be made. Does Japan desire to continue to be a tier-one nation, or is she content to drift into tier-two status? If tier-two status is good enough for the Japanese people and their government, this report will not be of interest.” (Emphasis, J.W)


Read that carefully. It is a thinly veiled appeal to the worst aspects of Japanese militarism and nationalism, which for good reason are so reviled in East Asia. It is done in the context of the “re-rise’ of China, a phrase that invokes China’s past world supremacy and Japan’s inferior status at the time. What sort of beast is this disturbing plea designed to awaken?

Again in the Introduction, the authors make the military dimensions of their appeal quite specific, writing: “Japan’s Self-Defense Forces (JSDF)—now the most trusted institution in Japan—are poised to play a larger role in enhancing Japanese security and reputation if anachronistic constraints can be eased.” (Emphasis, J.W.) What are these “anachronistic restraints”? As the authors later make clear, they are embodied in Article 9 of the Japanese Constitution, written under the tutelage of MacArthur’s occupying forces. The Article so irksome to Armitage and Nye reads:

“ARTICLE 9. Aspiring sincerely to an international peace based on justice and order, the Japanese people forever renounce war as a sovereign right of the nation and the threat or use of force as means of settling international disputes. (2) To accomplish the aim of the preceding paragraph, land, sea, and air forces, as well as other war potential, will never be maintained. The right of belligerency of the state will not be recognized.”


This is a breathtakingly appealing, pacifist statement; and there is a brief, worthwhile account of Article 9 here. Article 9 is extremely popular in Japan, and eliminating it from the Constitution would not be easy, as Armitage and Nye recognize (1). Moreover, Armitage and Nye concede that Article 9 prohibits collective self-defense, which involves joint military action by the U.S. and Japan . As they say in their paper:

“The irony, however, is that even under the most severe conditions requiring the protection of Japan’s interests, our forces are legally prevented from collectively defending Japan. … Prohibition of collective self-defense is an impediment to the (U.S.-Japan) alliance.” (Emphasis, JW. Note that the authors do not say protection of Japan but of Japan’s “interests.”)


What then is the U.S. to do? Armitage and Nye see a solution in the joint rescue operations mounted by the Japan Self Defense Forces (JSDF) and U.S. forces (Operation Tomodachi, meaning “Operation Friends”) in response to the earthquake, tsunami and Fukushima disaster of March 11, 2011, know as 3-11 in Japan. There, the joint rescue efforts were not opposed by those who favor Article 9 and the spirit it embodies. Armitage and Nye suggest that Operation Tomodachi simply be taken as a precedent to justify future joint operations. In other words, the Japanese Constitution is simply to be ignored, pretty much the tactic that Truman inaugurated in the U.S. to plunge the country into the Korean war and the tactic Barack Obama has used in interventions like the one in Libya. Simply ignore the Constitution and its requirement that the U.S. Congress alone can declare war. This is an example, as if another were needed, of how our elites view the “rule of law” to which they appeal so often. (And one wonders whether from the outset Operation Tomodachi was viewed in part in this way by its architects. How many other U.S. humanitarian missions might have ancillary covert purposes, one might ask?)

Armitage and Nye also mention that the Yanai Committee report of 2006 notes that the prime minister could by fiat put aside the Article IX prohibition, as in antipiracy efforts in Djibouti. But this report has been seen as an effort to subvert the Japanese Constitution. As Prof. Craig Martin of Washburn School of Law, an American expert in these matters, wrote at the time, “the exercise of using an extra-constitutional body to advance a ‘revision’ of the interpretation of the Constitution, was illegitimate on a number of levels, the most important being that it was an end-run around the amendment provisions in the Constitution.” But then that is precisely what Armitage and Nye are up to.

Article 9 remains popular in Japan although its popularity has been substantially eroded in recent years. The reasons for this and the forces behind it deserve some careful examination in light of the U.S. Empire’s “pivot” to East Asia. But so long as the Japanese Communist Party and Japanese Socialists remain a force in government and society there is little chance that Article 9 will be repealed, making the end run necessary if Japan is to be remilitarized. The very existence of the JDSF in fact can be seen as illegal under the provisions of Article 9, which is why the JDSF was originally dubbed a National Police Force. Armitage and Nye sum up the military aspects of their report in the following recommendation to Japan: “Japan should expand the scope of her responsibilities to include the defense of Japan and defense with the United States in regional contingencies. The allies require more robust, shared, and interoperable ISR (Intelligence, Surveillance and Reconnaissance) capabilities and operations that extend well beyond Japanese territory. It would be a responsible authorization on the part of Japan to allow U.S. forces and JSDF to respond in full cooperation throughout the security spectrum of peacetime, tension, crisis, and war.” (Emphasis, JW.) For diplomats that is about as specific and concrete as it gets. And it is very troubling since it is hardly a plan for peace.

The Armitage/Nye paper contains much more. Japan is urged to participate more fully in forums involving the Philippines, India, Taiwan and the Republic of Korea (ROK), i.e. South Korea. China is not mentioned in this regard – not surprisingly. Armitage and Nye know that this is a tough sell for the citizens of the ROK with vivid memories of Japanese conquest and atrocities in WWII. But Armitage and Nye hope it can be engineered.

The report also has an economic dimension. The idea of using India as a battering ram against China, which was popular in the Bush administration and which was aided by Israel, is not really viable. India is riven by internal disputes, corruption, religious divisions and a Maoist rebellion over a large part of its territory. And economically it is wanting. Military power grows from economic power and so the U.S. needs the aid of a powerful regional economic power in its drive against China. That is the role of Japan in the eyes of Armitage and Nye. Thus, to be useful to the U.S., Japan must restore its economy, now in decline. This is really a tall order since Japan’s main trading partner and the principle destination for its exports is China. That became evident in the recent Chinese boycott of Japanese goods as the dispute over the Diaoyou/Sinkaku island intensified recently, which hurt Japan greatly but had little effect on the Chinese economy. But again Armitage and Nye hold out hope. Their solution is for Japan to restore and expand its nuclear power. (One wonders why the U.S. environmentalists have not spoken out about that and whether the Japanese environmentalists have knowledge of these plans for Japan, hatched in the U.S.) In addition Armitage and Nye offer Liquid Natural Gas (LNG) and other petroleum products from North America as more largesse to link Japan closer to the U.S. As they write: “The shale gas revolution in the continental United States and the abundant gas reserves in Alaska present Japan and the United States with a complementary opportunity: the United States should begin to export LNG from the lower 48 states by 2015, and Japan continues to be the world’s largest LNG importer. Since 1969, Japan has imported relatively small amounts of LNG from Alaska, and interest is picking up in expanding that trade link, given Japan’s need to increase and diversify its sources of LNG imports, especially in light of 3-11.” Again one wonders where the voices of U.S. environmentalists are on this matter.

The idea of Japan outdoing China in East Asia economically is a pipe dream, with or without the U.S. China has a population of 1.3 billion and Japan 130 million. To expect Japan to emerge as a serious challenge to China in the long term is like hoping that in the immediate future Canada with its 34 million can challenge the U.S. with 315 million. And China has a vibrant economy, an educated workforce and a culture to be reckoned with, from which Japan’s emerged and followed until it was “Westernized.”

So what is Japan’s protection to be in the face of such a large and powerful neighbor? For one thing, Japan certainly has the wherewithal to deter aggression from any quarter with its advanced technology and its potential for nuclear weapons development. For another, China has no record of expansionism overseas even going back to 1400 when it was the world’s premier naval power but never conquered or established colonies or took slaves. But a large part of Japanese security lies in an increasing respect for international law with its emphasis on sovereignty. The concept of sovereignty in international law is the protection of small nations from the depredations of large ones. And ironically the principal threat to the idea of sovereignty comes from the United States and the West with their pre-emptive wars and “humanitarian” interventions, which trash the classical concept of sovereignty. Japan should be wary of dealings with such powers and supporting such ideas.

For Japan to take the bait and be the cat’s paw for U.S. schemes in East Asia borders on the insane. And diplomatic exchanges between China and Japan in recent weeks following the Japanese elections show that many Japanese recognize this. They and the Chinese seem increasingly willing to work out differences in a structure of peace. We should hope so – and so should the Japanese. He who takes the bait is often left holding the bag.


John V. Walsh can be reached at John.Endwar@gmail.com

We meet at the borders of our being, we dream something of each others reality. - Harvey of R.I.

To Justice my maker from on high did incline:
I am by virtue of its might divine,
The highest Wisdom and the first Love.

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Re: Relativizing the myth of China as future overlord

Postby semper occultus » Fri Mar 01, 2013 8:57 am

China loves the US dollar again as America roars back

China’s central bank has radically revised its view of US economic and strategic power, predicting that the dollar will remain the world’s paramount reserve currency for decades to come.

By Ambrose Evans-Pritchard
7:11PM GMT 19 Feb 2013

Jin Zhongxia, head of the central bank’s research institute, said America’s energy revolution and export revival had shaken up the global landscape and would lead to a stronger dollar over time. “The dollar’s global dominance will continue,” he said.

Dr Jin said the world was moving to a “1+4” system, with the greenback serving as the anchor of global payments, supplemented by “four smaller reserve currencies” – the euro, sterling, yen and yuan.

“Compared with the euro area, the dollar zone has much greater resilience to shocks. The debt crisis in the euro area has demonstrated the structural weakness of this currency,” he wrote in a paper for the February bulletin of the Official Monetary and Financial Institutions Forum.

The comments suggest a profound shift in thinking about the US since the financial crisis five years ago, when premier Wen Jiabao questioned if Chinese holdings of US Treasuries were “safe”, and the central bank issued a paper calling for a “global currency” run by the International Monetary Fund.

The prevailing view in Beijing was that America had been toppled as a great power and was crippled by debt.

China has since begun to face its own problems as it grapples with the hangover of $14 trillion (£9 trillion) of credit growth since 2009 and surging wage costs.

The advantage is shifting back to the US. A so-called “manufacturing renaissance” is under way as US companies bring home plants to exploit cheap shale gas and lower transport costs.

A report by Citigroup said the explosive growth of US oil and gas output over the past year had exceeded the “wildest dreams of energy analysts”. The US has halved its oil imports since 2005 and is moving “rapidly towards self-sufficiency”, turning global geo-politics on its head.

Citigroup said lower energy imports and the revival of chemical industries would cut the US current account deficit by three quarters, eliminating a key cause of dollar weakness.

China’s central bank has clearly lost its earlier enthusiasm for the euro project, chastened by the debt crisis of the past three years. Dr Jin said EMU lacked the flexibility and fiscal unity needed to cope with crises, while the rigid fixed-exchange system was ill-adapted to shocks.

The informal dollar zone – a worldwide nexus – was more supple. Weaker states were forced to put their house in order before they reached acute crisis, or to devalue. “The dollar zone looks more loosely connected, but in reality it is more coherent than the euro area,” he said.

http://www.telegraph.co.uk/finance/currency/9881410/China-loves-the-US-dollar-again-as-America-roars-back.html
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Re: Relativizing the myth of China as future overlord

Postby Wombaticus Rex » Fri Mar 01, 2013 11:05 am

^^That's all horseshit, though. America is not roaring back, China does not love the dollar, they are actively creating non-dollar trade zones and non-NYC/LDN finance networks. (Even in London, they just set up a massive yuan swap arrangement that US media has been mighty quiet about.) Citigroup analysts are sell-side hucksters, not economists.

Re: the OP, I am increasingly skeptical that China will be the victor of this century. That title will be going to Islam, in all probability, based on my unique brand of stupid.
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Re: Relativizing the myth of China as future overlord

Postby brekin » Fri Mar 01, 2013 8:56 pm

Wombaticus Rex wrote:
Re: the OP, I am increasingly skeptical that China will be the victor of this century. That title will be going to Islam, in all probability, based on my unique brand of stupid.


Well, you know there is always Indonesia. Highest Muslim population in world, 85% of population.
Fourth largest populated country (1. China, 2. India, 3. U.S. 4. Indonesia) and after you add all those islands together 15 biggest in land mass. Increasingly nationalistic and militaristic. And it is a goldmine mineral and resources
wise. There is a small minority that runs the country but popular sentiment is against them and periodically
they do horrible things to the small more affluent Chinese population.
With China, India and Indonesia all rising together they may start to bump elbows.

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Re: Relativizing the myth of China as future overlord

Postby Wombaticus Rex » Fri Mar 01, 2013 9:16 pm

Yes, that, Saudi Arabia's collapse into Jihad of the Dead, Qatar and Tehran building a Sharia finance bipolar hub to rival the Anglo-Pedo axis, and the smashing success of Al Whatever* destabilization in Africa were all early indicators. Once I saw that Turkey and Pakistan were converging on similar flavors, and once I was in a position to start quantifying the role of Arabic petroleum Sovereign Wealth Funds in fucking up the free lunch of US/UK hedge and mutual funds, I started to see China has a serious rival with 0% interest in pale little atheists as anything but a food source. The IMF paper on China's coming demographic crunch was a slow, steady burner and watching that information echo out through the pop economist sphere has been educational, side tangent, letting me track who does real critical analysis and who is just continually repurposing Other People's Content to make a f'ing deadline. (Charles Biederman, for instance. Not a fan.) More to the point, though, it got me looking into the nitty gritty of China's ascendancy and I'm hugely indebted to General Patton as per for feeding my brain for several formative months. US hedge funds, rating firms and even Anonymous Analytics, prior to melting down completely to find actual paying day jobs, spent 66% of their entire career trolling Chinese corps with obviously FUBAR filings: http://anonanalytics.com/research The scale of the greed, graft and grift is stunning stuff and in the past 2 months Western economists have been having a nerd-snark blast deciphering the funny figures behind China's alleged GDP. It is like Jeffrey Skilling being given Ben Bernanke's job...as cynical as I am about domestic market manipulation, it's packaging peanuts compared to the shell company juggling and shadow banking credit bubbles making the Chinese sausage. Also: water. Back to Teh Islams, this is not data-driven but personal conjecture: they will take the UK and France, and internal/external Pakistan allies will subjugate India. I relish neither outcome but feel strongly about each. Also, once NE Africa can disrupt the shipping lanes that maintain Vatican puppet strings to Latin America, you will start seeing more Mulsim Hispanics. Just wanted to rant for a second to flesh it out, cheers.

*it might have been a CIA network and all, but white men who play squash and believe in Jeebus don't have much sway over the "assets" they claim to control
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