It's rather with a mix of sorrow and irritation that I'm forced to recognize that China f...s the West, getting her growth 'subsidized' by the West's accumulated achievements and potential. The West knows it but seems to be helpless so far. Even more I am terrified by this surgical, virtuoso precision and knowledge with which China does it amidst Western self-flattering complacent talks about instability and non-sustainability of Chinese economic development. This assertion most of all pertains to the Anglo-Saxon economies. It happens because, unlike the communist iron-walled USSR sunk in self-extolling myths and irrational avoidance of self-critical reflection, China spent enough time on studying diligently and pragmatically the real advantages and disadvantages of the modern (but very obsolete at that) capitalistic system, including the machinery of the financial and monetary systems, trade and free-market mechanics. Also it happens because the real competition of ideas and rational debate that takes place within the autocratic communist party in China seems to have outstripped the real political competition in so-called democratic 'multiparty' systems in the US, Great Britain and some other Western countries.
The result of this was that China armed
itself with the best technical advantages of the existing system of
relationships for her own needs and sought out the biggest and most
terrible breaches in those seemingly unbreakable walls of capitalism
to use them AGAIST this system to their benefit. And it's rather the
latter than the former that contains the biggest parasitic element in
China's policy of growth – exploiting the intrinsic inconsistencies
of Western capitalism, rather than using free-market relationships
inside (which of course helps China in no small measure too, but
doesn't per se present much of a threat to the developed world in the
West).
China perfectly figured out the main
myths of the capitalism: 'democratic capitalism' and 'free-market
capitalism', grasping the truth that capitalism as such doesn't have
anything whatsoever either with democracy or with FREE-market, and
relates directly to CAPITAL and, what is even more relevant and
important, to CAPITAL CONCENTRATION. They adopted some part of those
myths and left the rest for the West. Understanding the main
realities and myths about capitalism, now China exploits all the
intrinsic deficiencies of it and their malign consequences, including
economic, social and political ones, to the best advantage and with a
surgical precision and cold-bloodedness of a professional sniper too.
These are some examples of those heavily exploited holes (holes the
size of an elephant):
1. Trading. One of the deepest
problem hailing directly from the myth of 'free-market capitalism':
money as such equalizes the values of different products and
industries belonging to completely different classes in qualitative
terms, even mathematical sets of completely different orders. Money
equalizes sets of values of different orders. This is heavily
exploited by China which understands this only too well. In practise
it means that the capitalistic 'free-market' can be productive only
when money is used for exchange and comparison of the values
belonging to similar sets, hence, between the entities that produce
and trade the values belonging to similar sets. The system China-US
shows very tellingly the asymmetry of the relationship caused by the
money equalizing power: China trades the US consumer values ONLY
(plastic spoons, rubber gloves and condoms, cooper wire and noodles
etc), but in exchange gets values corresponding to the first and
second derivative of consumer values production capacity
(telecommunication technology, information technology, engineering
services, etc). Same happens when the US hires a Chinese engineer and
China hires an American engineer. Equalizing of the primary values
with the derivatives (determining not the statics but the dynamics of
the development) creates a terrible asymmetry and losing practically
for nothing all those science and technological achievements that
have been done and accumulated by American universities, engineers
and scientists for decades, sometimes centuries. This happens because
the corporate political capitalism, driven by and for the
concentration of capital, not the fair competition, has nothing to do
with the free-market and at a certain point of this capital
concentration starts killing the very free-market and competition as
fast as possible. For example Microsoft or Google or Intel supplying
their technologies and services (infrastructural services) to China,
couldn't care less about the decades – sometimes centuries – of
effort and development applied by the best engineers, researchers and
universities in the US (and more often than not financed by the
state, that's by the taxpayer's money, especially in the time of the
Cold War, and which were sold to corporations for peanuts or just
given for free) because those corporations consider themselves the
full owners of those technologies and the only thing they want is to
get CASH for them NOW, no matter in China or in Belgium. They
couldn't care less that the net result of their activity is 'exchange
of condoms for computers' or stone age products for the 22nd
century infrastructural and technological advancements. Historical
examples include the technological jump of Russia at the time of
Peter the Great, which was caused by Peter's buying technologies and
engineering services from a handful of specialists from such European
countries as Holland – technologies that had been developed in
those countries for CENTURIES before and were given to medieval
Russia in a matter of years (!!) (after which Russia immediately
became and existential problem for Europe and continued to be that up
to the collapse of the Soviet Union); Stalin's industrialization in
Soviet Russia, when, despite all those Western embargoes, the Soviet
government hired specialists from German and French corporations and
institutions.
China, unlike the US, kept tightly in
secret its achievements from the rest of the world, including the
porcelain technology, which Britain had to develop on her own. This
problem of equalizing power of money which gives such a huge
parasitic possibility and opportunity to any underdeveloped country,
could be masked by the fact that trading relationships between
approximately equally developed countries could be quite productive,
because the contributions of the partners inside each class of values
are approximately equal on average. To put it simply, the US doesn't
loose when it sells goods and services belonging to the class of
values of high order (rearming technological base, changing the
infrastructure etc) to Germany, because, on average, it gains the
same amount of the same value class of assets in return from Germany.
But not so in the case of China where the qualitative and fundamental
difference between consumer items and high-tech,
infrastructure-advancing and productivity-enhancing values is not
reflected by the difference in prices, given by so called 'free'
market.
2. Ideological flaws. Second,
and perhaps most important, reason why China f..s the West is China's
understanding of the malign defectiveness of the Anglo-Saxon
ideological class-based foundation and turning its parasitic features
against it in the permanent situation where the Anglo Saxon DOESN'T
WANT to recognize this defectiveness (even though perfectly
understanding it), because the very fact of ideological recognition
of it existentially threatens the ruling elites: China understands
that free market is just a medium, not a driver, of economic
progress, whereas the main driver is the interrelated
infrastructural, scientific and technological development which is
done by engineers, scientists, teachers, artists and the
corresponding institutions like Universities, NOT by Rockefellers or
Donalds Trumps by any means. Free market at a certain level helps to
realize the potential given by this infrastructure.
What may be even more important is that
China not only recognizes this simple truth, but also this truth in
turn doesn't go against her overall ideology: human resource makes
wealth, not the other way around, and free-market is just a medium
that helps this, a medium that must be protected by state from
'relativistic influences and distortions' induced by 'supper strong
capital concentration fields'. It allows China not only invest
astronomic amounts of money into technology and education (mind,
China is still a developing country), but also BUY Western
specialists: engineers, scientists with their invaluable experience
(paradoxically, now one can observe some 'reverse brain-drain' from
the US into China). It allowed China to create monumental
institutions and state mechanisms for developing infrastructure.
Contrary to what happens in China, America doesn't recognizes this
'upper' classes of society – professors, engineers, scientists etc.
Washington understands the importance of those, but the class-based
and, even more class-lobbied, state ideology doesn't allow an
official recognition of this truth, because the state itself serves
the interests of those 'elites' who possesses the highest
concentration of capital. Not only are those elites uninterested
directly in creating and enhancing new and powerful independent
mechanisms and institutions for state-powered investments into many
research and technology development fields in which the US's lagging
behind, but on the contrary they are interested in creating
conditions and laws (especially in the field of patenting and
intellectual property) which prevent competition on the part of small
and medium research businesses. For example, scientists working on
the green sources of energy are now of much greater importance for
the US economy development than the owners of Exxon Mobile, but it's
owners of Exxon Mobile who use their ultra-concentrated capital to
hinder the former – not the other way around. China understands
that huge concentration of capital in the hands of privately owned
(hence privately motivated) quasi-monopolies makes them interested
not in creating market and competition but in killing it, on the
political level included. The Anglo-Saxon political capitalism
doesn't serve the purposes of the free-market and fair competition,
but the interests of a class of people in the hands of which are
concentrated the greatest infrastructural resources and capital
(hence, lobbying power). Capital owners are far from being infatuated
with the idea that some independent powerful institutions would
arise, which automatically gain political weight and the voice of
scientists and engineers will become more influential in distribution
of the state investments and the legislation process with all the
ensuing consequences. It's a very difficult decision to make to
recognize that universities are more important institutions for the
US economy than banks, but the very RIGHT of such like decisions lays
in the hands of banks, not in the hands of universities because of
the power of concentration of capital.
Again, it's not that the structural
problem of loss of industrial, technological and in some fields
scientific competitiveness because of the underinvestment or
defective investment model is not known to the political elites in
the US or Great Britain, but it's just that the problem doesn't have
a proper solution in the existing system of reference.
In the Cold War age the US channelled
state investments into science and technology through the army –
Pentagon to put it simply – and this 'squared the circle' allowing
in essence to drive the progress 'socialisticly' in the capitalistic
conditions through the state investments while at the same time
sticking to the old mendacious ideology in the public eye (because
superficially those investments were meant for army, which is
designed for the defence of the backbone of the nation –
corporations, not for engineers, researchers and universities, which
were placed into the context of being subservient staff, like a kind
of lackeys, temporary contractors belonging to an inferior class). In
the Cold War age this was possible because, first, capital owners
were afraid of the 'red infection' – simply put frightened to death
of the external danger to their purses – and allowed the state to
spend money on the army and keeping social development at an
acceptable level; second, because, post-war civil industrialization
and technological modernization didn't go against military
development and needs which provided a sufficient synergy degree (now
the situation is completely different: green and efficient sources of
energy, bio-technology, medical equipment etc are not what the army
is interested in; army is here not to heal but to kill).
On the contrary, China not only
understands the paramount importance of education, science and
technology as the main economic drivers in the 21th
century, but has never had any ideological or political issues with
this. She RECOGNIZES and PREACHES it ideologically plain and clear.
Many engineers and specialists by China's invitation come from the US
to take on the ultramodern infrastructural projects and give their
invaluable experience and knowledge. China, unlike America,
recognizes the huge value of American education and universities, so
many Chinese go to the US, Britain, Canada etc. In order to get the
quality of education they would never hope for in their country for
decades, and return back to China to give this knowledge and help
organize new universities (turning those decades into years) in China
which have lately been cropping up there at a mind-blowing pace.
It's interesting also, that knowingly
or unknowingly China exploits another very deep flaw of the
capitalistic mythology, which implies that the main motivational
driver of the productive and progress-causing forces is money.
Paradoxically, those great progress-causing forces like scientists,
engineers and teachers are not primarily interested in money: their
professional quests and interests are such a deep part of their
identity and quality of life, that on the material side they are
rather interested in STABILITY and SUFFICENCY of their income,
acceptability of living conditions and stability of the conditions
for the continuation of the works and projects to which they dedicate
their time and life. To put it simply, quite often an researcher
won't immigrate from China to the US for a much bigger income if the
stability of his life and work condition home are good, and, on the
contrary, an American can easily go to China just because the kind of
project he's is interested most is available there but not available
home (though other projects quite beneficial in terms of wages are).
So China gives a fair value to the intellectual and educational
resources of the US, unlike the US itself, and use it to the best
advantage possible. Unlike the US China recognizes (as has Germany
done since at least the 1880s) that the value of science development
cannot be made a hostage of capital-controlled market (not to be
confused with the free market), because big corporate players are not
only uninterested in those things, but also very often overtly
against them.
The result of this is not only this
phenomenal pace of China's technological and scientific development,
but also successes in some fields, like green technology and
renewable energy sources, which actually already now can put to shame
'high-tech ultra-developed America' (at the same time putting under
threat America's future on this market).
3. Economic flaws. Anglo-Saxon
capitalism doesn't differentiate between 'bad', parasitic business
entities and processes, which don't generate but kill the market and
competition, which don't create new resources and methods allowing to
use new resources, which appropriate the limited existing resources
and prevent development of the new ones, and 'good' entities and
processes – those companies which are competitive in nature in a
given set of conditions and create new markets and products with
limitations only placed by consumer demand. Capitalism also doesn't
recognize the difference (though perfectly understands it) between
the private quasi-monopolistic financial institutions with the
privilege to emit money and debt in practically unlimited quantities
and use it in speculative distortions of the markets in their own
favour and businesses who are intrinsically competitive and create
new types of values and new markets without any money-emitting power,
being 'taxed' by those financial institutions. But China does
recognize this difference. Huge structure-forming banks are core part
of the financial infrastructure and parasitically tax anyone for the
'oxygen pipe' – one for all - whereas car producers or hamburger
bakers make the final consumer items, which intrinsically cannot be
monopolized and are always exposed to competition. The same goes for
the bloated resource quasi-monopolies, whose main concern is not
creating new resources, new ideas and methods of replacing the old
resources with the new ones, but grabbing and retaining resources
(not necessarily developing them, rather the opposite), using all the
political lobbying power in hand, and prevent anyone else from doing
this. In this sense Anglo-Saxon capitalism doesn't make any
distinction between innovators like Google, or car producers like
Hyundai, and Chevron for example.
But China recognizes and exploits this
difference in their state-arbitrated market economy not only directly
for their direct purposes but also against the Anglo-Saxon model.
China has no problems about selling consumer items, cervices or
industrial consumables nor does she have any problems with the
concept of free market and competition in the sectors producing
those. BUT as to the attitude to resource sector it's a completely
different story. China state is in no hurry to sell its resources
without a serious measure of control (good example is the latest
decision to seriously cut down on the export of rare earths, which
caused so much concern in the US particularly) as is she in no hurry
to loosen its tight grip on the big resource corporations which are
in essence quasi-state-owned companies in China. She – China – is
also in no mood to step on the same rake as many other countries have
stepped before (like Argentina, Russia, Indonesia, South Africa and
many many other countries): granting and/or selling foreign
'investors' rights and concessions for huge resource deposits. They
excellently understand that it's not a matter of special talent,
competition and creativity of a particular owner running a big
resource mammoth without any problems with profits and economic
viability if the resources mined do have currently a serious
intrinsic value and the technology and infrastructure is already
there, which has been very well demonstrated by Norwegian, Sweden,
French and other resource state-controlled corporations, but it's
rather a matter of proper competition organized 'from above' for the
managers who want to perform their duties most effectively, or for
CONTRACTORS – paying for exploring and engineering services and
businesses, which are competitive without the charity of giving away
the resource base itself – that's the idea. The only difference
between Norwegian Statoil and American Exxon Mobil or British BP is
the amount of money that is taken out of the proceeds and distributed
among the pockets of some people whose main merits have nothing to do
with the special entrepreneurial creative powers but are related only
and only to their sitting on a huge resource base while holding a
huge working capital in hands – millions of people around the world
can do this with no worse economic performance (that's not to say
that, e.g. Rockefeller's talents weren't of essence more than a
hundred years ago at the time the market and infrastructure in oil
sector were just being born and competitive in nature – at the
moment of inception – that was more than a century ago; business
which was good and competitive a century ago can be parasitic and
market-killing today). They also perfectly understand that, as again
was tellingly demonstrated by very similar situations in many
developing countries, that those resources and resources deposits
which don't have currently a high value and, what is more important,
don't have proper infrastructure and technology to be developed, more
often than not are of NO INTEREST whatsoever to those 'creative
free-market foreign investors', and even when they are, such
investors buy such resources only and only to sit on their hands,
waiting for the right historical moment just in order to limit the
access to them by other exploring companies (including the states who
made the mistake or the crime of selling those lands and deposits)
beforehand.
On the other hand, China actively
exploits this huge defect of the West's equalizing truly competitive,
new products/services creating business ('good' business) and 'bad'
business using capital and political power concentration to compete
in grabbing some vital resources limited in quantity from the very
start (instead of creating them). China's state opted for a proactive
approach in buying up as many resource deposits abroad all over the
globe as possible, including North America (especially Canada),
Australia, Latin America, Africa etc, and investing in the
development of those 'pies'. No cause to reproach them for this,
because it's the West itself that equalized the resource mining and
high added-value service and productive business, and China never
said that. Interestingly, in doing this China combines exploitation
of both: political and economic flaws of the West's capitalistic
mythology, because Chinese state has no qualms about... yes,
POLITICAL LOBBYING for their resource purchases in other countries at
the highest level using all the financial and political power of the
Chinese state, which is quite OK, because lobbying is something
Anglo-Saxon economies are very proud of and use it to virtually close
the very question of state corruption and state betrayal of the
nation's interests (or, to be more accurate, people's interests,
because lately, it seems, the term nation in the democratic West has
become a full synonym of state or the commonwealth of corporations
and state). This approach not only solves the resource problems of
China's economy, but also helps avoid any harmful activity of their
own resource companies directed at inhibiting on purpose any progress
in the green and renewable energy production sector – inhibition
which is right now taking place on a large scale in the US, Canada,
Australia and a number of other Western, predominantly Anglo-Saxon,
developed countries.
China also actively exploits the huge
African and Latin American resource base with the same lobbying power
in the exceedingly benign conditions caused by the fact that the
developing countries in the above regions opted for the capitalistic
form of existence and oligarchic political structure and culture (but
unlike the US they fell initially down the potential well of a
self-robbing, ever lagging poverty out of which they will not be able
to get until the Second Coming if they don't change this form). But
the West doesn't actively exploit that resource base because 1.
resource companies don't want to invest into infrastructure (roads,
ports, terminals, communications and other basic infrastructural
elements critically important for their business) and into social
development of the heavily underdeveloped regions (educating and
training locals to create the qualified workforce in the regions;
creating schools, health, housing, infrastructure which doesn't
directly relate to their business) – they are intrinsically not
inclined to bear such costs and responsibilities 2. lately it's
become a general tendency for huge resource quasi-monopolies not to
invest actively in the buildup of the production volumes, because in
essence they have turned into speculators in the wake of and with the
nod of financial institutions: they just keep up their resource base
and production at a relatively stable level, understanding that in
the short and mid term holding back the production growth will give
them more profit than actually building it up – but such is the
management and ownership structure of those resource behemoths that
they are interested only in short term things (unlike, maybe, what
was the case half a century ago, which is also directly to do with
the crisis of Anglo-Saxon capitalism and its turning into an outright
form of parasitism) 3. even if and when Western governments
understand the long term importance of such developments and
investments (and they certainly do), they just don't have any power
to prompt those corporations to do anything above what's whispered by
Adam Smith's 'invisible hand of the market'.
On the contrary, China has an
integrated socio-economic approach and virtually aims for converting
those regions partly into Chinese affiliates at all levels,
understanding and recognizing that long-term investments in human
resource and infrastructure are the main drivers of that invisible
but highly influenced hand of the market. More to the point, unlike
the West that has been f...ing Africa and Latin America (though to
lesser degree) and still continues to do so, China with its
integrated policy continues by leaps and bounds to build up the most
precious and effective resource – TRUST and REPUTATION in those
regions: political trust and reputation, business trust and
reputation and last but maybe most important CULTURAL trust and
reputation. They are not COLONIZERS in this sense and they are not
seen in this way, because from the very first their approach implies
a kind of mutual development at all levels. This resource – trust
and reputation – is the most effective and liberal puppeteer of
that invisible hand of the market, which doesn't restrict but gives
more freedom to it. The West had enough time to straighten its ways
with Africa but it hasn't used a damn bit of that time and chance,
because it's never been in conformity with the will of the
Anglo-Saxon main puppeteer of the hand of the 'free-market' –
CONCENTRATION OF CAPITAL in a miniscule number of independent
quasi-monopolistic entities, especially if it comes to the mineral
and energy resource sector.
Again, it's not that the West doesn't
understand that it's being f...d on this front too – of course it
does, but the system within which state is a sort of concubine of
gigantic profit-driven private corporations with common realized
interests, just cannot offer anything effective. One could ask why
then socialistic free-market country Sweden would not be interested
in investing in African resources in the same way as China is? Only
and only because Sweden, having left behind Anglo-Saxon economies
long ago, is going to STOP USING oil AT ALL by no later than the year
2020 (!!) - because countries like Sweden in particular and
Scandinavia in general - are already in the 22nd century
in terms of their development unlike many so-called developed
countries who keep one foot in the 19th and one still in
the 20th.
At the same time China is in no hurry
to let foreign investors into its market – financial investors and
resource investors, and those who under the cover of being 'free
market creative businessmen' are indeed financial or resource
investors. China is in no mood to demonstrate on herself the
consequences of another capitalistic myth, that dealt such a terrible
blow to a whole bunch of developing 'newly capitalistic' countries
(in Latin America, in Asia, in Eastern Europe especially, in Russia)
slowing their development by many decades: a stupid myth that opening
doors unreservedly to foreign capital helps bring economy to another
qualitative level, bring in an enormous corpus of technological
knowledge and expertise and accelerate its development. In those
countries many 'ready-made' manufacturing and mining assets were
snapped up by those investors without further investing a single
penny in their development just because those assets gave profit at
once at the expense of cheap, tax abatements, the state of being
undervalued etc, or those, so called investors, invested in highly
automated assembly Lego-type shops and plants with no more than one
year pay-off period as a form of import (to avoid paying import taxes
on the finished articles such cars, washing machines etc) – note,
that was the best case, the worst being a deliberate suffocation of
the bought assets done just in order to correct the trajectory of the
invisible hand of the market, or, as in the aforementioned case of
resource deposits and lands, freeze any development of those mineral
assets. The damage done to a great many developing countries
specifically by foreign financial investors is mentioned below in the
section on the financial flaws.
On the other hand many of those
developing countries, who at some stage recognized the absolute
necessity for their state to plan and invest in the main sectors of
economy at the infrastructural level the hard-won savings of their
nations, demonstrated dramatic success, like Brazil in her
agricultural sector or China in her industry.
Again, as was mentioned above (see
section 2 on ideological barriers), it's not that the developed
capitalist countries don't know or understand that the state
investments and direct participation in infrastructural and
scientific development play a decisive and most important role in
determining economic development trajectory for huge periods ahead,
but the IDEOLOGICAL GROUNDS (and sometimes cultural) just prevent
those countries from final recognition of this fact ONCE AND FOR ALL,
because such recognition would automatically give rise to redefining
state's ROLE and RESPONSIBILITIES – ONCE AND FOR ALL, which in turn
would entail the obvious irreversible consequences for the ruling
classes or so called elites.
Another point is about the China's
wages, internal consumption and the exports. Nowadays one may too
often hear from many pundits in the West all kinds of hollow mixture
of critiques, complaint and lecturing advice about the ostensible
export dependency of the Chinese economy and its excessively
restrained inner consumption. The only element of truth to this
ranting anxiety is that China is really very diligent in her effort
to control and keep the right balance between exports, incoming hard
currency flows and the volume of the consumers appetites, imports and
currency outflow. And she does it very carefully exactly from the
position of a very good understanding of the dialectics of the
free-market economy development. China really puts constraints on the
volume of the inner consumption and stimulates the exports, and
couldn't do any wiser in her circumstances (needless to remind, that
such super successful developed non-Anglo-Saxon economies like Korea,
Japan, Scandinavia, Germany etc use this lever to the fullest too
though in their position some kind of ethical justifications could
really be required unlike developing China).
China understands (no worse that her
Western developed partners do, without recognizing it) that the
free-market condition alone will NEVER reduce the dynamic gap in
development between her and the developed countries as well as never
carry her into this category – the one of the developed countries.
On the contrary, what little money (per capita) may be possessed by
the wide masses of Chinese population would permanently go down the
never-ending drain of consumption (including consumption of the
Western consumer items) instead of infrastructural and technological
investment and will keep China in the limbo of a world contractor,
kind of mega dollar shop, for ever (just as is the case with decades
of stagnation and poverty of other permanently developing countries),
because of the never-ending dependence on Western high-tech products
and technologies. China consumer stimulates with his demand not only
Chinese producers, but the Western exporters of the consumer
products, which takes away from the money that could be spent on
catching-up with the West. China understands that to bring herself to
the same level and field of competition with Western developed
countries she needs to overcome a huge potential threshold –
threshold of technology and infrastructure – and make up a hell of
a lot of leeway to make the notion of 'fair competition' with the
developed world a bit closer to anything having the real sense,
meaning, and, fairness for that matter. That means, that Chinese
government must direct as much money in technological,
infrastructural and educational investment as possible, and save as
much currency from unnecessary spending as possible, because it's
precisely currency reserves and capabilities that China needs to buy
the most important services, technologies and products from the West
that can bring her to a qualitatively different level of economic
development and power. And that's precisely what China does full
steam ahead. Of course it doesn't mean that a certain growth of
consumer buying power doesn't help or that AFTER China has become a
member of the rich countries club (the richness of which is defined
first and foremost by enormous self-sustaining technological
development and huge infrastructural resources) it won't be
beneficial for her to have a consumer based model of economy – but
that's a completely different story.
Huge amounts of natural resources
required for an revolutionary industrialization of China are a very
important factor too of course, because in a situation when the means
of production still have a low efficiency and productivity, China (as
well as many other developed countries) needs some extra leverage
(including keeping low wages) to subsidize exactly the transition of
its industry and infrastructure from the present resource-inefficient
state to an efficient competitive state. Catching-up with the past –
Victorian industrialization – must be packed all in one with the
20th and 20th century industrial modernization
and technological rearmament.
All this gassing on the part of many
pundits about excessive export-dependance of Chinese economy is
completely ungrounded and, sometimes intentionally, confuses the
cause and effect: it's not because of China's incapacity to augment
the level of private incomes and consumption that China's export is
so high, but rather on the contrary, the other way around: it's
because China intentionally tries to keep the export to internal
consumption ratio as high as possible to gain as much currency power
and room of manoeuvre in terms investments (that require buying those
resources that still cannot be produced in China by reason of her
qualitatively insufficient technological development) as possible. In
the world crisis 'officially' started in 2008 and continuing up to
the present day China has very well demonstrated its excellent
ability to boost the inner consumption and spending at will just as
the need arises (and that was the case then – that need did arise –
because of the nose-dive of Western, especially American, demand).
Also, very characteristically, the share of China's economic growth
pertaining to her export is small and continues to go down from year
to year.
Again, to recap the above, no
free-market on earth as such is capable of providing a technological
and infrastructural revolution in China as well as in any other
developing country for that matter in the present conditions (when we
already have the developed world saturated with the highest
productivity industrial means possible), and before the technological
and infrastructural equalizing takes place all those talks about
'fairness' of investment and labour markets in the context of trading
exchange between China and the West will have not much more sense
than talks about fair competition between Auschwitz labour camp and
the main consumers of its produce. They are not in the equal or
'fair' position in the first place, and this dynamically retained gap
and status-quot cannot naturally change at any time and for an
arbitrary long time in the future without a non-equilibrium,
catching-up investment process boosted by the state.
4. Judicial flaws, especially
INTELLECTUAL PROPERTY LAWS, which, even by recognition of some of the
big corporate players like Google, nowadays serve the purpose of
killing the market and stifling competition at all levels: small
business, individual entrepreneurs, inventors etc. The whole system
of intellectual property rights by the end of the 20th
century had become a huge club and firewall all in one in the hands
of the huge soft, electronic, bio, pharmaceutical, chemical, resource
and such like corporations in the West, that helps them kill the
competition and the development of the markets even in the most
inherently competitive areas. China knows this (as does the West) and
exploits this. It's possible that a century ago the patent law helped
the Write brothers – inventors and engineers – to create their
own Wright air company and helped the Italian inventor Marconi start
his own radio company etc, but that was a century ago. Now the
intellectual laws are lobbied and invented by the capital
concentrators – huge corporations – precisely for the opposite
purpose: to prevent those drivers of progress – engineers,
researchers, inventors (or their free community) – from inventing
and creation as much as possible (not even steal those inventions and
ideas, but sometimes just KILL, because the killing of competition in
the present conditions is a simple, more predictable and reliable way
of supporting the status quo). Even when this creating process (like,
for example, in the case of free Linux-based applications) cannot be
stopped, those laws can prevent their spreading and wider use. The
degree of ethical absurdity of those laws have reached an
unimaginable level, where they turned into a branch of criminal law
(or repressive apparatus prescriptions) which is based not only on
the presumption of guilt without any right of defence, and where
anyone who independently, owing to his tests and experiments, decided
to use parsley in the process of the cooking of pizza would be
considered a thief (without the right of defence) if just a year
before another guy in another corner of the earth had used parsley in
pizza-like pastry... Amazing! The main criteria of this new type of
criminal law is not an established and proved fact of a theft beyond
reasonable doubts, but the POSSIBILITY of a reduction in the profit
of corporations who use, or, more often than not, just hold a patent
(never tried before in practice) for, a number of processes into
which their lawyers on paper put parsley, celery, cardamon and what
not! Of course, the sphere of ideas in the non-resource related
products and services is, at first glance, naturally invulnerable to
monopolization and parasitism, but the real life (not fiction) proves
this judgement completely wrong: capitalism in the 21th
century easily demonstrates that even an ocean can be packed into one
pipe with one valve and one controller – 'Adam Smith's strict
market hand'.
But China (China in particular and Asia
in general) couldn't care more and that's one more weak spot she uses
to pouch 'forbidden ideas', engineers and inventors from the West,
giving them 'an off-shore zone'. Again they exploit the myth of
capitalism that material wealth is the main creative motivator,
proving that for an inventor, scientist or engineer the tragedy of
losing his 'child idea' or project is often much bigger in the 21th
century than the problems of the sheer size of his income and
materially successful career. Maybe some phone companies (especially
smaller ones) have some problems in America in using the free
Linux-based platform Android, because corporations like Microsoft now
are trying to charge free users for the free open system developed by
themselves, using the intimidation and racketeering of law suits
(even if those suits are often doomed to fail, the capital of
Microsoft and the law makes it beneficial and absolutely void of risk
to start them and use them as a threat), but not in China! And not in
Asia as a whole. They couldn't care less. While those behemoths try
to guard their pie (or pipe) in America in order to more effectively
parasitise the American users and inventors, China continues to use
and support those technologies to the fullest.
5. Financial flaws. As was
already mentioned above, China gained a full understanding of the
super-power of CAPITAL CONCETRATION and its central place in classic
capitalistic models and economic relations between the same. This
allows China to direct this power in its most destructive and ugly
forms at those very capitalistic countries to pursue her goals and
derive benefits to the detriment of the latter: financial strength
allows China's state to lobby directly her interests through
corporations and political institutions using capital. For example,
China knows that Western corporations like Yahoo or Google or
Microsoft will come, share technology, improve infrastructure and
create a new system of Internet censorship and control without any
long songs about democracy if they are PAID ENOUGH (just like Hitler
in the 30s knew that Britain and America would fight not with Germany
but for German orders, because all those democratic values can be
easily traded for a good deal of money – the direct result of
contradiction between democracy and capitalism). China knows that
while America bleats something highly moral about autocracy in Burma
she can go on with her mono-partied political model as long as it
wants inasmuch as America's financially is dependent on China. China
knows that despite the pathetic Europe's spouting about Belarus
autocracy European leaders will be dumber than a fish about her,
while crawling on their belly to her to ask MONEY for their
ass-saving plans about the economic crisis in the EU. China knows
that while the West likes to belch out high-flown speeches about
authoritarian Syria or Iran, they will continue to shake hands with
the authoritarian military aggressor Russia, kiss and hug well-proved
terrorists like Qaddafi (as they did before revolution in Libya),
befriend King of Bahrain and 'ass-lick' thoroughly many other
'friendly' (but no less bloody for that) dictators – even when they
don't have to be so openly loving towards them – because their
Western INTERESTS stand well above democratic values and then name of
those interests is CAPITAL, short term, NOW. China knows and uses
these holes full steam ahead with developed capitalistic countries
like Canada, the US, Australia etc, as well as with those developing
countries in Latin America, Africa, Asia who, once having considered
a big privilege for themselves to pursue the 'American model' have
never been able to stop this hot pursuit afterwards, having fallen
into an infinitely deep pit-fall. Simply put, China considers that
she can buy them all whole for the benefit of her export interests,
her resource investments abroad, her direct financial interests etc.
Yeah, that works!And will likely work in the foreseeable future!
Second, China very diligently does one
very simple thing haling directly from her understanding of the
paramount importance of capital concentration in using foreign
capitalism: ACCUMULATION AND CONCETRATION OF CAPITAL – that's what
China's been doing pretty long and extremely successfully in all
possible senses. Yeaaah here we talk about China's HUGE CURRENCY
RESEVES and FOREIGN CREDIT accumulated by China, that's the part of
Western external debt, especially that of the US. Starting from a
certain point in the recent past many developing countries in Asia
and some in Latin America very clearly realized the absolute evil of
the endless loans from and accumulation of debt to Western
governments and the West-dominated financial institutions like IMF,
and the first among them being China. They clearly grasped the
vicious dynamics of and intentions behind this process: Western
capital can parasitise arbitrarily long the developing economies
while restraining their development (the latter, apparently, being
the first priority) on its own conditions thank to the exponential
growth of debt onus and draining of the capital back to the coffers
of the West because of the lobbying by means of those loans of
preferential terms for Western exporters and corrupted use of the
money (again, not only because of 'natural corruption', but because
of the conditions that give rise to the embezzlement and drain of
that money). Examples of this were plenty in Africa, Asia, Latin
America. But this very principle – using high capital concentration
to gain money without producing anything and wielding political and
economic influence over other, much poorer and backward, nations –
could be used the other way around – it is a double-edged sword so
to speak. Those countries, China included, understood that it would
be better for them 'to eat grass' and 'swell with hunger' than to
take a single penny from the West, die but save save and save... and
then turn the tables on the Western usurers. So turn the tables China
did! Now those huge reserves of dollars has become an iron-clad
guarantee for China's normal economic development because 1. Chinese
state now can independently and, what's important, reasonably in
terms of sustainable development of the whole national economy
finance the import of really necessary goods and services 2. Chinese
state can loan money to other countries 3. the whole Asian region
seems to have scrambled out of this black hole of the never-ending
dependence on Western loans in hard currency, so that the development
of the whole of Asia became decoupled from the West. Many other
powerful levers and advantages have been won by Asia in general and
China in particular ranging from prestige and reputation to credit
ratings and political clout on the international stage.
But all this doesn't mean on any
account that China decided to adopt capitalistic financial system.
Quite the contrary: Chinese state perfectly understood that Western
unconstrained banking system in overdrive will continue to print and
loan money, but, this time, for their own nations, driving their own
nations into debt and killing a lot of useful sectors of economy with
so called 'bad money'. This again stems from the same vicious flaw of
capitalism, which was mentioned before: it doesn't differentiate
between 'good business' – intrinsically competitive, creating new
products out of nothing and enlarging markets – and 'bad'
businesses which are intrinsically interested in limiting or even
stifling the market because of its monopolistic nature, or
monopolization induced by huge CAPITAL CONCETRATION or combination
thereof. And a capitalistic state intrinsically doesn't recognize its
role and responsibility of being an independent arbiter and guarantor
for the straightening-out of those distortions. Now many eminent
economists recognize the role of China in the current economic crisis
in the West, to which we see no end. This happened not only because
Chinese industrial machine was able to consistently absorb a huge
portion of the money printed by Western banks in exchange for cheap
and competitive goods, but also because China, in turn, doesn't have
the same financial capitalism that would allow her to go on a
spending spree of a scale unseen in history. Besides, a large part of
Chinese savings (state and independent) have been going (and still
going) in the form of loans to the West – as private investments as
well as the state ones (in the form of US treasures, bonds etc) so
the situation is deeply asymmetrical. That's how China turned the
tables on the usurers – using critical and ugly flaws of financial
political capitalism, that's how China has swapped places with the
West and became the creditor threatening to stifle the development of
the latter in favour of her own progress for an uncertainly long
period of time.
Generally China doesn't let in
financial investors in the manner Western capitalistic countries do
it, especially speculative 'investors'. In recent history huge
short-term influxes and outflows of speculative money have
demonstrated enough their destructive and disruptive power on many
Asian nations (Korea, India etc), who were naive enough to believe in
the malignant capitalist demagoguery equalizing 'good investments' in
the development and creation of economy and new market and parasitic
speculative sponging based on using excessive CAPITAL CONCENTRATION
to artificially correct the 'invisible hand' of the market and take
away part of the already existing value of the economy. Private huge
banks – the core of the existing financial political capitalism –
don't exist in China as such, but the state-controlled banking system
do (not very much different from what one can see in socialistic
Sweden) and on a technical level works quite in the same way as the
private ones in some functions. As was mentioned before the
understanding of the parasitic, monopolistic and absolutely
uncompetitive nature of banks as the main pillars of the financial
political capitalism (not to be confused with the industrial stage of
capitalism) is nowhere better than in China. The exclusive privilege
to 'print' or create money (hence debt) multiplied by the privilege
to use in unlimited volumes this created money power for speculative
purposes (as well as the money credited by natural persons and real
economy businesses) held by a limited bunch of super-giant financial
quasi-monopolies united by common, consciously understood interests
and the already ultrahigh capital concentration means the parasitic
force of astronomic proportions unleashed – especially within a
system in which such institutions are almost by definition the main
shareholders and owners of the state itself. Needless to say that all
that such institutions typify is the complete and ugly antipode of
the free-market, fair competition and possibility-driven creation.
As ever China took the right and
useful, predominantly technical, part from the idea of financial
credit institutions and left the rotten one for the West (again, if
one is to exclude some formations like free-market socialistic
Scandinavia from this notion): they created a banking system for
controlling the creation and inflow of money according to the short
and long term economic and market requirements and financing the
economy, whereas neutering all the rest – fully independent
commercial self-governance, any POLITICAL independent involvement and
lobbying power, uncontrolled money creation and using held and
created capital for the purposes of pure speculation. Banks in China
cannot and may not be political entities (or entities with huge
political power, no matter formal or informal) independent of the
state, not to mention the apex ones. If the banking system according
to its very exclusive functions and granted powers is above all other
economic freely competing entities it must be accordingly put aside
from those 'equal' relations and burdened with the very exclusive
responsibilities and accountability to and control by the nation and
the state. State must be an arbiter and guarantor, or else why is it
needed in the first place? To guard the chosen few from the nation as
it happens in some 'democratish' countries?
Now China, having comfortably lain
back, observes the self-eating frenzy in overdrive in Western
Anglo-Saxon economies, calmly smiling to themselves and capitalizing
on it to the fullest using precisely the same financial capitalism's
weapons against the capitalism itself in the West as they were used
against her and hundreds of developing countries. For China it
suffice just to beckon to any of those Western cash-oozing giants,
like HSBC bank, to have them briskly coming jumping to her knee under
any conditions, only to have at least some limited access to the
Chinese market and invest, all be it indirectly, in the Chinese
economy. But those investments are not speculative and and are done
only and only under the direct control and dictates of the Chinese
state. That's the way how China not only uses her own capital, but
easily harnesses Western banks for her purposes, and reasonably and
creatively too rather than parasitically and destructively as it's
done by the West itself. Does Western HSBC work for the benefit of
China and to the detriment the very West? Possibly.
6. Political and diplomatic flaws.
It's
possible that one of the main political as well as ideological flaws
that's intentionally as well as unwittingly exploited by China to the
fullest against the West is the terrible myth called 'democratic
capitalism', China knowing better than anybody else that there's
little more in common between those notions than between blood donors
and vampires. China exploits in a number of way the intrinsic
conflict between democracy and capitalism in her favour, being
herself an authoritarian country and dealing a terrible reputational,
ideological and image-related blows to the Western 'semi-democracies'
and democratic ideals which in the end could be the most
consequential, long-lasting and hard-to-treat damage to the West
which itself has lost too much time without choosing once and for all
what it wants best – capitalism or democracy. This is a really sad
development indeed. In practice the exploitation of the above flaw by
China manifest itself in a number of ways, such as:
As
was mentioned above, China state uses capital as a lobbying power A)
to gain economic and technological advantages, acquire assets in the
Western countries in the fields where those gains and assets are
dubious to say the least in terms of longer term interests of the
respective Western nations and their democracies B) silence and keep
Western governments away from saying to much about Chinese human
rights record and bad autocratic practices, which also sends a very
detrimental image-related and ideological message to the developing
world: 'Give us a break, all their democratic principles and values
aren't worth a rusty farthing, all of them can be bought and traded,
cos it's CAPITAL that is the real language of their elites, not real
democratic values'. It's not only to fill the gap of decades of
economic development that China beckons Microsoft or Yahoo to come
and share their technology and establish a new infrastructural
environment, but also to use the state-of-the-art methods happily and
readily supplied by those corporations to control their population
and strengthen the power of autocratic regime. So, simply put, China
proves the whole world (willingly or unwillingly) that 'democratic
values' are just an extra premium, and capital allows you to use
those so called democracies to strengthen your autocracy and tighten
your grip on your ownership of human's rights. Actually, on this
front, China's interaction with the West just adds to a number of
other examples (like Western policy in the Middle East, Africa,
Middle Asia and Latin America) which increasingly attests that the
West actually not only uninterested in the true propagation of
democratic mechanisms and reforms in autocratic developing countries
but, on the condition that those states are stable, poor, friendly
and dependent, try hard to restrain those nations from any true
democratic transition precisely because their poverty and economic
underdevelopment and dependence gives enough comfort to Western
corporations and owners of capitals (who are in no mood to sustain
more of international competition and pay more for resources supplied
very often by those poor nations).
Another
front on which China deals a huge blow to the image, credibility and
reputation of Western semi-democracies is her interaction with other
developing countries. As was said before, China is very fast and
effectively builds up its presence in and relations with other
developing countries and whole regions: in Africa, Latin America and
Asia. It proves on the practical level that her economic interests
(very often connected with resource exploration and supply) are not
against the social and infrastructural development of those regions
(see the section 'economic flaws'). Western corporations were and are
interested only in skimming the cream (more often than not at the
expense of ecological damage of 'Nuremberg-requiring' proportions)
and couldn't care less about long term economic and social
development of those regions. China's main (intentional and
unintentional) message is: “hey, look what those Western highly
principled, preachy democracies did to you through their
capital-driven corporations in addition to what they had done to you
before during the colonization period! They just robbed you,
anchoring your poverty for ever and making you dependent still more;
after bribing your governments and getting easy profit through
getting easy resources they packed up and got away as soon as
possible without any major investment and settling long term
relationships mutually beneficial for both states. Look at what those
miners did in Africa, look at what their oil companies did in Latin
America etc! But we, socialistic China, are going to have a long
relationship with huge investment in your infrastructure, human
potential, employment market, and exploring difficult resources. We
are going develop your employment market and teach your labour force,
we are going to tighten the cultural connection. We are going to take
you on a long mutually beneficial journey with the work on all
fronts. And don't forget, unlike those 'democracy custodians', those
'human-rights preachers' we've never been involved in any
colonization in the first place. So look, try, compare and chose!”.
That's a terrible blow aimed at the image of Western countries,
because it works not only at the political level, but at the cultural
and social level.' It's not America's starving little Cuban people
with its ruthless sanctions for decades in the name of democracy that
adds to the image of the West and its democratic ideals in the eyes
of the Cubans, but it's definitely China's now coming to Cuba with
its investment that ruthlessly ruins that image and gives some
free-market possibilities and knowledge to the people of Cuba.
Another
very important kind of damage that China is inflicting on the image
and credibility of democracy in general is done unwillingly by her
success against the backdrop of failure of many non-autocratic
capitalistic plutocracies and oligarchies which are advertized or
carry a stamp of approval as 'true and good democracies' by the West
– like Mexico or Pakistan, or South Africa or Greece or India and
many many other countries. China, again, intentionally or
unintentionally, proves in the eyes of many, that, all those
newly-made capitalistic plutocracies masked with some outward
attributes (like elections once per four years and a couple of
political parties) as democracies, in essence give 90% of ordinary
people fewer freedoms, fewer possibilities, less real competition,
less entrepreneurial economic participation than the autocratic
communist-ruled China. Especially well this could be seen in the neighboring India which has continued to drag miserably behind China
in terms of economic development and even economic disparity for a
very long time. Neither Indian state nor the newly born Indian owners
of capital (as usual doubling as the owners of the state itself) are
interested in the real quality-changing investment in infrastructural
development of the country, urbanization, technological development,
to say nothing about the development of the social institutions,
investment in the realization of the social potential, health,
education and standards of living. After some primary distribution of
the capital and power the situation in India became pretty much
frozen. India was no match for China, isn't and won't be as long as
its political capital-based structure doesn't change and the state
will give the first priority to investment in the human resource
instead of serving the interest of politically independent
capital-concentrators. But, as ever, the problem is that the
political power is already in the hands of those capital owners. So
the Indian problems have only started like in many other countries
who chose in the past one of the most dangerous myths: 'democratic
capitalism' instead of democracy.
RESUME
Anglo-Saxon
democracies and their peoples ought to choose once and for all what
they need: democratic capitalism or democracy, free-market or
free-market capitalism, investment in human development for creation
of quality of life or protection of capital for compensation for and
containment of human dissatisfaction.
Learn
long and hard from Sweden and Finland and other Scandinavian
countries of the 22nd
century – Germany is a worse but still quite a worthy example too.
See also on the similar topics:
EU tribulations have political, not economic roots: no democracy - no legitimacy
ECB starts printing money big time: nightmares come true!
Greece will fail without euro? Just another cynical myth?
How can the eurozone be saved by all these summits in the longer term?
Occupy Wall Street is just the tip of the iceberg: social pact of the US is through
Don't be afraid of the word 'socialism' in the 21th century, it can be helpful
Yes, Bradley Manning and Assange deserve the Nobel prize possibly more than Obama does!
A few words about the EU: good idea, but in reality a big fraud
Tax-cuts reduce employment: it's an old conservative myth!
The US has a hopelessly out-of-date political system: reform urgently needed
Some extra about the moral political crisis in the Western semi-democracies
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