In a recent article in the Spectator, Douglas Murray argues that since the Chinese Communist Party, by accident or by design, has destroyed all the world’s economies except its own through its virus exports, the countries of the world ought to get together and demand reparations. Naturally, this is pie in the sky, but the more serious point, which Murray also makes, is that the rest of the globe, saddled with record debts and deficits, will have no-one to bail them out but the Chinese, whose economy is once more riding high, and whose trade-surplus-fuelled cash mountain is bigger than ever. And with no Trump to stand in the way (another victim of the virus), the Chinese will be in the driving seat.
Is there an alternative? The answer is yes: correct the trade imbalance. For without a trade surplus, there is no accumulation of foreign currency to be recycled in the form of foreign investment. In other words, if we do not buy their cheap consumer goods, the Chinese cannot buy up our assets. Unfortunately, the correction is easier said than done. The traditional remedy of currency depreciation is ineffective because the Chinese are not engaged in classical mutually advantageous free trade but have a mercantilist trade policy: it is by maximising exports and minimising imports through trade barriers that they produce the desired surplus. Moreover, we have become addicted to imports of cheap Chinese consumer goods. Just as we enforced trade with China in the nineteenth century on our terms by getting them addicted to opium, so that we could import their blue and white porcelain in return, the Chinese enforce trade with us on their terms through our addiction to cheap plastic consumer goods, so that they can buy up our assets. Financial bonds, land, property, businesses, universities, nuclear power stations, railways, airports, telecommunications – you name it – they are all up for grabs.
Can we kick the habit? Yes, if we impose tariffs and quotas, tax plastic, move the goalposts, anything that curbs our demand for cheap Chinese goods. The catch is that resources would have to be redeployed either toward export industries, or toward domestic industries producing the goods the Chinese used to supply (import substitution), but now more expensively. Either way, prices in the shops would have to rise relative to wages resulting in cuts in living standards. Moreover, we would need to start investing in our own economy, and that would require us as a nation to stop borrowing and start saving again. So higher interest rates and higher taxes would also be needed.
Would any government dare implement such policies? We have not even begun to count the cost of the virus or of a botched Brexit. Much easier to turn a blind eye. Besides, so long as foreign investment (Chinese money) keeps flowing in, and lucrative directorships are on offer for those who smooth the deals, and City financiers get a cut of the business, our ruling elite are laughing.
Interestingly, the post-war Atlee government faced a comparable economic situation in 1945, only much worse. Britain was bankrupt, its overseas assets had been liquidated to pay for the war, it still had huge overseas commitments, and it faced a colossal balance of payments deficit. In those days there were no international money markets to finance the deficit, no foreign investors on hand, and the Chinese were not yet in business. Britain had to pay its own way in the world and there was a peace dividend to deliver in the form of a promised National Health Service, social security, homes, and universal education. Yet the peace dividend was delivered, and exports doubled in five years. Britain launched half the world’s ships and was the world’s leading car exporter. The price paid by consumers was high since most of what we produced was for export, and wartime rationing was continued for another five years. But the job was done. That Labour government can be criticised for many things in hindsight, not least for missing a golden opportunity to shake up Britain’s decrepit manufacturing sector (see Corelli Barnett’s The Lost Victory). Nevertheless, the achievement was immense.
But Britain today is another country. For all their faults, Clement Atlee, Ernie Bevin, Nye Bevan, and the like were patriots with a highly developed sense of public duty. The British people were patriotic too, more-or-less united in a common cause and a common sense of identity. Now look at us, beholden to the Chinese because of our addiction to cheap imports, and our ruling class’s addiction to financial kickbacks.
On the positive side, we do still have some assets we could sell to the Chinese to finance our consumer habit. Rolls Royce and British Aerospace are still nominally British owned. GlaxoSmithKline and AstraZeneca are the world’s fifth and sixth biggest pharmaceutical companies – the Chinese would surely put their labs and drug development programmes to good use. The BBC and The National Trust could be sold off – the Chinese influence might even improve them. And there are all those British dependent island territories scattered strategically around the world, the remnants of empire. Just think what the Chinese would pay, and the sweeteners they would offer, to get their hands on the likes of Ascension Island, the British Indian Ocean Territory, and the Falkland Islands.
Yes, welcome to Global Britain.
It seems to me that a good way for us to affect the Chinese market might be to, rather than seek to avoid products made in China, which is often difficult to manage with any confidence anyway, we buy British.
Not only do company’s that make or sell British products often go out of their way to tell us this, but we then know that they are not made in China and we are helping Brexit.
Where we want product that we cannot provide here, we should then look at the English speaking world… USA + Commonwealth.
Even so one has to be careful, because some British companies merely assemble Chinese goods. It is worth checking with high value goods.
I would not advocate official government tariffs on these purveyors of disease and pestilence, but I would firmly encourage us to take the law into our own hands.
After that, we can organise “Nuremberg 2021”, where we examine the acts and deeds of this chimera of a conservative government.
You can all do your bit on Amazon by avoiding buying stuff made in China,and putting it about how rotten their stuff is, which it is. I can’t think of the number of rubbish goods I have been landed with.
Even better, use Amazon for search and comparison, and then buy what you want from a real shop.
And don’t forget to tell your leftie friends that cheap Chinese goods are made with Mahometan slave labour.
1. China needs the Rest of the World more than the Rest of the World needs China.
2. China esp needs the USA -far, far more than the USA needs China.
3. Ditto (almost) China needs Europe…
4. In terms of its internal challenges -in its geographic debilitations and its natural resource weaknesses- and in its reliance on the Rest of the World for food, fossil fuels, iron-ore and bauxite, science and tech, China is on a Hiding to Nothing.
5. And growth in global demand for Chinese manufactured goods is now decreasing, and that started before the Wuflu plague.
6. And sure, in light of its extreme vulnerabilities, China huffs and puffs, and plays “let’s pretend” about all sorts of things-
-and will continue to do so, until it cracks up -at which time it will howl all the louder.
(Btw, the one-child policy is now presenting China with its natural consequence: Lower numbers in its rising generations to work and generate the necessaries to pay for and care for its older generations. While this ticklish problem also looms in Europe, it will be very, very hard on China, given China’s other weaknesses. And, as the one-child policy esp resulted in far fewer females than males (of course) then, there are many men who must go without women, and increasing numbers of the men will be faced with heavy work-loads in domestic services, looking after the old folk, innit.)
Thing is, the dominant, prevailing view among Western political-economic elites is that a China that cannot feed its 1.4Bn people, and keep ’em occupied in BS-not-actually-productive jobs, would be an even more difficult entity to handle than the China that currently exists.
And related, China is not a powerful “economic” force, nor a powerful “military” force.
Note that 1.0 Bn Chinese live at the material levels of the lower 90% of Nigerians.
Consider also the “belief” that China’s navy is larger than the USN. This howler is made possible by counting the number of vessels afloat, of whatever size and capability, and by ignoring tonnage, and by ignoring China’s non-capacity to project long-range fire-power.
Note that the Japanese navy out-guns the navy of China.
Note also that one USN super-carrier fleet can project more long-distance conventional ordinance than all the other navies of the world combined, including -for emphasis- China’s.
Now reckon in that the USN includes eleven such fleets, and then add in the nukes.
Must observe the right things and add up the right numbers when making assessments of such matters, if one wishes to deal with Actual Reality.
The main immediate and long-term threat from China is that in its existential need to feed its people and control ’em, China’s agents are now infiltrating all Western institutions, and indeed all institutions of all countries, everywhere.
Just one more destructive consequence, among many, of the marxist-inspired, anti-Western idea that multiculturalism in Western nations is nett positive for whites.
Read the article. China has colossal financial power because of its colossal trade surplus because of its mercantilist trade policy. The Chinese do not need military power on the American scale. The Belt and Road Initiative is doing the job of imperial expansion for them just fine. They also have the cyber technology – whether stolen or developed at home is irrelevant – and the totalitarian wherewithal to deploy it aggressively. This is power. It is terrifying. This is the ‘actual reality’.
James, many articles present mistaken views.
Actual Reality, in this case, includes these facts:
1. Chinese business enterprises are not expected to make profits and so make tiny, if any, profits.
This is actually, in reality, a big obstacle to economic growth using existing product groups, let alone being a major barrier to innovation and development.
2. What will China do with the Western debt, bonds and cash it holds?
Pull the plug on the West?
No -who would then pay for its manufactures -money that China needs to pay for imports of food, raw resources, incl fossil fuels, and science and tech -China requires these imports in perpetuity.
3. China needs a flourishing West to produce Western consumers of its manufactures.
4. Chinese business enterprises, as are all Chinese enterprises, are obligated to keep people occupied, not to produce economic surplus, or to be efficient in any way, really.
5. Chinese banking/finance systems are obligated to keep afloat all these forever-close-to-failing enterprises -which means that the entire Chinese economy always teeters on the edge of the Abyss, actually.
Yes, as I said James, Chinese agents are infiltrating all institutions of the West -to make it clear, that is what necessarily accompanies Belt and Road.
Now James, if you have access to such persons, discuss with them the matter of Chinese intellectual talent with Presidents/Vice-Chancellors and research chiefs in Western proper research universities -those who will talk honestly behind closed doors, or better, in distant fields, unwired for sound.
They will tell you that China has problems, still, producing the kinds of intellectual power required in the effective practice of basic and much of applied science.
Something to do with several thousand years of social engineering for conformity.
And James, remember what Max Planck said about science?
“Yes, science progresses, one funeral at a time”.
I mention this here not as comment on the Chinese, but as an observation of many in the West, scientists and civilians, who cannot make progress in their abilities to comprehend complex and ambiguous matters, beyond the reach of the concepts and information that they imbibed in their earlier schooling and university education, or occasionally pick up, in ill-informed articles channeled in various media, or from anti-Westernist academics whiling away their time in Western universities at the expense of nett wealth-producing, tax-paying Westerners.
Bit of a challenge for all of us -which must be confronted.
As Oscar Wilde and/or Yogi Berra would say:
“In dealing with facts, it is best to be empirical.”
Cheers James, and all best wishes to you for a Very Happy Christmas and a Flourishing 2021.
So Harry, you argue that the CCP is no threat to the western world or to its own citizens, and you heavily mock those who do, modestly pointing out the great inferiority of their intellectual abilities compared to your own. So I’m curious concerning what you say about the critics’ many accusations. These include the CCP’s massive militarisation program in recent years, its notorious use of massive industrial espionage to do so, its constant threats to invade peaceful and still free Taiwan, its illegal militarisation of the South China sea, its financial control of multiple developing nations by using indebtedness as a weapon, the infamous totalitarian regime monitoring and controlling so many aspects of people’s private lives, its intimidation and silencing of the heroic doctors trying to warn the world of the Wuflu and pandemic, its corrupt control of the WHO and other UN bodies, the persecution and disappearance of Hong Kongers, Christians and Falang Gong or anyone else with beliefs deemed incorrect by the CCP, the ongoing destruction of mosques, churches and temples, and those awful reports of hundreds of concentration camps in which torture, sterilisation and organ harvesting are state-sanctioned as part of the slow cultural genocide of Uigyurs and Tibetans. I guess these reports are simply delusions in our ignorant f western minds, not empirical facts at all. I’m guessing, but the very humanitarian CCP must be so pleased to have intellectually-superior defenders like you.
No Nick – you are dead wrong in what you take me to say.
The CCP is clearly mounting a massive assault on the world.trying to secure systems to feed its peoples.
But its external military threat is of minor consequence.
And China needs the world more than the world needs China.
China’s economy always stands on the edge of oblivion.
It’s all there in my various posts.
When assessing threats, it is necessary to look at the actual threats, not the false/fake ones.
And Nick, for these five decades or so, I have had comments such as yours directed against me -by persons who were unable to grasp what they have not previously grasped.
That annoyed me in the past, but now I mostly chuckle and simply say:
You are dead wrong in your reading of my comments, and perhaps you are envious of my superior take on things.
As for Uighurs, I am more concerned about the Islamist insurrection across the West.
Anyway, you have done me no harm -how could you.
And I wish you a very Happy Christmas and a 2021 in which your intellectual-emotional system might flourish.
The literature on all aspects of the new Chinese global imperialism and Han supremacy in books, articles and online research is now massive and irrefutable. So is the continuing supply of technology and aid to Beijing from western sources, an error that repeats the fatality of supply to the USSR documented by Sutton, Costick, Levinson, &c.
Western unity and co-operation in self-defence against this Y*ll*w P*r*l aka “socialism with Chinese characteristics” is at least as imperative as protection against Islamic terrorism and African population dispersal.
How ironic that in the 1940s and 1950s political opinion even among dedicated democrats like Hendrik Brugmans, Lewis Way, General Gavin and Hugh Dalton visualised a Europe-Africa development – now China-Africa threatens.