Social, Political and Economic forces in Global Finance
China the Dragon, or Tiger?
China’s rapid economic growth story from the last couple of decades is remarkable but not unusual in Asia. The Chinese experience has been the last one of a set of economic growth stories of ‘tiger economies’ that include post-war Japan, South Korea, Taiwan, Hong Kong and Singapore. All of these economic projects had been well provided with capital, technology, markets and deals but although these tigers did very well, they were slower to establish service-economies and create a middle-class.
From the Western perspective, China was another one of these ‘types’ of economies with that ‘type’ of potential. In his speech, Bill Clinton incorrectly and naively asked if China ‘will…be the next great capitalist tiger…or the world’s last great communist dragon and a threat to stability.’ Through the lens of the Western liberal democracy ‘end of history’ utopian ideal it was inconceivable that the Chinese, given the choice, would make any other decision.
Bizarrely, this type of mistake is the mistake of a Marxist ideology — an eschatological belief. That the past was a series of divine events that must lead to this terminal and permanent result. Into this bizarre naivete from the leadership of globalist organisations, supra-national organisations bounded into China with abandon, funding businesses they would never get their capital out of, supplying technology that new competitors would soon take and securing short term personal profits as company executives without any national allegiance and securing a dysfunctional, delusional globalist ideal that all roads lead to utopia and/or Davos.
On paper, China could have been another Asian tiger and decided to participate in the existing global order. However, in practice, it was primed with Marxist ideology that begins with perceiving an us/them David and Goliath concept of the world, and ends by aligning the political institution with manufactured social power through manipulation of the population.
These beliefs on the Chinese side illuminate an obvious path — one that took advantage of the buffet of international business practices from a liberal global order who believed that they had achieved the ‘end of history’ idealised state of human co-existence. It was plain to the Western global elite that China would choose ‘great capitalist tiger’, forced to participate in acceptable international relations rather than become ‘the world’s last great communist dragon and a threat to stability’. The depth and number of Western cultural failures during this time gave us entrenched political dynasties in the United States, even with their concepts of ‘separation of powers’ and ‘term limits’. Both sides of US Government abused their own ideological symbols of power through the cynical employment of their ideals for personal and political gain, these being ‘nationalism’ on the part of Republicans and ‘liberalism’ on the part of Democrats.
In the absence of ideals of nationalism and a cultural break-down that included the idea that no morality existed at all was the pursuit of money and power — the mistake with China was and is Western Greed. What Deng Xiaoping had suggested to his Communist comrades, the Americans already knew very well from Gordon Gecko in the 80s, leading into the 90s and 2000s — to get rich is glorious. Competing cultural ambitions were out and American material greed had been formally posed as a question of morality. It is good! ¹
China the Bad Faith Economic Actor
So, only 13 years after Bill Clinton’s naive speech, Obama was expressing ‘deep concerns’ to Xi about Chinese Intellectual Property theft — with a 2017 report estimating a cost between 225 and 600 billion dollars annually. Obama may have led the US initiative to pivot to the pacific for strategic reasons, but something like 1.6 trillion dollars was lost between his ineffective chat and the 2017 report.
China simply did not allow competition it could not benefit from — with Sony Electronics, Marks & Spencer, Metro, Home Depot, Best Buy, Revlon, L’Oreal, Seagate, Panasonic, shutting up shop. The most powerful technology companies did nothing in China. Google and Uber made no impact and neither did Facebook. In analysing foreign companies closing their doors, the consulting firm Bain & Company cited ‘Unclear laws and inconsistent interpretation of them’. The home-team advantage is the more appealing aspect of biased Chinese business conditions, which include shakedowns and the arrest and jailing of company executives.
The Western world’s technocratic rationalisations, globalist ideals and most of all weak cultural willpower stopped us from seeing the thing in front of our face. The Chinese plan had not been a secret. What has emerged since is an admiration of Stalinist ideological purification including the domestic removal of potential political opponents, the co-ordination and streamlining of state, economic, military and political ideology, and Xi doing the ‘dictator-in-military costume’ thing at military parades that suggest a different beast to other Asian tiger economies.
A Chinese Professor, Chong Tai-Leung, of the Chinese University of Hong Kong (Feb. 2017) even said that ‘China doesn’t need foreign companies so badly now in terms of acquiring advanced technology and capital as in previous years, so of course, the government is likely to gradually phase out more of these preferential policies for foreign firms.’
It’s clear what this means in the context of ‘Unclear laws and inconsistent interpretation of them’. China has been playing bait and switch with Western/global corporations with their cultural superficiality and the ‘end-of-history’ idealism of globalist organisations very successfully. China can play the man — no global or national identity stands behind the individual or the organisation, just a very weak and cynically employed ideal most commonly used to convert the Western public to private initiatives.
Interestingly, active attempts to obtain Intellectual Property had been boosted under Donald Trump. There was an obvious change in spirit from China after the 2016 election. Trump was very vocal about closing the door to China in his presidential run and unlike politicians in the western world, the Chinese are gracious enough to take western politicians at their word.
So it has been obvious for years that China has ambitions of hegemonic power and with millions in camps and political purges it has become a dragon, but it was the vulnerabilities of the Western World/Global elite that allowed this existentially risky development into Asia.
¹ This is literally the case. In neo-liberalism the single-minded pursuit of profit and ‘free’ markets was perceived as delivering the highest public good — of delivering billions from poverty, of providing clean water, food e.t.c. Pursuit of profit became indistinguishable from absolute moral good.
Author: Thomas Kuhn CFA, Mine Digital
https://minedigital.exchange/
