China Has Achieved An Economic Miracle
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China has achieved an economic miracle by being one of the few developing countries to shift its status up and into a world superpower. A billion people have together created a modern economy in record time. Only a handful of nations have made the jump to developed economy from developing status in recent times and they are Singapore, Taiwan, and Korea. According to Professor Richard Werner none of the developing nations primarily being helped by the IMF or the World Bank have made this transition. Why is that? Why has the West and the US in particular been so unsuccessful in their efforts to facilitate such economic progress, despite their wealth? In his estimation, as an international economist, it is because the help these financial entities offer is largely exploitative. Bankers just want to make money, it is in their DNA, and they come from investment banks and their associates are still tied to these banks and corporations. Miners and engineering firms are in it for their own profitability above all other considerations when operating in third world places. There are, also, disagreements around economic policy, as there always are in economics.
“For example, in the Asian crisis of 1997, many countries such as Indonesia, Malaysia and Thailand were required by IMF to pursue tight monetary policy (higher interest rates) and tight fiscal policy to reduce the budget deficit and strengthen exchange rates. However, these policies caused a minor slowdown to turn into a serious recession with very high levels of unemployment.”
The Economic Battle Between China & America
America’s attitude toward China in 2023 is aggressively competitive and geopolitically toxic. It is as if they invited China to play in the game they call global economics and were soundly beaten at it, and now are crying cheat and bully to the world at large. Accusing China of massive amounts of cyber espionage and stealing IP from American business. Beating the drums of war and pointing accusatory fingers at Chinese aggression toward Taiwan and in the South China Sea. China is a communist nation and I don’t think they ever tried to hide this. There are constant campaigns directed at drawing attention to human rights abuses by the CCP of its citizens. There is no denying that these things do go on and it would be better if they ceased. However, China is not alone on this score.
“We see this over and over again. U.S. analysts and policymakers reiterate the “upward trend of unhelpful and coercive and irresponsible Chinese actions in the South China Sea” and their threat to Southeast Asia’s maritime interests. And Chinese analysts and policymakers underscore to Southeast Asian counterparts the dangers associated with the so-called U.S. “Cold War” provocations and destabilizing economic policies. This suggests that U.S.-China tensions are leading to growing pressure on Southeast Asian states to make a choice between two critical relationships. “
- (https://www.usip.org/publications/2023/09/southeast-asia-us-china-competition-more-two-player-game)
Human Rights Abuses Begin At Home
What is that saying about people who live in glass houses should not throw stones! If you are a Native American or African American you may have a few things to say about human rights abuses in your own neck of the woods. The land of the free is OK if you are a white man, preferably an Anglo Saxon. Similarly, if you are an Indigenous person in Australia you may not consider your own plight to be so hunky dory. White men like to talk about the world as if they alone own it. The financial systems in our Western nations are set up by these chaps and are designed to favour them. White supremacists in the US have found their orange Jesus and are looking forward to another chapter of favoured status in 2025 and beyond.
American Climate Change Denial
Mark Blyth, another impressively intelligent economist from Brown University, talks about the problem child America has become. Blyth identifies the split in the US, as determined by the carbon dependent economies in the red states vs the blue states. The global warming denial so prevalent within the GOP is a manifestation of the current economic reality for these red states. The supposed ideological opposition to the green transition is driven by the concerns of fossil fuel industries and their investors/employees. The populist Trump is their climate change denying champion. Blyth predicts that Trump will win the next presidential election and put the global energy transition back a decade. Trump’s isolationist policies will feed Putin’s ‘sphere of influence’ aspirations for a new world order, according to Blyth.
China Investing More In Green Transition
Meanwhile China is investing far more in the green energy transition than most other developed economies. China has pumped more into offshore wind than any other nation in the last 5 years. China virtually owns the EV market.
“China once again topped the world in clean energy investments last year, a trend that could challenge U.S. efforts to develop more homegrown manufacturing.
Nearly half of the world’s low-carbon spending took place in China, according to a recent analysis from market research firm BloombergNEF. The country spent $546 billion in 2022 on investments that included solar and wind energy, electric vehicles and batteries.
That is nearly four times the amount of U.S. investments, which totaled $141 billion. The European Union was second to China with $180 billion in clean energy investments.
China also dominated in low-carbon manufacturing, accounting for more than 90 percent of the $79 billion invested in that sector last year, according to the report.”
Remind me who is the bad guy again!
In Australia, the conservative Coalition LNP are in opposition, and their leaders are jumping up and down about the threat China poses. Senator James Paterson and Peter Dutton are both yellow peril tragics. However, with the looming presence of Trump hanging over our major ally it would be wise to remember the complexity inherent within the real world. China is invested in decarbonisation for its own national interests. Global warming will devastate large parts of China. Biden has been rectifying American tardiness in the green energy investment stakes. Economically, the US is travelling pretty well right now, as it comes out of the high inflationary period. Predictions of economic recessions are still rife but we are not there yet.
The seemingly irrational nature of domestic politics in America makes the future uncertain for us all.
Dumb, Disinterested, & Easily Misinformed
The majority of voters all around the planet are not savvy when it comes to global economics and the future of the planet. They vote emotively and this is purposely stirred up by political strategists via their negative campaigning. The other guy in the race is always worse and polarisation is the name of the game. American GOP politicians point the finger at minorities and claim the lefties are under the control of special interest groups. Welfare is seen as a socialist plot. In Australia, a recent referendum to recognise Indigenous people in the constitution was defeated via campaigning rich in misinformation and negativity. Why should these generationally economically disadvantaged people get special treatment? Billions have been wasted on spending on Aboriginal Affairs! Ignorance and low levels of voter educational standards made the job of sowing doubt too easy.
“On the 14th of October 2023, Australians voted on a proposal ‘To alter the Constitution to recognise the First Peoples of Australia by establishing an Aboriginal and Torres Strait Islander Voice.’ Only 39.9 per cent of legal votes were in favour of this change, and there was not a majority or close to a majority in any of the six Australian States (there was a majority, however, in the Australian Capital Territory). In order to support an informed discussion about the referendum and its aftermath, the Australian National University collected a detailed survey immediately following the referendum (the October 2023 Australian Constitutional Referendum Study (ACRS)/ANUpoll) from a broadly representative sample of over 4,000 adult Australians. The survey data is available from the Australian Data Archive (doi:10.26193/13NPGQ).
There is no evidence in the data to suggest that Australians are against the idea of constitutional recognition in general. Of those who were willing to give an opinion as to what their vote would have been if the referendum was just about recognition those who would vote yes outnumber those who would vote no by a margin of almost five-to-one. The vote also did not signal a lack of support for reconciliation, for the importance of Aboriginal and Torres Strait Islanders having a voice/say in matters that affect them, truth-telling processes, or for a lack of pride in First Nations cultures. All of these notions were supported in our survey by around eight-in-ten Australians, or even more. We did find, however, that compared to start of the year, Australians are far less satisfied with democracy, less confident in the government, less satisfied with the direction of the country, and less satisfied with their own life.
Our survey data tells us a few things about who was more or less likely to vote yes. No voters were more likely to be male, older, speaking a language other than English at home, with low levels of education, living outside of capital cities, and living in low-income households. Furthermore, a higher proportion of people who didn’t end up voting said that they would have voted yes when asked in August, implying that low turnout suppressed the yes vote.
There were also a number of attitudinal variables that predicted a no vote. Trust in social media, disliking the Prime Minister, thinking that land rights/native title unfair, and thinking that if Indigenous Australians tried harder they could be just as well off as the non-Indigenous population were all associated with voting no in the referendum. Those Australians who were left-of-centre, those who disliked the Opposition Leader, those who trusted the federal government, those who thought that Indigenous people deserve special cultural protection, those that supported reconciliation, and those that thought that land rights/native title had not gone far enough were all more likely to vote yes.”
The China vs America Race Needs To Be Re-Assessed
China has achieved an economic miracle and it would be useful for all of us to take a breath and step back. Look at the self-interest of the US in the global economy and geopolitically. This is not a case of saints and sinners. It is a far more nuanced situation. The ideological stupidity exposed during the Covid pandemic in America is cause for serious reflection. Nearly a million Americans died in one of the wealthiest nations on earth. Science was disputed for political reasons. Mask wearing during an air borne viral pandemic was made out to be contentious.
President Trump behaved like the incompetent fool he is. Narcissists are not the kind of person you want running the country during times of real crisis. The consequences of global warming are likely to be far, far worse for much longer than the pandemic.
Robert Sudha Hamilton is the author of Money Matters: Navigating Credit, Debt, and Financial Freedom.
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