Page 54 - AEI Insights Vol. 7 2021
P. 54

AEI Insights, Vol 7, Issue 1, 2021




               Accelerating collision course already leads to the subsequent calls for a strategic decupling (at
               best, gradual disengagements) of the two world’s largest economies and of those in their orbits.
               Besides marking the end of global capitalism which exploded since the fall of Berlin Wall, this
               may finally trigger a global realignment. The rest of the world would end up – willingly or not
               – in the rival (trade) blocks. It would not be a return to 1950s and 1960s, but to the pre-WWI
               constellations.
               Epilog is plain to see: Neither more confrontation and more carbons nor more weaponized trade
               and traded weapons will save our day. It failed in our past; it will fail again any given day.


               Entrapment in Imitation
               Interestingly, China opposed the I World, left the II in rift, and ever since Bandung of 1955 it
               neither won over nor (truly) joined the III Way. Today, many see it as a main contestant, a
               leader from the global South. But, where is a lasting success?
               There is a near consensus among the economists that China owes its economic success to three
               fundamental factors. Firstly, it is that the People’s Republic embraced an imitative economic
               policy (much like Japan, Singapore, Taiwan or ROK did before) through Deng-proclaimed
               opening. Second goes to a modest domestic consumption, and German-like thick home savings.
               Finally, as the third factor that the economists attribute to Chinese miracle, is a low production
               costs of Sino nation – mostly on expenses of its aging demography, and on expenses of its own
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               labor force and country’s environment.  In short, its growth was neither green, nor inclusive,
               nor sustainable. Additionally, many would say that Beijing mixes up its nearly obsessive social
               control, environmental negligence and its dismal human and minority rights with the right to
               development.
               Therefore, many observers would agree that the so-called China’s miracle is a textbook
               example of a highly extractive state that generates enormous hidden costs of its development,
               those being social, environmental and health ones as much as expanding and lasting. And
               indeed, energy-intensive exports (especially carbon footprint) from China as well as its highly
               polluting industrial practices (overall ecological footprint) were introduced to and then for a
               long while tolerated in People’s Republic by the West.
               Further on, China accepted a principled relation with the  US (Russia, too), but insists on
               transactional one with its neighbors and BRI (Belt and Road Initiative) clients. This reduces
               the choice (offered by the two protagonists) on selection between the colonial democracy and
               authoritarian paternalism.

               None of the above has an international appeal, nor it holds promise to an attainable future.
               Therefore, no wonder that the Imitative power fights – for at home and abroad – a defensive



               5  High tech and know-how appropriation via mandated/forced technology transfers and copy-cats, joint ventures,
               discriminatory patent-licencing practices and cross-sectoral state-led industrial modernisation have lifted China
               up the value chain. No wonder that its GDP per capita has jumped from $194 (1980) to over $9,000 (2019).
               Beijing is modernising its navy, and is engaged in international economic expansion and geopolitical projection
               via its Belt and Road Initiative, and so far has bought, built or is operating 42 ports in 34 countries. In the
               meantime, Washington is publicly lamenting return to a  ‘worker-focused trade policy’  –  as the US Trade
               Representative Robert E. Lighthizer calls it – and openly objecting to both ‘market-distorting state capitalism in
               China and a dysfunctional WTO’. “No trade policy decision since the end of WWII proved more devastating to
               working people than the extension of permanent normal trade relations to China in 2000. Despite President
               Clinton’s predictions… , the opposite occurred” – he concludes. (FAM, 99/04/20)
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