24 January, 2014

THE CHINESE CENTURY



A number of anxious, paranoid articles recently written by Americans suggesting “we don’t need to worry about China, we’re still the biggest and the best,” made me wonder: are we still in the American century?
Christopher Matthews “China’s Economy Could be bigger than America’s,” in TIME.com, is an anxious look at this theme, along with this “let’s be good losers” consolation:  

The upshot is that the Chinese economy could already be bigger than our own. Does this knowledge make you feel any different? No? Well, it shouldn’t. That’s because, fortunately, economics isn’t about competition. It’s about collaboration.  Americans should hope for the Chinese economy to grow because that means there will be a larger market for the goods and services we create here in the U.S.”

Of course, half the articles that come up on the Internet is propaganda for one country or another, each suggesting their economy is doing fabulously well, and the other one’s economy is down in the dumps. However, there’s always a few indicators of what the real state of affairs might be. For instance, the BBC article here states that:
China has claimed that it is "very likely" that it overtook the US as the world's top trading nation, a title the US has held for decades.

According to the latest data, China's total trade grew at an annual rate of 7.6% to $4.16tn (£2.5tn) last year.

The US is yet to release it full-year figures, but its trade for the first 11 months of 2013 totalled $3.5tn.

Now is this real, or a bit of boosted up data from China? Well, from my own personal experience, I’d say that China’s trade has probably overshot the USA’s a while back. I think back to the last time I bought a piece of American manufactured clothing or goods. The Apple Mac I was bought in Thailand in 2010 was assembled in China-I hope Steve Jobs got a tiny percentage of royalty just before he died. Even the last Coca-Cola I drank was probably in 2005 or 2006-when I was in a remote area of Nepal and there was no clean water. The last Hollywood movie I watched in a theatre was The Titanic, in 1998.

Other than that, I give a great deal of money to the Chinese economy. I wear Chinese shoes, jeans, and even underwear. I buy fake North Face jackets from Khasa. Despite my best attempts to buy local, I hazard a guess all the sweaters, skirts, leather shoes and glass baubles I bought in my trips to Italy, Spain and France were made in China.  I am certain even the” Hmong village” I visited in Chiang Mai, where one lone woman sits ingeniously knitting an indigenous bag, is filled with Hmong inspired goods made in a factory in Guangzhou. 

Something tells me much of the goods in Bangkok’s markets are probably made in China. All Hollywood movies I watch are on DVD, pirated in China. Even the oatmeal we eat is made in China. 

The Chinese have also started to do this ingenious trade where they will take the nice, spicy ginger and tasty local garlic from Nepal for a cheap price, then send us watery, tasteless ginger and garlic, probably doused with chemicals and pesticides, from China for a high price. How can they not be doing good trade, with this sort of ability to bargain and negotiate?

Then there’s the fact that China keeps cordial relationships with all of the Muslim world; has never invaded a Middle Eastern country or tried to impose sanctions on an entire population; has never tried to assassinate Latin American leaders with cancer; builds, instead of destroys, nice highways and hospitals for everyone from the Nepalese to Africans (whether we want them or not); has never tried to use its foreign aid program to wipe out people’s seed stock with genetically modified seeds; doesn’t operate a drone program; has to people’s knowledge never kept political dissidents awake with secret sleep deprivation torture; and in general behaves politely and with great restraint in other people’s countries. This really helps to maintain trade relationships. 

Clearly, the Chinese have been following the “Art of War” by Sun Tzu to the letter, while the Americans let Dale Carnegie’s “How to Win Friends and Influence People” fall by the wayside. Guess who’s the better student here?

Unlike America, which preaches about freedom and democracy on the outside, while supporting a 54 billion dollar national security apparatus that has effectively separated from any chain of command and is running around the world secretly persecuting people in ways the ordinary American has no idea about, China has made some strum and drang about oppressing Tibet overtly, while secretly building trade links with all the Tibetans on the inside. Or as my Tibetan friend said to me a while back: “They may appear to protest China, but on the inside almost all the Tibetans are trading and working with the Chinese businessmen now.”   Richard Gere would be distressed to know the extent of the collaboration.

It is not a matter of “When China will overtake the American economy.” It is now a question of: “How much has it already overtaken the American economy?” While the Americans waste their time on stocks and bonds, and keep playing with illusory numbers, and bad Hollywood movies, China has been quietly and humbly making, and selling real objects, with real hard cash, since the beginning of this century, or possibly even a decade before that. It has changed the lives of people (whether we wanted it to change, or not.) Everyone now has warm clothes, and basic electric gadgets, and household items of use, because of China. 

China’s economic growth is unclear in terms of numbers, no doubt. But the Americans may be erring on the side of too much caution by thinking the Chinese are hiding their losses. In fact, it is equally possible they may be hiding a lot of economic activity and profit that even the Chinese government may have no idea about. 

The question now is  not: Is China bigger than America? The question is: how much bigger is it? And to answer that question you’d need more data than that generated by government surveys and tax forms.

An Austrian girl I met recently told me scornfully: "The Chinese go on these one week European trips where they run from one European capital to the other, hitting the main tourist hotspots. What do they expect to see in this strange way?"

These may be the lower middle class tourists who do their once-in-a-lifetime European tour in this manner. What I noticed in Oxford in the summer of 2012 was this—buses full of Chinese tourists who were bringing their children on a summer tour. They were literally hundreds of Chinese on the streets of Oxford. And these were not the poor Chinese. These were the rich ones, toting giant cameras that Europeans may not be able to afford now there’s an economic crisis, chatting and laughing and drinking coffee in throwaway cups. This is a China that the West has yet to notice.

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