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FTR#1312 This program was recorded in one, 60-minute segment.
Introduction: This program updates the ongoing destabilization of China.
Key Points of Analysis and Discussion Include:
1a.–Presidential emergency declarations have made it legal for the U.S. to test chemical and biological weapons on the American people.
1b.–The importation of solar panels has been made more difficult and opaque by virtue of the “Uighur genocide/human rights violations’ meme.
1c.–A recent op-ed piece in The New York Times reinforced the Uighur genocide meme.
2.–An expert opinion on the Biden administration ban on chips summed up the essence of the ban: “ . . . . Though delivered in the unassuming form of updated export rules, the Oct. 7 controls essentially seek to eradicate, root and branch, China’s entire ecosystem of advanced technology. ‘The new policy embodied in Oct. 7 is : Not only are we not going to allow China to progress any further technologically, we are going to actively reverse their current state of the art,’ Allen says. C.J. muse, a senior semiconductor analyst at Evercore ISI, put it this way: “If you’d told me about these rules five years ago, I would’ve told you that’s an act of war—we’d have to be at war.’. . .”
3.–The U.N. report on alleged human rights violations in Xinjiang was fundamentally flawed: “ . . . .It is well known but worth noting, that no Islamic country has criticized China for human rights abuses and, despite many visits, none have alleged crimes against humanity by China . . . . optimism was dashed by this report being released around midnight on her last day in office and without any signature or commentary from her interestingly, it is not signed by anyone, let alone anyone in authority; the authors, like many of the witnesses, remain anonymous. . . .”
4.–Despite sanctions, Huawei has developed a new 7nm chip for its latest mobile phone.
5.–With characteristically propagandized coverage, the U.S. MSM feeds the public a steady message of doom and gloom over China.
6.–Qualcomm will be particularly hard hit by the new Huawei chips/phones.
7.–The doom and gloom over China has been sounded in the past and proved to be fallacious.
. . . . These same emergency powers give the President the power to lift the bans on testing biological weapons on US citizens. . . . Yet another emergency declaration provides the authority for the US government to test biological weapons on American citizens. . . . US code allows the president to suspend existing law on biological and chemical warfare in the event of a declared national emergency. . . .
2. “The Silicon Blockade” by Alex W. Palmer; New York Times Magazine; 7/16/2023.
. . . . Though delivered in the unassuming form of updated export rules, the Oct. 7 controls essentially seek to eradicate, root and branch, China’s entire ecosystem of advanced technology. ‘The new policy embodied in Oct. 7 is : Not only are we not going to allow China to progress any further technologically, we are going to actively reverse their current state of the art,’ Allen says. C.J. muse, a senior semiconductor analyst at Evercore ISI, put it this way: “If you’d told me about these rules five years ago, I would’ve told you that’s an act of war—we’d have to be at war.’. . .
. . . . It is well known but worth noting, that no Islamic country has criticized China for human rights abuses and, despite many visits, none have alleged crimes against humanity by China . . . . optimism was dashed by this report being released around midnight on her last day in office and without any signature or commentary from her interestingly, it is not signed by anyone, let alone anyone in authority; the authors, like many of the witnesses, remain anonymous. . . .
4. “How Sanctions Failed To Hinder China’s Development;” Moon of Alabama; 09/04/2023.
These headlines related to China are demonstrating a very fast historic development:
- Why Do the Chinese Copy So Much? — IHT/NY Times, July 25, 2012
- 26 Things That China Ripped Off — Insider, August 27, 2013
- Chinese Tech Firms Are Increasingly Being Copied by U.S., Not Just Copying — The Street, June 28, 2018
- World Record-Breaking Drone Swarm From China Puts on Magical Show — Nerdist, June 10, 2018
- Pentagon unveils ‘Replicator’ drone program to compete with China — Defense News, August 28, 2023
From the last link:
The Pentagon committed on Monday to fielding thousands of attritable, autonomous systems across multiple domains within the next two years as part of a new initiative to better compete with China.
The program, dubbed Replicator, was announced by Deputy Defense Secretary Kathleen Hicks, speaking at the National Defense Industrial Association’s Emerging Technologies conference here.
“Replicator will galvanize progress in the too-slow shift of U.S. military innovation to leverage platforms that are small, smart, cheap and many,” Hicks said.
China’s industry developed by copying designs from other producers. But it only took a few years until it started to produce better or new products for new markets. Historically this is nothing new. Germany’s industrial development happened by ripping off British manufacturing processes and products. A few years later industrial German products could compete with British ones and the Brits started to copy Germany technology.
In 2018 China demonstrated large swarms of coordinated drones that could draw moving pictures into the sky.
Now the Pentagon wants to replicate such capabilities.
replicate: verb — If you replicate someone’s experiment, work, or research, you do it yourself in exactly the same way.
I have been given a DJI drone as a gift. It is an excellent product. It is light enough to stay within legal limits. It has good flight characteristics, with excellent design and usability of hardware and software. It is reliable and comes at a reasonable price. Even the packaging was very well designed and underlined the value of the product.
Asides from way too expensive Apple products I am not aware of many U.S. or European mass market products that come near to its overall quality level.
If China’s military gets drones of the quality that Chinese companies produce for consumers it is likely a generation ahead of everyone else.
It is doubtful that the Pentagon, with its lengthy procurement processes subject to Congressional graft, will ever catch up with that.
In 2019, when Trump sanctioned Huawei by denying it access to modern chips, I wrote:
Huawei currently uses U.S. made chips in many of its smartphones and networking products. But it has long expected the U.S. move and diligently prepared for it:
...
Soon U.S. chip companies will have lost all their sales to the second largest smartphone producer of the world. That loss will not be just temporarily, it will become permanent.The moment of reckoning has come.
Last week Huawei presented its new cell phone Mate 60 Pro. Since the sanctions were implemented the company has developed genuinely new CPUs for cell phones as well as for other equipment. Bloomberg reports of the teardown and preliminary analysis of the processor by a U.S. company. It is fairly complicate system-on-a-chip that is to 100% made in China:
tphuang @tphuang — 2:25 UTC · Sep 4, 2023
Kirin 9000S teardown so surprising
Includes CPU, GPU, 5G modem, ISP, DSP + NPU (w/ Ascend lite/tiny cores + TPU)
All this squeezed into 110 mm² die w/o stacking
...
Oh, 9000S in teardown/testing showed better overall CPU performance & power consumption than 9000 & SD 888 + had better peak CPU performance than SD 8 Gen 1 all this w/o advanced packaging.Huawei could do this because it is an extraordinary company that was created by an extraordinary man:
Ren Zhengfei, founder and CEO of Chinese telecoms equipment maker Huawei Technologies, urged the US-sanctioned tech giant to maintain its technological lead in specific areas and focus on developing internal talent, according to his latest speech published on the company’s employee website on Monday.
“Huawei will save talent, not US dollars,” Ren said in the speech, which he delivered on July 28. “We will try hard to lead in some business aspects globally, not all aspects. For our products, the boundary can be relatively narrow, but our research boundary can be wider.”
In his July speech, Ren said the best motivation for talented workers is passion.
“I think the material reward is not that important,” he said. “The first thing is that [the worker] finds a position he has passion for … If he can work on something he is interested in, he will have no regrets.”
Ren added that no one is good at all aspects of a business from day one and that it takes time for people to grow their talents beyond a single specialised field. “[In time], you will see who becomes a leader. It’s a natural process,” he said.
That sounds like a company I would like to work for. Huawei’s response to U.S. sanctions was not to give up but to hire more people:
Talent recruitment has long been important for Huawei. Ren initiated a programme known as “Top Minds” in 2019, just months after the company was blacklisted by the US government. That recruitment drive, later dubbed the “Genius Youth” programme, gave priority to candidates whose research had produced “tangible and impactful” results and winners of top research honours, according to an advertisement posted by Huawei on Weibo at the time.
Huawei has 207,000 employees globally, according to its website, and 55.6 per cent are research and development personnel. This is up from the end of 2021, when the company said it employed 195,000 people, with 54.8 per cent of them in R&D.
That is an extremely large research and development company to which a smaller production and sales arm is attached. Western finance and business attitude would never allow for something like it.
That is just one reason why the U.S. is losing the tech war with China:
Western media, for the most part, has ignored a remarkable array of Chinese pilot products in industrial automation, executed primarily by Huawei, the world’s largest maker of telecommunications infrastructure and the target of a global suppression campaign by the United States. Fully automated factories, mines, ports, and warehouses already are in operation, and the first commercial autonomous taxi service is starting up in Beijing. Huawei officials say the company has 10,000 contracts for private 5G networks in China, including 6,000 in factories. Huawei’s cloud division has just launched a software platform designed to help Chinese businesses build proprietary AI systems using their own data.
This again proves that sanctions can not end development when a certain base is already there:
Restrictions on technology exports to China at best are a stopgap. Eventually, China, which graduates more engineers each year than the rest of the world combined, will develop its own substitutes, as ASML, the world’s premier maker of chip lithography equipment, avers. Even as a stopgap, though, the controls are failing. They impose high costs on China in several ways but have not impeded the Fourth Industrial Revolution. On the contrary: the limited adoption of Fourth Industrial Revolution technologies by American industry is concentrated in firms that have major commitments to China.
...
To maintain a technological edge over China, we will have to spend an additional several hundred billions of dollars, train a highly-skilled workforce, educate or import more scientists and engineers, and provide broader incentives to manufacturing. It is simply too late to try to suppress China. That is no longer within our power. What remains within our power is to restore American pre-eminence.Well, good luck with attempting that.
5. “Media Say ... Gloom And Doom In China;” Moon of Alabama; 09/06/2023.
The New York Times, and other western media, are running a ‘doom and gloom in Xi’s economy’ campaign.
The latest entry is this piece:
China’s Economic Pain Is a Test of Xi’s Fixation With Control
The core claim is this:
Consumers are gloomy. Private investment is sluggish. A big property firm is near collapse. Local governments face crippling debt. Youth unemployment has continued to rise. The economic setbacks are eroding Mr. Xi’s image of imperious command, and emerging as perhaps the most sustained and thorny challenge to his agenda in over a decade in power.
But lets look at the sources the author quotes to make up ‘evidence’ for his claims:
- Neil Thomas, a fellow at the Asia Society’s Center for China Analysis, said in an interview
- Some experts say ...
- not all observers believe that China’s economy is in a sharp downward spiral. But ...
- Chinese internet users circulated an essay by a retired Hong Kong businessman, Lew Mon-hung ...
- Liu Shijin, a retired senior Chinese government economist, said ...
- said Alicia García Herrero, the chief economist for Asia-Pacific at Natixis
- said Bert Hofman, director of the East Asian Institute at National University of Singapore
- said Ms. García Herrero, the economist
- Some Chinese economists and former officials have warned
- Lou Jiwei, a former minister of finance said in a recent video interview with Caixin
The author of the gloom and doom piece is:
Chris Buckley, the Times’s chief correspondent in China, where he has lived for most of the past 30 years
If Chris Buckley lives in China why doesn’t he quote even one person who is really involved in China’s economy or policy making? Isn’t there any active Chinese politician or Chinese CEO or Chinese economist or Chinese worker he could quote?
Why is he quoting an Asia Society fellow?
Founded in 1956 by John D. Rockefeller 3rd, Asia Society is a nonpartisan, nonprofit institution with major centers and public buildings in New York, Hong Kong, and Houston, and additional locations in Los Angeles, Manila, Melbourne, Mumbai, New Delhi, Paris, San Francisco, Seattle, Seoul, Sydney, Tokyo, Washington, D.C., and Zurich.
Why is he mentioning the disgraced Lew Mon-hung?
In 2016, he was found guilty and imprisoned after being found guilty of perverting the course of justice by asking Leung, in letters and emails, to stop the Independent Commission Against Corruption (ICAC) from investigating him.
Why is he quoting the Vice-something professor of this or that Liu Shijin?
Former Vice-President (Vice-Minister), Development Research Center. Currently, Vice-Chairman, China Development Research Foundation.
Why Bert Hofman, the Dutch ‘expert’ of the EU financed Mercator lobby?
Why ask a Spanish ‘economist’ from a French investment bank?
Natixis is a French corporate and investment bank created in November 2006 from the merger of the asset management and investment banking operations of Natexis Banques Populaires (Banque Populaire group) and IXIS (Groupe Caisse d’Epargne).
Natixis provides financial data for the ‘Markets’ section on the news channel, Euronews. On October 26, 2010, Natixis Investment Managers (NIM) has acquired a majority stake in asset management start-up ‘Ossiam’.
Why use some other outlets interview with the retired Lou Jiwei without giving this (2019) context?:
Lou Jiwei, who has long been seen as a liberalizing force in China, an advocate of market reform and international openness. He served as finance minister, ran the country’s massive sovereign wealth fund, and has palled around with western economists since the 1980s. But recently he made a prediction that contained a startling phrase: At a forum in Beijing, according to reporting in the South China Morning Post, he said: “The next step in the frictions between China and the United States is a financial war (jinrong zhan). The U.S. has been hijacked by nationalism and populism, so will do everything in its power to use bullying measures [and] long-arm jurisdiction.”
In this financial war, he continued, the U.S. will exploit its dominance of the international financial system to hurt China—and China will fight back.
Now back to what matters:
Godfree Roberts @GodfreeTrh — 11:17 UTC · Sep 3, 2023
REALITY: Only four economies have ever grown by $1.5 trillion in a year, and 2023 will see the fifth. All five boom years are Chinese, of course. Its economy is booming and so are wages: 4.7% nominal rise last year, 4.2% after inflation. Bwahahah.
FT: China’s economic slowdown reverberates across Asia https://ft.com/content/...
But it’s all gloom and doom in China. The NYT says so.
With its backs to the wall, Huawei was forced to power its 2022 Mate 50 flagship line and its early 2023 P60 flagship line with the 4nm Snapdragon 8+ Gen 1 SoC. However, in order to obtain the license the manufacturer would need to buy these chips, they had to be tweaked not to support 5G. For the recently introduced Mate 60 Pro flagship model, Huawei surprised everyone by equipping the phone with its homegrown Kirin 9000s SoC built by SMIC (China’s largest foundry) using its 7nm process node.
This was a surprise because, as far as anyone knew, SMIC didn’t have the equipment to build smartphone-quality 7nm chipsets. For example, China is banned from receiving shipments of extreme ultraviolet lithography (EUV) machines. These expensive and big machines have an important job. They etch the extremely thin circuitry patterns onto a silicon wafer. These lines are a fraction of the width of a human hair and allow billions of transistors to fit inside a chip.
Only one company in the world makes these machines, Dutch company ASML, and it is following the U.S. government’s desire to keep these $150 million machines out of China. While the U.S. is concerned enough to investigate how Huawei and SMIC were able to build the Kirin 9000s, one U.S. company that faces an impact is Qualcomm. According to TF International’s superstar analyst Ming-Chi Kuo, Qualcomm is the “big loser” from Huawei’s ability to have its homegrown Kirin chips produced.
The just unveiled Huawei Mate 60 Mate Pro is the first Huawei phone in three years powered by a 5G Kirin chipset
According to Kuo, last year Huawei purchased 23 million to 25 million chipsets from Qualcomm with that number rising to 40 million to 42 million this year. As Huawei continues to use its Kirin chips next year, Qualcomm will not only lose all of the business it was getting from Huawei, but it also will lose business from non-Huawei Chinese phone manufacturers who will ship fewer phones due to tougher competition from Huawei.
Kuo says that Qualcomm’s SoC shipments to China next year (2024) will be 50 million-60 million units lower than this year and will keep dropping every year. The analyst says that his survey forecasts that as soon as the fourth quarter of this year (which starts next month), Qualcomm will start a price war in China in order to regain market share. However, this will result in lower profits.
Qualcomm has two other issues it needs to worry about, according to Kuo. One is a higher-than-expected market share for the Samsung Exynos 2400, a deca-core chipset that Samsung is expected to use on some Galaxy S24 series phones next year instead of the Snapdragon 8 Gen 3. The other issue is that Apple will be using its own homegrown 5G modem chip replacing Qualcomm’s in 2025.
7. “Forecasting China?” by Nathan Sperber; New Left Review; 09/08/2023.
Nobel Prize-winning economist Paul Krugman does not mince his words:
the signs are now unmistakable: China is in big trouble. We’re not talking about some minor setback along the way, but something more fundamental. The country’s whole way of doing business, the economic system that has driven three decades of incredible growth, has reached its limits. You could say that the Chinese model is about to hit its Great Wall, and the only question now is just how bad the crash will be.
That was in the summer of 2013. China’s GDP grew by 7.8 per cent that year. In the decade since, its economy has expanded by 70 per cent in real terms, compared to 21 per cent for the United States. China has not had a recession this century – by convention, two consecutive quarters of negative growth – let alone a ‘crash’. Yet every few years, the Anglophone financial media and its trail of investors, analysts and think-tankers are gripped by the belief that the Chinese economy is about to crater.
The conviction reared its head in the early 2000s, when runaway investment was thought to be ‘overheating’ the economy; in the late 2000s, when exports contracted in the wake of the global financial crisis; and in the mid-2010s, when it was feared that a buildup of local government debt, under-regulated shadow banking and capital outflows threatened China’s entire economic edifice. Today, dire predictions are out in force again, this time triggered by underwhelming growth figures for the second quarter of 2023. Exports have declined from the heights they reached during the pandemic while consumer spending has softened. Corporate troubles in the property sector and high youth unemployment appear to add to China’s woes. Against this backdrop, Western commentators are casting doubt on the PRC’s ability to continue to churn out GDP units, or fretting in grander terms about the country’s economic future (‘whither China?’, asks Adam Tooze by way of Yang Xiguang). Adam Posen, president of the Washington-based Peterson Institute, has diagnosed a case of ‘economic long Covid’. Gloom about China’s economic prospects has once again taken hold.
That there are structural weaknesses in the Chinese economy is not in dispute. After two waves of dramatic institutional reform in the 1980s and 1990s respectively, China’s economic landscape has settled into a durable pattern of high savings and low consumption. With household spending subdued, GDP growth, slowing over the past decade, is sustained by driving up investment, enabled in turn by growing corporate indebtedness. But despite this slowdown, the current bout of doomsaying in the English-language business press, half investor Angst, half pro-Western Schadenfreude, is not an accurate reflection of the fortunes of China’s economy – plodding, but still expanding, with 3 points of GDP added over the first six months of 2023. It is rather an expression of an intellectual impasse, and of the flawed conditions in which knowledge about the Chinese economy is produced and circulated within the Western public sphere.
The essential thing to bear in mind about Western coverage of the Chinese economy is that the bulk of it responds to the needs of the ‘investor community’. For every intervention by a public-minded academic like Ho-fung Hung, there are dozens of specialist briefings, reports, news articles and social media posts whose target audience is individuals and firms with varying degrees of exposure to China’s market, as well as, increasingly, the foreign policy and security establishments of Western states. Most analysis of China strives to be of a directly useful and even ‘actionable’ kind. The stream of profit- and policy-oriented interventions, aimed at a small section of the population, shapes the ‘conversation’ on the Chinese economy more than anything else.
Two further features follow from this. First, the most salient preoccupations of Western commentators reflect the skewed distribution of foreign-owned capital within the Chinese economy. China’s economy is highly globalized in terms of trade in goods but not in terms of finance: Beijing’s capital controls to a large degree insulate the domestic financial sector from global financial markets. Overseas financial capital has only a handful of access points to China’s markets, meaning international exposure is uneven. China-based companies with foreign investors, offshore debt or listings on stock markets outside of the mainland (that is, free of China’s capital controls) generate attention precisely in proportion to their overseas entanglements. Thus countless news articles over the past two years have been devoted to the defaulting saga of real estate giant Evergrande – a Hong Kong-listed firm that has relied on dollar-denominated debt. Journalists and commentators may be gearing up to give the same high-visibility treatment to Country Garden, another troubled property developer with a Hong Kong listing and offshore debt. By contrast, the Wall Street Journal or New York Times subscriber will be forgiven for not remembering the last time they read an article about State Grid (the world’s largest electricity provider) or China State Construction Engineering (the world’s largest construction firm) – two companies less dependent on global finance and over which international investors are unlikely to lose any sleep.
The second feature relates to the financial industry’s reliance on the art of political-economic storytelling to sell investment options. Clients with money to invest want more than an analyst’s projection about the likely rate of return on a given investment product; they want a sense of how that product fits into the ‘bigger picture’ – into an overarching tale of opportunity, innovation or transition in one part of the market, in contrast to vulnerability, decline or closure elsewhere. Discussion of the Chinese economy is regularly inflected by narrative arcs of this marketable variety, whether ‘bullish’ or ‘bearish’. These have included, for instance: the theory of Xi Jinping ushering in a third wave of institutional reform – ‘Reform 3.0’ – at the Central Committee’s third plenum in November 2013 (nothing of the sort happened); fears of a ‘hard landing’ if not a ‘Lehman moment’ during China’s financial volatility of 2015 and 2016 (GDP growth remained close to 7 per cent); and belief in the inevitability of China ‘rebalancing’ from investment to consumption through the 2010s (the investment share of GDP has remained above 40 per cent since 2003). Such narratives, which seem to be crafted in response to the storytelling needs of Western investors and financial intermediaries, become magnets for public debate. The ‘rebalancing’ story, for example, served as a compelling inducement to invest in consumer-facing sectors of the Chinese economy – until it gradually lost credibility. Some money was made along the way, and some lost, and in that sense the story was partly successful on the industry’s own terms even though it was a poor reflection of economic fact.
That so much of the discourse on China’s economy takes shape in response to investor interests may also explain its susceptibility to short-term reversals of sentiment. As a rule, the performance of financial markets is more volatile than that of the real economy, and in China’s case it is mostly the former – to which overseas investors are most exposed, if unevenly – that drives perceptions of the latter. Hence the sharp mood swings from bullish to bearish and back, from one financial cycle to the next. In part fluctuating with the vagaries of market sentiment, Anglophone commentary also lacks consistent, credible criteria with which to assess China’s economic performance. How much growth is enough? What kind of economic expansion would it take for China not to be in a ‘crisis’? In 2009, as the Chinese government was unleashing a spectacular wave of bank lending to stimulate activity in the aftermath of the global financial crisis, it was widely believed that growing the economy by 8 per cent was necessary to avert mass unemployment and social instability. That benchmark has now conveniently vanished from view; nobody in the West today would dream of saying China should aim to grow by 8 per cent per year. And is GDP growth itself an adequate metric of economic strength? The significance that Chinese authorities attribute to GDP performance has declined. The official target for 2023 is an approximate one – ‘around 5 per cent’ – affording a measure of leeway, meanwhile the Fourteenth Five-Year Plan (2021–2025) dispenses with an overall GDP target altogether.
In addition to protean standards for evaluating performance, there is also a degree of confusion about how to interpret major developments within the Chinese economy, especially in relation to the intentions of policymakers. The travails of the real estate sector are a case in point. The slow-motion collapse of over-indebted Evergrande has repeatedly been portrayed in the Western media as a calamity in waiting for the entire Chinese economy, in yet another iteration of the ‘Lehman moment’ trope. This elides the fact that the Chinese government deliberately prevented highly indebted property developers, including Evergrande, from accessing easy credit in the summer of 2020 – a measure since referred to as the ‘three red lines’ policy. Of course, no large-scale corporate default and restructuring is desirable per se. But it appears that failures like Evergrande’s have been treated by Chinese authorities as the price of disciplining the property sector as a whole and reducing its weight in the broader economy. Although the real estate downturn, with investment declining sharply in 2022, has weighed negatively on China’s overall growth performance, this seems to be the consequence of a concerted attempt to ‘rectify’ the sector – whose shrinking share of total economic output, even at the cost of GDP growth, might well be described as a positive development.
A starting-point for a more level-headed approach to the Chinese economy is to put the current moment in a longer-term perspective. China’s economy was comprehensively transformed in the 1980s and 1990s. As a result of the waves of reform that defined those decades, agricultural production passed from the collective to the household; state industries were converted into for-profit enterprises; the allocation of goods, services and labour was thoroughly marketized; and a powerful private sector was born, expanded rapidly and was consolidated. Since this era of intense institutional restructuring ended in the early 2000s, China’s GDP has more than quadrupled in real terms but the country’s fundamental economic structure has remained stable, in terms of both the balance between state-owned enterprises and private capital, and the precedence of investment over consumption. In this context, instances of significant change – technological upgrading, the expansion of capital markets – have been slow-moving. The decline of GDP growth is itself a protracted affair, and the essentials of the present configuration are likely to endure for some time. China’s economy is neither a ‘ticking time bomb’, as Joe Biden daringly opined last month, nor – an overused expression – ‘at a crossroads’. The China bulls of the West may well continue to morph into China bears and vice versa in the coming years, while the Chinese economy indifferently trudges on.
Once again, the Western media Establishment, and sadly some on the left, are talking up an impending economic disaster in China, when the truth is quite the opposite, shows John Ross
IN THE last four years, covering the period of the Covid pandemic, China’s economy has grown two-and-a-half times as fast as the US, 15 times as fast as France, 23 times as fast as Japan, 45 times as fast as Germany, and 480 times as fast as Britain.
To add in smaller G7 countries, China has grown four times as fast as Canada, and 11 times as fast as Italy.
China’s outperformance of advanced capitalist countries is even greater in per capita terms — a still better measure of productivity changes and potential for increasing living standards.
China’s per capita GDP grew three times as fast as the US, five times as fast as Italy, 44 times as fast as Japan or France, and 260 times as fast as Britain — while per capita GDP fell in Germany and Canada.
China’s outperformance of developing capitalist countries shows the same pattern — China’s per capita 4.4 per cent GDP annual average growth compares to 2.6 per cent in India, 1.3 per cent in Brazil, or 0.9 per cent in South Africa.
What is important about such economic growth, of course, is not abstract statistics but its meaning for the real lives of ordinary people.
The International Labour Organisation data on real, inflation-adjusted, wages shows that up to the latest available data — for most countries to 2022, and for India to 2021 — China’s annual real wage growth was 4.7 per cent.
For Britain it was 0.1 per cent, for the US it was 0.3 per cent, in France it was minus 0.4 per cent, in Germany minus 0.7 per cent and in India minus 1.3 per cent.
Given this enormous economic outperformance by China of capitalist countries, any rational discussion that should be taking place in Western mainstream media about the international economic situation would be, “why is China’s economy hugely outperforming the US and the rest of the capitalist West?” and, “what lessons are to be learned from China’s socialist economy that is so outperforming the West?”
For the left, the issue that needs to be assessed and publicised is, “Why are real wages rising 18 times as fast in China as in the US, 44 times as fast as in Britain, while in France, Germany or India real wages are falling?”
Indeed, the present author would argue that much greater stress should be placed on the latter point. The international left has begun to absorb that China has lifted more than 850 million people out of World Bank-defined poverty in 40 years — by far the greatest poverty reduction achievement in human history.
But it has not yet internalised how rapidly not only the poorest but average living standards are rising in China — far faster than in any Western country.
But, of course, this real economic situation can’t be discussed in the mainstream media, because its conclusions would be too damaging for the capitalist West.
Instead, a type of mad discussion is unfolding, with US claims about China’s economy becoming increasingly bizarre — one might say deranged — as they get further and further out of touch with reality.
President Joe Biden, for example, recently made a speech claiming China’s economic growth rate is “around 2 per cent,” when it was 5.5 per cent in the first half of this year and, as already noted, China’s economy is growing two-and-a-half times as fast as the US.
Biden bizarrely claimed that in China “the number of people who are of retirement age is larger than the number of people of working age” — entirely false, and inaccurate by a figure of many hundreds of millions of people.
Discussion in the US financial media equally refuses to face real facts. Because I am an economist, every morning, after the overall news, I switch on Bloomberg TV to catch up on the latest economic data. Discussion there is like Alice Through the Looking Glass — the book the principle of which is that everything is reversed compared to the real world.
Apparently, according to Bloomberg’s analysis, China’s annual average of 4.5 per cent a year growth in the last four years is an economy in severe crisis, whereas the US’s 1.8 per cent is allegedly strong growth — not to speak of Britain’s 0.1 per cent. Similar rhetoric, out of all contact with factual reality, pervades the Financial Times, The Economist, or the Wall Street Journal.
The left is well used to such US political lying — the completely fake claim that North Vietnamese ships attacked US naval vessels on August 4 1964 in the Gulf of Tonkin, used to launch the Vietnam war, or the equally untrue claim that Iraq had weapons of mass destruction to justify the US invasion, were classic examples.
Today, the US systematically lies about the state of China and its own economy because it is crucial for US capitalism to prevent its own citizens, and close allies, from understanding the real economic trends.
It is further proof, if one were needed, of the truth that if the real world and a theory do not coincide only one of two things can be done. One is to abandon the theory, the other is to abandon the real world.
In this case, the theory is that the US, because it is capitalist, should outperform socialist China. The real world is actual economic performance — in which China continues to outperform the US and other capitalist countries by an enormous margin.
Unable to abandon its theory the US is therefore forced to abandon the real world — hence the demented denial of comparative economic performance noted at the beginning of this article.
While the left should expect lies from capitalism what is rather shameful is that some sections of the left repeat such nonsense — apparently believing that if they put in a few left phrases into an analysis taken from the Western press this constitutes “socialist” commentary.
For example, an article in the New Left Review’s Sidecar called China a “zombie economy.” Some “zombie” when China’s economy is growing anywhere between two-and-a-half times and 480 times as fast as any major capitalist economy.
The real data shows the reality is simple. China has far outgrown any Western capitalist economy for more than 40 years. It continues to do so.
The result in China is by far the world’s most rapid rise in living standards — not only for the poorest but for the whole average population. It is known as the practical advantage of socialism. It is fact. We know why the US has to make up big lies about it. There is no justification for sections of the left echoing them.
This article was originally published by the Morning Star.
John Ross Senior Fellow at Chongyang Institute at Renmin University of China and the winner of China’s top book award for foreign writers on China.
Thanks. I’ve recognized since 2020 that COVID-19 was/is a U.S. bioweapon attack on China. The following article, which appeared early in 2020, gives a good statement of the basic evidence:
https://metallicman.com/laoban4site/was-the-2020-wuhan-coronavirus-an-engineered-biological-attack-on-china-by-america-for-geopolitical-advantage
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