Wednesday, February 10, 2010

European Chamber of Commerce Warns on China Protectionsim

"Foreigners don't have the money anymore," said the European Chamber. "They just have the know-how. And there is a feeling that China can develop the know-how on its own. What we are seeing is almost an isolationist stance."

Meanwhile, a manager at a retail company put it more bluntly: "The idea that China was one day going to be a lucrative market for foreign companies was just an illusion." 1

China was never going to fully open their economy to the West, particularly their financial sector. And domestic companies will always be favored, and potential profits for foreign run companies shaky. China can't open up too much because of the geographic scale and size of the country. Their leaders aren't idiots and they know fragmentation has historically doomed Chinese empires. Therefore, a powerful central government is of the utmost importance.

Ultimately, an authoritarian government can not integrate into the leadership of global capitalism. Capitalism requires a particular brand of bourgeoisie democracy to be successful - on its own terms - over the long run. This is not to applaud the West for its form of government, which of course is quite imperialistic in its foreign affairs. But China is ultimately a single party system that is going to restrict the 'rights' of private capital and the growth of an independent business class. No matter how much the City of London or Wall Street have stomped their feet, China has maintained control of its banking sector.

Meanwhile, Andy Xie has a presented rather detailed set of ways that trade war could be avoided, few of which look likely to be implemented. The various elites of the world seem to be preparing for war, and ready to drag the rest of humanity along with them.

1'UK businesses threaten to pull out of China over protectionism' - UK Telegraph; Moore, Foster
2'Steering Out of a Smash-Up No One Wants'- Caixin; Xie

1 comment:

thespanishprisoner said...

Are you suggesting there could be a war between the US and China? I would think that would be suicidal for both countries.