Why Western pundits want China to fail
By Jeremy Garlick Source:Global Times Published: 2016-1-26 21:23:01
Since the start of 2016,
there has been a proliferation of downbeat prognoses about the dire state of
China's economy in the Western media. Respected organs such as The Economist
and The Wall Street Journal have opined that it is a question not of if but when
China's economy will suffer a sharp downturn.
The Wall Street Journal gives China five more years before everything collapses. The Economist states that Beijing has mismanaged the Chinese economy, in particular by seeking to control its currency the yuan (RMB) for too long.
To add to these pessimistic prognostications, investment bank Goldman Sachs has advised its clients to abandon the sinking Chinese ship and get their money safely out.
It goes so far as to claim that "China risks an unsustainable increase in its debt-to-GDP ratio, which could push the country past the tipping point into economic and, in all likelihood, political instability."
Elsewhere, influential pundits such as George Soros have placed the blame for global economic woes squarely on Beijing's shoulders.
Soros, in a Bloomberg Business interview direct from Davos, Switzerland, where the World Economic Forum is staging its annual meeting, states that China is already in the middle of a "hard landing" and that things are only going to get worse.
The difference between the financial crisis of 2008 and today's emerging problems, according to Soros, is that in 2008 Western financial institutions were to blame, due to submerging themselves in dodgy debt, particularly US subprime mortgages. This time, however, it is the fault of the Chinese government, which has let public debt balloon out of control and created a bubble economy that is soon due to deflate.
Soros is right that the 2008 crisis was due to flaws in the structures of Western economies and financial institutions. What he does not take account of is in the years since the subprime meltdown those flaws have not been fixed.
Like over-burdened pack animals, developed countries such as Japan and the US are still limping along with ever-growing mountains of unsustainable debt on their backs and minimal or zero growth. Large amounts of cash have been injected in order to keep these laboring beasts alive.
So how has the global economy managed to keep staggering along these last few years? For the most part, on the back of Chinese, export-led growth.
But instead of being grateful for the ride, now that Chinese growth is slowing, as it inevitably must, Westerners point their fingers to say, "It's all your fault, nothing to do with us."
In essence, it is Western capitalist economics that have put the world where it is today. But instead of accepting responsibility for the mess, Westerners seek to pass the blame onto China.
Of course, China has its problems, and they are serious ones. China has severe industrial over-capacity, a housing bubble, excessive debt, over-reliance on exports, and so on.
But the Chinese government knows all this full well, and has therefore been seeking to transform the economy for the last several years.
It is trying to do this by switching to a more services-based model domestically and developing overseas initiatives such as the "One Belt, One Road" initiative and the Asian Infrastructure Investment Bank (AIIB) in order to generate productive work for Chinese companies that will also stimulate other economies, especially untapped developing ones.
The necessary transformation of the Chinese economy is going to be very difficult to achieve because of its immense size.
This does not mean that it is automatically going to fail or that Chinese leaders do not understand how to accomplish it. It means that there are inevitably going to be mistakes made on the way and a lot of major bumps on the road.
So why are so many Western pundits and media outlets so intent on talking China down?
Precisely because, although they are right that China is facing some serious problems and is highly likely to go through hard times at some point in the next few years (as all developing economies inevitably do at some point), it is in their interest to pin responsibility for any coming slowdown, which the law of economic gravity suggests must come sooner or later, on China rather than themselves.
The author is lecturer in international relations, Jan Masaryk Centre for International Studies, University of Economics in Prague. opinion@globaltimes.com.cn
The Wall Street Journal gives China five more years before everything collapses. The Economist states that Beijing has mismanaged the Chinese economy, in particular by seeking to control its currency the yuan (RMB) for too long.
To add to these pessimistic prognostications, investment bank Goldman Sachs has advised its clients to abandon the sinking Chinese ship and get their money safely out.
It goes so far as to claim that "China risks an unsustainable increase in its debt-to-GDP ratio, which could push the country past the tipping point into economic and, in all likelihood, political instability."
Elsewhere, influential pundits such as George Soros have placed the blame for global economic woes squarely on Beijing's shoulders.
Soros, in a Bloomberg Business interview direct from Davos, Switzerland, where the World Economic Forum is staging its annual meeting, states that China is already in the middle of a "hard landing" and that things are only going to get worse.
The difference between the financial crisis of 2008 and today's emerging problems, according to Soros, is that in 2008 Western financial institutions were to blame, due to submerging themselves in dodgy debt, particularly US subprime mortgages. This time, however, it is the fault of the Chinese government, which has let public debt balloon out of control and created a bubble economy that is soon due to deflate.
Soros is right that the 2008 crisis was due to flaws in the structures of Western economies and financial institutions. What he does not take account of is in the years since the subprime meltdown those flaws have not been fixed.
Like over-burdened pack animals, developed countries such as Japan and the US are still limping along with ever-growing mountains of unsustainable debt on their backs and minimal or zero growth. Large amounts of cash have been injected in order to keep these laboring beasts alive.
So how has the global economy managed to keep staggering along these last few years? For the most part, on the back of Chinese, export-led growth.
But instead of being grateful for the ride, now that Chinese growth is slowing, as it inevitably must, Westerners point their fingers to say, "It's all your fault, nothing to do with us."
In essence, it is Western capitalist economics that have put the world where it is today. But instead of accepting responsibility for the mess, Westerners seek to pass the blame onto China.
Of course, China has its problems, and they are serious ones. China has severe industrial over-capacity, a housing bubble, excessive debt, over-reliance on exports, and so on.
But the Chinese government knows all this full well, and has therefore been seeking to transform the economy for the last several years.
It is trying to do this by switching to a more services-based model domestically and developing overseas initiatives such as the "One Belt, One Road" initiative and the Asian Infrastructure Investment Bank (AIIB) in order to generate productive work for Chinese companies that will also stimulate other economies, especially untapped developing ones.
The necessary transformation of the Chinese economy is going to be very difficult to achieve because of its immense size.
This does not mean that it is automatically going to fail or that Chinese leaders do not understand how to accomplish it. It means that there are inevitably going to be mistakes made on the way and a lot of major bumps on the road.
So why are so many Western pundits and media outlets so intent on talking China down?
Precisely because, although they are right that China is facing some serious problems and is highly likely to go through hard times at some point in the next few years (as all developing economies inevitably do at some point), it is in their interest to pin responsibility for any coming slowdown, which the law of economic gravity suggests must come sooner or later, on China rather than themselves.
The author is lecturer in international relations, Jan Masaryk Centre for International Studies, University of Economics in Prague. opinion@globaltimes.com.cn
Comments
Lasme
Diedro
Pay
attention: You named Goldman Sachs, George Soros ... Not all who you named but
most of them are bankers and Zionists. Now take a quote from a famous Zionist
banker Mayer Amschel Rothschild: “Let me issue and control a nation’s money and
I care not who writes the laws.” Add to this the fury that the west is
unleashing onto the rest of the world: i.e. Russia, Americas, Africa the middle
east ... Same trend towards China.
A pack of twisted, snooty bankers -mostly Zionists and imperialists- too delusional to consent that they are the source and creator of many political and economic woes around the world –in essence they are the problem- are hell-bent on twisting Communist China’s arm to surrender its wealth to them after they botch their own economies: i.e. “Why Western pundits want China to fail”. They are not interested in fixing political and economic issues as noted in Rothschild’s quote, they want to control China’s money –liquidate its SOEs, loot its assets and plunder its money through the capital markets. Somewhat in their twisted mind, they are convinced that they can achieve this through the capital market -with the aid of their western abettors, the mainstream media that they own and with the money stashed away in the Bahamas, in tax havens. The goal is: Tank China’s economy, take over and own it –like in Africa or in the Americas. Unsurprisingly, we hear and see a lot of China muddying not because it is a dominant conversation but because the mainstream media is forcing the narrative to vanguard.
For them Xi Jinping’s reform – which by the way is excellent and going well- holds a different denotation. They want Xi Jinping’s reform to be chaotic –kind of a Gorbachev’s perestroika: “hectic privatization, rampant corruption, deep-seeded mistrust within China Communist Party and social unrest as it happened in Russia in the 90’s. Then the west –the bandits- will creep in with their bankers to plunder China’s SOEs, assets and wealth. The mechanism is simple: own china assets through the capital market.” Then as in Rothschild’s quote, take control the nation’s money; next, wreak havoc on China –unleash hell on China as they did in Russia in the 90’ and wish to redo or in China case take the country back to the west and Japanese occupation era.
The bankers and their abettors loathe Xi Jinping anti- graft policy most because money in the Bahamas and Switzerland is sitting, waiting to unleash onto China the type of hell and corruption served to Russia in the 90’s but Xi is standing in the way. Make no mistake, they don’t admire Li Keqiang and the communist party either, they loathe Li’s economic expertise and the communist party coolness.
This is nothing new, when Pope Clement V made the belief in the right to usury a heresy in 1311 forbidding Christian from handling usury, he forced the monarchs to thrust Jews in the position of financiers. The same thing happened when Muslim adopted laws against usury. Zionists have since developed a complex -somewhat messianic- and self-canonized as exceptional state financiers as it is often accepted in the west and the US of A. This is why this gang of culprits abhor communism. China Communism does not incorporate this religious heresy that can be exploited.
It will truly be ironic but commendable, to see the culprits –the bankers and the imperialists- bring the capital market to its demise and Communist China takes total command of the world economy.
A pack of twisted, snooty bankers -mostly Zionists and imperialists- too delusional to consent that they are the source and creator of many political and economic woes around the world –in essence they are the problem- are hell-bent on twisting Communist China’s arm to surrender its wealth to them after they botch their own economies: i.e. “Why Western pundits want China to fail”. They are not interested in fixing political and economic issues as noted in Rothschild’s quote, they want to control China’s money –liquidate its SOEs, loot its assets and plunder its money through the capital markets. Somewhat in their twisted mind, they are convinced that they can achieve this through the capital market -with the aid of their western abettors, the mainstream media that they own and with the money stashed away in the Bahamas, in tax havens. The goal is: Tank China’s economy, take over and own it –like in Africa or in the Americas. Unsurprisingly, we hear and see a lot of China muddying not because it is a dominant conversation but because the mainstream media is forcing the narrative to vanguard.
For them Xi Jinping’s reform – which by the way is excellent and going well- holds a different denotation. They want Xi Jinping’s reform to be chaotic –kind of a Gorbachev’s perestroika: “hectic privatization, rampant corruption, deep-seeded mistrust within China Communist Party and social unrest as it happened in Russia in the 90’s. Then the west –the bandits- will creep in with their bankers to plunder China’s SOEs, assets and wealth. The mechanism is simple: own china assets through the capital market.” Then as in Rothschild’s quote, take control the nation’s money; next, wreak havoc on China –unleash hell on China as they did in Russia in the 90’ and wish to redo or in China case take the country back to the west and Japanese occupation era.
The bankers and their abettors loathe Xi Jinping anti- graft policy most because money in the Bahamas and Switzerland is sitting, waiting to unleash onto China the type of hell and corruption served to Russia in the 90’s but Xi is standing in the way. Make no mistake, they don’t admire Li Keqiang and the communist party either, they loathe Li’s economic expertise and the communist party coolness.
This is nothing new, when Pope Clement V made the belief in the right to usury a heresy in 1311 forbidding Christian from handling usury, he forced the monarchs to thrust Jews in the position of financiers. The same thing happened when Muslim adopted laws against usury. Zionists have since developed a complex -somewhat messianic- and self-canonized as exceptional state financiers as it is often accepted in the west and the US of A. This is why this gang of culprits abhor communism. China Communism does not incorporate this religious heresy that can be exploited.
It will truly be ironic but commendable, to see the culprits –the bankers and the imperialists- bring the capital market to its demise and Communist China takes total command of the world economy.
Lasme Diedro
Economist and Statistics Professor
Economist and Statistics Professor
No hay comentarios:
Publicar un comentario