A Tale of Two Countries: Why is the U.S. Drowning in its own Blood while China Prospers?

Your perspective of China does carry some degree of truth to it. But we need to keep in mind, its not an issue of whose system of government is better, but rather, what are the Chinese doing to address poverty in their country.

Let me address it from another angle, rather than discussing who is getting $2/day and how many or who are the billionaires, etc.

In 1980, China's power grid was roughly 50,000 MegaWatt (MW). 50 GigaWatts (GW) for ease of arguement. The US on the other hand, had a power grid that produced 500 GW, ten times the size of China. Today, both China and the US have roughly 1,000 GW, with the US a hair more and the Chinese a hair less.

In order to sustain this industrial growth, China had to insulate her economy from the West while exposing it where she could compete, and that is in the area of selling her cheap labor. If the West had had her way with China, China would have become a playground for the West, opening resorts, casinos, cruise lines to China, etc. Much like Cuba in the 1950's. In fact, China of the 1920's and 1930's (especially around Shangahi) was like a giant version of 1950's Cuba (except without the latin music :). Where the buying power of the West simply comandeered their economies however the West wanted them to and not how those countries wanted to develop.

China's economic model is an ever changing set of policies based on their current level of economic development. And here is the kicker; their policies, is based on what they learned at Harvard Business Schools, Oxford Business Schools, etc. And before 1980, they were also applying Western economic thought, it was called Marxism (and obviously, it didn't work).

Getting back to my electricity argument, obviously, China is better off today than 1980, when electricity production was only 1/10th the size of the US. Today, it is about equal. However, the flip side is that China has over four times (4X) the population of the US and obviously does not have the standard of living of the US. And it is evident in that the average Chinese has less than 1/4 of the electricity available to them than their American counter part.

The question now is, will China, continue to evolve her economic policies in such a way, so that she can be producing 4,000 GW of electricity by 2040-2050 time frame. This isn't an issue of who has the better economic model, but how does China adjust her economic policies in the backdrop of a Western World suspicious of her economic rise.

China has been slowly exposing more and more of her economy to the world as she continues to grow economically. But exposing those areas only until it is clear she can compete and it benefits her. If she doesn't do that, she will return to the days of "Old Shanghai". That probably wouldn't hurt the feelings of Westerners, but its not the way the Chinese people want to go.

Thank you for the information.

In this case I think that I would have backed the Chi-Coms against the Western efforts you described. It smacked of returning China to the 19th Century it seemed to me.

It did not happen but still the Party leaders had to "address poverty in their country." Even today the (only?) existential threat is the widespread social unrest getting out of hand and turning into a revolution.

Yes the Chi-Coms did a great job creating an infrastructure for what was needed.

However, I see "Deng's market socialism, as a version of Lenin's New Economic Policy. Like Lenin the Chi-Coms needed capitalism to save the revolution.

IMO today the Western corporations (whom Lenin referred to as useful idiots) have surrendered their technology, intellectual property, skills -- or it was stolen -- and now it's time for them to be kicked out of China.

"The People" will now own the means of production.

Perhaps the labor dispute with foreign-owned (at least in part) enterprises is the first step?

I personally don't believe that Western entities will ever be kicked out again like what happened in 1949. China knows all to well that it isn't healthy for her own economy.

What is happening, is that there is a deliberate attempt to use government policies to nurture Chinese owned industries. On the surface, it can seem like rolling up the welcome mat. But in reality, it isn't. Keep in mind that GM and Volkswagon are currently the largest auto producers in China.

So, to nurture their own corporations, China institute policies that give preference to Chinese corporation. For example, giving government subsidies to automobiles with engines less than 1.6 litres. Foreign automakers don't build them in China.....yet. So in the meantime, Chinese auto makers are given some breathing room. And these are policies, I'm sure, the Chinese have looked at and could likely cite historical Western examples of governmental policies to aid domestic firms.

Another example is that China is trying to produce their own commercial aircraft. They aren't going to simply kick Boeing and Airbus out. In fact, industrial cooperation is actually increasing between these two manufacturers and China. What China will do, is provide heavy subsidies to China's own domestic airlines to buy Chinese built aircraft when her first full size commercial aircraft is due to roll out in 2016. Something that Airbus did for all the world's airlines by giving subsidies. So, once again, China merely is taking a page out of Western policies to build up her economy.

And China cannot merely nationalize her industries. It simply doesn't work. Rather, she will do everything she can to ensure she is part of the global picture, except not to be at the mercy of foreign entities, but to have her own home grown corporations.

Just as America cannot wipe out debt owed other countries (such an act would cause a massive pull out of investments), the Chinese cannot simply take over or nationalize businesses as this would cause a massive fear of anyone wanting to do business in China in the future.

What China is doing, is trying to build up her own corporations through subsidies. And keep in mind, China wants corporations to make overseas investments.

China's overall investments around the globe is only in the tens of billions of dollars, vs trillions for the US. Japan alone has invested hundreds of billions just in the US. And they're not even the largest foreign investors into the US. The British are (think of companies like BP).

Lastly, I wasn't trying to imply that Westerners would deliberately undermine China's economy had she exposed all of it. But the natural buying power of wealthy nations is to spend in such a way as not always build up local industries. Local governments must deliberately implement policies to build industries. Otherwise, you would naturally have situations like Cancun Mexico, Mazatlan, etc. Or to buy natural resources like what had been happened between the US and Latin America back in the 19th century.

Governments involvement in building industries is important. Don't forget, that during the 1930's, in the US, FDR was accused of communism himself. He instituted government programs to build up infrastructure, power grid, etc. Many believe the depression actually helped America prepare for WWII.

And Teddy Roosevelt himself broke up monopolies held by Robber Barons back in the early 1900's. He may have been accused of being a communist as well. Anyway, my point isn't that I believe in communism, but that the West is full of examples where government intervened to either build up domestic industries or to do what they thought was right for the economy.

And during the 1970's, Australia had a strengthening currency because of all the natural resources she sold abroad. This crippled Australia's auto industry. So the Australian government had to subsidize their auto industry to help it survive.

My overall point is, the Chinese government involvement in their own economy is many pages taken from Western school of thought, not their own. They cherry pick Western policies that have historically been used (and ....maybe.... create some of their) to navigate their economy within the global economy.

Excellent. Thank you.

I have enough awareness to understand it. I do not have the knowledge to write it but I am aware.

Obviously there are things that could derail, if you will, the mother of all leaps -- and this time the leapers appear to know what they are doing.

I however do not trust the Communists. I am old enough that every atrocity was a contemporaneous event and even as a child I followed the news -- ever since that Saturday night in June 1950 as we Kentucky hillbillies were enjoying the Judy Canova show when the bulletin interrupted to announce that North Korea had invaded South Korea. ("The North invaded Berea?!" "No, Grandpa. Korea. It's a country in Asia.")

Maybe I'll change if I never hear a Chi-Com ask something like, "How would you like it if Los Angeles got nuked?" Or my favorite, "We can afford to lose [insert current population of the U.S. here] how many can you afford to lose?"

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.