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Yearend laurels for China’s performance from friendly media in the West abounded in recent weeks. While the Chinese are enjoying the praise, they are cleverly suppressing news about factory closures, economic riots and workers being sent back to their home provinces in 2009.
But China did something worse at the climate change summit in Copenhagen last month. To garner sympathy it branded itself a developing country in the same class as India, Brazil and South Africa.
The Chinese also fiercely opposed any international monitoring of their carbon dioxide emissions data. This can be understood to mean that China’s economic and carbon dioxide emission statistics for the past 25 years were a hoax. With outlandish claims, the country is about to announce that it is the second or third largest economy in the world.
Disallowing outsiders to collect any data in China is basically admitting that their own statistics are below par. China strictly controls the preparation and distribution of economic data. It is well known that Chinese statistics have been faulty for the past 25 years.
Even the World Bank and the International Monetary Fund have fallen victim to this ruse. This is because there is only one source of data in China, the official statistics. If there are deliberate falsifications in the data it is not their fault.
Still, China definitely had something to show in 2009. The Chinese deposited an additional US$300 billion in the U.S. banking system, mainly their export earnings. Now the United States can spend the money to get out of recession.
The Chinese beat the recession by offering a US$581 billion stimulus package, none of which was new money, but funds already planned for development. Their banks lent close to US$1.4 trillion to the country’s failing industries, real estate and other state corporations in 2009. If the loans go bad, which they will, China will have another Dubai on their hand.
And the Chinese built the world’s fastest train – another showpiece for 2009. They were also praised for the architecture of their Olympics Stadium in 2008. Years earlier they were praised for the Three Gorges Dam, a massive undertaking but built in an earthquake-prone zone. An earthquake could cause 50 million causalities should the dam burst.
While showcasing its remarkable achievements, China still claimed to be a developing nation at Copenhagen. The Copenhagen summit revealed what angry analysts in the West can come up with. When the Chinese refused to make concessions, the Western media was suddenly full of reports as to how polluted China is.
U.S. President Barack Obama’s failed visit to Beijing was another feather in the Chinese cap. He went hoping to reset and balance economic relations, but did not succeed. The Chinese did not agree to change and reset the yuan-dollar relationship, which is the main engine of China’s growth. Nor did they agree buy more American goods. After all, it is the United States that needs China’s money. All that China continues to buy are light industrial goods, all duty free.
Obama also failed even to get assurances from the Chinese that in next 10 years U.S.-China trade would be balanced. The visit should not have taken place, as with trouble in the U.S. economy at home, Obama had nothing to showcase.
Last year was also a banner year for China striking major international business deals. Although two large deals totaling US$20 billion and US$3 billion with Rio Tinto and Coca Cola failed, PetroChina together with its offshore oil company are close to acquiring a US$15 billion Argentinean oil company. Other oil deals in South America, Africa and Central Asia have either been successfully closed or are in the process of being completed.
Presently, the Chinese are aggressive in acquiring oil assets abroad, even looking into the India-Pakistan-Iran gas deal. Can you imagine piping gas economically some 8,000 kilometers away? Only the Chinese can think like that.
Closer to home, they strongly objected to the Dalai Lama’s trip to his birthplace in India’s Arunachal Pradesh state. They even persuaded Obama not to meet him in the White House during his trip to the United States. All previous U.S. presidents since the days of President Richard Nixon have invited the Dalai Lama to the White House.
China is also cozying up with Myanmar with military supplies to grab as much of its gas and oil as possible. But deals may be short-lived as the Myanmar junta has begun to cozy up with the West. Also, India has signed a deal to develop a river navigation system on a common river between India and Myanmar. This does not sit well with China. However, it appears that Myanmar’s ageing leadership that signed most deals with China may be relenting to pique the West.
On the social and educational front, the Chinese have predicted that they will have command over the English language by 2010. English is the language of international business and the Chinese need to master it quickly. Their timeframe is based on hiring a large number of foreign teachers on short-term temporary basis. They fail to understand that a new language cannot be mastered in a jiffy. But the Mandarins in Beijing are after statistics to show the results of their campaign.
Chinese cities in the last ten years have been transformed, and their unique political system can be credited for this. But citizens have no choice if a Communist Party directive tells them to vacate a particular piece of land or location to make room for a high-rise office or commercial building. Failure to obey can bring severe punishment.
Then, within months, a construction crew transforms the landscape. It is true that displaced people are looked after. But it is not their choice where they wish to live and work. It is the Mandarins in Beijing that determine that. If this formula were tried elsewhere the political landscape would surely change.
The United States is to be blamed for allowing China to expand its influence outside of its own territory. Now it is uncontrollable. Chinese money and cheap goods have hooked the West, especially the United States.
The only way out for the United States is to unhook itself from China’s money stream, after which it can talk about balancing U.S.-China trade. This may involve forcing the Chinese into a new dollar-yuan relationship. Failing that, the only choice would be countervailing import duties.
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(Hari Sud is a retired vice president of C-I-L Inc., a former investment strategies analyst and international relations manager. A graduate of Punjab University and the University of Missouri, he has lived in Canada for the past 34 years. ©Copyright Hari Sud.)
