The Other Source of Global Imbalances : China

In this blog, I have written extensively (here, here and here) about the economic crisis we are experiencing, focusing on the financial crisis, the western world and the way capitalism has been denatured from its original characteristics by an oligarchy of corporate interests.

In this post, I would like to write about the other crisis, the industrial crisis, and about the other major source of global imbalances : China.
Or more precisely, the Chinese Communist Party (CCP).
I am emphasizing the difference from start because :
1- Talking about China is sometimes awkward and can easily be caricatured as an opposition between the east and the west or even racism.
2- In addition, the CCP would actually like to make each and everyone think that China is the CCP and that the CCP is China, implying that if the CCP collapses, China would also be doomed, which is obviously false. It is just the kind of basic propaganda all the dictatorships use to frighten their own citizens and foreign countries.
3- Finally, the CCP is very good at using nationalism to its profit.

The CCP is the Party-State. It is above everything. Above the laws, above the government and of course above the people. Even if the CCP has shifted from marxist communism to "socialist market economy" in the 80's, it has kept the culture, organization and ways of doing of communism. Actually China and the chinese people are right now experiencing the "worst of both worlds" : the worst of communism, with the repression of opponents (or so-called opponents, the CCP is literally creating "enemies" regularly to infuse fear), torture, labor camps, censorship, propaganda, no free press, state control of the economy etc etc. And the worst of the most extreme capitalism, with deregulation, consumerism and the worship of money.

Actually it is very interesting to note here, why the CCP feels so comfortable with this "extreme capitalism" : capitalism pushed to its unregulated extreme, promotes the emergence of an oligarchy that is controlling most of the system = The corporate oligarchy that is, in my opinion, poisoning our democracies. A nebulous oligarchy that is above the system and cannot basically be held accountable of anything.
And that is actually what the CCP is : an oligarchy, which is ruling the country (but which is not the government) and is never held accountable of anything => the CCP wipes out its own members regularly rewriting history, blaming them of all the possible sins, but the structure itself is actually never guilty or held accountable of anything.

The goal of an oligarchy is not really power. Power is just a tool to reach their ultimate goal : make as much money as possible.
In order to do so, the CCP has launched a race to the bottom, which is now a sprint...! Even mexican maquilladoras are now suffering from the unfair competition of China, which proves, if necessary, that we are not anymore in an "adjustment period" between high and low wages areas. This is a race that is destroying the industries of the world, including the industries of the other emerging countries.

What happened at the Asia-Pacific Economic Cooperation (APEC) summit a few weeks ago was quite revealing about the state of mind of most countries of the region (latin america and asia) who are now realizing what is happening. How do you want to compete with a country were there is no will to promote social protection or to improve working conditions? Where there is no environmental consciousness? Where a lot of goods are actually manufactured in forced labor camps (the "laogai" system) where political prisoners or prisoners of conscience are enslaved?
The answer is clear : you cannot, and you MUST not.

It has been 10 years since China joined the World Trade Organization (WTO).
A lot of people are now questioning China so-called progresses, realizing that since then, there has been no real intention to implement free markets and play by the rules of the WTO. The Office of United States Trade Representatives (USTR) published a report making clear that "China has not fully complied with the WTO’s basic principles, and that over the last 5 years, Chinese leaders have gone backward in terms of market reform".
Here are some excerpt of an interesting article :
"When China joined the WTO on Dec. 11, 2001 (after trying for 15 years), it was widely felt that a market economy had not been established in China, that there was a need to open its markets to foreign investment and trade, and to establish and nurture a free and fair competitive system within China.
But things haven’t gone to plan, according to Chen Zhifei, a New York-based economist affiliated with the City University of New York. He said that the benefits of China’s entering the WTO over the last 10 years have been receding, while the problems have become more pronounced. This is most obvious in the CCP’s ramping up of state capitalism, which involves massive bank loans that often don’t get repaid, land transfers, and myriad other subsidies. Foreign businesses have no way to compete against them."

Western countries agreed to let China join the WTO (and greatly benefit from it) thinking that in the end, they would have free access to a potential 1,3 billion consumers market.
It is obviously not what happened. The CCP has created, backed and favored huge State Owned Enterprises so that no foreign company could have a chance to succeed in China. In the meantime their economic model has had a huge negative impact on the other economies of the world.
On the other hand, I guess the idea was that "free trade" would favor the emergence of democracy. Instead, the CCP has promoted "state controlled trade" and tightened its dictatorship thanks to the huge profits they made by exporting goods to the US and Europe.
The failure is complete.

Anyway, there would be many other things to write about China and the CCP...
Actually I strongly suggest you read this outstanding presentation from Greg Autry. This is a really impressive summary of the situation where the author is analyzing the issue from various angles (economics, military, human rights, geopolitics etc), successfully drawing a clear picture of what China is in 2011.
He correctly states that "even China’s critics in particular areas, such as trade and human rights, fail to place their own concerns into context with the other issues", and that's why his presentation is so interesting.

To know more about the CCP and modern history of China, I also suggest : The 9 commentaries about the Communist Party and Facts and Details about China