by H)-FUNG HUNG
Abstract
At a time when the global economic status quo seems to be crashing down, the seemingly endless hyper-capitalist growth of China has spurred such admiration and even euphoria from a wide circle of observers as may indeed justify use of the term Sinomania. While many corporate CEOs look to China’s strong recovery from the crisis as representing a vast, new, and limitless frontier to profit from just when business profitability in the global North sees little room for expansion, many left intellectuals take it as proving once and for all that China will successfully challenge the West’s global capitalist domination. Martin Jacques, the former editor of Marxism Today, says as much when he looks forward to ‘when China rules the world’ and celebrates ‘the birth of a new global order’ amidst ‘the end of the Western world’.
Just as eighteenth-century Sinomania among Enlightenment intellectuals reflected cursory, exotic, and sometimes deliberately distorted information about China compiled by Jesuit missionaries, so has the latest celebration of the Chinese miracle been informed by superficial understanding of China’s political economy. Within China, ironically, the excitement about the prospect of endless economic growth has long been offset by anxiety about a looming economic crisis even before the global financial crisis erupted in full in 2008. In 2007, the Chinese Academy of Social Science warned that China was witnessing an unsustainable expansion of an asset bubble reminiscent of what Japan experienced in the 1980s. At a press conference during the annual plenary session of the National People’s Congress in March 2007, Premier Wen Jiabao himself characterized the current path of development in China as ‘unstable, unbalanced, uncoordinated, and unsustainable’. Although the Chinese government’s stimulus programme of 2008-09 staved off the free fall of the economy that would have been caused by the collapse of the export engine, it at the same time opened the floodgate of lax lending by state banks, aggravating overinvestment that had already been worsening before the crisis. The hyper-investment spree and liquidity creation via lax lending in post-crisis China has already generated a mega bubble. The bursting of this bubble can be the trigger of a second wave of the global financial crisis.
Socialist Register for more