The fight of the century: China versus US-style capitalism
May 24, 2017 01:00 By Tulsathit Taptim The Nation 2,691 Viewed
While democracy is busy trying to figure out who the enemies are, China is wasting no time in presenting itself as the new thing to look up to.
But while the Belt and Road Initiative will supposedly reinforce the vast nation’s linkages to the rest of the world and has set alarm bells in America, financial gurus are saying “Not so fast”. If Beijing’s ultimate goal is to knock Washington off its perch, it will be very, very expensive.
Let’s look at the strengths and weaknesses of Chinese ambition. Advantages, of course, lie in the United States’ unsettled affair with Donald Trump, America’s declining popularity and the continuous challenges facing Washington-led democracy, which might take a further hit during this year’s commemoration of the September 11 attacks. (In case you hadn’t noticed already, the theory that 9/11 was an “inside job” is alive and well thanks to scientific questions that remain unanswered.)
China’s relatively dark recent history is competing with America’s highly uncertain and questionable present, so to speak. Beijing’s poor record on democracy and human rights is being measured against such things as the US-led invasion of Iraq and claims made by Americans themselves that their “model democracy” is being controlled by a Russian puppet-master. While Americans are divided over who they should be more worried about – Russia, religious extremists or Donald Trump – China is busy rebranding itself. Beijing may not be as swanky as its Western counterpart, but it’s portraying itself as an open book – what you see is what you get.
Yet while Beijing may have an edge politically, that’s not the case financially.
Countries are now eager to trade with China, but linking them by Belt and Road requires the construction of vast land and sea corridors that even new money will struggle to bankroll. The struggle is made harder by the fact that the dollar remains the global currency of trade and investment, not the yuan.
These are not the only “weaknesses”. Analysts looking at the geo-political impact of Belt and Road stress that America’s status as unrivalled global superpower is built on foundations of military might, economic muscle and readiness to take trade deficits on the chin. China may be able to match the US in terms of firepower and economic strength, but to really overtake America, it must be prepared to “waste” a lot of money.
China’s focus has always been on old-fashioned “profit first” trade policies, and the Belt and Road doesn’t sway from that. The US has historically blurred the lines when it comes to trade, diplomacy and international politics, while China’s “dual tracks” have seldom crossed. Beijing is reluctant to “cast the first stone” when it comes to moral or political issues. In fact, it has barely thrown any stones at all.
China will get richer. What’s less clear is whether it will topple America as the world’s most influential country. Politically, China may be able to cash in on America’s downturn. Financially, the Belt and Road may be a tough project. And when it comes to combining politics and trade, the United States is an experienced professor while China is just a freshman.
What does the rest of the world do now? Sometimes it’s difficult when two big guys vie for attention, but sometimes it makes things easier. Monopolies are never good – just look at the Thai pay-TV industry. Competition is often sweet – just check out smartphone operators’ promotions.
Asia can think of both China and America as friends. The former lives nearby but went rogue for a long while, during which the latter roamed our neighbourhood with a carrot and stick. Having amassed wealth and power, the former has returned to remind everyone of his presence, at a time when the latter’s sincerity, integrity and riches are under the microscope.
America has been saying democracy is great, since it facilitates capitalism, free enterprise and an equal chance to get rich. China is working to beat the United States at its own game. The Belt and Road idea seeks to offer something US-style capitalism has failed to do, aiming to contribute 80 per cent of global GDP growth by 2050 and lift another three billion into the middle class.
If you are ideologically confused, don’t be. At the end of the day, money dictates everything.