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China case: Reversal of fortunes
By Raul J. PalabricaPhilippine Daily Inquirer, v
With Europe in financial trouble because of the failing economies of Greece and Italy, and the United States still struggling to recover from the effects of the 2008 meltdown, cash-rich China has emerged as a model for fiscal responsibility.
Forget about alleged violations of civil and political rights of the Chinese people. Ignore reports that the Chinese government encourages rock-bottom wages for its laborers to attract foreign investments.
Despite these black marks, financially beleaguered European countries have come knocking at China’s doors to ask it to buy their bonds or invest in their companies to avoid possible default.
Even the US, for all its braggadocio as the world’s largest economy, had to call on (not demand, as it used to do in the past) the Middle Kingdom to tweak its exchange rate and make some adjustments in its export policies to enable the US to lower its trade deficit.
Flushed with pride over its new standing on the world stage, China strongly spoke its mind during the Annual Meeting of the New Champions held in Dalian, China, on Sept. 14-16, 2011.
Described as the “Summer Davos,” a veiled comparison to the World Economic Forum held annually in Davos, Switzerland, which is graced by the world’s key political and economic leaders, the meeting was attended by representatives from 80 countries.
Sacrifices
Now in its fourth year, the Asian business gathering was attended by 1,300 participants, including 400 CEOs from the organizer’s partners and member companies.
The annual forum, which is conducted under China’s auspices, has been cited by some commentators as China’s way of asserting its influence in the global financial scene.
In that meeting, Chinese Premier Wen Jiabao served notice to countries with serious financial problems not to look at China as a white knight that will come to their rescue.
He said “countries must first put their houses in order,” meaning, cut their deficits and create jobs, before asking China to bail them out of trouble.
It was a scathing dig on persistent not-so-subtle attempts by some countries to make China assume the burden of solving their financial problems by using its huge foreign reserves for that purpose, or buying their sovereign bonds to prop up their economies.
The underlying message of the verbal spanking is clear: We will help you only after you’ve made the necessary sacrifices or changes in your lifestyle. China is not the world’s credit card.
Relations
How times have changed!
Some two decades back, China was, in the eyes of so-called First World countries, a sweatshop that produced goods and products that their citizens did not consider worth their time or commensurate to their intelligence level.
The world’s most populous nation was hardly mentioned, much less talked about, in international business circles unless it involved shoddy production processes or corrupt business practices.
While the rest of the developed economies sat on their laurels or basked on past glories, China quietly put its financial house in order, strengthened its ties with its trading partners and reached out to Africa for the natural resources it needs to fuel its growth.
The result? China is now an economic superpower while those countries can hardly make both ends meet.
Not surprisingly, the Western media (which are controlled by financial interests that feel threatened by China’s progress) have belittled these successes as having been made on the back of politically-oppressed citizens, in violation of ethical business standards, or without regard to the adverse effects of their exploration projects to the environment.
It was a classic case of the pot calling the kettle black.
While there may be some truth to the accusations, the China bashers conveniently forgot that the interests or countries they represent earned their wealth at the expense of former colonies whose people they brutalized and whose resources they exploited in wild abandon.
Payback
This time around, the distressed economies of Europe are looking to China as a possible savior from the bankruptcy that threatens to engulf them in case France, Germany and the International Monetary Fund fail to deliver the promised bailout funds.
With the state of desperation the ailing countries presently find themselves in, China can dictate the terms and conditions under which it will, figuratively speaking, throw good money after bad. After all, beggars cannot be choosers.
For some European countries, it is payback time.
During the 1600s, China suffered the humiliation of ceding some of its territory to the “foreign devils,” e.g., German, Dutch, Spanish and English merchants, who built their own enclaves near the sea ports.
The foreigners’ laws, not China’s, were enforced in these areas and the Chinese were allowed entry only with the permission of the foreign masters. The Chinese emperors were forced to endure the insult because their forces were no match to the foreigners’ superior firepower.
Some political analysts believe this sore spot in China’s past remains in its national psyche and rears its ugly head, from time to time, in its dealings with some countries. The hurt has not healed.
Almost half a century later, with the roles reversed, it’s China that has the “financial firepower” over the countries that have come a-begging for its financial assistance.
Poetic justice.
(For feedback, write to rpalabrica@inquirer.com.ph.)
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Tags: China , economy , fiscal management , fiscal responsibility
