OP-ED: China tears the foundations of neoliberal globalization
The 90s have just died. China has a new approach to equality, technology and redistribution
Profound changes are taking place in China, which will impact its Asian neighbors.
China has made mistakes. Fortunately, for them, their successes more than made up for the mistakes. Now that they have eradicated absolute poverty, they recognize the cost of this skyrocketing growth over the past 30 years.
For a decade, they have tried to tame the monster that is corruption. The environment is being cleaned up, although there is a very long way to go before it becomes an ecological civilization. Inequality has become the number one political problem to be solved.
Common prosperity is the new goal
This is not the prelude to a European welfare state. In terms of per capita income, China is still only at the level of Poland.
It has already engaged in “dual circulation”, which means that it is no longer totally dependent on exports for overseas markets. Its own market of one billion consumers is equal in weight and size. Made in China for the West continues, but Made in China for China is the dominant new variant.
It’s supposed to become a technology for society, not a society served on a plate for Big Tech. Europe wants to do the same, but its political class is under the boot of the big multinationals. Beijing ruled head-to-head with its own multinationals.
The unprecedented level of Main Street savings has always been invested in the property. The bad old methods of speculation now need a cleanup. One of the biggest companies, Evergrande, sinks with $ 300 billion in unpayable debt. This will hurt. More will go into social housing, less into speculative private housing. Labor will gain a much larger share of GDP.
Big Western companies are nervous
The Financial Times of London, owned by Japan, covered these changes. One of his last articles unfortunately prefers the old tropes, explaining it as an attempt by the Communist Party to gain full control. He portrays the latest changes as a throwback to the days of the Cultural Revolution. In terms of geography and location, it is several thousand kilometers away.
The Cultural Revolution of chaos and social upheaval is in Modi’s India. It is the superpower of the subcontinent which is sinking into identity and religious politics.
China went through all of this in the first generation of its revolution. 70 years later, it is preparing for storms as well as sunny, affluent highlands a century after the Civil War. As usual, China designates a test area (in this case Zhenjiang with a population the size of the UK) to put the theory into practice. It will then be extended to the rest of the country.
Chinese big tech has finally understood that it cannot continue like Google or Microsoft. In the West, big business dominates humble politicians. Here too, attempts are made to bring equity and equality back into the equation. Its capitulation to the capital manifested itself since its blank checks to the banks from 2008 and then during the pandemic for the 1%.
Tencent and Alibaba pledged to invest 100 billion yuan each (25 billion euros in total) in the initiative for common prosperity, for innovation, development, better jobs, subsidies for small businesses and support for vulnerable groups. The so-called odd-job economy, which means a precarious existence for tens of millions of people in the rich world and the wealthy cities of the South, is being curbed.
Soon it will no longer be acceptable, at least intellectually, to be filthy rich, to binge on while others are content with less in difficult times. The trickle-down economy dominated the global economy for 30 years. It is now intended to be severely modified and replaced later. The sheer size of the world’s largest economy, in terms of PPP, means East Asia signals a new era is due.
At the root of all of this are deep debates about long forgotten ideologies, such as Marxism-Leninism. This is not Revolution 2.0 in terms of the 1950s and 1960s. However, it is a shift from the days of “getting rich is glorious” to “let’s all share the growing pie more fairly”. Billionaire George Soros also drafted a pen for an editorial in the FT. He is unhappy with the sidewalks and fully appreciates the importance of these developments. If you think that China is just another capitalist society, like the others, it’s time to rethink. Its political economy is not at all Western.
For a generation, he quietly crouched down and worked in a structure of globalization dominated by the West. He is now rejecting much of that model and rewiring it for the next generation. Outfitters of extreme luxury must change their strategies. What is good for Prada and Chanel is not good for China. Amen to that.
Farid Erkizia Bakht is a political analyst. @liquid_borders.