The Chinese Century?

Capitalism “with Chinese characteristics” is coming to a neighborhood near you

By Morf Morford

Tacoma Daily Index

I lived in Beijing China for almost all of 1999.

It was obvious then, and even more obvious now, that China, in more ways than one, was, and continues to be, a nation on the rise.

China, especially as it is aligned with the 10 countries of the Association of Southeast Asian Nations (ASEAN) in the 2020s, now forms the world’s largest trading bloc.

Those nations influence, if not dominate, every aspect of the economy from shipping to manufacturing to resource and labor availability (and pricing).

An introductory – and essential – guide to our next steps regarding the ever-growing influence of Asia over the global economy can be found here: asiasociety.org/sites/default/files/2020-09/A%20TPP%20Roadmap%20for%20the%20Next%20U.S.%20Administration.pdf.

It was put together by former Acting Deputy US Trade Representative Wendy Cutler, and is titled Reengaging the Asia-Pacific on Trade: A TPP Roadmap for the Next U.S. Administration.

We have a wide range of possible responses, but essentially no way of evading this set of changes that impacts everything from interest rates to the price of gas at the pump.

We need to be concerned about any response to the Asia-Pacific that does not include a substantial focus on what is needed in that region, what that region wants, and what would be beneficial to us here in the Pacific Northwest – in every category from housing (and related investments) to import/export guidelines to our ever increasing dependence on trans-border supply chains.

To put it mildly, the dynamics of the Chinese (and pan-Asian) economy are very different than they were a generation ago. But in many ways, the underlying principles are still at work.

The Chinese economy is not bound by unions, environmental restraints, or even, in most cases, by the complication of private property ownership. It could, and usually did, make progress (as in construction) that defies expectations – if not our standard definition of what is possible.

A bridge for example, that might take us months to build, could be, and has been, built in China in a matter of days (https://www.youtube.com/watch?v=PELqclmn_KI) or a high speed rail system could be built that literally does not stop (https://www.youtube.com/watch?v=o7lr5e-MmTU).

If we want our supply chains to work, we need our ports to work

Of the ten largest ports in the world, nine are in Asia. The one not in Asia is Jebel Ali Port in Arab Penisula (United Arab Emirates) as of 2021.

Ports can be measured and defined by different criteria – amount of cargo, dollar value, container size among other criteria. Any or all of these can change dramatically – and continually.

That was then…..

The Port of Rotterdam, for example, is the deepest port in north-western Europe and allows deep docking of ships. The regional government is carrying out a development program which will approximately double its cargo handling capacity.

The European port served as the largest port in the world for 42 years between 1962 and 2004 before it was surpassed by Singapore and Shanghai. The Rotterdam port is still the largest port in all of Europe.

One Port to rule them all

The handling capacity of ports is measured in terms of TEU (Twenty-foot Equivalent Units).

By this, or any criteria in the 2020s, the Port of Shanghai dominates.

With five working areas, the port of Shanghai became the biggest port in the world and has both a sea and a river port.

With 125 berths, one-fourth of International trade from China is carried out from this port and an average of about 2,000 container ships are served by this port on a monthly basis.

For most of the past twenty years or so, Chinese models championing GDP growth at any (literal) cost have shifted to models emphasizing efficiency, consumer welfare and protection, climate-change mitigation, and environmental protection.

In short, Chinese companies’ growth will be less unbridled and more regulated and monitored.

Whatever terms we may use to describe our respective economic and political systems, and despite bilateral tensions, China and the West are facing essentially the same social/economic challenges.

We are both confronting ever-increasing income disparities, the boundless growth, intrusion and vulnerability of Big Tech firms, and a deepening divide between elites and the grass roots.

But unlike much of the rest of the world, China has decided to tackle these issues head on.

Again, not bound by the intricacies of Western law and custom, over the course of 2021, the Chinese government took major steps to regulate and discipline a constellation of leading corporations, ranging from construction companies to consumer-facing platform companies to education firms. The grounds for these interventions were antitrust, data security, and social equality – sometimes all of the above.

Liberty, justice and prosperity for all – sort of

In the USA or Europe, this would be fertile ground for endless lawsuits, but in China regulatory and enforcement actions are both necessary and welcome in a country where companies’ growth prospects and contributions to GDP have long overridden consumer and worker welfare and protection.

The changes mostly introduced in 2021 represent a “coming of age” for the Chinese economy, signaling that people matter more than aggregate numbers.

Under the new rubric of “common prosperity,” the government’s official goal for the coming decade is to create the conditions for the growth of a large, prosperous middle class, better opportunities for everyone, and more “empathetic” behavior on the part of Chinese companies.

The unrestrained Western-style capitalism that has resulted in a “middle-class squeeze,” thanks to unbridled income inequity, is to be avoided.

The Chinese approach to tackling these problems is far different from most other countries. For starters, China’s responses are often swifter and more dramatic.

US policy makers, for example have done almost nothing to rein in Facebook, for example, despite continual and horrifying revelations of the company’s questionable practices and constant reminders of the deep societal problems its business model has caused.

China, by any, if not every criteria, will dominate the economy to come no matter where we are.

The stakes are high for China – and us.

No matter what we call it, the economy for the rest of the 21st Century is going to have a very different character.

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