Re: [PEN-L] in hock to the Chinese
Interesting article in today's NYT about China's growing influence elsewhere in Asia - some new cross-border class network that's a potential rival to US linkages. I wonder if when the US bourgeoisie will begin worrying about China as a serious rival. Doug --I've argued for awhile now that the tensions about Taiwan are basically about nervousness about such potential rivalry built on cross-border networks. That and the pace of Chinese opening to FDI. Steve
[PEN-L] in hock to the Chinese
in hock to the Chinese -clip- Between this and North Korea, it looks like they have Bush by the short hairs. Mbs- ^^^ CB: Does Bush have any hair ?
Re: [PEN-L] in hock to the Chinese
Stephen E Philion wrote: Interesting article in today's NYT about China's growing influence elsewhere in Asia - some new cross-border class network that's a potential rival to US linkages. I wonder if when the US bourgeoisie will begin worrying about China as a serious rival. Doug --I've argued for awhile now that the tensions about Taiwan are basically about nervousness about such potential rivalry built on cross-border networks. That and the pace of Chinese opening to FDI. Steve -- Of course, there's global capitalist interpenetration at the higher levels which can work to offset particular rivalries between countries and trading blocs lower down. The company-state known as Wal-Mart, for example, has successfully thwarted Bush administration officials, congressional Democrats, and manufacturers (at least those lacking an entree into the China market or dependent on its imports) who want to get tougher with China by pressuring it more strongly to revalue the yuan, curb its exports to the US, and accept Taiwanese gestures towards independence. Other multinationals have a similar interest in a stable China and a stable US-Chinese relationship, which is as likely to deepen as deteriorate, given China's crucial role as the fastest-growing growing consumer of OECD goods and capital and low-cost supplier to OECD corporations and consumers. This could change as Chinese corporations and banks continue to mature and spill over their borders, challenging Western and Japanese rivals for new sources of investment, as is already happening. But its banks are also opening up to foreign investment, which will tie them more closely to the money-centre financial houses, and China's other emerging multinationals will probably follow suit, as Chinese stock and bond markets develop. So contradictions abound. MG How Wal-Mart Treads Heavily In Foreign-Exchange Forest By Robert Flint Wall Street Journal November 17, 2004 When the world's largest merchant pays its bills to the world's largest exporter, even the dollar feels the squeeze. Wal-Mart Stores Inc.'s purchases of goods made in China have become such a force in markets that seemingly everything -- from the price of plastic Santa ornaments to international monetary policy -- is influenced in some way. The magnitude of the transactions between megabuyer Wal-Mart and megaseller China is creating a situation that is unique in business. The ripples from the interaction between the two superpowers within the retail world are felt by government officials in North America, Europe and Asia as well as families everywhere. Wal-Mart has achieved economies of scale that are unprecedented, said Oded Shenkar, a China expert and professor of business management at Ohio State University's Fisher College of Business. Wal-Mart by itself accounts for more than 10% of U.S. imports from China and this is having a dramatic effect that also has secondary and tertiary impact, Mr. Shenkar told Dow Jones Newswires by telephone during a visit to Shanghai. Although various methods of calculation yield differing results, Wal-Mart is termed China's eighth-largest trading partner by the government-controlled mainland media and would place ahead of Russia and the United Kingdom on the top-10 list. Other published reports indicate Wal-Mart would be the fifth-largest importer of Chinese manufactured items if it were considered as a nation. Since Wal-Mart doesn't produce anything for export, the large-scale importing contributes to the gap in U.S. trade. The U.S. is expected to run up a total trade deficit of more than $600 billion in 2004, with the deficit in its bilateral trade with China contributing $150 billion. Thanks mainly to the shortfall in merchandise trade, the U.S. current-account deficit is approaching 6% of gross national product. According to Amy Wyatt, a spokeswoman for the Bentonville, Ark., retailer, Wal-Mart imported $15 billion in goods from China in the fiscal year that ended Jan. 31, 2004. About $7.5 billion were directly imported by Wal-Mart, the other $7.5 billion came indirectly through suppliers. In the same period, Wal-Mart's total net sales reached $256 billion, with roughly $209 billion coming from U.S. operations. The situation goes to the heart of the controversy over the U.S. trade deficit and China's de facto peg of the yuan to the dollar. It begins when American consumers plunk down their dollars or credit cards on the counters of Wal-Mart stores, eager to pay bargain prices for toys, electronic items and apparel. But because the U.S. imports about $6.50 in goods from China for every $1 that U.S. exporters sell to China, the Beijing central bank ends up with a huge reserve of dollars, amounting to $514.5 billion at the end of September. Not wanting stacks of dollars in its vaults, the People's Bank of China, the central bank, uses a big portion of its reserves to buy Treasurys. This is a key to keeping the yuan from
Re: [PEN-L] in hock to the Chinese
Marvin Gandall wrote: Of course, there's global capitalist interpenetration at the higher levels which can work to offset particular rivalries between countries and trading blocs lower down. True, but this NYT article was in no small part about Chinese-centered networks displacing US-centered ones in business and education. E.g., a very sophisticated (and rather glamorous too, by the accompanying pic) young Singapore development official who got her MBA in China rather than going to the US. Ok, the biz school program was a joint venture with MIT, but the point was that the Chinese connections were thought to be very important. Doug
Re: [PEN-L] in hock to the Chinese
Marty's comments are all well-taken, but I think he understates a tad the Chinese advantage. Yes the Chinese need to sell into the U.S., but in this vein they are riding the wave of free- trade policy originating in the U.S., plus the U.S. appetite for imports. At the same time they can diddle with their holdings and purchases of U.S. Gov bonds under no restrictions. I would say in this way they have fingertip control of interest rate deviations. They don't have to cause any large change or suffer from it. All they have to do is jiggle the table a bit to neutralize any annoying U.S. overtures. Between this and North Korea, it looks like they have Bush by the short hairs. mbs -Original Message- From: PEN-L list [mailto:[EMAIL PROTECTED] Behalf Of Martin Hart-Landsberg Sent: Wednesday, November 17, 2004 6:57 PM To: [EMAIL PROTECTED] Subject: Re: [PEN-L] in hock to the Chinese
Re: [PEN-L] in hock to the Chinese
My sense too. I do not deny the importance of Martin's question The issue here is whether Chinese workers are benefiting from this ongoing shift to a foreign driven export led growth model. But in terms of geo-politics this looks like a pivotal moment. The Chinese have still a unified power system, however you define it in class terms, and they can coordinate how they deploy the capital at their disposal on a massive scale. It is highly debatable, to say the least, that it is even a form of socialism, but in terms of capital being ultimately a social relation, this is monopoly finance capital being wielded on a world scale against the hegemonism of the US, very cunningly. I cannot see how the US can escape the snare. The Chinese can be quite sophisticated in how they tweak the noose very occasionally, eg with the sudden absence of bond buyers in the market, studiously NOT connected with any public policy comment. Whether it ultimately provides conditions for a more socialist world and the overthrow of the power of capital as dead labour, will be highly contested territory. Chris Burford London - Original Message - From: Max B. Sawicky [EMAIL PROTECTED] To: [EMAIL PROTECTED] Sent: Thursday, November 18, 2004 2:06 PM Subject: Re: [PEN-L] in hock to the Chinese Marty's comments are all well-taken, but I think he understates a tad the Chinese advantage. Yes the Chinese need to sell into the U.S., but in this vein they are riding the wave of free- trade policy originating in the U.S., plus the U.S. appetite for imports. At the same time they can diddle with their holdings and purchases of U.S. Gov bonds under no restrictions. I would say in this way they have fingertip control of interest rate deviations. They don't have to cause any large change or suffer from it. All they have to do is jiggle the table a bit to neutralize any annoying U.S. overtures. Between this and North Korea, it looks like they have Bush by the short hairs. mbs -Original Message- From: PEN-L list [mailto:[EMAIL PROTECTED] Behalf Of Martin Hart-Landsberg Sent: Wednesday, November 17, 2004 6:57 PM To: [EMAIL PROTECTED] Subject: Re: [PEN-L] in hock to the Chinese
Re: [PEN-L] in hock to the Chinese
Interesting discussion. I guess the question for me is what is at stake in this dance between Chinese and U.S. leaders?. Let us assume that the Chinese can in fact move in and out of the bond market to give the U.S. a bit of shock treatment. Given their development model what do you think that they might use their power to achieve. Will they just demand that the U.S. drop its objections to their dollar peg? And thus the export-import connection continues further? Or said differently, what U.S. policies are now potentially undermined by this new financial power and in what ways does that change the political/economic terrain? Marty --On Thursday, November 18, 2004 9:37 PM + Chris Burford [EMAIL PROTECTED] wrote: My sense too. I do not deny the importance of Martin's question The issue here is whether Chinese workers are benefiting from this ongoing shift to a foreign driven export led growth model. But in terms of geo-politics this looks like a pivotal moment. The Chinese have still a unified power system, however you define it in class terms, and they can coordinate how they deploy the capital at their disposal on a massive scale. It is highly debatable, to say the least, that it is even a form of socialism, but in terms of capital being ultimately a social relation, this is monopoly finance capital being wielded on a world scale against the hegemonism of the US, very cunningly. I cannot see how the US can escape the snare. The Chinese can be quite sophisticated in how they tweak the noose very occasionally, eg with the sudden absence of bond buyers in the market, studiously NOT connected with any public policy comment. Whether it ultimately provides conditions for a more socialist world and the overthrow of the power of capital as dead labour, will be highly contested territory. Chris Burford London - Original Message - From: Max B. Sawicky [EMAIL PROTECTED] To: [EMAIL PROTECTED] Sent: Thursday, November 18, 2004 2:06 PM Subject: Re: [PEN-L] in hock to the Chinese Marty's comments are all well-taken, but I think he understates a tad the Chinese advantage. Yes the Chinese need to sell into the U.S., but in this vein they are riding the wave of free- trade policy originating in the U.S., plus the U.S. appetite for imports. At the same time they can diddle with their holdings and purchases of U.S. Gov bonds under no restrictions. I would say in this way they have fingertip control of interest rate deviations. They don't have to cause any large change or suffer from it. All they have to do is jiggle the table a bit to neutralize any annoying U.S. overtures. Between this and North Korea, it looks like they have Bush by the short hairs. mbs -Original Message- From: PEN-L list [mailto:[EMAIL PROTECTED] Behalf Of Martin Hart-Landsberg Sent: Wednesday, November 17, 2004 6:57 PM To: [EMAIL PROTECTED] Subject: Re: [PEN-L] in hock to the Chinese
Re: [PEN-L] in hock to the Chinese
- Original Message - From: Martin Hart-Landsberg [EMAIL PROTECTED] Interesting discussion. I guess the question for me is what is at stake in this dance between Chinese and U.S. leaders?. Let us assume that the Chinese can in fact move in and out of the bond market to give the U.S. a bit of shock treatment. Given their development model what do you think that they might use their power to achieve. Will they just demand that the U.S. drop its objections to their dollar peg? And thus the export-import connection continues further? Or said differently, what U.S. policies are now potentially undermined by this new financial power and in what ways does that change the political/economic terrain? Marty - I'll wager a trio of guesses: 1) The $ peg must end soon per WTO obligations so China can ignore US whining until that day. That piece of the discussion has left out the fact that while China runs a trade surplus with the US, it is running a trade deficit in toto, which must compound the policy modeling for all the players paying attention to worst-case scenarios. The question of the how much of a trade deficit would there be if all the exports from US firms/subcontracotrs in China switched ledger places on the accounting books would be an interesting exercise in debunking and swith attention back to the problems of MNC's and their ability to manipulate State policies, giving a toehold for breaking up the Realist-cum-State centric storytelling still in vogue with all it's attendant problems for conflict escalation. 2) China can tell the US to back off on Intellectual Property enforcement issues for a decade and calls from the AFL-CIO for independent trade union rights. They also have greater bargaining chips when it comes to the transfer of hi-tech know-how which are deemed national [in]security sensitive in the US. 3) China can effectively block the sale of weaponry to Taiwan, clearing the way for further economic integration so that Taiwan is just an eventual Hong Kong type handover on a larger scale/slower timetable. This will hurt quite a few US firms wanting to make sales who've been lobbying Congress and the White House since Dubya and his pack of nihilists took hold of the State in 2000. Also, see the piece below on China and Iran: http://www.washingtonpost.com/wp-dyn/articles/A55414-2004Nov16.html Iran's New Alliance With China Could Cost U.S. Leverage By Robin Wright Washington Post Staff Writer Wednesday, November 17, 2004; Page A21 TEHRAN -- A major new alliance is emerging between Iran and China that threatens to undermine U.S. ability to pressure Tehran on its nuclear program, support for extremist groups and refusal to back Arab-Israeli peace efforts. The relationship has grown out of China's soaring energy needs -- crude oil imports surged nearly 40 percent in the first eight months of this year, according to state media -- and Iran's growing appetite for consumer goods for a population that has doubled since the 1979 revolution, Iranian officials and analysts say. An oil exporter until 1993, China now produces only for domestic use. Its proven oil reserves could be depleted in 14 years, oil analysts say, so the country is aggressively trying to secure future suppliers. Iran is now China's second-largest source of imported oil. The economic ties between two of Asia's oldest civilizations, which were both stops on the ancient Silk Road trade route, have broad political implications. Holding a veto at the U.N. Security Council, China has become the key obstacle to putting international pressure on Iran. During a visit to Tehran this month, Foreign Minister Li Zhaoxing signaled that China did not want the Bush administration to press the council to debate Iran's nuclear program. U.S. officials have expressed fear that China's veto power could make Iran more stubborn in the face of U.S. pressure. The burgeoning relationship is reflected in two huge new oil and gas deals between the two countries that will deepen the relationship for at least the next 25 years, analysts here say. Last month, the two countries signed a preliminary accord worth $70 billion to $100 billion by which China will purchase Iranian oil and gas and help develop Iran's Yadavaran oil field, near the Iraqi border. Earlier this year, China agreed to buy $20 billion in liquefied natural gas from Iran over a quarter-century. Iran wants trade to grow even further. Japan is our number one energy importer for historical reasons . . . but we would like to give preference to exports to China, Iranian Oil Minister Bijan Zanganeh said this month, according to China Business Weekly. In turn, China has become a major exporter of manufactured goods to Iran, including computer systems, household appliances and cars. We mutually complement each other. They have industry and we have energy resources, said Ali Akbar Salehi, Iran's former representative to the International Atomic Energy Agency. China's
Re: [PEN-L] in hock to the Chinese
I do not see the situation as the U.S. in hock to or dependent on China. One could just as well see the situation as the Chinese are dependent on a steady flow of FDI, increasingly from the U.S., and access to the U.S. market which is where a growing percentage of their output is going. The more important thing is that workers in both countries are increasingly being emeshed in a accumulation dynamic that is destructive of working and living conditions. The U.S. needs Chinese capital to keep growing (and that growth is doing less and less for working people) and China needs fdi directed at the U.S. market to keep growing (and that growth is doing less and less for working people) and the growth process is leading to greater and greater imbalances. Not a good situation. Marty Hart-Landsberg On Wed, 17 Nov 2004, Chris Burford wrote: The magnitude of what has happened is scarcely comprehensible. This regime has placed the USA in hock to the Chinese. All the more serious because the Chinese, drawing on 2000 years of culturally rich tactical and strategic approaches, will not overplay their hand prematurely. They will be sure not to lose this strategic advantage. They are in a sense drawing the USA into the orbit of the Middle Kingdom in a world of advanced finance capitalism. The fly is caught in the mesh. Chris Burford Mike Friedman wrote: Dollar's Decline Is Reverberating Sun Nov 14, 7:55 AM ET By David Streitfeld Times Staff Writer During a routine sale of U.S. Treasury bonds in early September, one of the essential pillars holding up the economy suddenly disappeared. Foreigners have been regularly buying nearly half of all debt issued by the U.S. government. On Sept. 9, for the first time that anyone could remember, they stayed home.
Re: [PEN-L] in hock to the Chinese
I can see how the enmeshments could on both sides lead to instability and vulnerability. But I am having a hard time imagining how the Chinese are not benefiting from this massive growth. Perhaps if we broke down the beneficiaries (in class terms if you like or by residency and age) we will get a variegated picture but I think on the whole the Chinese workers are doing economically well, compared to its own history and relative to others. One young Chinese student commented if I expected the Chinese to remain poor! As for the circuits of capital, China is playing pretty much the same game. It must, the rules dictate it. So I would agree with Marty that China is a capitalist roader in a trajectory sense. What it does later and whether it actually does are different issues. And on a remotely related note, the report on China and the textile quotas going away there was not one mention of Indian exports. I might add that even businesses in India (esp the smaller ones were already shivering with fright). But India is a large exporter. Low costs are to China's advantage but why not India's? My understanding is that it has to do with production knowledge and logistics of volume production. On these China is ahead in the textile game. Cheers, anthony xxx Anthony P. D'Costa, Professor Comparative International Development South Asian and International Studies Programs University of WashingtonCampus Box 358436 1900 Commerce Street Tacoma, WA 98402, USA Phone: (253) 692-4462 Fax : (253) 692-5718 xxx On Wed, 17 Nov 2004, Martin Hart-Landsberg wrote: I do not see the situation as the U.S. in hock to or dependent on China. One could just as well see the situation as the Chinese are dependent on a steady flow of FDI, increasingly from the U.S., and access to the U.S. market which is where a growing percentage of their output is going. The more important thing is that workers in both countries are increasingly being emeshed in a accumulation dynamic that is destructive of working and living conditions. The U.S. needs Chinese capital to keep growing (and that growth is doing less and less for working people) and China needs fdi directed at the U.S. market to keep growing (and that growth is doing less and less for working people) and the growth process is leading to greater and greater imbalances. Not a good situation. Marty Hart-Landsberg On Wed, 17 Nov 2004, Chris Burford wrote: The magnitude of what has happened is scarcely comprehensible. This regime has placed the USA in hock to the Chinese. All the more serious because the Chinese, drawing on 2000 years of culturally rich tactical and strategic approaches, will not overplay their hand prematurely. They will be sure not to lose this strategic advantage. They are in a sense drawing the USA into the orbit of the Middle Kingdom in a world of advanced finance capitalism. The fly is caught in the mesh. Chris Burford Mike Friedman wrote: Dollar's Decline Is Reverberating Sun Nov 14, 7:55 AM ET By David Streitfeld Times Staff Writer During a routine sale of U.S. Treasury bonds in early September, one of the essential pillars holding up the economy suddenly disappeared. Foreigners have been regularly buying nearly half of all debt issued by the U.S. government. On Sept. 9, for the first time that anyone could remember, they stayed home.
Re: [PEN-L] in hock to the Chinese
The issue here is whether Chinese workers are benefiting from this ongoing shift to a foreign driven export led growth model. I certainly agree that there is a rising middle and upper class that is enjoying great new wealth. And I also agree that China at the end of the Mao period was in need of change. But it is my impression from reading and talking to labor analysts and activists in Hong Kong and totally unrepresentative visits to China, that while many working people probably did benefit from the early stage of reforms, that is no longer the case. In fact almost as staggering as the gains in output are the losses of health care, pensions, education etc. for the great majority of workers. In fact, not only are Chinese workers low wage in general, most of them do not even get paid what they are supposed to be paid. There are increasing numbers of strikes, especially by the migrant work workforce over non-payment of wages. There are also increasingly organized protests by state workers over pension non-payment. So, behind my statement is a sense that working and living conditions are now on the downslide for many workers. Again, I am not saying that real production is not taking place in China or that a significant minority of people are not enjoying new wealth. But rather that economic dynamics are not favorable for a majority of working people. Income may have gone up, but the marketization of health care, pensions, education, housing etc. means that for growing numbers that money does not buy what it might seem. And, the process under way in China is likely to intensify pressures on workers to work harder, under unsafe conditions and for little if any gain. That is separate from the question of the sustainability of China's growth. Marty On Wed, 17 Nov 2004, Anthony D'Costa wrote: I can see how the enmeshments could on both sides lead to instability and vulnerability. But I am having a hard time imagining how the Chinese are not benefiting from this massive growth. Perhaps if we broke down the beneficiaries (in class terms if you like or by residency and age) we will get a variegated picture but I think on the whole the Chinese workers are doing economically well, compared to its own history and relative to others. One young Chinese student commented if I expected the Chinese to remain poor! As for the circuits of capital, China is playing pretty much the same game. It must, the rules dictate it. So I would agree with Marty that China is a capitalist roader in a trajectory sense. What it does later and whether it actually does are different issues. And on a remotely related note, the report on China and the textile quotas going away there was not one mention of Indian exports. I might add that even businesses in India (esp the smaller ones were already shivering with fright). But India is a large exporter. Low costs are to China's advantage but why not India's? My understanding is that it has to do with production knowledge and logistics of volume production. On these China is ahead in the textile game. Cheers, anthony xxx Anthony P. D'Costa, Professor Comparative International Development South Asian and International Studies Programs University of WashingtonCampus Box 358436 1900 Commerce Street Tacoma, WA 98402, USA Phone: (253) 692-4462 Fax : (253) 692-5718 xxx On Wed, 17 Nov 2004, Martin Hart-Landsberg wrote: I do not see the situation as the U.S. in hock to or dependent on China. One could just as well see the situation as the Chinese are dependent on a steady flow of FDI, increasingly from the U.S., and access to the U.S. market which is where a growing percentage of their output is going. The more important thing is that workers in both countries are increasingly being emeshed in a accumulation dynamic that is destructive of working and living conditions. The U.S. needs Chinese capital to keep growing (and that growth is doing less and less for working people) and China needs fdi directed at the U.S. market to keep growing (and that growth is doing less and less for working people) and the growth process is leading to greater and greater imbalances. Not a good situation. Marty Hart-Landsberg On Wed, 17 Nov 2004, Chris Burford wrote: The magnitude of what has happened is scarcely comprehensible. This regime has placed the USA in hock to the Chinese. All the more serious because the Chinese, drawing on 2000 years of culturally rich tactical and strategic approaches, will not overplay their hand prematurely. They will be sure not to lose this strategic advantage. They are in a sense drawing the USA into the orbit of the Middle Kingdom in a world of advanced finance capitalism. The fly is caught in the
