First, China’s growth rate of 6.9 percent last quarter, far higher than any Western economy, was reported as a disaster for China, followed by forecasts of imminent unemployment, collapse in trade, inward retreat of economic activities and turmoil amongst trading partners.
Second, the growth of the Chinese economy and its trading capacity were blamed for the failures of the industrial sectors in nations ranging from Australia to the UK, while the reports on Chinese President Xi Jinping’s (習近平) visit to London was wrapped in attacks on China’s human rights record, business morality and corruption.
Anyone dealing with Chinese businesspeople is warned of both their commercial aggression and their insidious cultural corruption.
However, because every Western government wishes to jump into the Chinese market, people find British Prime Minister David Cameron and Queen Elizabeth II welcoming Xi with pensive smiles.
British political leaders are trying to balance a condemnation of China’s human rights record and closure of UK company Tata Steel’s Scunthorpe, Dalzell and Clydebridge plants — for which cheap Chinese steel imports were blamed — against a substantial agreement with two state-owned Chinese companies for the construction of the UK’s first nuclear power plant in years.
Also on the table are contracts for UK construction companies taking part in a massive project in Xinjiang region aimed at building transport and energy infrastructures that would create a secure gateway between China and Europe through Central Asia. If economic growth wins elections in democratic nations, then the UK’s stance on the deals should be a no-brainer for Cameron.
Partaking of Chinese growth while doubting and condemning it has become the name of the international game played from Paris to Washington to Sydney, with the ball bouncing for a few days in London.
The irony emerged due to the failure to comprehend large forces: the character of the Chinese economy in the past and present; its possible future dynamics; and its potential impact on other economies.
For Taiwan it might be wiser not to mimic the behavior of the major economies, instead finding some perspective on the underlying issues and thinking about the most likely outcome for the economy in the short-to-medium term. For Taiwan at least, it is by no means all doom and gloom.
First, what is meant by economic failure? Western pundits are confused about this, realizing that a near 7 percent growth rate is actually very high. Some have suggested measures such as a decrease in popular consumption, which happens to be marginally worse for China than a decrease in GDP. This is not a smart move. As a series of global economic depressions over the last two centuries have shown, artificial extensions of consumer credit can give rise to growth inflation, which is illusory and soon collapses. So, fast growth in consumption might only be a measure of financial mismanagement.
After 2008, Chinese commentators were posing a figure of 8 percent as the desired minimum growth for maintaining job creation and increasing salaries with minimum effort, given the nation’s youth demographic and migration from poorer regions to the coastal and southern regions of China.
