New China Shifting World Economy

Report and Compilation by Said El Mansour Cherkaoui / July 1, 2018

The new foreign policy consensus in Washington rejects American internationalism at precisely the time when it is needed most to define more accurate and less expansionist diplomatic approaches to the challenges and the rise of nationalism and seclusion in Europe, military coups and internal rifts and wars in Africa , instability and inter-confessional confrontation in the Middle East, expansionism and rivalry in Southeast Asia, institutional uncertainty, economic downturn, ethnic rejection along immigration and refugee around the globe, argues Dr. Said El Mansour Cherkaoui in Global Affairs, Business and Trade Magazine .

China Giant panda startle and U.S. paper tiger awakening

China’s Great March to Ali Baba’s Cave

China Without Mao:

Paper Tiger Transforms into Receptionist Panda

According to the famous expression of Mao Zedong (1956 interview), America is only a “paper tiger” ( Zhi Laohu ), that is to say, it roars like a tiger but in reality remains harmless and can be easily destroyed.

Image result for Telecom and technology companies in China during 1990's

When Mao died in 1976, a fraction of the Chinese Communist Party, led by Deng Xiaoping, undertook to reform the economy. Observing the extraordinary economic development of its neighbor, South Korea, Deng Xiaoping decided to liberalize the Chinese economy while preserving the communist political framework: it is the “socialist market economy”. As he himself says in an aphorism: “It doesn’t matter whether the cat is black or white, as long as it catches mice!” Deng, on the other hand, undertakes a double liberalization with the end of the all-state within and the beginnings of openness to the outside (…)

Deng Xiaoping ‘s Vision :

“There is no need to fear the proliferation of foreign companies, as long as you keep your cool. We indeed have our intrinsic superiority, as well as our large and medium-sized state enterprises, our rural enterprises, and above all…

the power is in our hands. Foreign businessmen want to earn money. The state, for its part, derives tax revenue from it, the workers their wages, and, moreover, we can learn about technology and management, derive information from it, and open up new markets.

Plan and market are only processes. The essence of socialism is the liberation and development of the forces of production, the abolition of exploitation, ultimately leading to common prosperity. This is a truth that must be imposed on everyone. Is the stock market, for example, beneficial or dangerous, is it specific to capitalism, or does it have its place in a socialist system? It is not a forbidden fruit, but it must be experienced resolutely. If it works, it can be extended after one or two years. […à In a word, if we want to bring out the superiority of socialism over capitalism, it is necessary to absorb, to borrow boldly every element of civilization created by human societies, all modes of organization and performance management specific to each nation in the world today, including in developed capitalist countries. »

Source: THE TESTAMENT OF DENG XIAOPING, François Lenglet, published on 02/06/1995 at 09:36

Economic Growth, International Openness,

Political National Resistance

China thus carried out, in the space of a single generation (thirty years), its “industrial revolution”, this phase of economic take-off that Europe and America had known a century and a half earlier and which had required , in these regions, two or three times longer. Everything in China happened much more quickly: the transfer from agriculture to industry, from the countryside to the cities, the emergence of a middle class and the beginnings of mass consumption. Production has thus increased on average by nearly 10% per year. It has been multiplied by seven in thirty years. Never seen.

Never in economic history has such a large country experienced such strong growth for such a long period. That said, despite its billionaires, its boomtowns and its appetite for Western luxury, China is at the beginning of the 21st ^century a rich country populated by poor people, a young country but with an aging population even before it has become rich. Number two, behind the United States, by its total gross domestic product, it is at the bottom of the ranking, not far from the 100th ^place , if we take into account the gross domestic product per capita – a more relevant indicator the standard of living of the population. (…)

To maintain its rank, as suggested by the XII ^th Plan, China must now move from growth fueled by exports, investment and copying to growth based on household consumption, services and innovation. “Communist”, China actually needs a double revolution: “socialist”, with the establishment of a welfare state, and “liberal”, with the establishment of the rule of law, the development real checks and balances and the promotion of the spirit of initiative. The Party and the State say they are working on it. This is, for example, the objective of the project aimed at ensuring minimum protection for all citizens in terms of health, unemployment or retirement. It is also the one sought after with the effort put into high-level education and training. At the end of 1978, the aeronautical company Boeing announces the sale of several 747 planes to airlines in the PRC, and the beverage company Coca-Cola announces its intention to open a production plant in Shanghai. From 1979 the liberal-inspired economic reforms accelerated, although the communist-style rhetoric was retained. The commune system was gradually dismantled and the peasants began to have more freedom to manage the land they cultivated and to sell their products on the markets. At the same time, the Chinese economy is opening up to the outside. 1 although communist-style rhetoric is retained. The commune system was gradually dismantled and the peasants began to have more freedom to manage the land they cultivated and to sell their products on the markets. At the same time, the Chinese economy is opening up to the outside. 1 although communist-style rhetoric is retained. The commune system was gradually dismantled and the peasants began to have more freedom to manage the land they cultivated and to sell their products on the markets. At the same time, the Chinese economy is opening up to the outside. 1^{January 1} , 1979, the United States diplomatically recognized the People’s Republic of China, abandoning the authorities of Taiwan. Commercial contacts between China and the West are beginning to develop.

• The countryside is de-collectivized: each peasant now produces in his own interest. openness to trade and the influx of international capital (50% of which comes from the Chinese in Hong Kong, Singapore and Taiwan), China can finally bring its comparative advantage into play major: a large, disciplined and cheap workforce (“workshop country”). From then on, industrial establishments multiplied, half-Chinese, half-foreign: Bell telecommunications factory (United States) in Shanghai, Jeep automobile factories (United States) in Beijing (Beijing), Volkswagen (FRG) in Shanghai, Peugeot (France) in Guangzhou, etc.

Deng Xiaoping. the economic reforms launched which resulted in an unprecedented acceleration of economic growth and foreign investment in China during the 1990s. Deng’s policies lifted hundreds of millions of Chinese relatively speaking out of poverty. China is today, overall, an intermediate country , far from extreme poverty. Its HDI (0.745) places it 94th ⁱⁿ the world (out of 177 countries). Its GDP PPP amounts to 4,580 dollars per inhabitant, in constant progress. However, such figures are only averages: for the rural population, they are considerably lower. In some respects, the China of the 2000s remains a poor country.

For the past twenty years, however, China has been progressing very rapidly . It is even the country in the world where economic growth is the strongest. GDP thus increased by 8.2% per year between 1975 and 2002 and by 8.6% per year between 1990 and 2002, i.e. a multiplication by 2.5 in 12 years, by almost 8 in 27 years! No other country can boast of such economic development which has placed the republic on the path which today makes it the second power in the world.