[Pen-l] Chinese stability

["Charles Brown" <charlesb@xxxxxxxxxxxxxxxxxxxxx>]

This sort of sees a similar possibility as Jim D. does in  the US finance crisis causing the fall of the CP in China maybe. 

Wadi'h Halabi writes in Political Affairs:

[...] Today, the growth of economies formed by workers' revolutions, 
particularly China, tends to introduce some stability into the world 
economy. China's potential stabilizing role is why I am still reluctant 
to call the present crisis a "general crisis" of disproportionality, 
although it could rapidly turn into one if the dollar collapses, 
bringing down world trade with it, or if China falls to 
counterrevolution, as with the USSR and eleven other states under 
similar pressures in the 1980s. Although counterrevolution is by no 
means inevitable, both domestic and international measures are necessary 
to avoid it. Cuba survived such attempts in the 1980s - thanks in large 
part to internal strengths, but it is once again coming under immense 
pressure.

To understand this point more fully, contrast China to Mexico, one of 
the United States' largest trading partners. Per capita, Mexico's trade 
with the US is far higher than China's. US exports to Mexico by the end 
of 2008 were about double total US exports to China, according to US 
government data. So why isn't Mexico significant as a stabilizing force 
on the US economy (and indirectly, the world)?

The fundamental difference between China and Mexico is that the former 
is a product of socialist revolution and so has some control over its 
economy, while Mexico's socialist revolution is still ahead of it. 
Capitalism's "control" in Mexico is only over distribution of pain in a 
crisis it cannot control.

Mexico has suffered at least three devastating crises over the past 30 
years, major damage to its basic industrial capacity. Real wages today 
are significantly lower than they were 30 years ago, in part due to 
sharp currency devaluations. A big part of Mexico's imports are for 
processing and re-export to the US, adding to problems with 
"overproduction" and "overcapacity," i.e. disproportionality. It may be 
about to suffer even more than it has in recent decades. Already, 
Mexico's currency has depreciated sharply in recent weeks, effectively 
cutting wages and the standard of living.

By contrast, China has now gone over 40 years without a downturn, and 30 
years averaging 9.8 percent annual growth; real hourly workers' wages 
have been rising at least nine percent a year for over a decade. The net 
effect is that China's economic activity as a whole tends toward 
stability while Mexico's (and other capitalist countries) tends to 
cyclical crisis and instability.

For all of the talk about China's exports (which are smaller than 
Germany's, even though China's population is fifteen times larger), 
China's imports are intended primarily to serve domestic needs. Directly 
or indirectly, China has accounted for some 30 percent of the growth in 
the world economy in recent years, possibly more. China's purchases from 
Japan, Thailand, Indonesia, South Korea, etc. not only have helped keep 
those economies from freezing up, e.g. in the face of the crisis of 
1997, but have also allowed them to continue purchasing from the US - 
and to service their massive debts, which can be traced back (sometimes 
indirectly) to Wall Street.

While China's economic strength has so far resisted the global downturn, 
it hasn't been free of problems and vulnerabilities. This is 
attributable to the fact that China still exists within a world 
capitalist system on which it depends for investment, resources and 
trade. Growth of China's industrial production has slowed from a rate of 
20 percent at the end of 2007 and 14 percent this past summer to eight 
percent currently. Further decline of the dollar and instability in 
currencies will affect China's ability to sustain internal investment. 
To offset this, China is considering abandoning the dollar as a major 
currency reserve.

The stabilizing tendency of China's economic power indicates the 
relative strength of the working class. The key question now is how this 
strength will be used. Will it strengthen workers' power, or attempt to 
maintain an unsustainable status quo? One positive sign of the direction 
China is going can be found in the different responses to the global 
crisis by the US and Chinese governments. While the Bush administration 
poured $700 billion into propping up banks, China has pledged almost 
$600 billion for affordable housing and necessary infrastructure. [...]

Full at:
http://www.politicalaffairs.net/article/view/7778/1/355/ 



This message has been scanned for malware by SurfControl plc. www.surfcontrol.com
_______________________________________________
pen-l mailing list
pen-l@xxxxxxxxxxxxxxxxxx
https://lists.csuchico.edu/mailman/listinfo/pen-l