Chris,

the cold war is over.
You won!!

"I do believe there will be a public backlash against China should it benefit most without playing by the same rules."
Posted by Chris Lewis

Mr Lewis, I was pleased to read the article, as well as the first page of comments, but I'm confused over the meaning of 'by the same rules'.

Does that imply that an economically successful communist country should not be permitted to play the game of capitalism by the same rules as the capitalists that invented the game?

Hasn't rampant capitalism made its own bed over the past decade? About time we had a wake-up call IMHO.

When I went to Sydney last I was stood on a railway platform with camera overhead focused on my every move. A sniffer dog came up to me to check me out and I saw a row of policeman sweeping the platform to ensure all passengers got the sniff treatment. My heart nearly leapt out of my chest, in fact I do not think it ever returned to its original beat!

I got on the train and missed my stop due to a few reasons, one being I was traumatised. These Nazi demanded my driving license because I missed one stop. I replied "I was not driving the train" This angered them and their big red sweaty faces demanded "you must comply or we will call the real police". Over their shoulders I could see real police ransacking a kid’s backpack. Their next victim: a little old lady who didn't buy her $1.oo ticket.

Come election time I wanted to vote for real old fashioned left wing workers party, you know the ones that used to make employers take notice. All there was on offer were varying shades of white, I mean right. The champagne socialist took over the workers party as some sort of fashion statement a number of years ago. It seemed us workers had been broken up into little camps called multiculturalism and lost our collective voice. The rich said we were racist, though could never find a rich multicultural neighbourhood, funny that.

Of course we had to lose some freedoms because some horrific event occurred overseas, and of course this never used to happen before the internet, when the zing had left the news when it arrived some months later. However, good enough reason to filter the internet. Opinions, nah do not need them. Just cut and paste somebody else’s.

Rich capitalistic Chinese or Rich Capitalistic European? No difference, race has never been the issue. Just used to splinter us or weaken up so we can be exploited.

Communism, Fascism. What is the difference again?

Seano,

By the term 'the same rules', I refer to the reality that China has a number of advantages over Western societies such as control over worker demands, and strict rules on foreign ownership of its state companies.

I am basically arguing that in a world of more open trade, China's govt can shift its resources to wherever they are needed. Western societies, answerable to public debate and sectional interest groups, cannot do so.

Sure all nations are free to organise themselves in a way necessary to benefit from capitalism, yet Western societies are not merely capitalist as their govts must take account of many different needs and wants. In other words, a liberal democracy is hardly a match for communist state now comparatively rich in gross terms hell-bent on mercantile economic success.

I understand the approach taken by China. But I am an Australian (and a Westerner. I would simply be lying to suggest that all is well for Western nations as China rises and rises based on my intepretation of recent and near future trends. As a Westerner, there may need to be limits to how far we can support liberalism, even if it is somewhat hypocritical from myself (as a supporter of liberalism).

I hope that greater debate in Western countries does lead to a give and take scenario which help China move more in line with Western expectations and hopes. This would be far more preferable to any trade war.

Simple truth is that the West is now in a mess because it can not compete with such nations, although Western leadership has remained evident for the past 30 years through a greater relaince upon debt to boost trade and economic activity. However, such a reliance is now over as US debt levels will need to be addressed one way or another.

1. "China has a number of advantages over Western societies such as control over worker demands, and strict rules on foreign ownership of its state companies."

I suggest we continue to follow those rules as state ownership of Australian government companies is fairly strict too, while Hewlett-Packard et al. are free to setup manufacturing divisions in Australia or in China, depending on where the living costs and consequent labour costs work out the more economically viable.

2. "China's govt can shift its resources to wherever they are needed"

Capitalists refer to that as 'perfect mobility'.

3. "Western societies, answerable to public debate and sectional interest groups, cannot do so."

Capitalists refer to this as 'imperfect knowledge', but that's meant in jest. Sectional interest groups see my hourly day-shift rates at around $15 p/h for casual forklift operations. Naturally I am lucky to have them around to help me load trucks for my weekly rations.

4. "a give and take scenario which help China move more in line with Western expectations and hopes."

If we consider point #1 above, perhaps a g&t scenario which helps the 'west' move more in line with China's expectations might be more hopeful.

Also, I boycott Perth trains altogether purely because of the sniffer dogs and concur totally with The Missus on the communist/fascist statement. Sectional interest groups can sniff someone else's behinds if they have such a fetish for it.
This train don't stop there anymore.

Damn fine article Chris. Having spent some years in China myself, I agree with the thrust of your arguments.

Peter Hume states: "And now the USA, whose government is more socialist than that of Red China, and taking over more and more private industries every year, wants protection from their competition!"

This comment displays what I fear is becoming a common attitude among westerners.

The Chinese economy is more-or-less a western one, not really communist, and if it is, that's just because it's involved in similar protectionist stoushes that happen between western countries. After all, with all the multinationals operating in China and its extreme growth, it must be turning capitalist, right?

Wrong, naive and downright dangerous:

1. People can't buy property in China. It can be leased for a set period, but the government owns the bulk of land. This has dramatic implications for investment.

2. Unlike the Soviets, the Chinese cleverly allowed production to be opened up to commercial competition (with government assistance). However, other industries crucial to maintaining state influence and financial power remain firmly in government hands - media, telecommunications and in many cases port logistics remain government assets. Even technology and finance companies typically have boards comprised of party members.

3. The party apparatus extends into every industry. Senior business figures are expected to be party members.

4. Foreign investment in key Chinese assets are blocked. Can you give me examples of any major state industries in China that have a significant level of foreign ownership?

When the author speaks of playing by a different set of rules, he's right. In all human history, we haven't witnessed an economy of this scale being so centrally controlled. That will have ramifications for the future.

One point not made in the article though, was the notable absence of Chinese companies from the world's most recognised corporations. Chinese companies don't innovate or invest in R&D, because of rampant piracy at a domestic level, handicapping transitions to the international stage. Heavy state support handicaps their moves internationally because other countries distrust multinationals with such strong links to foreign governments.