File spoon-archives/marxism-thaxis.archive/marxism-thaxis_1997/marxism-thaxis.9709, message 165


Date: Mon, 22 Sep 1997 15:43:17 -0700 (PDT)
From: Dennis R Redmond <dredmond-AT-gladstone.uoregon.edu>
Subject: M-TH: Re: Query & Comment on East Asia


On Sat, 20 Sep 1997, Rob Schaap wrote:

> If the word on Chinese privatisation policy is right (a staggering figure
> of 100 million consequentially unemployed has been bandied about), might we
> not expect some trouble in China?  Everybody points to China's (relative -
> esp. to SU) ethnic homogeneity as a mitigating factor here, but it occurs
> to me that 100 million lifelong socialists suddenly deprived of income and
> work would occasion some draconian social policy (perhaps courtesy of the
> 'People's Army'?), wide open doors to foreign investment capital in search
> of rapid compensatory employment, and, I suspect, some sort of attempt at
> regional development policy too (China ain't Shanghai - and I can't see
> foreign investment proliferating beyond that south-eastern zone).

Not necessarily. To paraphrase Gertrude Stein, privatization isn't
privatization isn't privatization. China's state apparatus is powerful,
devious, and extraordinarily effective. We're talking about a culture
which has had some 5,000 years to perfect mechanisms of authoritarian
bureaucratic rule. Foreign investment has been greeted not with wide-open
arms, but with a carefully-crafted Chinese Wall of protectionism,
supplemented with an occasional bonbon for unusually generous
multis. The choice markets are going to Hong Kong industrialists, not
Western rentiers. China Telecom has, for example, carefully protected its
home markets, is growing 20% a year and has developed some world-class
homegrown technology, and has kept Alcatel, AT&T, Ericsson et. al. at bay.
And China has also been very, very crafty about buying off discontented
urban workers with subsidies and a large and growing welfare state
(recently, the social security system was upgraded into a genuine 
safety net in a bunch of Chinese cities). 

> go well beyond China's borders, no?  Has the IMF factored into its happy
> global forecasts a billion extra consumers and cut-price producers?

Those billion consumers produce only $785 billion a year in output, in a
world economy of maybe $25 trillion. That's about the size of Spain plus
Eastern Europe -- an important regional market, but decades away from
being able to derail a global economic expansion. Of course, the
production side of the ledger is going to give other countries headaches
-- but given China's specialization in simple manufactures, those
headaches are more likely to be exported onto Indonesia,
Thailand and India, not Taiwan or the First World. The 1990s seems to be 
witnessing a tremendous shake-out of the semi-peripheries, not
the metropoles, whom are effectively insured. 

-- Dennis



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