RED CHINA’S LOVE AFFAIR WITH FREE ENTERPRISE

It is ironic that China which had been bullied by the United States in the 19th century to force it to help it (US) bolster its trading position vis-a-vis Europe’s, is today, without being coerced, assisting the US against Europe by its encouragement of the outsourcing of American jobs, a move seen by US investors as necessary for their and America’s economic survival. And, in turn, appreciated by China, which hosts almost a quarter of the world’s population, as crucial to its economic growth and being the world’s next superpower. Mao Tse Tung and Chou En Lai, who had been frustrated by US military support of Chiang Kai Shek as well as America’s efforts at keeping it out of the United Nations for several years, preferring instead of holding to the ridiculous policy of recognising Formosa as China, may very well be turning in their graves. However, the realities of international politics and trade continuously demand that differences be set aside, or at least appear to have been set aside, and new alliances, however convenient, be formed. In the process, yesteryear’s foes become today’s “friends.”

Jobs, in difficult to calculate numbers, have been outsourced by US companies to China and India, incidentally, creating a stituation in which tens of thousands of jobs have been and are still being lost in the United States. But in the age of globalisation, when the United States of America, the flag bearer of free enterprise, is faced with growing European trading challenges in the international market place, and the American dollar is steadily being devalued against the European currency unit, it is only natural that the US would take pragmatic defensive action. In July of 1999, one euro was worth US$0.98. Today it has soared to US$1.28. The US dollar has been battered by, among other things, rising demand for European Union goods and services, while the relatively high wage rates of American labour have led to many traditional importers of US goods and services looking elsewhere. The outsourcing of American jobs which had tacitly begun with US overseas investments over the years had gained understandable momentum with the creation of the North American Free Trade Area (NAFTA), and with it the transferring to and the setting up of US industries in Mexico.

Labour is far cheaper there than in the United States and appalling working conditions are another low cost factor.  While the outsourcing by the boatload of America’s jobs to Communist China may appear odd to the innocent, nonetheless United States goods and services in all too many cases can only remain competitive and the returns of investors guaranteed, if the goods are able to be produced far more cheaply than existing wage structures in America permit. A militarily weak China had suffered, indeed been effectively humiliated by the 1842 Treaty of Nanking and the other “Unequal Treaties” inflicted on it by European powers, under which China had been forced to open its ports to European trade. In addition, the Chinese were forced to purchase opium from European traders and coerced by Europeans with their superior firepower to grant them concessions. In addition, the Europeans would exercise extra-territorial sovereignty over China’s ports and indeed somewhat inland.

The United Kingdom even assumed control of China’s Customs, taking possession without authority, save the authority that comes out of the barrel of a gun, of China’s Customs revenues. China was required, under pain of penalties, which I leave to the readers’ imagination, to import goods manufactured in Europe. Sylvie Brunel in La Colonisation responsable du Sous-Developpement? (Page 51), published in 1987, noted that European shipping companies earned massive profits from their control of China’s maritime and river commerce. William Woodruff was even more blunt in his “The Emergence of an International Economy 1700-1914,” (Page 5), published in the Fontana Economic History of Europe, and quoted by Alvin Toffler in his The Third Wave (Page 90), when he stated: “It was the exploitation of these territories (Europe’s colonies) and the growing trade done with them that obtained for the European family wealth on a scale never seen before.” United States investors are exploiting the cost benefits of cheap labour obtaining in China, the difference being that it is a controlled exploitation with Chinese workers gaining employment, admittedly at existing low wages, at the expense of American workers.

China’s economy has benefited and continues to benefit to the tune (please forgive the cliche) of billions of American dollars in joint investments, equipment, technology, wages and salaries, Customs duties, corporation taxes, port handling charges and profits, among others. And while the relevant plants are in specified areas of China, yet the economy of the entire Communist country benefits from this love affair with free enterprise, and, ironically, with the greatest capitalist market the world has known. Is it a cynical or pragmatic stance that has been adopted by the world’s most populous country which happens to be Communist and the world’s most powerful free enterprise State? Meanwhile, ironically, China’s expanding industrial development presents and will continue to present not only a threat to the economies of developed nations including that of the United States, but to those of developing countries as well, for example Trinidad and Tobago and the Caribbean Community of Nations (Caricom).