By Ramin Mazaheri 
The Chinese economy is, according to the Western financial media, both a huge success and also a huge failure. It has become an economic rival and superpower, and yet it is also accused of being the cause of the global slowdown.
Why such contradictory, nonsensical reporting?
When the economic panic hit in 2008 Washington needed a scapegoat, as it was US citizens who were the author of the crimes, so they turned to China. “Blaming China” emerged at the very beginning of the crisis.
This 10-part series (this is Part 7) uses as its jumping-off point the 2018 book Collusion: How Central Bankers Rigged the World by Nomi Prins, a former Wall Street executive who saw the light and is now informing on the crimes of Western imperialism-capitalism. Prins gives a thorough and chronological account of central banker doings in key areas – Mexico, China, Brazil, Japan and Europe – ever since US banker crimes set off the Great Recession in 2007. The essence of her thesis is that the US orchestrated collusion among the central bankers of many of the G20 economies and the Eurozone in order to primarily save busted US banks, and then also to maintain the 1%-enriching policies of QE, ZIRP and no-strings attached bailouts.
“Blaming China” emerged at the very beginning of the crisis: immediately after Lehman Brothers in September 2008, Prins notes: “To assign blame elsewhere for US economic problems, the US Treasury Department strongly criticised Chinese exchange rate policy and colluded with other developed countries to do the same.”
Who can forget Barry Obama’s constantly reading from his script and accusing China of “currency manipulation”? Obama’s “pivot to China”, replete with fake South Sea warmongering propaganda over desolate sandy islands, was clearly all an attempt to divert public attention from American financial crimes. “Currency manipulation” was always a code phrase for “financial policies independent from Washington and NYC”.
Rather incredibly, even though Timothy Geithner was the chief of the Federal Reserve Bank of New York – the locus of the banker crimes which created the Great Recession – he got a promotion by Barry Obama to Secretary of the Treasury. In an obvious sign of 1%er collusion and more proof (if anyone needs it) that the Democrats and Republicans are two sides of the same coin, Geithner reportedly also would have been the choice of Republican presidential candidate John McCain.
Print refers to a May 2012 visit along with Hillary Clinton to Beijing: “He (Geithner) was relentless, as if the entire future of the US economy was contingent upon minute differences in the dollar-yuan exchange rate.” It was an obviously absurd emphasis and analysis, and obviously propaganda.
Yes, China will act to protect their currency should disaster arise, but they have floated the yuan since 2016. And yet, years of Obama-era propaganda had their effect on Trump, who in August pressured the Treasury Department to formally declare China as a “currency manipulator”. The IMF didn’t back Trump up, but anti-China rhetoric has a proven track record of propaganda success, thanks to the Democrats false “pivot to China” instead of properly blaming Wall Street.
There is a huge fatal flaw in any Western criticism of Chinese “currency manipulation” – Japan. Since 2011 the yen has lost a whopping 42% of it’s value to the US dollar, making their exports hugely cheaper to buy – so why aren’t they considered to be “manipulators”? The answer is easy: Tokyo follows in lockstep with Washington and NYC in QE and elsewhere, whereas Red China refuses to join Western capitalist imperialism and sticks with the hugely successful “socialism with Chinese characteristics”.
The ‘Blame China game’ – how long can this go on despite all their success and the West’s failure?
A more recent diversionary tactic has been the pathetic reason that “China’s slowing growth” is the reason for the global economic slowdown. Anyone with a basic grasp of global economics knows that this is not just an inherently absurd argument, but a pathetic one.
China’s growth rate has been remarkably stable since 2012 (which was when the West went all-in on “QE forever for 1%er benefit”) despite the global slowdown, always falling between 6.6% and 7.9%. If we take China’s average annual GDP over the last decade to be around $10 trillion annually, a loss of 1% translates to $100 billion – hardly a sum which would have saved the $75 trillion per year world economy. Of course, this all rests upon the faulty idea that China is solely responsible for its minor economic slowdown.
The current tactic is just as absurd – that “Trump’s trade war” with China is the cause of the global economic woes.
Slightly decreased US-China bilateral trade caused by Trump’s sanctions cannot possibly wreck the global economy because the world is so much bigger than just the US and China. Sadly, the US has the biggest megaphone so anything they want to focus on gets over-amplified. US-China tariffs could shave a point of the US annual GDP and 1.5 points off China’s, perhaps, but that would still represent a loss of just 0.2% to the global economy.
Thus, if anything, the neoliberal Mainstream Media’s hype, hysteria and anti-Trump propaganda will probably do more damage to business and consumer confidence than Trump’s tariff increases.
What should be clear is that tiny fraction of global GDP and cannot possibly be more damaging than the neoliberal policies which created the original Great Recession, and then the Lost Decade of Eurozone economic growth and broad economic stagnation which were the pathetic result of men more neoliberal policies.
For example, what if the Eurozone – the biggest macro-economy in the world – had not chosen far-right economic austerity policies which resulted in a lost decade (2008-2017), which is turning into a lost score. They averaged just 0.6% of growth, which makes “blaming China” so absurd considering Beijing centrally-planned their way to results which (8.3% annual average over that period) were 14 times (1,400%) superior.
Adding just 1.4% of average annual growth to a rough average of $12 trillion to the annual Eurozone GDP over the last decade gives $168 billion. Over a decade that adds up to nearly $2 trillion, dwarfing the impact of China’s alleged “currency manipulation”, Trump’s tariffs and would more than offset China’s allegedly horrific GNP fall from 7.9% in 2012 to 6.7% in 2018. “It’s European austerity, stupid,” continues to be the right answer for why the global slowdown persists.
A fundamental problem is: why is decreased demand from China the problem, as opposed to the decreased demand in the US and EU caused by QE, which diverts money from infrastructure growth/consumers’ pockets, and austerity, which worsens infrastructure and takes money out of consumers’ pockets? Why must China pull all the weight?
The answer is: China must pull the weight because the West’s political and cultural elite has used the past 11 years to fundamentally exploit their own communities in neo-imperial fashion. The West has relied on China’s superior economic engine to achieve their incestuous neoliberal goals, but China cannot be blamed by anyone (except a Trotskyist).
China has become a superpower despite the Great Recession, but it’s not because of China
To paraphrase a very intelligent refrain of Prins’: What’s certain is that if, back in 2008, G7 central bankers wanted to do everything they could to empower their enemy – socialist China – they have succeeded wildly.
Beijing says thanks: The past decade has seen China soar so high they have broken the glass ceiling of a unipolar world. This was certainly not the case in 2007.
But it is not “China” which succeeded – that is essentially an ethnic or nationalist argument. China has policies which have nothing to do with lo mein and Fu Manchu moustaches – their policies are globally available and referred to as “socialism”.
It is socialism which is succeeding – saying “China has succeeded” is to divert, in an essentially jingoistic way, credit from socialism.
Of course, capitalists would stoop to any explanation in order to avoid the spread of the acknowledgment of socialism’s fundamentally-superior policymaking and humanity towards its citizens. Capitalists famously launched World War I to prevent the spread of socialism; socialists back then mistakenly assumed that enough people finally realised the stupidity of fighting wars t enrich bankers and were certain that the war would be called off due to a lack of grunt participants – they were dead wrong. A century later the West’s political intelligence and modernity is even worse than back then.
We should absolutely credit China, but the true credit must go to socialism – central planning, state ownership and control of the majority of the economy, actually listening to public opinion when formulating public policy, socialism’s guiding belief of empowerment of the “average person” and not the “exceptional person”; and its implicit rejection of capitalist policies – central planning limited to conjunction with the military, creating state assets via taxpayer money and then privatising them to the 1%, having as few legal restrictions on business as possible, policy formulated by bankers (and now primarily to serve the stock market).
China is fundamentally a Stalinist (socialism in one country) nation rather than a Trotskyist (socialism universally and all at once) nation. Maoism, which highly praised Stalinism of course, is constructed upon a generation of Stalinist success, and later disagreements cannot ever change socialist China’s childhood and adolescence. What Trotskyists and capitalist-imperialists both endlessly, stupidly and boringly criticise China for is the fact that they will gladly manufacture and sell the rope for you to hang yourself with.
China’s central bank is all about encouraging market reforms – of a Chinese socialist-market format and not neoliberal-market format, very significantly – which encourage your consumption and their savings & security. Being a leftist who wants to actually win and a patriot I say, “Yay for Stalinism (which is really “Marxism-Leninism-Stalinism”, of course) ” and “Yay for China”.
China does not want to be France or the US – whose economies are based mostly on consumer demand (i.e., household debt) – they want to be Germany. And that is what they have achieved over the past decade – these are the 2 countries with the biggest positive trade balance. Of course, the US wants China to be like the US, and thus less competitive, but Beijing takes no orders from Washington, unlike Paris.
China’s (Marxist-Leninist) Stalinist-Maoist ideology pushed it to be the only major central bank which actually pursued policies in the past 10 years which were designed to benefit China and the broad Chinese people and not New York City and Washington. Unsurprisingly, this has created growth (2008-17) 14 times better than both Europe and Japan, and 6 times better than the US. China is able to plan years and decades ahead, as every nation should and as Iran does, but this is against free market ideology.
China thus pursues this very sensible, moral and modern ideology and thus has reaped the benefits. As time goes on, and as neoliberal capitalism continues its inevitable trajectory to an even worse bust than in 2009, I see no logical reason why we cannot see China’s rise during the Great Recession as a historical trend towards more socialism around the world.
The USSR, after all, fell when Gorbachev imposed completely anti-socialist policies – the ending of central planning, the ending of the state being the biggest economic actor, the end of bans on capitalist propaganda, the weakening of the revolution party’s (Communist Party in the USSR) primacy. The USSR fell thanks to Western capitalism and not at all due to socialism – Gorbachev’s policies cannot be interpreted otherwise. China has rejected this Gorbachevian switch to “Westernism”, and at a time when the West and Japan doubled down on capitalism… and they have thrived.
Developing countries are noticing this. Western countries should notice it as well… thus the massive “blame China” propaganda campaign.
The reality is “emulate China” is the answer, but that’s a faulty nationalist claim. It’s not China which is superior, but having national policies influenced by socialism and not capitalism.
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Ramin Mazaheri is the chief correspondent in Paris for Press TV and has lived in France since 2009. He has been a daily newspaper reporter in the US, and has reported from Iran, Cuba, Egypt, Tunisia, South Korea and elsewhere. He is the author of the books I’ll Ruin Everything You Are: Ending Western Propaganda on Red China and the upcoming Socialism’s Ignored Success: Iranian Islamic Socialism. His work has appeared in various journals, magazines and websites, as well as on radio and television.