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Thursday, July 26, 2012

Red Dragon Falling

Has China clipped it's own economic wings?

In previous posts, I have mentioned on more than one occasion how I feel about China and it's current economic platform. Yes, many economists and financial junkies love the Chinese due to their extreme growth and positive future outlooks, but how accurate can anyone be in the current economic environment we live in?

 As consumers continue to gobble up various "Made in China" goods, there seems to be a continued denial or utter ignorance to how these goods are provided to us and the methods used to create them. Continuing on with this, what makes this even more outrageous is that even when you directly and in plain language show people the atrocities committed to manufacture that new designer brand coat or those new shoes, they mostly give you an expression of shock, only to continue on five minutes later as if you had said nothing at all.

It seems almost like poetic justice that the very firms who employ cheap labour and exercise utter disregard for the environment or the people around them, are the very same ones who now risk posting a severe loss in profits. However, I think we all know that this was coming all along and is unfortunately not a surprise for China as a manufacturer and our current system.



What do you expect, when a country manipulates the international financial playing field by not only imposing slave like conditions on their workers/citizens, but also has an utter disrespect for all human rights regardless of what anyone says. China has manipulated and molded it's own currency in order to remain the most competitive and as a result many companies have moved their production lines overseas in order to maintain their competitiveness or increase their profits through sheer greed. One can only wonder what implications a major slow down in the Chinese economy will have on the international system as a whole. Can China struggle to supply its own people with their basic necessities and tackle conditions resembling a recession as well? Are we going to see a major shift in Chinese policy because of this? Probably not, but one thing will remain certain, that workers within China will continue to suffer in order to continue a steady supply of cheaply created goods.

This should be a further wake up call to the world that we need to smarten up. Our own health coupled with the health of our local and international environment, whether it be financial or biological, is important to the continuation of the human race as we know it. However, something has got to give and what appears most likely to change/already be changing is the lifestyle we have come to love so much in our own country. We need to eat less meat, use less gas and plant more trees in an effort to try and reverse the damage we have already committed just by living the capitalist dream. However, it seems almost futile to suggest this as the majority of our own changes will be offset by the increase created by demand both in China and India. This is no surprise and is nothing new, but people in China and India are working slave like conditions to achieve a level of wealth and luxury similar to that enjoyed in the west. The question one must ask in all of this, is whether it is possible or not to grow to fast?

I want to be clear that my post is in no way attempting to bash the Chinese or impose some xenophobic view against the worker's of a rising power. There is no doubt that the very laptop I am currently using has either been assembled in whole or has parts assembled on a Chinese worker's line. I just have to ask how far we as a civilization are willing to go before we do something to reverse the damage that continues on in ignorance?

More importantly, I want to stress how important it is for not only consumers in general, but also recently laid off employees of many factories who lost their contracts to foreign competitors to look at China with sympathy as opposed to anger. The Chinese people are not responsible for the damage that their current system is causing the world and if anything they are the biggest allies the world has to creating strong and lasting change in the near future. Why is this the case? Well, as this emerging Chinese middle class continues to grow, they are going to raise families educated in the system and will start demanding more from their country. This will be the last nail in the coffin that will result in the end of the current Chinese rise. I am so sure of this that I can say with confidence that China as a manufacturing super power will collapse within the decade unless the necessary changes are put in place. As Karl Marx so famously said: "The seeds of destruction for a system often lie within that same system." The truth in this statement runs as deep in China as it did in reference to the Capitalist system, Which Marx was targeting.  

To end this entry, I can only say that the "Red Dragon" is clipping it's own wings and the world is here to witness it. Do not believe the propaganda which refers to America falling, because although America has taken a large economic hit via the rise of China and the increased power of the multinational corporation, America like many other western countries will rise again and stay afloat. And they will do this because they are centered on a system of freedom and truth, granted that truth can be corrupted as is going on now, but what makes the system so beautiful is it's ability to shift and weed out the very contaminants that pose a risk to it.

The next 10 years are going to be very interesting to witness and promise great change...whether we want it or not. Let's just hope we can learn from our mistakes and continue forward as we make new ones for our future children to tackle on our behalf.

Until next time.

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