Western criticism labelled “overproduction” is in fact starting a new trade war as part of a comprehensive containment of China and its perceived threats.
When one side starts a war, whether military or trade, the other side typically blames the other side for starting it.
Hence the latest attack from US Ambassador to Japan Rahm Emanuel, who, in an interview with Bloomberg, argued that China is exporting its economic problems to the world and that the US is increasingly determined to help its allies stop China from dumping cheap products on them.
By the rest of the world he presumably means the United States and the European Union. Most people think the world is much larger than that.
The real “rest of the world” doesn’t necessarily feel the same way as Emmanuel. Samaira Zubair, chief executive of the Africa Finance Corporation, said last month that China should look to Africa to diversify its supply chains and counter its claims of overcapacity to the West.
He said that as a global leader in renewable energy, China should relocate much of its green industry supply chain to the African continent.
“Our hope is that China will look at Africa as a way to diversify their supply chains because Africa has the minerals and metals to support this,” he said. “Africa also has renewable energy sources, so the processing of these materials should have been done here.”
China has already shifted the majority of its exports from developed markets to countries in the Southern Hemisphere and relocated production to developing countries, including in Africa, in recent years, according to state-run CGTN news agency.
Emanuel’s views, of course, are in line with criticism from other U.S. officials, such as Treasury Secretary Janet Yellen, who says China cannot get out of its problems by overproducing and dumping heavily subsidized products overseas.
Another version of the same criticism was voiced by prominent columnist and Nobel Prize-winning economist Paul Krugman, who told Bloomberg that Beijing has been “unusually unwilling” to boost government spending to shore up consumer demand rather than expand production.
Beijing doesn’t think so: China is only reacting to Western hostility, and not just in trade or economics.
Given the readiness of Washington, and increasingly Brussels, to deny China access to certain technologies, markets, and financial channels, China needs to develop its own domestic high-tech capabilities and establish a reliable global supply chain for its own products and services.
This is especially important for the green industries, a priority that, under government guidance, has achieved global dominance in solar cells and panels, electric vehicles and lithium-ion batteries. Western complaints about these sectors are merely venting frustration because their own industries have lagged far behind due to lack of investment. Only now is the United States catching up.
Other rapidly developing areas include China’s high-speed rail system and its domestically produced C919 commercial jetliner.
Measured by GDP, Beijing’s efforts to support emerging technologies and advanced manufacturing rival its defense spending.
This is an integral part of the Chinese aggressive state that has achieved clear technological advances and successes – and which, of course, the West wants to undermine.
Which one is right? Well, choose for yourself.
