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China's Motivations

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China's Motivations

There is a debate (perhaps it is a discussion) going right now with Dr. Paul Krugman at one pole of the opinion about China and her government's monetary policies, the objectives of which are often said to be "obvious," but are not really necessarily clear.

The "discussion" includes the following recent publications by Dr. Krugman in the New York Times:

I was hooked on the discussion quickly, but felt like the commenters on the Krugman blog and Krugman himself were ignoring some important historical anthropological political economy. Namely, that China, with all its animus against the 19th century West, against anti-communism in the 20th century, against Japan since the rape of Nanking, against India because of India's claims of territory, but more because of India's population and aggressive modernization, against Russia for untold ideological and nuclear weapons reasons, and against U.S.arrogance in foreign and monetary policy, ... that China is a developing nation with a window of opportunity that leaders dare not miss.

The 1904 Mackinder Thesis is not entirely irrelevant here. Although China historically within itself has practiced a version of a "heartland" strategy of east Asian imperial hegemony--the Middle Kingdom and the Five Peoples--the point goes deeper than the movement of national borders. It goes to the almost imponderable significance of population numbers and poverty. In a nutshell, the history of the Han in China has been (except for one maritime foray to the east coast of Africa) the history of an inward focused people, content (if not perforce compelled) to focus on what is certainly the world's largest population with all that implies and connotes.

Which brings us to the considerations that Krugman and most of his commenters leave out--the motivations of the Chinese Communist government, leaving aside for the moment the question of whether "communist/ism" is at all germane to the discussion. Why does China pursue a monetary policy that it does (see Krugman's description of it)? The answer is that China earnestly wishes to modernize and to bring its people up out of what Marx termed "the idiocy of rural life." The Chinese people want this, of course, in terms they can stomach, namely, with due respect to useful traditions and cultural values. The methodology is essentially transparent to the average Chinese citizen, but competitive pressures and advanced quality controls have an impact, as do Google and other forces that work against population control.

The lessons of the Maoist period are not lost on Chinese. The "great leap forward" was not successful. The "cultural revolution" created a backlash. The last twenty years of flirting with capitalism, on the other hand, have produced unparalleled wealth and brought wealth down to the level where a legitimate middle class now exists, not "compradores" and their retinues, but educated professionals and people with a stake in continued socio-economic progress. So, in general and overwhelmingly China can be seen as seeking a better life for its people.

Krugman sees beyond this and into Hari Seldon's book that China in doing what it wants for its own people becomes a force to be reckoned with internationally. There is no gainsaying this perception, except that China really has no significant experience beyond its own cultural bailiwick. Yes, there is Chinese nationalism which can be whipped up almost instantly by a cynical government, but all always it tends to focus inwardly.

Krugman and others are savvy. They know the cultural history and they know the typical responses of North Americans and Europeans to a rival. The essays and blogs Krugman has written recently may be seen, therefore, as a heads-up to the West that an economic rival is playing its necessary game to the detriment of western recovery from the Great Recession. I am not convinced China's motives are hostile, but I am convinced that the Chinese government knows it is pinching our nose and hard!

Krugman knows that incidents like this do not produce comity. We do not easily forget, in this case, that China did not help the rest of the world recover, despite the fact that the rest of the world has been the consumer that China absolutely required to get this bootstrapping operation moving. The ethical or moral imbalance is obvious when it is our nose being pinched. Not so much when it is theirs, perhaps. Krugman is to be commended and applauded for bringing this up.


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James R. Brett, Ph.D. taught Russian History before (and during) a long stint as an academic administrator in faculty research administration. His academic interests are the modern period of Russian History since Peter the Great, Chinese (more...)

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