As everyone expected, China retaliates hard at the tariffs imposed by the Trump administration and hits the West (including Germany and Japan) by restricting the export of the „gold of technologies”: rare earths. But the measures are not just aimed at the US – they are also meant to create a basis for negotiations with the European Union, which has since last year slapped additional tariffs on Chinese cars and is now looking for other tariff solutions to prevent Chinese overproduction from flooding the European market.
We are already in the midst of an economic war waged by the US against China – and the stakes are deglobalization as we know it today and re-globalization according to other criteria and coordinates. For the clear-sighted, the way globalization has worked so far has become detrimental to the imminent future of the economic West:
In the last decade, the global trade had become toxic because, for the first time in history, the confrontation between liberal market capitalism and state capitalism was clear to the naked eye.
The proponents of free trade and economic cooperation theory are ignoring, at this point, one essential fact: for liberal market capitalism there can be NO free trade with state capitalism precisely because the rules of managing the economy are fundamentally different, not to mention the essential differences in labor law and in the way other means of production are managed – all of which meet at the critical point of competitiveness when entering the global market.
4 examples of market capitalism versus state capitalism. The Western „cherry orchard”
The so-called global „free market” has been undermined over the last decade by the violent difference between the two systems in terms of this competitiveness:
1. Although Chinese law provides for an 8-hour work day and a 5-day work week, in reality, most Chinese strategic industries practice the so-called „996” system – i.e. from 9 in the morning until 9 in the evening, 6 days a week. Sick leave in China is so poorly paid that both companies and workers avoid it; pensions (except for the state administration) are so low that support of the elderly falls mainly on families, in case pensioners have not saved up in advance; official national holidays in China – between 12 and 15 per year – are, as a rule, recovered at weekends; the pressure to meet the stringent quota is huge for the Chinese worker, who faces severe penalties if they fail to meet them.
It is hard to believe that any country in the free West could afford such productivity using such conditions in its own labor market.
2. Statist decisions on the basic sources of competitiveness ignore any kind of rule if it gets in the way: it is true that China has made official progress on „green energy”, but only to the extent that the price of energy has not gotten in the way of its competitiveness: in the last 5 years, coal-fired power generation has doubled in China.
3. Political decision-making in a state capitalism like China’s beats any economic rules (and we know this from the economic decisions of the Ceausescu regime): the state can – and does – intervene at its discretion by financing the production of export goods to ensure dumping prices on the global market.
This is not to mention the fact that China was keen to show us not only its prices but also our dependencies: The West saw the chip crisis, the container crisis, and even the detour around Africa when a cargo ship capsized in the Suez Canal and cut off the distribution pipeline to Europe.
4. The processing of rare earths – as the most prickly example – is so polluting that economic entities such as the EU have left it to China: increasing dependence, at one point, up to 86%; dependence that concerns not only the present, but especially the future of the Western technological economy.
If we add China’s technological advance, we can say that for the West (i.e. for us) the functioning of globalization according to current rules and criteria means clear economic death and the future is bleak: China is only now putting its cards on the table and the game has not yet started.
In a way, we find ourselves in the plot of Chekhov’s „The Cherry Orchard”: the employee of the noble family has become rich using the money of the noble family, and when the noble family becomes stone-broke, he buys the cherry orchard, the emblem of the times of glory, and cuts it down to make a neighborhood of vacation villas.
Can the West avoid this outcome?
3 Western misconceptions. The wedding night of in-love newly weds
Western economists, especially leftists, insistently propose – and promote to the hilt – the solution of total cooperation between the Western and Chinese economies:
In effect, they propose an „economic peace” between Western liberal capitalism and state capitalism. But it’s hard to believe that such a peace is possible – for, if you put all the terms you know into the equation, it can’t work even theoretically: this is precisely the impasse that globalization has reached.
Three errors lie in such a vision:
1, One starts from the – false – premise that such global cooperation is strictly economic. In reality, we are faced with a geo-economic confrontation – where it is about power and the domination of one civilization over another – i.e. at a level at which human nature is only willing to cooperate on a conjunctural basis, waiting for a moment of weakness of the other.
All the while stealing technology and know-how, and then ending up producing it itself, China has been arming, entering and disrupting markets, creating dependencies, undermining states and economies – preparing for the role of second – or even first – global power pole.
2, One ignores the fact that we are not looking at a set of economic alliances between states on different continents and with different political systems: we are looking at the so-called „revisionist triangle” – China-Russia-Iran – an alliance with the declared aim of fighting the liberal system and Western democracy – which will use the „free market” not so much from an economic perspective, but more from a geo-economic and geopolitical one.
Of course, the idyllic images of global cooperation – a leisurely picnic, where one brings the grilled meat, another the drink, and the other the dessert – are beautiful: in reality, history records not a single instance in which powers of such magnitude – such as the US and what China has become – have cooperated other than conjecturally and without undermining each other along the way.
Trust? Conjunctural as well: the myth of Cain and Abel (both producers – one of vegetables, the other of meat), before being a story in the Christian Bible, is a psychological archetype – we have carried it with us for tens, hundreds of thousands of years throughout history.
3, One ignores the fact that fundamentally different social systems will never be compatible and will never meet other than on the basis of brutally concrete resources such as money, for example. As such, we have the error of Western Europe (of which we are a part) with regard to Russia, with which it thought it could cooperate to the point of complementarity (us with technology and know-how, them with resources): a military power like Russia will never accept a position of equality with the other Europeans – we have the relationship described so plastically by Vladimir Putin to Angela Merkel (the video exists, and the German Chancellor’s reaction is just delicious), that even on their wedding night there is someone who takes the initiative and establishes positions of the two lovers.
Now, the economy – what we are talking about when we assess our position vis-à-vis China and Russia – is not only about money, or production, or commodities, or the market: before all that, the economy is 90% about people and their way of satisfying their personality beyond the struggle for survival: from the social status of the individual to the global status of the great powers.
The Europe of de(re)globalization and the next decade
How can we, the West, get out of this tangle of economic dependencies, societal differences and advantages that our geo-economic competitors and systemic adversaries have woven around us?
The violent measures taken by the Trump administration are so disruptive that only the speed with which we can fall back can save our relevance in the global economy – we are talking here, of course, about the EU.
It will be a difficult period for Europe, caught between the tariffs the US is threatening with and the tariffs it is preparing to impose on China to protect its market from its aggressiveness: but if it repatriates its economy during this deglobalization – which may last 5 years or 15 years – the chances of a reglobalization with the other global economic players on the basis of compatibility criteria are high: trade relations with China will be re-established, dependencies that have become geostrategic will be reduced, trade relations with the USA, Japan and Global Britain will be re-established – as during the other Cold War, when it survived economically to the breaking of the gold dollar by Nixon, and the measures to dismantle the American welfare state and the Reagan’s provoked recession.
And it will also have time to create – if only it wants to – the big global economic players that will keep it on the geo-economic map.
Information war and its oddities: From MAGA to MCGL – „Make China Great at Last”
A trade war like the one we have just entered needs – like any war – an information war. Here China – generously helped by the progressive line of the American left – seems to have won the game so far: although some measures taken by the Trump administration have been a continuation of the geo-economic (and geopolitical) line started in the Biden administration, an „anti-Trumpist” current has been created that ignores even the most visible rationales of the de(re)globalization process:
Some narratives are naïve, some are insidious, some are downright stupid – but two things stand out for the international and national press reader:
– from anti-Trumpism one has turned to praising China – just as the anti-Europeanism of sovereignist in EU countries has turned to sympathy for Russia. Everyone falls over backwards in admiration of China – and if not, you’re already labeled as Trumpist.
-, the enclaves of the progressive left that hyper-personalized anti and pro Trump radicalizations have created, with substantial funding (they are called „projects”, possibly „independent projects”, not progressive propaganda), that have dragged a historic geo-economic moment into the purely ideological zone, ignoring the reality (not good or bad – but REAL) that triggered the entry on the turn of a new historic cycle.
These informational enclaves – press, or influencers – will get rich from the deal: The problem, however, is with the so-called „useful idiots”: with no first-hand knowledge of the difference between living in Western liberal capitalism and China’s state-run liberal capitalism, these people simply are fed up with their good life.
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There is, in this trade war, a perspective even above the geo-economic warfare: an intelligent, and structurally divided into groups species has come to produce not just for survival, but far more beyond its needs, consuming vital energy, long-trained skills and natural resources: each group adds them up and invests them in the war to shove them down the other sides’ throats, and for this they are all ready to do anything – and that, paradoxically, in a legitimate way: the economy is not about commodities and their production, but about human nature. Human nature is implacable, but the choice of which side we belong to is not.
(Cristian Grosu is editor-in-chief of cursdeguvernare.ro)
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