U.S. Plans Preventive War Against China

Samir Amin's article, "China 2013," in March's Monthly Review is worth checking out. I think whether you're on the Left or the Right there is a tendency to automatically reject the Chinese state as a totalitarian capitalist monstrosity. Amin, while possibly a little too sanguine about the nature of China's leadership, provides some excellent perspective. Here's an example:

China entered globalization in the 1990s by the path of the accelerated development of manufactured exports possible for its productive system, giving first priority to exports whose rates of growth then surpassed those of the growth in GDP. The triumph of neoliberalism favored the success of this choice for fifteen years (from 1990 to 2005). The pursuit of this choice is questionable not only because of its political and social effects, but also because it is threatened by the implosion of neoliberal globalized capitalism, which began in 2007. The Chinese government appears to be aware of this and very early began to attempt a correction by giving greater importance to the internal market and to development of western China. 

To say, as one hears ad nauseam, that China’s success should be attributed to the abandonment of Maoism (whose “failure” was obvious), the opening to the outside, and the entry of foreign capital is quite simply idiotic. The Maoist construction put in place the foundations without which the opening would not have achieved its well-known success. A comparison with India, which has not made a comparable revolution, demonstrates this. To say that China’s success is mainly (even “completely”) attributable to the initiatives of foreign capital is no less idiotic. It is not multinational capital that built the Chinese industrial system and achieved the objectives of urbanization and the construction of infrastructure. The success is 90 percent attributable to the sovereign Chinese project. Certainly, the opening to foreign capital has fulfilled useful functions: it has increased the import of modern technologies. However, because of its partnership methods, China absorbed these technologies and has now mastered their development. There is nothing similar elsewhere, even in India or Brazil, a fortiori in Thailand, Malaysia, South Africa, and other places. 

China’s integration into globalization has remained, moreover, partial and controlled (or at least controllable, if one wants to put it that way). China has remained outside of financial globalization. Its banking system is completely national and focused on the country’s internal credit market. Management of the yuan is still a matter for China’s sovereign decision making. The yuan is not subject to the vagaries of the flexible exchanges that financial globalization imposes. Beijing can say to Washington, “the yuan is our money and your problem,” just like Washington said to the Europeans in 1971, “the dollar is our money and your problem.” Moreover, China retains a large reserve for deployment in its public credit system. The public debt is negligible compared with the rates of indebtedness (considered intolerable) in the United States, Europe, Japan, and many of the countries in the South. China can thus increase the expansion of its public expenditures without serious danger of inflation.

An article by Mike Whitney on the Counterpunch web site this weekend, "China's Shadow Bankers and the Vampire Squid," raises doubts about the extent to which China "has remained outside financial globalization." Whitney says, "The industrial powerhouse has succumbed to the same problems as its trading partners in the West who were thrust into crisis by soaring real estate prices, reckless credit expansion, and an out-of-control shadow banking system." In China money is increasingly flowing into wealth management products (WMPs) because they pay out better than bank deposits. The problem is that these products are largely opaque, unregulated and tied to development projects that might not pan out, making it all sound a lot like our last bubble.

But we've been hearing about China being a bubble ready to burst for years now, and so far the PRC has managed to manage things. Today there was a story by David Barboza, "2 Chinese Cities Move to Cool Overheated Housing Market," showing that Chinese policymakers are far more active than our captured politicians ever proved to be:

In the nation’s capital, the Beijing municipal government said that unmarried individuals would now be allowed to purchase only one residence. The city also increased the minimum down payment for buyers of a second home and imposed a 20 percent capital gains tax on owners’ selling a residence.

In Shanghai, an identical capital gains tax was announced and took immediate effect, and city officials pledged to install and enforce other measures aimed at stabilizing housing prices. The stiffer capital gains taxes take the place of a 1 percent to 2 percent transaction tax that was previously assessed on the final price of the property being sold.

The announcements came weeks after China’s State Council, or cabinet, said the government would take stronger action to ensure that property prices do not continue to soar, fueling what many analysts believe is a real estate bubble that could seriously damage the economy and exacerbate social tensions between the rich and the poor.

Property prices in China have been rising sharply in the last year, with housing prices in many big cities up an average of 3.1 percent in February, according to a government survey. In many cities, the cost of buying a new home has doubled in the last five years.

In a country where investment options can be limited, property is considered a good store of value.

Returning to Amin's piece, one passage that caught my attention is the declaration that Washington has preventive war plans with China:

The objective of U.S. political strategy is military control of the planet, the only way that Washington can retain the advantages that give it hegemony. This objective is being pursued by means of the preventive wars in the Middle East, and in this sense these wars are the preliminary to the preventive (nuclear) war against China, cold-bloodedly envisaged by the North American establishment as possibly necessary “before it is too late.” Fomenting hostility to China is inseparable from this global strategy, which is manifest in the support shown for the slaveowners of Tibet and Sinkiang, the reinforcement of the U.S. naval presence in the China Sea, and the unstinting encouragement to Japan to build its military forces. The practitioners of China bashing contribute to keeping this hostility alive.

It's worth keeping this in mind as the "Pivot to Asia" commences and we send F-22s and B-2s to cow the North Koreans.