GOOD MORNING FROM LONDON
#1. CHINA AND INDIA
#2. THE U.S. IN ECONOMIC DECLINE
#3. A TOURIST’S VIEW OF CHINA
#4. CHINA AND PROFESSOR JOHN MAYNARD KEYNES
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#1 ASHLEY TELLIS.
FOREIGN AFFAIRS.
“The problem for New Delhi is that its strategy “may not be effective or even realistic,” Tellis argues. “Although India has grown in economic strength over the last two decades, it is not growing fast enough to balance China, let alone the United States.” New Delhi will continue to need Washington to constrain Beijing, making its efforts to promote “a multipolar system that would limit Washington’s power” counterproductive. Even as India grows “undeniably stronger” in the coming decades, Tellis concludes, its “relative weakness, its yearning for multipolarity, and its illiberal trajectory mean that it will have less global influence than it desires.”
GRAHAM PERRY COMMENTS;-
For the past quarter-century, “the United States has sought to help India rise as a great power,” says Tellis in a new essay in the forthcoming issue of Foreign Affairs, correctly reasoning “that a stronger India would make for a stronger United States”. The problem for New Delhi is that its strategy “may not be effective or even realistic,” Tellis argues. “Although India has grown in economic strength over the last two decades, it is not growing fast enough to balance China, let alone the United States.”
No matter how impressive India’s more recent performance has been, the country has fallen short of China’s reform-era achievements. Since Beijing opened up its economy in the late 1970s, Chinese GDP has grown at close to 9% annually, reaching double digits 15 times between 1979 and 2023, according to World Bank data. The same figures show that, by contrast, India has never chalked up double-digit GDP growth. As a result, China’s economy went from being roughly the same size as India’s in 1980 to almost five times its size today.
Beijing has also used its wealth to become far more influential than New Delhi. China has built a larger, more sophisticated military and integrated itself into the Indo-Pacific region in ways that enhance its economic influence and provide it with considerable more political influence.
And the irony today is the probability of closer – not more distant – relations between the two countries, China and India. There have been frontier clashes over disputed boundary lines but at the same time India has shown an independence of the U.S. especially over Ukraine where Modi has sided, a little mutely perhaps, but clearly nevertheless with Putin.
China and India are both founder members of BRICS representing the Global South and a body of growing importance in world affairs. Both China and India have in recent months taken steps to restore links with each other. Relations are improving but it is the global Multi-Polar v Unipolar context that leaves India looking with more focus to Beijing than to Washington.
Multi-Polar is the current key term for international politics. No Superpowers. No domination by the U.S. or China. Instead a recognition that across the world the balance of power issue is much more fragmented. China’s approach is straightforward – Multi-Polar will prevail. Trump’s approach is that the U.S. must prevail. The direction that India is taking is much closer to the China concept than to the U.S. concept. The world today is quite different from 1945 and also from 1991 and the fall of the USSR. The rise of China spells the end, not the continuation, of the Superpower Era
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#2 THE U.S. IN DECLINE.
PUBLISHED IN COUNTERPUNCH AND PEARLS AND IRRITATIONS (AUSTRALIA).
“Over the past 45 years, the United States has experienced deepening economic divisions between the rich and poor. Economists such as Jared Bernstein, Paul Krugman and Joseph Stiglitz argue that the major cause of this division is the result of the United States becoming a debtor nation. This is directly linked to capital flight, deindustrialisation, lack of infrastructure investment, and the militarisation of the economy. The cause of the deepening economic crisis can be traced to neo-liberal economics and the conservative Reagan revolution.”
GRAHAM PERRY COMMENTS;-
Thomas Piketty’s Capital in the Twenty-First Century, 2014, addresses the precipitous decline of the US economy into Third World status. He argues that the average workers’ wages in the United States have declined considerably from 2007 to 2012 to a level far below poverty wages on an individual basis. In the same period, more than 90% of all new income went to the top 1% while approximately 46 million Americans remain in poverty.
Professor Kishore Mahbubani makes the point with equal emphasis. He writes in his book – Has China Won? – “The average income of the bottom 50% of the U.S. population has declined over a thirty year period”
Peter Temin, Professor Emeritus of Economics at MIT, argues that the ongoing decline of “Middle America” has created, in effect, two countries typical of developing nations in which a minority elite live in opulence while the majority live in poverty. Temin, in his book – The Vanishing Middle Class: Prejudice and Power in a Dual Economy, 2018, – presents an economic description of the United States which is split into two distinct factions of rich and poor. One faction controls a bounty of resources and power and the other experiencing the “American Dream” slipping away, quickly.
But the U.S. remains the world’s dominant economic power with the largest military and, despite its in-built weaknesses that point to long term economic decline, the country continues to possess a world-wide reach. The country has in-built major weaknesses which call into question its long term ability to play a leading role in international affairs but for the present it continues to demand careful attention. A Heavyweight Boxing Champion, losing heavily on points, starts the 15th Round searching for a Knock Out Punch.
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#3 SOUTH CHINA MORNING POST.
A TOURIST WRITES;-
“I have just returned from a four-week holiday in China, my first visit ever. Wow!
I have to reach for my thesaurus for the appropriate superlatives to describe what I saw: thousands upon thousands of kilometres of high speed rail (my personal land speed record has now reached 308 kph – my guide was apologetic that we hadn’t nudged closer to 350 kph). One railway station we pulled into had 24 parallel tracks serviced by 12 platforms, freeway overpasses stacked 3-4 high on top of each other everywhere you looked, 40-storey apartment buildings stretching from one horizon to the other, daringly modern architecture that makes Brisbane (my home town) look dowdy in comparison, and Shanghai by night as viewed from a River Cruise simply takes your breath away.
Everywhere I and the 12 other Westerners on our guided tour went, we were accosted by smiling locals who politely wanted to know if they could take selfies with us. The scare campaign of “China bad” instigated by America has frightened most Western tourists away, so we were a novelty.
The few Chinese who spoke English were witty, self-deprecating, intelligent, well-versed on world politics and immensely proud of China’s 5000-year history, and what their country has achieved in their lifetime.”
GRAHAM PERRY COMMENTS;-
Similar reports to the above appear frequently in the Western media. Visitors to China return in buoyant mood. So often one reads of the atmosphere on the streets, the buzzing street cafes and the popularity of historical monuments. But, please, no illusions life is still hard in China. The average income is $13,000 per annum. There is a strong work ethic which the people need for two reasons;- first, to defeat the Trump Tariff Squeeze and, second, to continue along the path from a ‘moderately prosperous economy’ to ‘ a prosperous economy’.
The Chinese are not smug or complacent. They have overcome, to their cost, the Great Leap Forward, the Cultural Revolution and the Tiananmen Deaths. They are now on a path of progress and prosperity but it is a Long March. And remember – there is unemployment; there is corruption in high places and at the local level; there are drugs and prostitution – whilst not rampant they do exist; there is also divorce. Yes, the people are proud and patriotic but they do not spend all their time congratulating the Government for lifting one billion of the people out of poverty or for enabling 200m citizens to travel abroad in 2030 (as Travelux predicts).
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#4 PROF KEYNES AND SHORTER WORKING HOURS.
NIKKEI ASIA.
“China is trying to encourage people to work shorter hours in a bid to spur consumer spending, with a Sichuan province city known for its electronics sector considering a 2.5-day weekend.
The city of Mianyang is weighing a policy that would urge businesses to close on Friday afternoons, along with Saturdays and Sundays. With a population of 4.9 million, Mianyang is the second-largest city in Sichuan province in terms of gross domestic product.
During March’s National People’s Congress, boosting domestic demand was positioned as a top policy priority. An action plan prepared by both the state and party authorities includes language forbidding the unlawful extension of working hours.
The average employee in an urban area worked 48.3 hours a week in 2023, according to China’s National Bureau of Statistics, up 5% from 2016.
This trend is pronounced among people in the prime of their working lives. Work hours per week jumped by 12% for those aged 30 to 34, a group that also has a big appetite for spending. The government seeks to reverse this trend for overwork.
Beginning this year, appliance maker Midea has been telling employees at its Foshan city headquarters in Guangdong province to go home at 6 p.m.
Tech companies, which are facing intense global competition, are being forced to follow suit. This spring, drone maker DJI began requiring employees to leave work no later than 9 p.m.
Long working hours have become an issue in past years. The term “996” gained traction around the late 2010s, referring to working from 9 a.m. to 9 p.m. six days a week. In 2021, the Supreme People’s Court issued a ruling declaring 996 work practices illegal.
But the situation has changed due to China’s economic slowdown and a tough job market for college graduates. Many feel compelled to work longer hours to demonstrate their commitment to supervisors.
“The work quotas were strict, and it took a mental toll on me,” said a young engineer who worked in development at a major game company.”
GRAHAM PERRY COMMENTS;-
Let’s start with John Maynard Keynes – the foremost economist of the 20th Century whose theories are still the foundation of modern economics – East and West.
Keynes referred to the “paradox of thrift” which means that when individuals become cautious they save more and spend less and this can worsen an already difficult economic situation. The reverse is also true – when individuals receive additional income, they are likely to spend more proportionately, which leads to a multiplier effect on overall demand in the economy.
The multiplier effect occurs when increased consumption leads to increased production and income, which in turn stimulates further consumption. Things are on the up
There is an opposite – individuals become cautious and save more in times of economic downturn, They don’t spend. This leads to a decrease in aggregate demand and a decline in economic activity. Keynes believed that during recessions, it is crucial for individuals to maintain their spending levels to stimulate economic recovery.
China’s problem is that its people prefer to save rather than to spend and when this happens it slows economic growth. Why do they save? – because they have a clear experience of bad times and prefer to save rather than spend. China seeks to boost its domestic market and make its economy operate increasingly independent of the world economy and to achieve this sensible goal they have to change the spending patterns of their people.
Shorter working hours are within the Government’s focus but habits die hard and savings remains stubbornly high. The skills of J.P. Morgan and Goldman Sacks have been employed by the Chinese Government to devise schemes to loosen the people’s tight grip of their earnings in favour of investment schemes yielding increased returns with the hope that the Chinese consumer will spend more and save less.
Associated with this Government initiative are steps to shorten the working day. Sichuan Province seeks to extend the weekend break to 2.5 days. The city of Mianyang is weighing a policy that would urge businesses to close on Friday afternoons, along with Saturdays and Sundays. With a population of 4.9 million, Mianyang is the second-largest city in Sichuan province in terms of gross domestic product.
Appliance maker Midea has been telling employees at its Foshan city headquarters in Guangdong province to go home at 6 p.m and drone maker DJI began requiring employees to leave work no later than 9 p.m.
“996” is part of the problem – working from 9 a.m. to 9 p.m. 6 days a week. The Supreme People’s Court in Beijing issued a ruling declaring 996 work practices illegal. But the work ethic in China is strong and this discourages employees from being the first to end their working day.
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China Post #576 on the Tiananmen Deaths provoked positive comment from readers for its plus/minus approach to the turmoil. There is a link between the Cultural Revolution and the Tiananmen Deaths. China had experienced the worst consequences of the Cultural Revolution. What started in 1966 as an attempt to stiffen the revolutionary commitment of the Chinese Young – the Mao Badge snd the Little Red Book and the study of the history of the Revolution – descended into fractional strife at the heart of power as Left Politics took control.
Too little Politics and China would lose its focus and ambition. Too much Politics and China would lose its cohesion and balance. Deng saw the writing on the wall if the protests continued. The Party leadership had stumbled big time and chaos was the consequence. ‘Send in the Troops’ was a necessity if the vision of the New China mapped out by Mao on 1 October 1949 was to be saved.
36 years on China is a very different place. With DeepSeek it has experienced its Sputnik Moment and with 200 million tourists from China predicted to travel the world in 2030 China has made progress that no one could have predicted in 1989.
But the Tiananmen Deaths remain as a warning to a Government of the consequences that will occur if it plays politics with people’s lives – as the Gang of Four did in the years 1966-76
