THE SECOND WESTERN ECONOMIST ON CHINA #299

GOOD MORNING FROM LONDON

Yesterday – 4 August 2021 – I summarised the views on China of the Chief Economist of Bloomberg, Thomas Orlick who, subject to reservations on China’s policy on civil liberties, focused on the underlying resilience of China’s Economy + Financial System and what he referred to as the “under-appreciated ingenuity of China’s policymakers”.

Today I focus on the views of the former Polish Finance Minister, Mr Grzegorz Kolodko as stated in his recent book “China and the Future of Globalisation: The Political Economy of China’s Rise”.

Kolodko, like Orlick, endorses China’s ability to manage challenges. He cites 3 main world problems; i) Demographic Imbalances; ii) Environmental Collapse; iii) Economic Inequality. He concludes that the West has failed to cope with the 21st Century Challenges because of its neoliberal reliance on markets to solve problems. In China, the State, not the Capital, is the Power.

He attributes China’s success to its innovative pairing of a free market economy with a high degree of state intervention. The greatest threat to the West comes not from China but from Western reliance on the “myth” of the power of the free market. Looking ahead. It is not a case of victory for Western Market Capitalism or Chinese State Capitalism but casting aside Cold War Thinking and working together to produce a World System that meets the needs of the World’s People.

China has the advantage because of “its capacity for collective actions, for community behaviours, without which humanity will not manage itself”. The West hoped that China’s adoption of ideas + technology from the West would lead to the adoption of market capitalist democracy. It didn’t. China has succeeded because it consciously rejected market capitalist democracy despite the dire predictions of Western Pundits. Western failings are due to the failings of parliamentary democracy, short-termism and five-year election cycles.