The China Syndrome

In Paterson's telling, 11 December 2001 is a highly significant date, far more significant as it happens. China was allowed to join the World Trade Organisation. Three months to the day after the World Trade Centre was felled. Not many people noticed this at the time. Of the few who did, virtually none would have contemplated what was to follow – China's takeover of the world. Following years of lobbying by American corporates, driven by venal profit motive considerations, Clinton cluelessly caved, and Bush 43 cluelessly signed off on the deal. Then followed merciless outsourcing of jobs to China, especially manufacturing jobs, the global financial crisis, massive western under-employment, trade deficits with China, destructive deflation, turbo-charged globalism, and now China's status as a world power.

We did that!

US corporates wanted cheap labour. They got it. It went straight to the bottom line. Outsourcing meant that the rich got richer in both Western countries and China, and the middle class at home disappeared. That is, us.

The West signed its own death warrant, in effect. Focusing on the Islamic threat post 9/11, real but episodic and run by whacko and ill-disciplined mullahs in caves, we missed the big one in the early 2000s.

China now has 25 per cent of the world's manufacturing. Twenty years ago it had a quarter of that. We in Australia no longer make things. Until Trump arrived, neither did the USA. The Chinese love vertical integration, with themselves in control of the supply chains. That is why they buy Australian farms. And New Zealand agricultural assets, like Silver Ferns, once a Kiwi commercial and innovation success story. The dumb Kiwis don't yet get this. The pathetic Australian Foreign Investment Review Board, in thrall to the god of FDI – direct foreign investment – sold us out, with no one really watching. Too much economics textbook learning, and not enough realpolitik. And policy common sense.

The Western dupes all fell for the meme that if China went capitalist, it would also go liberal. What idiocy, right there. They also bought the "free trade at all costs" line. Free trade was a great theory for an era before technology changed the world, without anyone knowing. Old globalisation WAS about trade. Not any more, given the rise of multinationals and enabling technology.

The trick was to allow China to develop its export economy, on which was based its push to, one, raise the living standards of its future capitalists, and two, to screw the entire Western economy. Which it has proceeded to do, with our supine acquiescence.

The top ten richest members of the Chinese National People's Congress are worth $185b. A fine old communist regime, indeed. The Chines Communist party (CCP) isn't really "communist" in a Marxist sense. It is merely authoritarian. Viciously so. The way to Chinese wealth is through the Communist Party. This is a corporatist state, just like all the others. With kickbacks, crony capitalism, in-groups and thuggery.

It all started with the Deng Xiaoping 1978 reforms, so much welcomed in typical non-seeing fashion by Western leaders. Deng overturned Mao's absurd economics but no one ever overturned Mao's politics. The democratic dividend never appeared. With China's hideous twenty-first century social credit regime, the cultural revolution on steroids, it gets ever worse for the Chinese punters, while their "one per cent" gets ever richer. Marx would be spinning in his grave. Lenin would get it, though, entirely.

The whole China Syndrome has been an unalloyed catastrophe for the West, and for the globalisation project. This has been brought home by the belated discovery by Western countries of the Covid out-workings of Chine imperialism – direct flights from Wuhan to New York and to Rome, the takeover of the Italian textiles industry by the Chinese mafia, the Chinese Big Pharma control of global medical supply chains, the Chinese ownership of the World Health Organisation, and the rest.

The globalisation experiment is now increasingly seen as being dead in the water. Writers like the late Sir Roger Scruton belled the cat on globalisation in his book Where We Are: The State of Britain Now (2017), and as did Richard Baldwin, author of The Great Convergence: Information Technology and the New Globalisation (2016). These writers have drawn back the curtain on the globalisation project and revealed its essential reality.

Scruton nailed the turning point as the decision by his own British Government to allow foreign ownership of British property at a time when technology was transforming the whole nature of international commerce. The new, easy moving of people and capital gutted home grown business and national identity and in the process rendered traditional notions of "free trade" obsolescent.