Awakening monster economy

By Bukka Rennie
December 17, 2003

Last week when I walked through the retail stores on Frederick Street, I was amazed that almost everything I touched carried 'Made in China' tags. That surely was not the case 10 years ago, nor for that matter five years ago.

Back then, particularly after our break with British colonialism, every product of worth on the shelves of our commercial enterprises came directly from the USA. Now and again, here, there and in-between, you would come across something made in Taiwan or Hong Kong but seldom anything from China. The world has changed significantly.

Every morning when I access my e-mail, 95 per cent of the junk mail emanates from some Chinese manufacturing outfits listing available products in every possible line imaginable, eg hardware supplies, tools, equipment, household utensils, ceramics, toys, plumbing and electrical supplies, chinaware, etc.

And somehow one gets the impression from the presentation of the information that these Chinese manufacturing outfits are in fact cottage industries or community-based type enterprises, rather than huge, giant corporations such as those with which we have become accustomed in the Western Hemisphere.

There is though a suggestion that this may be an erroneous assumption that probably stems from the difficulty Chinese people have when attempting to communicate with an Anglophonic population, in that the style of "language" used seems somewhat simplistic and more parochial than the usual jingoism of the professional marketers employed by the highly centralised Western-type corporations.

The reality that strikes, however, is the fact that modern Chinese history narrates the efforts and endeavours of their social leadership at all levels to discover a path to economic development different to that which had become accepted, predetermined dogma to Westerners.

They were seeking a new way, and they made huge, earth-shattering mistakes but what they discovered in the process is today establishing them as an economic Goliath of the future. They know now that "small" is also "big" and that a co-ordinated network of the "small" is even bigger yet.

That is the secret to their economic growth; their economy comprises a network of cottage-type, community-generated industries. Not that there are no large corporations, but the bulk of business activity is efficiently streamlined through the networking of communities.

While speaking last week to a local businessman who imports from China, he indicated that the Chinese market their products vigorously and aggressively and regularly organise massive trade fairs, exhibiting therein a mind-boggling range of products that are globally competitive since the State subsidises manufacturing at every stage in the process, ie at the stage of raw-materials purchase, during actual production and finally at the stage of local and international marketing.

He too did in fact pay to learn that to facilitate trade with China, one needs to proceed via brokers based in English-speaking Hong Kong.

It is therefore not surprising to us that the economy of China has been enjoying a growth rate for the past few years that is above the average global growth rate. China's balance of trade with the US now stands in China's favour to the tune of some $120 billion. This has resulted in numerous calls from within America for measures of protectionism, eg tariffs and duties, against Chinese goods.

Ironically the catalyst for all this began back in the early 1970s with Richard Nixon's commitment to opening up the "Bamboo Curtain", China, the most populous country in the world, to direct American capital investments.

The result of this has been partnerships or joint ventures between Chinese and American capital and the establishment of Chinese subsidiaries of US-based multinational corporations, enterprises which now generate the bulk of China's exports to the USA and the rest of the world.

This year China's exports rose by 32 per cent, probably the largest increase in exports ever recorded. Obviously these corporations were attracted to China because of its low wage structure and the desire to maximise profit rates. Now they are being criticised for the jobs that America loses, and China gains, as a result.

This shift of business activity from the traditional epicentres to the so-called Third World has been happening for quite some time as the global market objectively extends and deepens activity in the marginal areas while at the same time its intrinsic cyclical contradictions seek resolution, only to burst out again in new areas with added antagonistic force.

In the last five years, with the growth of the information technology (IT) industries and the transfer of service-sector jobs to places like India and China, the process has intensified significantly. US firms are now doing their billings via St Kitts and Barbados, and if you call some US firms for particular information, the response comes from someone in India which has a "silicon valley" and is now a major world player in computer software development.

The Chinese are not far behind in this regard and when you factor in their manufacturing power and the fact that there are over one million universities and technical institutes in China, one can only just visualise the strength of what is to come. The monopoly of the West will soon be a thing of the past precisely because of what it has given to the whole world.

We said before that Western international capitalism is but only a moment in human history: 500 years. And what denotes this moment? Before it was scarcity and the limits to knowledge that determined the nature of political economy and the social arrangements therein.

Now, however, the peculiarity of the epoch is not scarcity, but opulence and the universality of knowledge which are only restricted in terms of distribution and consumption because of the very nature of the modalities, structures, and relationships that created and generated the plenty and the opulence and the universal knowledge in the first place.

Whatever is to emerge next in human history must by necessity be even more tightly global in scope and must be devoid of any structural restriction to universal consumption and sustainable development. But East must clash with West before this can become reality.