Jamie Andrews

Dear Ashley Seager

I just read this article by Ashley Seager about the rise of China and other emerging economies. This is my response.

Dear Ashley,

I read your article with interest. Whilst it is interesting to read a recap of the prevalent theory of capitalist growth as applied to China and the US, I find it disappointing that so much conventional economic theory is taken as fact, when the last two years have shown us that things are far less predictable than ‘we’ thought.

For example, you state that

“By 2030 it [China] is likely to have eclipsed the US as the world’s top economy. Brazil will overtake France and Britain to become the world’s fifth-largest economy by 2025 at the latest”

Reading this reminded me strongly of the economic determinsm associated with Karl Marx’s writings and the notion that economic forces are independent of human activity. What happens in reality depends on what politicans and their electorates/citizens (both Western and Chinese) choose to do just as much as economic theory dictates it.

Besides, there is a hole in your argument, and the argument of the economists who project the growth of the Brics in the way that you report, because the historical growth on which the projections rely depend on China’s surplus fuelling the Western and particularly US growth. The twenty year trajectory for China overtaking the US seems ludicirous in light of this fact – isn’t there a better way to measure these figures? Just because its US GDP, its China’s money! They hold all the cards. China could choose to reduce its surplus now and take over the US economy almost immediately, notwithstanding the protectionism that would likely result.

The tone of your article was not bold enough to paint the picutre in these stark colours. This is understandable in a sense; we all know what panic can do to economically stability, and you wouldn’t want to contribute to it.

However, it would have been nice to have a different take on the theme of economic interdependence, which you fluttered towards at the end.

Instead of assuming that the interdependence would be based on conventional consumption-based economic growth in China’s domestic economy, we could choose to internationalise renewable power generation and increase economic efficiency through energy demand reduction. China’s suprlus could fund these efforts almost exlcusively and rise to economic prominence that way. This is what we need to be working towards and suggesting, not simply implying that “further economic stability would be nice, please China, consume more whilst we pay off our defecits”. That’s way too meek, especially for the Chinese.

Yours

Jamie

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