Monday, 6 April 2009
Chinese flip new page in push to be superpower
Mr. Song Hongbing's Currency Wars is reportedly read by senior levels of government and business in China but Beijing seems to be treating the recent nationalist works more warily. Books like China is Unhappy have been slammed by academics for being "extreme".
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Chinese flip new page in push to be superpower
New wave of bestsellers pressing Beijing to exert its economic influence
By Grace Ng
6 April 2009
It is time for China to wage a bloodless economic war, says a collection of books here which has shot up the bestsellers list.
The genre, dubbed ‘economic nationalist’ literature, has gained popularity just as the world looks to the world’s third largest economy to lead it out of the financial crisis. The Chinese should rise up to this role, suggest the books.
The running theme - which has inspired many similar essays online - is that China should use its growing economic might to transform itself into a global superpower.
Currency Wars, for example, a book published in 2007 but enjoying a resurgence recently, pooh-poohs the popular notion of a G-2 or ‘Chimerica’, which suggests the co-dependence of two world powers - the United States and China.
Author Song Hongbing believes that a ‘great power’ like China does not need the US to become a world power. In fact, it should ‘distance itself’ from the US.
After all, the root of the world’s problems for nearly a century - from the Great Depression to the Asian financial crisis - is Wall Street’s manipulation of the global financial system, he says. China should be prepared to fight ‘bloodless wars’ waged by ‘evil forces’ like the US Federal Reserve aimed at destroying the Chinese economy, Mr. Song’s book concludes.
If that does not send chills across the developed world, another book, China Is Unhappy - which just hit No. 3 in the bestseller’s chart - laid bare Chinese unhappiness with the current set-up where the West holds major influence.
‘With Chinese national strength growing at an unprecedented rate, China should stop self-debasing and come to recognise the fact that it has the power to lead the world, and needs to break away from Western influence,’ it said.
But what actions should this economic nationalism take? The West fears that China would adopt ‘beggar-thy-neighbour’ economic policies to protect its domestic interests. Last year, the European Union Chamber of Commerce in China cited ‘growing economic nationalism’, shown by China’s barriers to market access, as a key concern among its 1,400 members.
In 2007, then-US Treasury Secretary Henry Paulson also used this phrase to describe some of China’s actions, including its refusal to float the yuan.
The Obama administration recently published a 55-page catalogue of Chinese subsidies and policies that it said discriminated against American companies.
The recent rejection of Coca-Cola’s bid to take over Chinese juice company Huiyuan fuels these fears.
According to Beijing University international studies expert Wang Jisi, some define economic nationalism as a form of ‘strong trade protectionism as well as caution and resistance to global capital flow’.
Others, like blogger Xian Liangping, described it in a more benign manner - ‘creating companies that are global leaders, the same way South Korea’s economic nationalism created brands like Samsung’.
While some are worried that the Chinese government would pander to such economic nationalism, pointing to the failed Coca-Cola takeover, analysts believe that Beijing is trying hard to manage, and contain, it.
Unlike Currency Wars, which reportedly was read by the most senior levels of government and business in China, Beijing appears to treat the recent batch of nationalist literature more warily. State news agency Xinhua reported two weeks ago that China Is Unhappy ‘fails to inspire the masses’. It also quoted academics such as Professor Shen Dingli of Fudan University lambasting the book for being ‘too extreme and nationalistic’, showing Chinese intellectuals purveying opinions that would serve only to demean their own nation.
Currency Wars, in contrast, is enjoying fresh public interest as its proposals appear to be playing out in some of China’s recent economic policy moves. Mr. Song advocates reducing China’s investment of foreign reserves in US-dollar assets, an appreciation of the yuan to protect China’s longer-term interests and reducing the US’ dominance of the global financial system.
Indeed, the yuan has been on the rise against the US dollar over the past few years, and Premier Wen Jiabao shook the world with his frank statement last month that China is ‘concerned’ about the safety of its investments in US-dollar assets.
China’s central bank governor Zhou Xiaochuan’s proposal before last week’s G-20 summit for a new reserve currency to replace the US dollar also appears to signal Beijing’s shift towards a more assertive role in shaping a new order.
But why does the state differ in its reaction to the current batch of economic nationalist literature and Currency Wars?
Currency Wars focuses on how to boost China’s economic strength by resisting the West’s control over the financial order. In contrast, China Is Unhappy demands that Beijing makes radical changes in all its foreign policies ranging from economic to military, said retired Australia-based finance professor Shi Yuzhong.
‘China is ready to play a big role in global economic affairs, but it is treading carefully about exerting the same sort of ‘nationalism’ in other areas like foreign policy,’ added Prof Shi.
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