29 May, 2022


Xi Positions China For Global Economic Leadership

By Kumar David

Prof. Kumar David

President Xi Jinping veritably let the cat out of the bag with his speech at Davos (World Economic Forum) in January. As Trump’s America abandons the international scene and retreats into fortress America, it is clear that the Chinese have decided that it is a golden opportunity to fill the vacuum and take pole position. Trump has overreached and the US is scampering to recover some mileage with post-Brexit Britain and Japan but overall it has lost the plot, at least for now.

The highlights of Xi’s presentation were:

  • Globalisation is good; it is not the problem. (“The problems troubling the world are not caused by economic globalization”).
  • Globalisation promotes prosperity and makes for win-win relations between countries. (Globalization has powered growth and facilitated movement of goods, capital, and advances in science, technology and civilization”).
  • Economic autarchy and turning inwards is passé. (“Cutting the flow of capital, technology, products, industries and people and channelling the ocean’s waters into isolated lakes is not possible; it runs counter to history”).
  • New relationships are needed. (“The global governance system fails to embrace recent developments and falls short in representation and inclusiveness”).
  • The gap between rich and poor is obscene. (“There is growing inequality and widening gap between return to capital and return to labour. The richest one percent of the world owns more wealth than the 99 percent. Over 700 million people in the world are living in extreme poverty”).
  • Development models must be socially driven – implying it can’t be untrammelled capitalism. (“A sound development philosophy and model is essential for balanced development and ensure that people have equal access to opportunities and share in the benefits”).
  • Without saying it in so many words, Xi is saying that China is ready to step in where Trump’s US is pulling out. (“China provided 400 billion Yuan of foreign assistance, undertook 5,000 foreign assistance projects, and held 11,000 training workshops for 260,000 people from developing countries. China has attracted $1.7 trillion foreign investment and made $1.2 trillion direct outbound investment, a huge contribution to global economic development”).
  • China is committed to action on climate change. (“Global climate change must not be allowed to fail”).
  • These remarks alone give the game, if you call it that, away. China is priming itself to take global economic leadership. An ideological tilt is also evident; Xi is phrasing things in ways unthinkable for any US President to mouth. China cannot match the US in military clout or diplomatic influence – except on the Taiwan issue where China will even go to war. Economic power is where it will assert dominance over an ailing America. Add in things like the new ‘One Belt – One Road’ dream of a new land and sea Silk Road which is well underway and the new Asian Infrastructure Development Bank, and you get a picture of the game plan.

One of our Deputy Ministers misunderstands all this and imagines that Xi is a recent convert to the classical economics of Smith and Ricardo. This is not the case, and as I argue in the accompanying piece, liberal economics is passé anyway. Xi’s play is to make China the world’s premier economic power and displace the US, not to espouse liberalism. His internationalism could just as well be out of Karl Marx (“Communists are reproached with desiring to abolish countries and nationality; workers have no country”).

The Chinese economy is state-capitalist, not market capitalist, though it uses the market for efficient resource (capital) allocation and distribution of consumption goods. Economists who imagine that a high percentage (over 50%) of the economy is in the hands of the private sector are guilty of oversimplification. A huge part of “private enterprise” is underpinned and controlled by central and provincial governments. I can quote chapter and verse but one obvious example must suffice. The booming property market, the apparently private housing and real-estate sector, is underpinned literally in state-owned land and financially in how developers are funded; a façade for state supervised economic activity. The same is true of larger “private” manufacturing enterprises. The Communist State dictates terms to the whole economy.

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Latest comments

  • 0

    Won’t work! Countries might use China a bit, but in the end, all the hard work China will put in will only strengthen the US dollar even further. Why? Because US still has consolidation on original innovation and tertiary education – and Trump will never let go of that. Of course US military might will quell any thoughts on upheavals of currency. Thus any intricate social and commercial networks created by the Chinese will have no great revolutions in monetary values. But they will be accessories to the good life, anyway.

  • 1

    Let asia have a common currency.

  • 0

    When long -march was begin by CPC and Mao was in-charge Yen nan caves, I still having my memory that said by Issus Dorchester of Poland Trotskyite, who had been slandered against Mao Zedong ,how can he learn Marxist Dialectics by the living in caves?

    That was inductive logic forwarded author of Duchester by who wrote book of “Unfinished Revolution”.

    Now writer said his comment of “Communist state dictated terms to the whole economy”. I disagreed with this comment.
    That give wrong picture of the whole world economy by and that where China stand for what direction ?

    Still China 12% of world GDP,. IMF SDR Yuan is portion is 11% of out of total US $ 11 Trillions dollars by time China is developing her economy in deeds.

    She cannot dictated terms her whole Economy is quite impossible by even her own country with their territorial limits time being .
    The productive forces has ample oppournity to release by their vast land and manpower factors are concern. The Driving force of new technology and Science innovation China is behind USA, EU countries and Japan.

    The relations of production is in primer stage of socialist mode of production, the major part play by market economy is timely driving force of development and its GDP still far behind by China.

    In such background China is not prepared to extended that materialist that conditions to command whole Communist an Economy.
    Needless to say that is the wrong perspective by anti- Marxist approach of whole world economy by metaphysis outlook of world.

    In present context China has no ability to meet such demand by socialist political forces.

    The current world economy is doldrums by decaling old Imperialist world Order was founded by USA led monopoly capitalism since 1945 after end of second world war.

    The objective of concrete that an analysis of world economy, which still dominated by USA, UK, EU and Japan even their pace rate growth become low and market economy leads to disintegration of moribund capitalism. But USA timely command whole world economy.

    Well known facts says shifting old into NEW Order is not so easy task; its need time factor by clearing complexes of anarchism of mode and relation of Global Economic.

    Hence so that uneven development of monopoly political-economic powers so many inequalities has newly arises are vast in many sphere of Productions, life of society and its political-economic system of monopoly capitalism. The unaddressed of inequalities of old order and their problems need to be identify by New political -economic -social order are the most paramount issues challenge to face China.

    That is task of current leadership of CPC led by Xi Pen, has undertaken by new order of the day.

    What I come to understanding that certain features of CPC leadership are in right path of New World Order by enriching commanding Economic step by step.

    This is positive move by CPC of China, which is working on grand planning by focus of correct handling of current world situation by Xi pen leadership of CPC and PRC.

  • 0

    What ever it is China is building a solid foundation. China is moving to every new field that they think they need to move. On the oother hand, USA tried to win the world mostly with military power, international currency, building maga cities which caters to the whole world. people moved to work in these mega cities. Peasant farms became hugh private co-oprative farms. Their factory production went bust. Eventhough Trump wants it back that won’t happen. He needs money to maintain so many military camps all over the world. Rich europeans are not helping or paying the installments, that is why they have to move smaller countries which pay their share. China has a large reserve of dollars, so, why should not they support it.

    • 0

      jim softly,

      US mega cities have an over 150-year history. People moving to the mega-cities was a natural flow, initial by millions upon millions coming in as immigrants in the early 1900’s. They also have a history of destroying the land, but there is some attempt to reverse that. Their monetary value was gained by their creativity and ingenuity of making structures and items that the whole world needed and/or desired. Creation of things has possibly come to some stalemate. Only thing that is needed now is for the dollar value to be maintained.

      China doing exactly what the US did (but in less than 10 years), will surely bring them crumbling down too soon. China is blatantly copying the Western structure, with little originality in sight. In one-year is a mega-city built in China. Natural productive farms are decimated in a jiff. China might have a large reserve of dollars, but it is the eventual meaning to that money that creates its value.

      On what set of creative codes will money achieve its new value, it is wondered. In the meantime, US will ensure that their currency value is maintained by their military might. China might attempt to neo/soft-colonize places, but who will want to play around with nuclear codes when it can be a win-win situation for all.

  • 0

    The point where I strongly differ is the implied assumption that China is still socialist.
    China as a global power will move further away from socialism. And growth based on indifference to the environment and even the plight of the lower strata of society will make a smooth return to socialism impossible.

    Trump may push the US to the brink, but China is no pushover anymore, as it may have seemed to some when the US attacked Syria & Libya.

  • 1


    “but China is no pushover anymore,”

    Therefore let us invite China to rule this island because many so called Sri Lankan Mao intellectuals believed China was truly a socialist country and made all transactions with other countries based on comradeship and socialist principles, never had its own interest at heart of its international relations.

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