Asia Times: US template wrong for China

[marmar]

US template wrong for China
By Samuel Bleicher

A recent New York Times editorial gives China broad advice on the economic and financial crises, most of it wrong. Headlined "As Goes China, so Goes ..." (an allusion to the old US presidential election bromide, "As goes Maine, so goes the nation), the editorial distills the essence of the macroeconomists' conventional wisdom about the proper future direction of the Chinese economy: reduce exports, expand imports, and create a modern consumer economy.

The Times implies that China's government budget surplus, high individual savings rate, and endless consumer and social welfare needs make the task easy, if only Chinese policymakers would catch on. In fact, this transformation would be far more disruptive. Moreover, neither China nor the world can survive the creation of a clone of the 20th-century US economy in the coming era of high-cost energy and low-carbon footprints.

To get China's consumers to spend, the government will need to spend more at home, investing in public works projects and providing more social benefits - including health insurance and pensions - so its citizens don't feel they have to save so much for a rainy day. - NYT editorial

Noting that private consumer spending amounts to only about one-third of the Chinese gross domestic product (in the United States it has been over 70%), the editorial says China "must do more to unlock the savings of its citizens and encourage them to spend". And the switch would be easy - the Chinese government has a "huge budget surplus" and "money to spare"to execute this policy.

Attempting to reshape China into an American-style mass consumer economy, however, is a recipe for economic, environmental, and probably political, disaster. It's a path to the past, not the future. ........(more)

The complete piece is at: http://www.atimes.com/atimes/China_Business/JK20Cb01.html

[Joe Chi Minh]

1. Human costs! What's this about "human costs...?!?!?"

But seriously, what a sensible article, and a comprehensive rebuttal of the typical Anglo-Saxon capitalist, short-termist lunacy proposed by that New York Tmes editorial, which really would finish off the planet - quite apart from duplicating our uber capitalist, Western hubris.