【foreign police】Is China the New America?

渔音谦谦

Is China the New America?

地址：http://www.foreignpolicy.com/story/cms.php?story_id=4778&;page=0

In the Great Depression, as in the current economic crisis, thedownturn was particularly severe because of a lack of leadership in theinternational order. The dominant financial power of the 19th century,Britain, was financially exhausted by the First World War. The newmajor creditor, the United States, had emerged as a strong economicplayer, but did not yet have leadership committed to the maintenance ofan open international economic order. The simple diagnosis was thatBritain was unable to lead, and the United States unwilling.

Ifthe scenario sounds familiar, it should. The story from the GreatDepression has an uncanny echo in current debates about internationaleconomic leadership, with the United States playing the role of Britain-- the exhausted debtor economy -- and China taking the place of theUnited States as the world's largest creditor. But if China is theAmerica of this century, can it do a better job than the United Statesdid in the 1930s? The way in which the emerging superpower takes tothis role will determine in large part how the world will emerge fromthe downturn and the shape of the new global economic order that willfollow.

Charles Kindleberger, the late economist, argued thatthe United States should have acted as a lender of last resort in theearly 1930s, continuing to keep its financial markets open toinvestment and its market open to foreign goods, rather than headingdown the path of protectionism. It should also have stimulated theworld economy through countercyclical fiscal policy.

But at thetime of the Great Depression, there were all kinds of convincingreasons why Americans did not want to take on the burden of a worldwiderescue. Sending more money to Europe was seen as pouring money down thedrain, and after all, Europeans had fought the world war that had beenthe root cause of the financial mess. Economically, helping Europewould have made a great deal of sense from a long-term perspective, butpolitically it was a non-starter with no short-term payoff.

Inthe middle of the current financial crisis, a deep-pocketed China facesthe same dilemma: swallow its pique and help save the same countriesthat got us into this situation, or look to its own short-terminterests first. Today, there are increasing demands that Chinacontribute more to internationally coordinated rescue packages througha reformed International Monetary Fund (IMF). China is also one of thefew economies still growing in 2009, though most economists havereduced their estimates of growth rates. Finally, China and the UnitedStates are the only countries that are large enough, and havesufficiently well-ordered government finances, to launch major effortsat fiscal stimulation.

Beijing's leaders might feel like theyhave already taken their best shot. The initial stages of the creditcrunch in 2007 were managed so apparently painlessly because sovereignwealth funds (SWFs) from the Middle East, but above all from China,were willing to step in and recapitalize the debt of U.S. and Europeaninstitutions. Between November 2007 and March 2008, the SWFs provided$41 billion of the $105 billion injected into major financialinstitutions. Had this process continued, the events of 2008 would haveincluded problems with U.S. real estate and a severe stock marketdecline, but no meltdown of financial institutions.

But afterMarch 2008, the availability of funds to prop up the global financialsystem shriveled up. The pivotal moment in today's events came when thestate-owned China Investment Corp. (CIC) was unwilling to go further inits exploration of buying Lehman Brothers. CIC's turning back will beheld up in the future as a moment when history could have shifted in adifferent direction.

Today there may be plenty of reasons whythe Chinese will be tempted to pull back from their engagement with theworld economy, and the external political logic sounds very much likethe U.S. case of 1931. Some of the economic arguments reverberatingaround Beijing are very reasonable: There is a great deal ofuncertainty, and the SWFs have lost a lot of money already and mightlose more. China's investments in U.S. securities in 2006 proved to bea huge costly mistake. Clearly the CIC would have initially lostfurther billions had it tried to rescue Lehman. Other lines of thoughtare more emotional and political: Might not 2008 be a righteous paybackfor the U.S. bungling of the 1997-1998 Asian crisis? Trying times tendto heighten paranoia.

There are also many domestic reasons whyChina might be wary about opening up to the global economy. The Chinesebanking system is still quite opaque and might still have to wrestlewith the legacy of problems of the 1990s, in particular, bad loans tobig state-owned corporations that were the consequence of a politicallogic of directed credit. China is investing large amounts ineducation, but it may be more difficult to build a creative andinnovative society that replicates the dynamism of the United States inthe second half of the 20th century (which was fed in large part byopenness, above all openness to immigration). China also faces aproblem of aging and even demographic decline after the 2040s as alegacy of its one-child policy, which has also created a potentiallydestabilizing surplus of young males. With all these threats tostability, an authoritarian though reformist regime may find it harderto respond flexibly to popular demands and may be prone to try tomobilize a reactive nationalism to fend off challenges to its authority.

Thepressure to engage in large-scale fiscal stimulation is also likely toalter the balance of China's economic development. The Chinese model ofcapitalism is very different than that of the United States, and evenbefore the economic crisis, there were two alternative models. Thefirst was the rural, family, and small-business-based boom of the1980s. But by the 1990s, some of the private-sector growth was beingchoked off by a rival vision of economic growth built around prestigeprojects and the large, state-owned enterprise sector. ConsiderShanghai, which impressed many commentators as the most modern city inthe world: Analysts of the Chinese economy have suggested it is one ofthe least entrepreneurial cities in China. Yasheng Huang, in his bookCapitalism with Chinese Characteristics, described it as "a classicindustrial-policy state." The new stimulus package is likely to pushthe balance of Chinese development more decisively in this latterdirection, toward state capitalism.

China thus has plenty ofreasons why it might want to close itself off to the forces ofglobalization, as the United States did in the interwar years. This thinking will be reinforced by the structure and character of theinternational order. Again, an interwar analogy is appropriate. TheUnited States felt uncomfortable with the international institutions ofthe interwar period, in part because they were aligned with theinterests of the old hegemonic power, Britain. The League of Nationslooked as if it was an instrument of British power. Similarly, in themodern context China worries about whether it is adequately representedin U.S.-dominated international institutions. Its influence in the IMFand World Trade Organization clearly does not correspond to its realposition in the world economy and to the role that China could play ineconomic stabilization. Reforming international institutions is thus akey issue in deciding whether the coming geopolitical alterations willbe crisis-ridden, abrupt, and disruptive, or whether a more gradual andpeaceful path of adjustment can be achieved.

Just before theAsia-Europe meeting last October, President Hu Jintao stated that Chinawould behave "with a sense of responsibility." It remains to be seenwhat stake China really has in the survival of the global economy. Asin 1931, the political arguments are all against a rescue. Only thefarsighted will see that the economic case for such an operation iscompelling. Much depends on the extent of China's voice in an alteredinternational institutional architecture.
But that voice willmake demands that are increasingly difficult for the old world toaccommodate, including demands for a guarantee of China's U.S. assetholdings and suggestions for an alteration of the world's reservemanagement. In proposing a global reserve currency to replace thedollar, the Chinese central bank president recently followed in thefootsteps of Charles de Gaulle in the 1960s. But unlike France, Chinais in a much stronger position to assert its preferences forinternational monetary reordering.

In other words, the world maybe asked to transition from an American to a Chinese model ofcapitalism, and as in the 1930s, that won't be an easy switch for anyof us.

渔音谦谦

这篇俺自己领走了。。。。