China, Trade and Power: Why the West's Economic Engagement Has Failed

Why the Wests Economic Engagement Has Failed

Stewart Paterson

• Publisher: London Publishing Partnership
• Year: 2018
• Print ISBN: 9781907994814
• eBook ISBN: 9781907994838
• Edition: 1
• Topic: Business
• Subtopic: International Business
• Index: Business

From a Western point of view, the policy of economic engagement with China has failed. A rapid rise in living standards in China has helped legitimize and strengthen the Chinese Communist Party's power. How did Western, market-orientated, property-owning, liberal democracies go from being in a position of complete global hegemony in the early 1990s to the current crisis of confidence and loss of moral foundation? This book tells the story of the most successful trading nation of the early twenty-first century. It looks at how the Communist Party of China has retained and cemented its monopoly on political power since China's accession to the World Trade Organization in December 2001. It is the most extraordinary economic success story of our time and it has reshaped the geopolitics not just of Asia but of the world. As China has come to dominate global manufacturing, its economic power has been translated into political power, and the West now has a global rival that is politically antithetical to liberal values. The supply-side deflation from allowing 750 million low-cost workers into the global trading system combined with the policy of inflation targeting by Western central banks has led to falling real incomes for many in the West and rising asset prices that have benefited the few. Worse still, China's mercantilist model is now held up as a viable economic alternative. To have a fighting chance of protecting the freedoms of liberal democracies, it is of the utmost importance that we understand how the policy of indulgent engagement with China has affected Western society in recent years. Only then can the global trading system be reoriented for the mutual benefit of all nations.

Index

Africa, 95, 123, 150

AIG, 110

Airbus, 25

Albright, Madeleine, 19

Anbang, 128

Asian financial crisis, 13, 39, 88, 98, 115

Asian Infrastructure Investment Bank (AIIB), 118, 123

asset price inflation, 6, 7, 97, 108, 109, 143

Australia, 5, 80, 91, 92, 95

B

Belt and Road Initiative (BRI), 122–124, 128, 147

Bernanke, Ben, 101, 102, 104, 117

BMW, 70

Boeing, 25

Bo Xilai, 136

Brazil, 5, 92, 95, 98, 118

Brexit, 71

Brittan, Leon, 24

Bush, George W., 24, 98

Bush tax cuts, 99

C

Canada, 5, 80

Cato Institute, 22

central bank independence, 107

China

capital controls, 127

contribution to global growth, 51

deflationary impact of, 79–89, 97–110, 149

demographics, 119, 147

environmental degradation, 69

exchange rate, 6, 44, 68, 73, 74, 75, 82, 85, 101,...

Table of contents

• Acknowledgements
• Introduction: May You Live in Interesting Times
• Unconditional Economic Engagement: Motives for WTO Membership
• Communist China’s Post-WTO Economic Transformation
• The Triumph of Mercantilist China
• China’s Global Impact: Turning the World Upside Down
• Making Things Worse: Inflation Targeting in an Age of Deflation
• Hearts, Minds and Wallets: Washington versus Beijing
• Political Reform with Chinese Characteristics
• The Legacy, the Mistakes and a Change in Direction
• Index