"China will not buy the world"


Among the few westerners able to look at the world from the Chinese point of view is Peter Nolan, professor of Chinese development at Cambridge University. In a thought-provoking book published last year, he addressed one of the big fears about China – that it is buying the world. His answer is no: we are inside China but China is not inside us.

To understand what Prof Nolan means by this, one must understand his view of what has happened during three decades of technology-driven global economic integration. The world economy has been transformed, he argues, by the emergence, through mergers, acquisition and foreign direct investment, of a limited number of dominant businesses, almost entirely rooted in advanced countries.

At the heart of the new global economy are what Prof Nolan calls “systems integrator” companies – businesses with dominant brands and superior technologies, which are at the apex of value chains that serve the global middle classes. These global businesses, in turn, exert enormous pressure on their supply chains, creating ever-rising consolidation there as well.


And of course, China is home to none of these businesses, even though Chinese consumers are increasingly getting spendy with it. Fact is, China is a fast follower, not an innovator. That has nothing to do with the Chinese people or Chinese culture, and everything to do with Beijing’s currency controls and its decision to make the country a sort-of sweatshop to the world.

There’s also the stasis induced by one-party rule. We keep things all shook up here with our institutionalized revolts every four years. We’ve lost quite a bit of that as both of our major national parties now favor big government — our elections simply mean less than they once did.

But China is politically locked into place, which locks entrenched businesses into place. And that’s not going to change until the people win back their power to change the government.


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