RE-Alt

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A Review of Joseph E. Stiglitz Article ‘China Century’ (Vanity Fair January 2015) upgraded in July 2015.

Opening arguments

(II)

By

Sampson I Onwuka

Professor Joseph E. Stiglitz opens his essay in (Vanity Fair, Jan. 2015) with a laconic 18th Century English

rondo, (1) “When the history of 2014 is written, it will take note of a large fact that has received little

attention: 2014 was the last year in which the United States could claim to be the world’s largest

economic power. China enters 2015 in the top position, where it will likely remain for a very long time, if

not forever. In doing so, it returns to the position it held through most of human history.” China he said

will likely remain in ‘top positon’ ‘for a long time’, ‘if not forever.’ We suggest that this point is more of a

punch line than a main focus, a hyperbole perhaps, but rendered in Economics it is a combination too

far. Looking at the basic outlines of his essay and how he roved from statistics showing that China has

superseded USA in GDP, he moves into an argument about the politics of Washington, which was based

on our knowledge of his opposition to the issue of Washington Consensus which may be suggesting too

much that one perhaps, he was moving from right of International Politics and trade to Washington

which needed to moderate its official policy in several parts of the World. Only to the extent that we

notice politics from policy and why in the major economies of the world do better than others, can some

redemption be possible in showing that International policies help define a people, any people.

The Professor mentioned that issue is important, that (2) “The world economy is not a zero-sum game,

where China’s growth must necessarily come at the expense of ours. In fact, its growth is

complementary to ours. If it grows faster, it will buy more of our goods, and we will prosper. There has

always, to be sure, been a little hype in such claims—just ask workers who have lost their manufacturing

jobs to China. But that reality has as much to do with our own economic policies at home as it does with

the rise of some other country.” Perhaps the cultural age of China gave way to the Industrial reality and

as they move from home front to global market, the world saw explosion of growth that they have

never seen since the Muslims and their Islam turned the world – most of it – as their footstool. I cannot

disagree with Stiglitz on his tutored analysis of the Chinese Century, which should be taken seriously in

spite of its gaps and actual grappling with reality, on the condition that China head to tail with US, China

has more people than the U.S, a matter of numbers and vital human energy and value given the

Population economies. We may suggest also that tail to head Chinese population ratio to U.S is three

times when American immigrants are rested here, all the Americans if not four. Why do we parry a

China who only lately after long and exhausted currency rotation and Government spending and world

isolation now meets us at the market place with both hands full of it. It is not clear how to proceed on

this matter, for if argument about clashing cultures reaches a new political levels, we may let on but

doesn’t seem like the chain of relation between new and old empires yielding to the new is suggestive

that China is a new World Order.

 

On China by Henry Kissinger @ 2011, “American exceptionalism is missionary. It holds that the United

States has an obligation to spread its values to every part of the world. China’s exceptionalism is

cultural. China does not proselyte; it does not claim that its contemporary institutions are relevant

outside China. But it is the heir of the Middle Kingdom tradition, which formally graded all other States

as various levels of tributaries based on their approximation to Chinese cultural and political forms, in

other words, a kind of cultural universality.” “On Mao death, America’s total trade with China amounted

to $336 million, slightly lower than the level of America’s trade with Honduras and one-tenth of

America’s trade with Taiwan, which had approximately 1.6 percent of China population. “

 

Warring States periods 475 – 221 B.C “treasure ships” of Admiral Zheng He – (JAVA, India, the Horn of

Africa and the Strait of Hormuz, at the time of Zheng’s voyages, the European age of exploration had not

yet begun. Deng Xiaoping to Carter who ended his speeches that the Soviet must be resisted, that

“(w)herever the Soviet Union sticks its fingers, there were must chop them off.” Tibetan, Uighurs,

Manchu and Mongols, tribes in China and We qi – ‘name of surrounding pieces’ , Mao Zedong, Ho Chi

Minh and Vo Ngoyen Gigs ---he argued were said to have not disguised their problems with Asia history

and the past, above all, there were concerned with domestic issues. The government could not prove

that it looked and acted differently, it was not easily to expect certain changes in normal economic

conditions without domestic transformations.

 

The trick as we some third economies is toe the lines of transformation without heading towards the

land of confiscation, predetermined prices, government control of choice and issues of International

trade. Yet the future of any economy which is what we learned from these Professor Stigliz is the

competitive economy and advantage and in the history of the United States.

Harry Gelber (2007) American entered into trade with China in 1784 had been done through the East

India Company through England 1784; chiefly interested in Aphrodisiac from England and Ireland

(Yohembe bark) and was introduced to the major ship routes by ‘Empress of China’ entered through

Canton to New York, Harriet and Hope.

“One of the first shipmasters on that route was Amasa Delano, a great-grandfather of President Franklin

Delano Roosevelt. When he sailed to Canton he was vastly impressed. ‘China is the first for greatness,

riches and grandeur of any country ever known’ was a statement attributed to Amasa Delano who

traded with his son – Warren, who joined the ‘House of Russell’ Americans bought Turkish Opium at

Smyrna on the Mediterranean and through the tans-continental Banks under the contracts with Scots

Jardine and Matheson, transferred deep resources to world power and resources. The history of

American ship going exercises especially in the South remain a test of process in globally factoring the

size of Chinese power at the turn of the 19th century, especially the longest running magnate between

Asia and privateer ship owners who loaned ships to U.S Navy and in time rent from the Government,

populated the major businesses and items and sometimes opium production which are over emphasized

in Texas perhaps and perhaps in Florida as the first of American States.

This early contacts explains a late reasonableness of American business in China and in Asia. We may yet

argue that the collapse ancient power was due local resources and focus which characterized Chinese

economy.

Beijing Consensus

Natural regional government and exercise of government is casualty in Communist government and for

China, it is a product of the last century. For all intent of international trade through Taiwan and Canton

and San Francisco, Americans were late comers to Asia in principle, arrived when the Napoleonic wars

had ravaged the world and its people. The wars divided Asia and explicate the reasons why Canton and

South China was destined to be controlled by Britain and the East Indian Company or the Royal Dutch by

proxy. A penetration into India and Cambodia was due to the English and French presence in Canton and

in the district leading to Yellow Yangzi and Hunan province where the earliest conflict between Sino-

Chinese and Westerners were effectively launched.

 

It is not here in Canton that the seeds of Vietnam wars were planted, but in command which the Seas

offered these arrivals from Europe and Africa following the ends of the hostility from Spain and Portugal

adds meaning to a period of Muslim rule and Moors who brought Cathay to the nearer Mediterranean

demographic and India. There is no one interest in the world history at this period, interested in

reconstructing ‘the great divergence’ or now – ‘the great convergence’ that will not fail to grasp that

seeds of 19th century were planted through the areas long forgotten, that the revolutions in U.S and in

Europe forced a linear conversion of one major aspect of productive lifestyle and military existence to

give Europe wings it didn’t have. Yet the political consequences of French in debacle – however brief –

do not juxtapose the economic consequence of a compromised Yangzi River. In the end, the problems

which bedeviled China were through and through local and domestic, through and through

international.

 

It matters it is a story undisguised from reality and with meaning which will define the century, that

China with long traditions was destined to be humbled by unlettered outsiders who were almost

pedestrian in their want of goods and newly mechanized appliances delivered separately in Europe and

the Americans. We are able to understand the minds of Chinese at this point, for how could an empire

struggling to defend itself of territory against Russia and the World, with maps of showing a China bigger

than a certain place called Europe be forced to accept the slippery nature of International Trade and

business relationship, that overtime local return of rate – however superefficient was not dependable,

for obvious it was not tested. A test of process in the Russia 1950 treaty with China for economic

expansion for 30 years, submerged China in of itself into doldrums of Russian Shield and China defense,

a fact too military to ignore that Russia arrived slightly early in redemption of Shanghai and Beijing from

the hands of Japanese acting in with pleasing disguise as friends of the Americans.

 

Then it matters now it does that economic corporation between nations are forged through big

corporation with leniency of International Corporation and Free trade agreement. It matters that some

measure of this agreement several controlling influences for Chinese integration with the rest world

until the ends of the treaty and embargo with Russia in 1980 or thereabout. It does not deny here that

part of the reasons why Mao Zedong was limited to the local market and exchange of goods was due to

the problems of control China had, yet in all, the restriction to overseas was not such a control devise as

they were the outcomes of a necessary existence. In Hong Kong much of the later struggles between

KMT and the Mao forces wagered, the territory was entirely under the cultural diction of United

Kingdom who signed sometime in 1860 a Beijing agreement with China concerning their rule in Hong

Kong and their sovereignty exhausted in 1997.

 

All domestic issues apart and all respective apart did not meet with meaning on international trade;

China relied mostly on experts on Western trade to free engage the rest of world. If these conditions are

destined are prerequisite for smooth transition into free economy, it should be taken seriously and

perhaps into account that between the North China and Russia, Japan, and… ‘The Dragon and Foreign

Devils’ “People from Japan, Korea, Vietnam, Persia and Western Asia came to China’s cities and the Tang

empire was hospitable to communities of Nestorians, Zoroastrians, Hindus, Jews, Arabs, Persians,

Mongolians and others. Nestorian Christianity founded by Bishop, Nestorians or Constantinople, who

have fled the east.”

 

Free Fall by Joseph E. Stiglitz – points to reaching to Housing Bubble, “…securitization had one big

advantage, allowing risk to be spread…” but generates imperfect information. “Those buying a

mortgage-backed security are in effect lending to the homeowner about when they know nothing. They

trust the bank that sells them the product to have checked it out, and the bank trusts the mortgage

originator. The mortgage originators’ incentives were focused on the quantity of mortgage originated,

not the quality. They produced massive amounts of truly lousy mortgage.”

“When the music stops, in terms of liquidity, things will be complicated. But as long as the music is

playing, you’ve got to get up and dance. We’re still dancing.” Chuck Prince, Financial Times --- July 9th,

2007.

 

Joseph P. Quinlan (2011) ‘The Last Economic Super Power’, “By early 2010, the Chinese economy was

growing at a 12 percent dip, a torrid place well above the rest of the world and one that unequivocally

proclaimed that China was emerging no longer. It had arrived.” “The Irony is that China is not entirely

comfortable sitting at the pinnacle of power. It has not been shy about criticizing the United States for

its part in triggering the global recession, going so far as to broach the topic of replacing the U.S dollar as

the world’s reserve currency.”

 

“But in terms of proactive measures of its own, China has been coy about stepping out onto the global

stage. It almost feels as if China’s moment has arrived too early – for Beijing and the world at large

Beijing, in many Cases, would still rather follow that lead.” Deng Xiaoping – “…remain free of ambition,

and never claim leadership” and Barely – (1989) a “The world accepted the Common refrain from Beijing

that China, despite decades of near 10 percent annual growth, was still developing, was poor, and was

incapable of leading the world given its own massive internal domestic challenges.”

Kishore Mahbubani author of the Great Divergence, States “Given…overwhelming domestic concerns,

the Chinese leaders have little appetite to lead the world.”

 

Too early to praise China and its resource allocation and too early to the kick for and against Global

investments opportunity, “The exotic global investments of the past are likely to become less exotic and

more mundane, in addition to being far more constrained. Since the crisis global financial reform has

become the primary rallying cry of politicians around the world.” How financial landscape will evolve the

global structure is a subject of some significance….especially Nicholas Sarkozy (French President) and

IMF who are increasing call for Ne Bretton Wood System. China has opted for a different kind of world

money order to U.S, that “Germany has opted for a unilateral ban or short selling for all stocks and Euro

– currency derivatives should sale be for speculative purposes. “Naked” short selling has also been

restricted.”

 

Dodd Frank ‘Wall Street Reform and Consumer Protection Act of 2010’and Governing dynamics,

American Policy and miscellaneous and in the process document the issue in terms of the business that

remains active in everyday business life and opportunity. It needs be compared from the past that a look

at the resolutions of Russia during and after the Bolshevik resolutions, points a China there was in

disrepute, rotten to its quick by the British preliterate ideologue and their proliferate French that barred

each other’s way but with understanding suckered China into a local and under-developed market. With

the rise of Russia, especially under Stalin, was a China riddled with uncertainties between Kuomintang

and the Ming or Red Party led by Chairman Mao. The drug ragged Shanghai and the double functions of

Du Yueh Sheng, the total collapse of Shanghai under finance minister and premier T.V Song and head of

states Chiang-Kai-shek and his elder and younger sisters; Ai-ling and Mei Song summarizes

determination under Chairman Mao and eventually Hua Guofeng who opened China to the rest of

world.

 

But new sensation that China is besting invokes the past triumphs of powerful states that in the last 50

years has seen Russia rise and in debacle – a debacle further complicated by the new measures of

President Putin in separating Russia from certain areas of the world market. It was not a best way to

replicate on a world sanctions, the better approach was to challenge the procedure in court, collectively

as the United Nations, G-20, BRICS economic block, the MINT and individual members of the signatory in

Courts of appeal of their individual nations. Such long process will meet the sanctions half way, enough

to redeem what is left of sanction. Russia did not do this, yet there will already struggling from the total

collapse of the long and powerful empire which they inherited from the Turks and ruled with their help.

The Japanese would be the next great wave whose export power and production hub transformed Japan

and in fact Asia into one of the world’s leading technology areas. Japan came very close to overtaking

the US in 1980-1982, but failed just by whiskers largely for the role of a SIC (V) Insurance Company

called these days AIG. The spread of AIG into Asia; Philippines, Japan and China, was so charismatic that

it may breathe easy on my comparative separation of quantity of money as a physical property and the

use of digital cash-less technology not exactly like the Cards. Japan’s rise heralded its decline. Its reasons

why so different from Russia ascending and descent, that new falcon on the block that would surpass

America was said by Robert Mundell not to be easily available. In limelight of the actions performed

against third world economies with more than a share of Tiger money to buttress, for instance money

derived from cash crop may have found its way to the hands of those in power, may have found it way

as a form of default and above all, it looks like the saying is equally correct that the idea behind regional

formation of currency may have been based on John Nash’s ‘Governing Dynamics’ which from his

essays, seem to dovetail on the fact that in chain of ….in other to release the forces held by the

Fareed Zakari drew economic landscape of Iraq, Afghanistan, Somalia, that “Over the past quarter

century, the global economy has doubled every 10 years, going from $31 trillion in 1999 to $62 trillion in

2008. Recessions have become tamer ever before average eight months rather two years. More than

400 million people across Asia have been lifted out of poverty.” Kishore Mahbubani (Dean of the Lee

Kuan Yew school of Public Policy), that ‘The last two hundred years of world history has been a major

historical aberration” ‘this is a key point that people in the West have a hard time wrapping their minds

around. From the year 1 to the year 1820, China and India consistently had the two largest economies in

the world. When you think about, it’s quite amazing that a small continent like Europe was able to

conquer and colonize the world. In many ways this global domination by the West, continued for a

surprisingly long time. But I think it’s finally coming to a natural end. So the challenge for the West is,

will it accept its loss power in the global system wills it resist the transfer of power?

From the optimism raised by the Kishore Mahbubani ‘2014’ (The Great Convergence), which lack some

degree of pronounced and specialist depth, but scores of the collective advantages of Global markets

without defeating its actual meaning it did not mention that the Global is not easily accessible. In the

context of Applied General Equilibrium, the themes of the Global Market is not new – net outflows

correlating net inflow; Outsourcing within the specific industrial sectors that levitate the diminishing

returns in one crop of real dividend at a bifurcation of an entirely or sub-ordinate alternate. There is no

ending to the acceptance that the ‘World is Flat’ in which a certain Thomas Friedman writes for the

larger playing field of world market which for him was inter-connected, gradually plain and flat rhetoric

about the business of everyday industries, about the idea that cultures of the world have a trade-in bias

for majority of the companies in the world. Therefore a process of meddling services needing more open

systems like judicial activity in handling Child worker cases in India and in how well some cultures of the

world attend to the….. What these men and women arguing for a flat world market is a market

condition where there are no profits for smaller companies, where there is no ending to mercantilism

and a market where the government of any type, can essentially dump any the rest of world market

without barriers and regulations.

Po ‘The great convergence’

Kenneth Pormeranz (2001) ----The Great Divergence, “The mines in Xuzhou and Suxian in Northern

Jiangsu, not too far from the Grand Canal, might have been the best positioned among the few mines

potentially within reach of the Yangzi Delta; but even in the Xuzhou mines, the cost of coal in Qing lines

doubled by the time it reached the country seat, which was also the canal port.”

Yangzi River, ‘lower Yangzi and Upper Yangzi’, Country of Anhui, Guangdong and Fijian ----

The Endgame of Middle Story Management….,“The Merchants and bankers in these trading nations of

Asia could not turn their investments into sphere of public interest protected by law and encouraged by

the state. Members of the public who invested their money in the bonds of the Republic of Venice or

Genoa or the Bank of Amsterdam were not free from financial risks. But the bonds had the qualities of

legal recognition and of mortgage value.”

 

The Communist Community based Utility Complex propels productions, shrinks its consumer based

market and offers all sorts of challenge when there are materials cases separating a Communist

economy from a Capital economy. This is a big concern since in the immediate circumstances of world

market, or World Market as is, there are still gaps in consumer markets that can be explored, but a level

is not without reach and a Global Convergence in a Globalized world market not without Plateau, which

in recent times is incidental to Great Depression where the absence of disparity between Europe

markets and US created a flux in the primary direction of price movement. Momentum achieved

through Keynes leads mainly to Divergent market dynamics and not it’s Convergence. We may

understand how Globalization works from Jagidish Bhagwati’s ‘Defense of Globalization’ and ‘Why

Globalization Works’ by Martin Wolf, these two are well known theorist of Global Free trade. William

McGuaghey (1993) lavished on Bhagwatti essays which appeared in Foreign Affairs where he quoted

Bhagwatti’s defense of GATT over NAFTA, that “If the United States turns foolishly away from the world

to her own backyard, the European Community’s likely reaction would be; fine, get buried in it.”

But from at least the regimes of the arguments which we can referee from Mabhubani ‘Great

Convergence’ is his citation of Eswar Prasad (Cornell University) lecture on Global Market and

Globalization that “The notion of a single global economy is a big step from the high level trade and

financial integration we now observe. As we are seeing from Europe however, you need an institutional

framework that is global in nature to manage a global economy as a single unit. You would then a

unified political system or at least a high level of coordination at the political level.” A careful read

through on the plain discourse on the political activity of a global market is shortened by the sight to a

global political network – not exactly dissimilar to a smaller Communist system dynamic, but seem from

long and tenured official position of Prasad on Europe, leads him to see without necessarily accepting

that the role of Government in selecting and moderating price no less dissimilar in history to socialism as

the vitae of a Globalized future world. It is necessary to the extent of not diminishing the driven roles of

individual efforts and companies towards the actualization of profit.

 

Such markets without friction and are flat, are markets that are not essentially real and are prone to

damages and devoid of the laws of comparative advantages away from Says, Ricardo, Jevon, and in

recent times,…, such world is a world of zero accountability, judicial inactivity or interferences, and in

Free Falling (Stieglitz)…. There are objections to the land field theorem of a large, burgeoning and

expanding world where all and everything is possible. The timing of these scheduled execution of

businesses in between the member states of various organization and less than independent Labor

Union. Paul Blustein (2010) stated in his Misadventures of the Most Favored Nations, that U.S Steel

companies can impose “….as high as 30 percent on imported Steel, based on “safeguard” rules that

allow countries to raise such duties when suffering from a sudden flood of imports”. In his case against

WTO, the problem of flooding markets with cheap imports in the name of resource allocation was

essentially creating a labor gap which the safeguard through tariff did not fill, that the issue bothers on

geographical indication where the 135 members of World Trade Organization varied in their profits and

losses towards achieving a more resourceful economy.