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The economic leadership award

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Stephanie Flanders | 14:50 UK time, Monday, 30 March 2009

They won't be giving out awards at the G20 summit this Thursday, but what if they did...?

The week's first award is for Most Promising Display of Global Economic Leadership and it goes to the Chinese.

Take the issue of fiscal stimulus, now jokingly referred to by officials as the "story that will not die". While America and Europe have been publicly squabbling over who will stimulate when and at what cost, China has quietly accepted that it needs to do more than its fair share.

According to the IMF, China's active measures to stimulate its economy come to 3.2% of GDP this year, by far the most of any major G20 economy. The average is just under 2%. And China is already planning stimulus of 2.7% of GDP next year, compared to a G20 average of 1.3%.

In many ways, that is as it should be. After all, the Chinese are the ones with all the money these days. Their foreign exchange reserves alone are close to $2 trillion.

A pedestrian is reflected in the walls of a business decorated with replica Chinese 100-yuan notes featuring a portrait of late Chinese leader Mao Zedong in Hong Kong on March 1, 2009

You might also say that China's actions are down to self-interest rather than global statesmanship. After all, they need to keep their economy going just as much as everyone else does, probably more.

If you look at history, an economic slowdown after a period of rising expectations and dramatic growth is a prime recipe for revolution.

But by actively pushing up domestic demand, the Chinese are at least looking to participate in the re-balancing of global demand that most economists would say is the only sustainable path out of this mess. And they are not (so far) looking to devalue their way to recovery.

As I've noted before, this crisis has pointed up the costs of an imbalanced global economy for savers and spenders alike. Borrower countries like Britain and America are suffering, but so are those that sold to them: the big exporter, saver, nations like Japan, China and Germany.

One of the many reasons the Americans are focused on getting other countries to do their part at the G20 is that they know a recovery built on the US consumer (and taxpayer) isn't going to stand the global economy in very good stead in the future.

Every government needs to prop up domestic demand, but saver countries need to do the most. Germany has done more here than you might think: it has stimulus plans worth 2% of GDP next year.

But, buried in the German chancellor's interview with the FT on Saturday was an astonishing rebuff to the re-balancing scenario outlined above.

Angela Merkel told the paper: "the German economy is very reliant on exports, and this isn't something you can change in two years." So far, so unexceptional. But note the rejoinder: "and it is not something we even want to change".

Charles Dumas, of Lombard Street Research, has pointed out that more than 80% of Germany's growth since 2001 has been accounted for by exports (and much of the rest was export-related spending and investment).

That is a tribute to the imbalances in the global economy that helped create this crisis, and which are leading Germany to have one of the steepest economic declines of any European economy. Yet, amazingly, it is not something the German government would like to change.

Contrast that with China, which not only takes dramatic steps to boost domestic demand but openly debates how to create a better system in future.

At the recent meeting of G20 finance ministers and central bankers in Horsham, Zhou Xiaochuan, the governor of the Chinese Central Bank, talked about creating a system more similar to Keynes' original scheme in 1944, where it's not just deficit countries that face pressure to rebalance their economies.

Last week Governor Zhou made those views public, in a short paper laying out the case for a new international reserve currency based on the IMF's internal unit of account, the Special Drawing Right.

I'll say more about the ins and outs of this proposal in another post. Let me just say here that while the markets have understandably focused on the short-term impact on the dollar, the long-term implications for China of such a system would be no less challenging.

In the lead-up to the summit, many G20 officials, including Mervyn King, have been talking about the need for a better mechanism to prevent global imbalances building up in the future, not just in banking but at the level of global trade and capital flows.

Here is a senior Chinese official promoting an ambitious long-term solution that would have made it quite difficult for economies like China to exist. If there had been a Keynes-style global currency system, China would have had to rein in exports and cut domestic saving a long time ago. There would have been no wall of cash looking for safe, or pseudo-safe, assets in countries like the US. And we wouldn't be where we are today.

Maybe Governor Zhou is making mischief at America's expense. Maybe he hasn't gone back to the Keynesian roots of his idea to see where, exactly it would lead (though I would find that very surprising).

Regardless, set against the rather unstatesmanlike behaviour of many of those coming to London this week, in my book it still counts as a reason to give China the prize.
Tomorrow I'll be awarding the prize for the G20 Economy Best Prepared for the Global Crisis. Watch this space. Clue: it isn't the UK.

Comments

  • Comment number 1.

    As the Chinese fund their stimulus they will probably have to sell a big part of their US (and UK?) government bonds. So who will fund the US and UK deficits?

    At the very least US and UK bond yields will have to rise to compensate for the loss of Chinese investment.

  • Comment number 2.

    Even if his solution would prevent the current Chinese economy then so what. I am increasingly wary of the once size fits all solutions for the different economies. The herd mentality does not only apply to traders but also to politicians and if differnet countries feel they need to take different approaches then perhaps by this fact we will be introducing more agility and resilience into the system. Western politicians may need to hold their tongue as the days when they could lecture on governance, anti-corruption and proudence are a distant past.

  • Comment number 3.

    Hoping for a job with our new Chinese overlords next year, SF?

    You say:

    "If you look at history, an economic slowdown after a period of rising expectations and dramatic growth is a prime recipe for revolution."

    Ouch. We've just had the biggest of all booms and it's about to be followed by the mother of all busts... it's going to be VERY messy in the West according to your logic. Or does your reference only apply to non-Europeans...?

  • Comment number 4.

    When I studied economics (a little while ago I have to admit) markets were perceived as self regulating with a gentle shove when needed from governments.
    So, while I accept that some banks need a gentle shove to stay in business it seems to me that this over activity on regulation, fiscal stimulus etc is a bit premature
    We cannot return to the cavalier way of doing business so the most important bit is not to resort to protectionism and to keep trading
    Banks have already self regulated in that they are now scrutinising assets and loan conditions, public spending is being reigned in (well in lots of countries as they seek to reduce debt overall)
    The co-ordination should come in the sphere of trade - all the rest looks like governments doing anything they can to stop people feeling any pain - and that seems impossible to me
    If you have a cold you can take every remedy possible and it clears up in about a week - if you do nothing it takes about 7 days ..
    What we'd be better doing is deciding where we want to go next , rather than hanker after what we had - its gone , get over it

  • Comment number 5.

    There is little demand for Chinese, German and Japanese manufactured goods.

    There is little demand for British and American financial services and defence manufactures.

    There is little demand for commodities.

    In this situation, I would like to have savings to fall back on, and a degree of self-sufficiency to protect me from imported price inflation. I wouldn't want to be over-indebted, reliant on imports, and have a weak currency.

    The USA still possesses the world's reserve currency, a stable political system, economies of scale and a good work ethic. Britain, alas, is not quite so fortunate.

  • Comment number 6.

    "At the recent meeting of G20 finance ministers and central bankers in Horsham, Zhou Xiaochuan, the governor of the Chinese Central Bank, talked about creating a system more similar to Keynes' original scheme in 1944, where it's not just deficit countries that face pressure to rebalance their economies."

    May I remind you Stephanie, that despite appearances/spin/makeovers (incl.SEZs aka NEPS) the 1.x billion people of the People's Republic of China have a Stalinist Constitution which is Democratic-Centralist, and, like the USSR have a central bank akin to a GOSBANK.

    As to Keynes, didn't he say in the foreword to the 1936 German edition of his magnum opus that it was best suited to a totalitarian state?

    Still what does any of that matter. We're all made of chemicals!

  • Comment number 7.

    Let's face it, there is no way that the US and UK can keep their current standard of living. Both need to import goods that are not produced within their borders. To pay for them, they should export things that are demanded in other countries but are not produced, or produced well enough, or produced cheaply enough inb those countries. Instead, both the US and the UK have flooded the rest of the world with promises. "Yes, we aren't producing what you want, but next year - or in ten years - we'll produce more of them than you can have now in change for your money or goods. Meanwhile, buy our splendid financial services, embodied by such magnificent companies as AIG or Northern Rock". There's no blaming Germany for wishing to export instead of importing: basically, the Germans have been doing what many others should have done -- paying for unreplaceable imports with exports. Even the Germans won't escape some deterioration in their standard of living, though.

  • Comment number 8.

    Perhaps you and the IMF underestimate the Chinese contribution? So far as I can see, the small matter of establishing an effective National Health Service - which the Chinese have chosen to do in this recession - is not included; nor is the re-equipment of the Chinese armed forces? Both these were matters left outstanding in the export boom years; and are not clearly reported in the Chinese financial projections.

    My unconsidered guess at The G20 Economy Best Prepared is Norway.

  • Comment number 9.

    What, Gordon Brown, is the difference between "national protectionism" (which you condemn) and "national self interest" (which is the Chinese Government's goal) ?

    If there were no national self-interests, international politics would be unnecessary.

    Of course politicians have to fight for the best interests of their own countries. If they didn't they should be hung out to dry !

    So Gordon, stop playing with words. Ever country has self interests, which include protectionism in some shape or form. And if the UK hasn't, then YOU should be the first to be hung out to dry !

  • Comment number 10.

    We already had a global currency...

    It was called gold. Yellow shiny stuff. Can't simply print as much as you like to solve your friends bankruptcy problems though.

  • Comment number 11.

    It seems clear that the large German and Chinese export surpluses were a sign of weakness or at least, by definition imbalance, which could not last. The Chinese at least realise this and are taking the necessary action to boost their dometic economy and to gradually, if that is possible, cease to be US's funder of first and last resort. This can only be healthy for te world economy and will help boost the West's exports to China, in the longer run.

    Meanwhile the West, especially UK and US can either inflate their way out of their public and private indebtedness, or tighten belts for a decafde or so until te debt is paid down to a reasonable level. In the meantime, the only bright spot for UK is our exports which have held up reasonably well compared with the 40-50% declines seen by China, Germany, Japan etc. A few more years of that and we might actually be able to pay our way in the world again

  • Comment number 12.

    What a pathetic, fawning article.

    How did the Chinese get these foreign cash piles?

    Subsidies to exporters
    Currency manipulation
    Poor product safety controls
    Liberal environmental controls
    Shameful health & safety record (how many dead miners per year?)
    Subsistence wages
    Communist dictatorship
    Allow purchases of foreign assets but block takeover of Chinese companies.

    Why are BBC journos so much in thrall of China? BBC reporting of China's antics has been pathetic and it leaves me gnashing my teeth to see the drivel above that you smeared across my screen!

    Come on, roll up your sleeves, get yourself a coffee, and sit down and do it properly.

  • Comment number 13.

    #10 true-liberal:
    #We already had a global currency...

    It was called gold. Yellow shiny stuff. Can't simply print as much as you like to solve your friends bankruptcy problems though.#

    ++++++++++++++

    Despite the forecast Gold was going to hit USD 1000, our Chancellor sold a lot of British gold at less than USD 280.

    What were his motives? Was UKplc so STRAPPED?

    Y



  • Comment number 14.

    I don't think there is a problem with greedy bad bankers in China - I wonder why?

    The Chinese are doing fine with one main central bank - so why has the British taxpayer been lampooned into shoring up an ever growing number of banks and wayward bank deposits?

    Perhaps Gordon Brown will get a 'big response' to the G20 summit and it may be that Great Britain no longer has a credit rating worthy of the UK being in the G20? Look before you leap Gordon!

    I wonder how the Chinese view westernised concerns about 'protectionism' when our government protects and supports its bloated financial sector through historic ties to numerous tax havens. I suppose they may view this hypocritical westernised tax haven arrangement as rather odd when our prime minister galavants globally preaching about tax financed stimuli when he has surrounded himself with knights of the realm that are armour plated with every possible tax evasion policy. This is surely protectionism in disguise as attracting oligarchs, and yatchs from around the globe to do business in the UK (pay no tax as non doms) and fizz the money down the wire to some sunny shored tax haven. I don't think the Chinese operate like this - or do they?

    The other thing is that the lack of effective financial regulation in e.g Europe transatlantic/transpacific markets can also be a form of 'protectionism' - the Chinese have a clear view, I'm sure, where the problems are.

    I wonder if taxation exists as a malaise in China?

    I can't see the chinese throwing GBP £1.3 trillion to support an assortment of banks when their single central bank appears steady without any bonus problems.

    However, I do think that the UK will stay in the G120 (Yes - G Hundred and Twenty!)

    Global money supply is the big issue in case the global money supply is so highly levered that some currencies are at risk of collapse besides Iceland and Eastern europe - the economies that will be best prepared in the short, medium and long term are the one's having a resource backed currency, good climate and natural resources and effective population control:

    USA
    Canada
    Russia
    Brasil
    China
    Germany
    France
    Japan
    Indonesia
    Malaysia
    South Africa
    India
    Norway
    Sweden
    and a few more - probably thirty countries, in total, that are in reasonable overall shape

    The problem for Gordon Brown is that the only institutions capable of large scale co-ordinated global stimulus is e.g World Bank. IMF and the new pecking order of IMF contributions based on credit rating, GDP, leverage etc AND INDIVIDUAL COUNTRY CONTRIBUTIONS FOR PROPPING TROUBLED ECONOMIES I expect will leave the UK much lower down the global pecking order.

    So G Brown has not got the massive stimulus package he wanted to save his own political reputation at the next election and the UK is set for a period of much slower growth which I think will turn out to be a good thing.

    The summit may turn out to be a massive tussle between the US and China?

    Let's hope we see the car producer nations planning some new vehicles (from China if the UK cannot do it) like durable and economical 'mini-moke' style remake general purpose vehicles with multi utility components - Cars have got so boring! For those that want to make and sell cars - please don't keep making fuel guzzling, over-priced, junk - they are also harder to sell.

    Be nice to see a new global monetary currency emerge - but not one that is controlled by the Chinese as bankers?

    The big issue - World population - but when are we going to see a summit to discuss the underlying cause that underpins the financial crisis and global warming/carbon issues?

    My guess is that G20 summit will do very little for the poor and developing nations - but I hope that I am wrong on that.


  • Comment number 15.

    It takes some time to change a completely destroyed communistic state into a democratic state. I believe China is one of the most interesting political experiments at this moment and I don't believe they are striving for world dominance like other countries. I advice everybody to spend some time exploring the history and the culture of China.

  • Comment number 16.

    arnsbrae (#12) "Communist dictatorship"

    Look up 'democratic-centralism' and the PRC constitution. Leaders are elected. It's a pyramid. Elected representatives discuss policy and when a decision is made everyone has to comply.

    NB. This is different from anarcho-capitalism aka 'light-fingered management'.

  • Comment number 17.

    Where is the great surprise here? China has been slowly diversifying from dollar holdings and US export dependence for years. Their only alternative has always been to stimulate a domestic economy and try to bring wages up to levels where the populace can afford to consume their own produce.

    Now things need expediting and they can look forward to at least cheap sources of minerals, cheap long term investments in foreign assets in commodities, and perhaps even cooperation on globally coordinated wage rises.

    However China is only part of the problem and certainly not any kind of solution or part of it. The idea that China is some kind of potential growth engine or other panacea is a myth.

  • Comment number 18.

    Toldyouitwould (#13) "What were his motives? Was UKplc so STRAPPED? Does anything in the UK over the past three decades bear close scrutiny when it comes to improvements? I just see anarchism and destruction.

    It seems to me that whatever improvements one can focus upon can beput down to improvements in automation/computerisation, i.e technology, and are not the result of Thatcherian or Blairite politics. All they've done is Balkanize the nation and sold off its assets paid for by previous generations' hard work and taxes. They've been wreckers not builders and all parties three main are basically cut from the same neo-liberal cloth.

  • Comment number 19.

    The Chinese find themselves in a win-win situation.

    They will refocus their productive capacity onto their domestic market through both infrastructure and consumer goods. They will be able to make a little go a very long way and much of this could become self-sustaining development.

    They will also be able to continue funding the deficits of other countries. This will mean that the world is going to have to sit up and listen to China.

    Two hundred years ago China was pulled down and trampled underfoot by the western powers. Now we have a resurgent and successful China; there is no reason for them to listen to what we think or say.

  • Comment number 20.

    As I said many moons ago on a Peston blog real global leadership was likely to come from China as it quietly took the time to form a world view of the way forward and what a new economic vision might look like rather than (self) indulge in knee jerk and backward looking attempts to revive the dead dog of the worlds previous bubble economy. Taking the long view is essential if the new way forward is to engage all countries and offer real growth opportunities on a sustainable basis whilst hopefully taking note of the ecological essentials as well. For those that feel living standards will be driven down in the USA and UK over the longer term they are wrong. China more than anyone understands the need for a prosperous West to help it continue to grow and achieve the economic supremacy that its natural potential ensures.The new economic order will still have a familiar look and feel to it in many ways but it will inevitably be a lot more demanding and less tolerant of misdemeanor than in the past. Inevitably the consumer will take center stage as the key asset of the Global Republic rather than the much abused bit player of the past.Consumer empowerment based on earnings rather than debt will be the engine of growth.Where and how those earnings are enabled will be a key factor in stimulating global recovery. Game on.

  • Comment number 21.

    The Chinese Authorities are very pragmatic and they also don't have any particularly altruistic feelings about the long-term well-being of other economies. They wanted to industrialise China as fast as they could, and the best way they could see of doing so over the last decade was to give a massive subsidy (around 70%) to exporters in order to get them to grow at the expense of Western manufacturers and those of other developing nations. So they didn't get anything like the number of Dollars per item that they could have done - but why should they care? It kept a large number oftheir people in jobs and kept their manufacturing sector growing.

    We should have cared. We should have told them to stop the subsidies or we would introduce an equal and opposite tariff against their products. But we didn't. We were too happy that cheap imports were keeping the great God of Inflation under control. More fool us for getting our priorities completely wrong.

    But now we may well be seeing Chinese pragmatism changing tack before we do. If industrial growth based on exports is no longer a very promising approach, then they are more than happy to seek a new approach. If internal growth stands a better chance of success for the next decade or so then that is what they will go for. Most likely the best way of running the world economy in the next few years is to have much more balanced system of trade, without the massive net importers and net exporters. It's in their interests as much as it is in ours.


  • Comment number 22.

    And here's something else, completely off topic, not that the original topic was in any way informative or interesting:

    http://news.bbc.co.uk/2/hi/business/7971202.stm

    How is it possible that the boss of GM is called Rick Wagoner?? Are these real people? Or does someone make up the names? Who's the boss of Ford? Charlie Chariot?

    It's bizarre. Rick Wagoner (aka Rick Shaw in China) is kicked out by one Barack Hussein Obama, which itself sounds something like 'Osama-bin-Laden-Hussein-Sadam-US-army-barrack'. I'm telling you it's all fiction. We're characters in a video game.

  • Comment number 23.

    "There would have been no wall of cash looking for safe, or pseudo-safe, assets in countries like the US. And we wouldn't be where we are today."

    If economies like the US and to a lesser extent other countries including the UK had not consumed so much and had exported more real products to balance trade, we would be in a better position today. However, focusing too much on trade deficits overlooks the real cause of the problem; that is government budget deficits and central bank loose monetary policy.

    The Chinese might be able to adopt Keynesian fiscal stimuli (after all they have the savings to do it), but the US, UK and other countries are practically broke because 'we' blew most of our savings and whatever the Chinese and middle eastern countries loaned us on consumption (governments, of course, being the biggest consumers of the lot!).

    As JadedJean quite rightly points out, Keynesian theory is probably best suited to totalitarian regimes: But, according to Obama and Brown (multiple genuflections!), the theory is equally suited to 'representative democracies' as well!

  • Comment number 24.

    "Look up 'democratic-centralism' and the PRC constitution. Leaders are elected. It's a pyramid. Elected representatives discuss policy and when a decision is made everyone has to comply."

    And what happens if one doesn't comply? A scenic 're-educational' tour of a gulag or salt mine or even a 7.62mm from a Mosin-Nagant just behind the left ear.

    "NB. This is different from anarcho-capitalism aka 'light-fingered management'."

    Wrong!



  • Comment number 25.

    #10 "We already had a global currency...

    It was called gold. Yellow shiny stuff. Can't simply print as much as you like to solve your friends bankruptcy problems though."

    We have ??? Where ??? Where ??? I thought a certain G Brown Esq. flogged the lot at a terribly cheap price ages ago when he was the Chancellor !!

    Seriously thought, unless you are thinking of heavily armed convoys transporting tonnes of the stuff around to settle international trade balances, it is not a very practical or workable idea !! The Chinese idea, which was first proposed by the Russians, is to have a form of virtual gold made up of a basket of major currencies and dispensed as SDRs (Special Drawing Rights) by the IMF. The more *real value* a country puts in, the more SDRs it will have.

    Quantitative easing will not have any effect on the amount of SDRs a country has and, therefore, will not affect the value of the SDRs and, in turn, will not affect the reserves held by other countries in SDRs. If the US$ devalues tomorrow due to quantitative easing, many countries will lose *that* value of that portion of their national reserves held in US$ !!

    Crash Gordon can run the printing presses night and day but the price of Russian gas will be priced in SDRs and not quids; so the only people hurt by that quantitative easing will be the Brits having to pay a lot more quids for their fuel !! God help us all if the fools who support quantitative easing get their way !!

  • Comment number 26.

    FrankSz (#22)"How is it possible that the boss of GM is called Rick Wagoner?? Are these real people? Or does someone make up the names? Who's the boss of Ford? Charlie Chariot?........."

    Excellent post!

    I had to look it up today too as I'm ever more suspicious of all these odd names! :-)

    Ever since I saw the size of Rahm Emanuel and some of his chums I just knew we were all in for trouble!

    Don't look into what Henry Ford got up to in the 1920s (aside from helping setting up the Soviet Gaz works!).

  • Comment number 27.

    #11 "This can only be healthy for te world economy and will help boost the West's exports to China, in the longer run."

    Unfortunately, Western exports to China are tiny compared to imports from China. Therefore the overall effects will be minimal.

    "Meanwhile the West, especially UK and US can either inflate their way out of their public and private indebtedness,"

    This is exactly the fear that the BRIC nations have and had caused the Russians and the Chinese to insist on a new reserve currency that is inflation/devaluation-proof !! Not if but when that comes about, the only people hurt by that inflation/devaluation will be the citizens of the country(s) undergoing the inflation/devaluation !!

    Comical Ali has been blathering on about trust to the bankers even while his minions are quantitatively easing the quid through the floor !! How can anyone trust the quid while this printing of money is going on ??

  • Comment number 28.

    LibetrarianKurt (#24) "And what happens if one doesn't comply? A scenic 're-educational' tour of a gulag or salt mine..."

    Since you asked.

    Incidentally, it was the French Communist Party (PCF) which educated Pol Pot and the other anti-colonialists.

    One really should be just a little more sceptical about all the propaganda which comes out of Hollywood and other Liberal-Democratic 'portals'. The lastest RAMBO naturally depicts Burmese (Stalinist) soldiers as the evil-dooers.

    Plus ca change eh?

  • Comment number 29.

    #14 "I don't think the Chinese operate like this - or do they?"

    Actually they do but those caught will have a date with a speeding 9 mm bullet !!

    "the economies that will be best prepared in the short, medium and long term are the one's having a resource backed currency, good climate and natural resources and effective population control:"

    I have doubts about Malaysia and I think Singapore should be on that list. Singapore has about 4 million people and most of them are highly educated so its natural resource is its peoples' skills and knowledge. From this tiny island city-state comes Creative Technology whose Zen products challenge Apple's IPods in the MP3/MP4 arena !! Meanwhile, Malaysia is going through the throes of a serious political change !!

  • Comment number 30.

    #16 "NB. This is different from anarcho-capitalism aka 'light-fingered management'."

    Is this a synonym for kleptocracy ?? Shouldn't porn charged to the taxpayer be classified as such ??

  • Comment number 31.

    #17 "The idea that China is some kind of potential growth engine or other panacea is a myth."

    China *IS* a growth engine, but only for the Chinese. Any Western politician (no names mentioned) who expects China to fund their growth is living in a Class A substance dream !!

  • Comment number 32.

    Whilst we'd probably all agree that China's talking the most positively at this juncture, that's perhaps only because for the last ten years, China has been a major cause of the problem. By promoting its own exports at the expense of everyone else, the Chinese origins of this crisis - but only a small part of the blame that properly lies in Wall Street and in a few US States - cannot be over-looked. Buying T-Bonds with China's low value currency was never a good idea.

    Still, like the shareholders of US and UK banks who've lost most of their investments, the Chinese are suffering from losses on their T Bonds and related US investments as the dollar declines. So maybe their more realistic talk nowadays reflects China's regrets and sorrow for their shrunken investments?

  • Comment number 33.

    JadedJean # 28

    Propaganda is a double-edged sword; it cuts both ways. So, do not expect everyone to believe that life was all sunshine and roses in the USSR and still is in the PRC.

    None of us have ever witnessed, in living memory, a laissez-faire capitalist society much less suppose it to be the (obviously to some of us) socialist dominated mixed economy that has brought us all to where we are now.

  • Comment number 34.

    LibertarianKurt (#33) "So, do not expect everyone to believe that life was all sunshine and roses in the USSR and still is in the PRC."

    I remind you (from the Von Mises site): propaganda, Hayek style. The target? Perhaps the oppressive 'Fasicst' post-war Old Labour, or French incipient welfare states The 70s were not as bad as some like make out, but some did want to make it look bad in pursuit of 'individual freedom' (translation: relaxation of state regulation and the selling off of taxpayers state assets to privateers for profit.

    The USSR and PRC certainly punished people who were criminals as defined by their penal code. They were considered enemies of the state i.e people. But look at how many the USA lock up. You are now witnessing how true enemies of the people operate and hold politicians to ransom over their PFI/PPP projects. Some of my links suggest the DSM-IV Cluster B, Axis II Personality Disorders (similar in ICD-10) which are more prevalent amongst these enterprising libertarians. Is the reason why you personally don't think any of us have ever witnessed, in living memory, a laissez-faire capitalist society, simply because you don't have a living memory of what it was like before 1979?

  • Comment number 35.

    If you are looking for China to take over as the world economic leader then you will have to wai for a very long time! Chinese focus has been and will continue to be upon itself. Anything and anyone outside of China's borers is viwed either as a tool to be used or as a threat.

    West indebtedness is the one tool in the armoury that the USSR always lacked. China has the economic rserves to make life difficult should it so wish but does not have the USSR's former advatages of location and military hardware (yet). So we will see China adopt a non-leadership role until it feels itself sufficiently empowered.

    Their focus will be upon US actions. Should the US choose to stimulate through defence spending then you will see a more agressive reponse from China. Europe does not even figure in their calculations for even if we did become militant then our focus would be on Russia or the Muslim world and not on China - therefore no threat.

    Where does that leave the UK? Well conrary to a lot of the opinions expressed above, not as badly placed as some may think. Sure we will experience some severe conditions as we come to terms with our indebtedness but just watch that become less of a problem as debts are written-off or traded off. You may not like it but Britain has always been very fortunate and circumstances will transpire so save us yet again. BUT DON'T ASK ME HOW

  • Comment number 36.

    29. At 9:56pm on 30 Mar 2009, ishkandar wrote:

    #14 "I don't think the Chinese operate like this - or do they?"

    Actually they do but those caught will have a date with a speeding 9 mm bullet !!

    Yes! I suppose it could explain the shortage of rogue Chinese bankers?

  • Comment number 37.

    The whole point of Bretton Woods was that the dollar served as the worlds reserve currency AND WAS ITSELF PINNED TO GOLD. The US did not follow the rules and ultimately Nixon got rid of the gold standard to devalue the dollar to pay for Vietnam. The value of the dollar in real terms has been falling ever since. Interestingly, a loaf of bread costs approximately the same in gold as 100 years ago, while the dollar price has risen over 90 fold. This is not what is required from a reserve currency and makes a prime case for the SDR or whatever it will be called to be gold or at least commodity rather than currency backed. This was also the basis of Keynes system.

    I for one would welcome some sort of ultimate currency whose supply is independent of national politics and cannot be increased by adding afew zeros in the computer. This would make global trade simpler and prevent countries such as China holding their currency below the true worth. The dollar is most definitely not that currency.

  • Comment number 38.

    The British government is heading for a deficit in excess of 10% of GDP. So if you measure contribution to ending the recession by fiscal irresponsibility, then the British government are paragons. I guess the Chinese don't want to buy US Treasuries any more, so they can afford to spend the money instead.

    The proposals from China for a new reserve currency have much more to do with politics than economics. Are you really too naive to see that? China was not being "responsible" and showing global leadership. No, China was trying to weaken the United States, which it sees as its main long-term rival. After all, the current international reserve currency is the US dollar. China is trying to replace the US as the major superpower. It is not in Britain's interest for this to happen, not least because China is a non-democratic and also politically unstable country, and because the US is traditionally our closest ally. We should all be hoping the US can win this historic struggle and doing everything we can to help. One thing we can all do is avoid buying Chinese-made goods.

  • Comment number 39.

    Adam_C_UK (#38) ".. China is a non-democratic and also politically unstable country, and because the US is traditionally our closest ally."

    Two questions:

    First a subtle one:- why do you say China is non-democratic? Do you mean non Liberal-Democratic/Neo-Liberal, as it is of course democratic-centralist. Try to see that as similar to Old Labour's socialism in one country, or our permanent government (i.e. the Civil Service) and you'll see my point.

    Second, the USA fought a war of independence against Britain. Why? The USA came into WWII only when Britain was on its knees, put it into debt for 60 years or so, forced Britain to relinquish its colonies/assets to secure that debt, refused to support Britain in the fight against Jewish terrorism in Palestine, belittled it in The Suez crisis, discouraged its efforts to build and sustain a 'national socialism' (Old Labour welfare state) and most recently, got it to support Israel's interest in the Middle East, alienating its much larger, fast growing, Muslim Commonwealth minority at home, labelling them potential terrorists!

    As I see it, the USA has always undermined Britain's interests, as it's seen it and Europe as a competitor against larger statist nations (the USSR and China), and friends/allies don't do that.

    I suggest it's a powerful, high prevalence of Personality Disorders, self-interested, minority group in the USA which has done this. They have also taken the USA down too.

    Is such behaviour (promoted by 'The Apprentice') a good role model?

  • Comment number 40.

    However, most of the stimuli spending by China is in form of infrastructure, so as to create capacity and further subsidies export. This is likely to create further trade imbalance in future.

    Moreover, the problem is that neither American govt is asking their people to save more and spend less nor is China asking their people to save less and spend more.


  • Comment number 41.

    Stephanie,
    You only give awards when the competitors are all playing by the same rules. If stimulus in China benefits the world, fine. If their capital flow restrictions prevent or limit western interests from accessing their huge home markets, give them 5 out of 10 and ask them to change. You say its borrower economies like US / UK contrasting with saver / export economies like China , Japan and Germany as if morally eqivalent. This is all apple and pears stuff. China is a command dictatorship - it makes a good job of reaping the rewards of the free flows of capital allowable in the international markets having directed its state businesses what to do.All credit to them. What it hoards in "savings" western social democracies "spend" in safety nets and social justice requirements.All credit to them, some would say. When there is an even playing field in political philosophy, these contrasts may eventually mean something. For now, they are meaningless.

    Self interests and interdependency are the governing factors. The dollar reserve currency gives the US an advantage as everyone knows. The Chinese get hacked off when their asset pools are denominated in a currency at the mercy of the policies of its governor, The Fed. They dont like being in the US pocket - and who would blame them.

  • Comment number 42.

    #39 Jadedjean

    I'm not sure what you mean by "democratic centralist", or how Labour's old "socialism in one country" could be perceived as democratic. China is not democratic in any meaningful sense of the word. To suggest otherwise is to pervert the meaning of the word "democratic", which would obviously suit a socialist but not anyone who cares about the truth. "Democratic" first means that the people choose the government, which they do not in any meaningful sense in China. And it means much more as well. It means freedom of speech for example. The Chinese government are so scared of freedom of speech that they (notoriously) lock down their internet, and imprison those who speak out against the government. Living in a free country like the UK, where we can write criticism of the government freely on blogs like this, it is easy to take our freedom for granted and forget that this freedom would be anathema to the authorities in China.

    As for your rants against the USA, thankfully most British people know those views are nonsense. Of course the US looks after its own interests, just like Britain does. But ultimately they really are our closest ally, with close co-operation on military matters, sharing of intelligence, and a shared outlook towards business and politics that has lead us to work together repeatedly in the past and will do so again.

    Fine, you want to choose China over the US. I choose the US, and I believe most British people would be with me in that.

  • Comment number 43.

    Adam_C_UK (#42) "I'm not sure what you mean by "democratic centralist"

    I thought not, but I thought you might look it up rather than argue from ignorance, but here's some help:-

    Democratic-Centralism (modelled on the early C20th German SPD originally).

    The PRC constitution and explanation.

    'The people' come first there, people work and have a duty to the state. What they have been doing, I suggest, is working together to economically destroy what they ideologically, conditione dthrough their education system, believe to be the pernicious threat, i.e Liberal-Democracy, which they see as run by anarchistic, double-dealing self-interested enemies of the people/wreckers out for what they can get.

    China is Stalinist. It allegedly fell out with the USSR in the 50s because of the latter's revisionism after the death of Stalin (although see what Golitsyn had to say in 'New Lies for Old'). The Cold War is allegedly over, but why? China has a population 10x that of Russia and was even more Stalinist than the USSR during the Cold War! ....Go figure.

    PS. Check out the mutual international alliance of the German SPD and New Labour (hint: fist and rose).

  • Comment number 44.

    #41 "If their capital flow restrictions prevent or limit western interests from accessing their huge home markets, give them 5 out of 10 and ask them to change."

    Large sections of the highest (and therefore most expensive) American computer technology is banned from export to China. Ownership of American companies are blocked by Congress from sale to China. There are other examples but this is what caused the trade imbalance to start with !!

    Furthermore,China has *NOT* blocked McDonalds and KFC and a host of other Americans from operating in China. The most profitable parts of GM are JVs in China !! If the rest price themselves out of the market, it is not the fault of the Chinese.

    When some brainless US congressmen wanted to levy a 27 1/2% tariff on all Chinese goods because they want to protect manufacturing in their own state, the Chinese cheerfully told them to go ahead so they can levy the same on American goods. The Brits, Germans and the French silently but eagerly cheered the Chinese on because that would instantly make the cost of a Boeing more expensive than an equivalent Airbus and, thereby, guaranteeing their sales !!

    I don't know where you get your propaganda from but you are obviously buying into it !!

  • Comment number 45.

    Adam_C-UK
    JadedJean

    So, its China or the US is it? I would rather choose Bhutan and their Gross National Happiness than either model, thanks.

    By the way, it was the strength of Russia that swung the course of WW2 not the entry of America. The US just cleaned up afterwards.

  • Comment number 46.

    Adam_C_UK (#42) "Democratic" first means that the people choose the government"

    Here you get the 'choice' between a red, blue or yellow Liberal-Democractic rosette. The policies are all basically exactly the same - anti-statism, pro-deregulation. The reality is that the electorate gets Hobson's Choice or maybe Morton's Fork?

    Have you noticed how the BNP is treated in this alleged democracy? It's used as a whipping stool to deter the electorate from statism (some of their alleged polices are impracticable).

    Here's [Unsuitable/Broken URL removed by Moderator] another example of subtlr domestic free-market propaganda. In this country the government is really the Civil Service. That's why Thatcher began destroying our Civil Service - New Labour has continued doing this but you may not know it - as it's ever so cleverly done.

    Finally, appealing to what most people think when propaganda is designed to make them collectively think what they do because of the propaganda..... a bit......

    well, see my other posts on dysgenesis and look at the number of people who voted for any particular party.

  • Comment number 47.

    #42 ""Democratic" first means that the people choose the government, "

    Democracy was commonly believed to have begun in Athens. There and at that time, 80% of the people living in that city-state were not allowed to vote because they were not landholders. All candidates standing for election also had to be landholders. Craftsmen, merchants and serfs were excluded. So, what's the difference between landholders and Party members ?? In Britain, women couldn't vote until 1928 !!

    On the other hand, Temujin was chosen by popular election and acclaim by his people to be the Great Leader or Genghis Khan and accepted as the total and autocratic ruler of all Mongols and any one else they conquered !!

    So, unless you are a fanatic and insist that *your* version is the *One True Version* and all the others are false and heretical, perhaps we should avoid such political arguments in the same way as we avoid religious arguments !!

  • Comment number 48.

    #43 JadedJean

    The reason I didn't know what you meant by "democratic centralism" is that to me, these two terms are a contradiction. Maybe we're just talking about language here. Maybe you would call me a "liberal democrat". But any creed that puts the State first (as "democratic" centralism does) is not democratic in the sense I understand the term. "The people come first there" you say. In truth, the State comes first there and the people only matter in as much as they have a duty to the State.

    Really, I thought those old debates against the evils of socialism had been won 20 years ago. Even Russia has now abandoned them. But it seems there are still people arguing for them.

    Certainly I do agree with you though, that with China still being a "communist" state and also being very large and powerful, it is a grave threat to the liberal (free) democracies of the West, including our own country.

    Labour's international alliance with other socialist parties is nothing new either.

  • Comment number 49.

    ThorntonHeathen (#45) "So, its China or the US is it? I would rather choose Bhutan and their Gross National Happiness than either model, thanks."

    Does 'choice' really come into any of this?

    Incidentally, Bhutan has a populaton of ~600,000. Smaller nations are easier to manage/govern and so find it easier to spot and manage their bad eggs presumably? What we have to deal with, I suggest, is our rapidly shifting demographics and our very poor (liberal, light touch/anarchistic) governance.

  • Comment number 50.

    Isn't it strange that while looking to economic leadership and praise the Chinese for their "enlightened self interest" (see my previous posts on various BBC blogs regarding the folly of "anti-protectionism"), we no longer make mention of the crisis in Darfur?

    Such is the allure of the G20, that we expect economic miracles to emerge, but conveniently forget that it isn't just about the leading nations, the return of market liquidity and the suppression of tax havens. Forgive the borrowed (and inappropriate) term, but even if the G20 could agree, the next flotilla of Black Swans will come from the unexplored lands beyond Geetwentistan.

    The suggestion of a new global reserve currency, to become a global currency should be ringing alarm bells. A few months ago, I speculated (not financially) upon the demise of sterling and that it wouldn't be the euro that replaced it - whose inscription will be on the new money?

  • Comment number 51.

    This piece is really sick. Hanging is too good for most economists.

    "The week's first award is for Most Promising Display of Global Economic Leadership and it goes to the Chinese."

    China's "prosperity" has been bought at a terrible price. It is one huge toxic waste dump, the world's biggest. Most of it's people work for subsistance wages, that is when they can find work at all. China 2009 resembles the US and UK in 1869 or 1879 during the cruelest period of the industrial revolution. China is in great part owned by foreigners who take much of the profit out of the country. They only invest there in the first place because there are no environmental, labor, or consumer protection laws, or social safety net to pay for in taxes, no lawsuits for liability of any kind including of the criminal kind. Anything goes. What's more, China is vulnerable to a falloff in exports and if someone comes along with cheaper labor and more favorable business conditions, the owners of all those factories will just pick up and move out. All of this was imposed by a brutal dictatorship which chose this path over its previously failed path of perpetuating feudalism under the banner of communism. Under that regime, 90% of the population worked in agriculture yet there were periodic famines. The consequences of the current recession in the nations which imported from and thereby sustained China's economy is looming disaster, a return to mass starvation and political upheaval. 2 trillion dollars doesn't look so large when you consider that it is less than $2000 per person and it may have to go to buy food and other vital necessities it is not self sufficient in. Most of its 1.3 billion people live in dire poverty, over 500 million of them on less than $2 a day and another 200 million of them at or near subsistance wages when they work. Award? For what, going from the fire into the frying pan? Let any politician in Britain propose adopting China's laws and see how quickly he loses almost all of his constituents?

  • Comment number 52.

    http://news.bbc.co.uk/1/hi/business/7973541.stm

    More out-flanking maneuvers by the Chinese !!

    While the Crash Gordon was politely fed and sent on his way during his Latin American tour, the Chinese are making mutually advantageous deals there !!

  • Comment number 53.

    "The reason I didn't know what you meant by "democratic centralism" is that to me, these two terms are a contradiction. Maybe we're just talking about language here."

    You have just told us you are confused. All there is is language (verbal behaviour). Please just look terms up if you do not know how to use them conventinally, i.e. learn how to use language as everyone else is supposed to.

    The rest is confusion/error (there's a lot of it about alas). There are no 'private languages' or 'meanings'. To believe otherwise is merely testament to people being victims of Gramscist Political Correctness indoctrination.

    Consider this a benevolent lesson in clearer expression.

  • Comment number 54.

    "I cannot forecast to you the action of Russia. It is a riddle, wrapped in a mystery, inside an enigma; but perhaps there is a key. That key is Russian national interest."

    Winston Churchill, 1939.

    The same could be said of China seventy years later; Britain, alas, does not build statesmen any longer.

  • Comment number 55.

    Our politicians used to be elected to oversee the permannent government of this country, i.e a selected Civil Service, selected in the past from the best educated. These people (largely male) comprised specialists and generalists. They managed departments which ran matters of state (communications, transport, health, defence, energy, civil order etc).

    Very oddly, over the past 30 years or so, we have elected narcissistic celebrities to do exactly the opposite, i.e to cripple the Civil Service, privatise the state, and legislate to deregulate i.e undermine the management of the country.

    This is what has been going on.

    It beggars belief that more people don't see this for what it really is - i.e. subversion/anarchism.

  • Comment number 56.

    JJ Leave the man alone. He has as much right to his opinion (and that's all you are forwarding - opinions) as you do!

    Despite all of its failings, I believe in democracy based upon choice i.e. not one based upon a one party state. Pehaps one of the failings in the UK has been that the differences between our political parties has narowed to such a degree. Hence no real dynamic debate resulting in a lack of strategic choices.

    China's position is not as strong as some here seem to believe - and they would like you to believe. They face very serious problems both internally and externally. Whilst they still have a centalised administration, they have opened a pandoras box that cannot be closed by administrative will. The 'ME2' generation have aspirations that the administration will find it hard to curtail. The ability of the regime to adopt old style Moaist/Stalinist policies that result in starvation for millions is very very limited. The possibility of internal unrest in the face of adversity is high. The ability of the administration to put down such unrest by martial measures is decreasing.

    Externally, China faces the same type of strategic problem as did the UK. It lacks raw materials. It may have long term contractual arrangements with other countries to supply but they are vertually useless if transportation is threatened by global conflict. (and conflict is one outcome that becomes more and more likely if this depression worsens). China also has very few allies that could/would support it when push comes to shove.

    So, whilst the Chinese posture at the G20, they will still want us to be myopic about their real strength.

  • Comment number 57.

    ThorntonHeathen wrote: "it was the strength of Russia that swung the course of WW2 not the entry of America."
    Unfortunately, this shows a great lack of knowledge of the non-military events in WWII (please note the preference from Roman numerals over the Arabic numbering system when dealing with Historical matters).
    Russia, in any case being the Soviet Union, was devastated by the initial Nazi attack. Stalin had to go to the UK and the US and ask for assistance. Further to this, the Soviets were also facing complications in their Far East with Japanese aggression - whilst in the West we argue that Hitler's fatal mistake was attacking the USSR; the counter-argument (and a defence of Hitler's plicy) was that the Japanese made the fatal mistake by bombing Pearl Harbor. Had the Japanese not underestimated American resolve, American military entry to the war may have been further delayed to a point where victory was unrealistic for the Allied Powers.
    The US was broadly in favour of siding with the British from the onset - afterall in 1939 Germany was the #2 economic power and #1 military power; the Americans' foreign policy would have been about keeping the status quo of power in Europe (aside from its hatred of Nazism anyway). In truth this foreign policy was broadly the same as Britain's had been in the 19th and early 20th century - hency why we fought with the Prussians against the Russians; with the Germans and Russians against the French, and with the French and Russians against the Germans... (and won all the wars - though, ultimately, at great cost).

    In any event, all this goes slightly off the actual topic re: economic leadership. I would broadly suggest that Keynesian economics would suggest that it is China's and other export nations' interest to reduce over-supply in the market. There are two methods that can be utilised:
    1) Increase domestic demand
    2) Decrease production
    Whilst China, Germany, Russia, Japan et al work on this, it would be fair if there were a temporary false demand created for the excess production in the rest of the world. This can be funded through debts (the fiscal packages we are seeing) and also through loans (e.g China can loan Russia, US etc money to buy surplus Chinese goods - which we have seen through a Chinese loan to a Russian gas company)
    The G20 needs to ensure that there is an end to the false demand economy within 2-3 years maximum AND that systems are put in to place to create a more stable global trade and financial system.

  • Comment number 58.

    #55

    Now JJ, you are not seriously trying to suggest that a self-selected Civil Service has been the ultimate administration for the UK are you?

    Whilst the 'old boy', 'old school tie', 'right background' networks may have been cozy, they have never been efficient. They have however been highly bureaucratic. They have produced faceless manadrins. They have also produced a classic envionment wherein Burgess, Maclain and Brunt could flourish.

    Yes Minister may have been a parody (look the word up) but there has to be more than just a hint of truth for it to have been an effective parody.

  • Comment number 59.

    #44 Ishkandar
    I hold no brief for US trade policy, and I used the word "if". By the look of it you've read The Peoples Republic of China's "Catalogue of Industries for Guiding Foreign Investment". It appears to contain three lists : 1) Encouraged ie what the State Council deem they are happy with and doesnt offend them 2)Restricted - warily cautious 3) Prohibited - speaks for itself. For those areas of sensitivity for the Chinese I can see on the web, they warily control investment with jvs and coops. Whose propaganda are you buying?

  • Comment number 60.

    foredeckdave (#58) "Now JJ, you are not seriously trying to suggest that a self-selected Civil Service has been the ultimate administration for the UK are you?"

    Yes I am.

    Fact: for generalists It was based on exams (including IQ tests) and interview. For specialists it was basd on professional qualifications. They took the best in the country. The reason why there was a high proportion of people from Public Schools etc was because, like it or not, most (~80%) of our abilities are inherited as I have explained before (that remaining 20% is not what you think, it is damage post conception). See assortive mating.

    People benefit from a good background because that benefit is genetic and embryo/child protection from harm! This is something which large numbers of people in this counry have been brainwashed into not believing despoite the evidnece, and that brainwashing has been political/subversive. It has largely taken place since the start of the Cold War. If you can persude people to believe the opposite of what is true, it is then easier to sell them what you want as you can appeal to aspirations aka dreams and expand your consumer base (see sub-prime!).

    You need to think about all this and examine the evidence upon which it is based. I am not misleading you but for some reason you think you know better. You do not. I have provided links elsewhere (see NN blog archive). What I have to say is not opinion.

    Your hidden (even from yourself) assumptions are radically wrong. The rest of your erroneous conclusions are a consequence.

    You are not alone alas.

  • Comment number 61.

    58 FDDave
    60 JJ

    I went for (and failed) a Civil Service test & Interview in the mid 70s. The IQ test really threw me - too many questions, not enought time - so I probably didn't score as high as I should have. Obviously my IQ therefore suddenly dropped :-0

    As for the interview, I took one look at the four fob-watched double-breasted jowlly fossils barking questions at me and, tucking my hair band back in my shirt collar, realised that this was not going to be my finest hour.

    Clearly they saw my C2 essence behind my public school veneer.


  • Comment number 62.

    #60. JadedJean wrote:

    "What I have to say is not opinion."

    Yes, it is. It is your opinion. Others may hold different opinions.

  • Comment number 63.

    rbs_temp (#62) "Yes, it is. It is your opinion. Others may hold different opinions."

    You don't know the difference between stating empirical facts and personal opinions. That's not an opinion, it's an empirical fact.

  • Comment number 64.

    No 58. foredeckdave wrote:
    "Whilst the 'old boy', 'old school tie', 'right background' networks may have been cozy, they have never been efficient."

    Today we have too many "players" and not enough "gentlemen" in the City and in prominent positions elsewhere in Britain. Some of our senior bankers have no banking qualifications at all. The financial system is inherently risky and unstable, and must be actively managed by people who know what they are doing. Controls must be put in place and actively enforced.

    The important point is to ensure social mobility allows players to become gentlemen. We must all aspire to the qualities of the professional, rather than lowering our standards by constantly rubbishing real hard work, craftsmanship and professionalism.

  • Comment number 65.

    ThorntonHeathen (#61) They are tough tests, and people do prepare for them. That helps. The non IQ tests used to be somewhat slanted towards the arts too - science graduates don't write essays or debate. There was a review about all of this but the outcome evidently made matters far worse. In the 80s the Civil Service seemed to receive a deluge of Press Officers - a guaranteed disaster wherte reports were sexed up as Executive Summaries and 'consultants' were brought in. True hatchet job on the state. I attribute a lot of our ills to subversion of our Civil Service. CP Snow got a lot right in 'The Two Cultures' and Clive Pontin wrote a good book about Whitehall too.

    Without a good Civil Service and its Honour Code, we can just forget about better 'regulation' in my view. Intelligence is like a searchlight, dim people just don't see the problems.

    That, and anti-deference/anti-elitism, alas, has been very useful to the wreckers :-(.

  • Comment number 66.

    Jaded

    The fact is that your opinion that Rbs_temp's opinion is not a fact but yours is is just your interpretation of his opinion, which is a fact.

    QED

  • Comment number 67.

    ThorntonHeathen (#66) Like Rbs_temp, you are revealing your true colours. You need to learn the difference between statements of empirical fact and opinion. It is the failure to be able to do this which accounts for so much corruption in our culture today. Whilst dysgenesis is a major contributor, so is environmental damage like alcohol and drug abuse etc.

    I have explained before that beliefs are intensional, and like all other idioms of propositional attitude, they are non truth-functional. This is not the case with respect to scientific observations and relations. The expression of these is not expression of opinion.

    This is a logical, epistemological, and linguistic point, and it's one which you both appear to be unfamiliar with, and neither of you appear to be able or willing to take instruction on the matter.

    This, I suggest, is sign of impaired intelligence.

  • Comment number 68.



    The Civil Service made enough blunders prior to 1960 (or whenever it was supposed to be dispoiled). It will continue to make blunders. However, it is less likely to be able to form a secret cabal as it has done before - General Strike, Wilson and Callaghan governments.

    Now, can we please return to the real point of this piece

  • Comment number 69.

    I find that we do not undestand or know enough about China, and that our media could do more to inform us. We often treat them as a distant interest, but we all know that their impact on the UK and the world is huge and growing.

    How many people in the UK would recognise the Chinese Premier if shown his photo? I would imagine less than 5%!

  • Comment number 70.

    Dear Ms. Flanders,

    Germany's "steep economic decline" is likely less a result of its export-based economy as much as a result of its over burdensome social welfare state and the resulting growth in bureaucracy in regards to demographic changes which have been adversely affecting the cost of financing its extensive social welfare programs.

    Unlike other nations, many Germans admit that a true solution to their fiscal challenges lies in their ability to fundamentally restructure their over burdensome social welfare state. They know that fiddling with their trade imbalance will not accomplish anything but balancing out the amount they import in relation to what they export.

    Thank you for offering more on Governor Zhou's very interesting SDR-based proposal. I look forward to it.

    Cheers

  • Comment number 71.

    foredeckdave (#68) "Now, can we please return to the real point of this piece"

    The real point not being that the PRC is ideologically committed to controlling the economies of the Liberal-Democracies in order to put political pressure on them, just as the Liberal-Democracies constantly strive to undermine Democratic-Centralist duty based systems by saying they're not respecting Human Rights?

    Nevermind.

  • Comment number 72.

    China does not have the capacity or experience to take on the role of world economic leader. I doubt that it would even want to take on such a responsibility. After all it merely has to look at the experience of the one nation that has sought that position

  • Comment number 73.

    foredeckdave (#72) Look who's in and wants to join their club. You're not too interested in geo-politics I take it?

  • Comment number 74.

    Time will tell JJ. But if you want to put money on it?

  • Comment number 75.

    foredeckdave (#74) "Time will tell JJ. But if you want to put money on it?

    More pointless, narcissistic rhetoric.

    Next time you hear about or 'see' alleged savage infrigements of Human Rights in China, just bear in mind 1) the size of the PRC population, 2) their mean IQ advantage over Europe, 3) the 0.5 SD and 1.0 SD disadvantage of Hispanic and Black Amaericans respectively even relative to White Americans, 4) the PRC's recent 1995 eugencics (family planning) legislation which is proscribed by Article II of the Lisbon Treaty for EU members, 5) the US Census Bureau projected demographics for the USA (highlighting growth of the Catholic Hispanic sub-primers where White Americans will become a minority by 2051), 6) the high positive correlation between mean IQ and GDP, 7) membership of the SCO, 8) the hostility of the demographically booming Muslim world to the USA and allies....

    And remember what I have said about Narcissitic Personality Disorder and Anti Social Personality Disorder being revered in our sumbed down, go-getting, corrupt, celebrity culture. Dysgenesis - see teh ETS video, read the report, (here's a topical CNN article) then look into the history as ETS was just reporting what the rest of us who've been collecting and analysing the data have been reporting for much longer - they said so in Feb 2007. They also said that far too many people (like yourself) don't listen and are in denial.

    You won't be told I suspect, because your pride (narcissism) is greater than your intellect (and this certainly isn't your area given what you have posted to date so I don't know why you argue or think you have expertise). Remember, I am saying (and explaining how) misconceived education has been the primary cause of our problems along with an equalitarian myth which has been used subversively. Instead of acting like an Oppositionally Defiant child looking for 'narcissistic supply', try taking on board the evidence and see where it leads you and what you can contribute.

  • Comment number 76.

    JJ LIGHTEN UP

    Your expertise is as limited as mine. You are NOT the font of all knowledge. You continually hector people but do not have the ability or humanity to understand - this I believe is at the core of your problem.

    Now before you go "off on one", please sit down and just reflect for a while. I would recommend that you think about the speck in others eyes and the plank in your own.

 

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