China sees G-20 outcome as a decline of Anglo-American capitalism

June 30th, 2010 - 7:16 pm ICT by ANI  

New Delhi, June 30 (ANI): The outcome of the Group of Twenty (G-20) summit held in Toronto, Canada, has been interpreted by China as crisis that symbolises both the decline of the Anglo-American brand of capitalism and the weakening of American economic power, an expert has opined.

According to Brahma Chellaney, the author of Asian Juggernaut: The Rise of China, India and Japan, and Professor of Strategic Studies at Centre for Policy Research, this has, in turn, strengthened Beijing’s two-fold belief - that its brand of state-steered capitalism offers a credible alternative, and that its global ascendance is inevitable.

Chinese analysts gleefully point out that, after having sung the “liberalise, privatise and let the markets decide” song for so long, the United States and Britain took the lead in bailing out their financial giants at the first sign of trouble.

By contrast, state-driven capitalism has given China economic stability and rapid growth, allowing it to ride out the global crisis.

In an article that appears in The Scotsman, Chellaney says: “Despite perpetual talk of an overheating economy, China’s exports and retail sales are soaring, and its foreign-exchange reserves now approach 2.5 trillion dollars, even as America’s fiscal and trade deficits remain alarming.

He feels that has helped reinforce the Chinese elite’s faith in the country’s fusion of autocratic politics and state capitalism.

According to Chellaney, in China’s view, Uncle Sam is the biggest loser from the global financial crisis.

That the US remains dependent on China to buy billions of dollars worth of Treasury bonds every week to finance its yawning budget deficit is a sign of shifting global financial power - which China is sure to use for political gain in the years ahead, Chellaney claims in his article.

“Against that background, China’s growing assertiveness may not surprise many. Deng Xiaoping’s advice - “Hide your capabilities and bide your time” - no longer seems relevant. Today, China is not shy about showcasing its military capabilities and asserting itself on multiple fronts,” he adds.

America shies away from exerting any kind of open pressure on China. US policy today is a study in contrast relative to America’s unabashed exercise of leverage in the 1970s and 1980s, when Japan emerged as a global economic powerhouse. Japan kept the yen undervalued and erected hidden barriers to foreign goods, precipitating strong pressure - and periodic arm-twisting - by the US for Japanese concessions. (ANI)

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