The Chinese Dragon Shakes its Tail

Part One

The Chinese Market Opened…or did it?

By Albert Koopman

In November 1999, China and the USA signed an agreement that was to change the face of the global economy. In December 2001 China joined the world, and signed the WTO (World Trade Organization) Agreement!

For China, entry into the WTO served the distinct purpose of liberalizing trade barriers, lowering import tariffs and opening China’s ability to trade with the world as well as opening its own market to the world … and of course, adapting to the necessary accounting and legal compliance accompanying such practices

For the young Wang Yadong … just fresh out of Beijing university … this meant buying a cheaper, imported, model car from Europe!

For John Smith, in Plush Street, New York?…. Why, he envisaged an opportunity for ‘conquering’ the Chinese consumer market …. single-handedly……all 1 Billion of them!

As the anniversary dates of successive WTO Celebrations went by, things turned out different…….unexpectedly!

While China became a major manufacturer of motor vehicles and exporter of parts, creating many new manufacturing jobs …. Europe and the Americas retained the service industry of Carwashes and Software Companies…. and closed down factories left right and centre.

As it went with cars and industrial equipment … so it went with other white goods … telephones … clothing ….. and gee-gaws …… of every type and description, fuelling and feeding the Wal Marts of the world! Benefiting consumers internationally and keeping them happy with ever-dropping prices.

The Chinese interpreted this event differently. For them it was a case of: WOW …. Now we have access to 6 Billion people … with whom we can establish relationships. We’ve got new access to CashFlow. Now we need technology and training….! Fast!

What happened?  

Whereas the Western world viewed the collapse of Russian ‘Communism’, as a victory for the West (hooray!)… the Chinese sensed a vindication of Mao’s suspicion of the bureaucracy that underpinned the leadership and adopted Russian State machinery at the time…. (hooray).

The discussion about bureaucratic imbalances…. often blunders…… within the body politic … over some 40 years, has left volumes of criticism emanating from internal party struggles, feuding villages…..student groupings, and so on.

As quoted from ‘The Changing Face of China’ by John Gittings:
“…the Cultural Revolution is not a revolution to dismiss officials from their office  or a ‘dragging out’ movement , nor is it a purely Cultural Revolution , but is a revolution in which one class overthrows another . Seen from the facts of the storm of January (1967) revolution , the class to be overthrown is none other than the class of bureaucrats formed in China over the past 17 years.”

The nature of Marxist doctrine never gained any real ideological foothold in China, despite Mao Zedong’s obsession with his own ideology of peasant-farmer-soldier relationships.

Instead, it was adopted as an administrative construct to oversee the running of the Middle Kingdom…which, in its own right, spawned a new kind of bourgeois amongst the ‘ruling class bureaucrats’… confusing Western ‘positional hierarchies’ with the ‘natural hierarchies’ inherent in Confucian tradition.

by Albert Koopman 2007