MESSAGE
| DATE | 2020-11-05 |
| FROM | Ruben Safir
|
| SUBJECT | Subject: [Hangout - NYLXS] The Chinaization of the West in the advent of the
|
This is what the continued mainstream political course has done to our
society and economy. We have put ourselves, especially Obama and Biden,
in the position of being dependent and competing with Chinese Slave
Labor and Communist politics and we totally fucked ourselves.
wsj.com
Western Economies Embrace State Intervention, Emulating Asia
Tom Fairless and Stella Yifan Xie
12-15 minutes
FRANKFURT—Western governments are taking a page from their Asian rivals
and moving away from the free-market doctrine that defined their
economic thinking for decades, instead embracing greater state control
of business activity.
The shift reflects a deep anxiety about the West’s ability to maintain
its living standards and technological edge while competing with giant
state-backed companies in China and elsewhere in Asia.
The trend is being accelerated by the Covid-19 pandemic, which has
prompted a rethink of the balance between the state and private sector,
as well as fresh ideas about how giant stimulus programs in Europe and
the U.S. could be deployed to reshape economies.
In the European Union, an export powerhouse that had long prized
laissez-faire policies and free trade, leaders last month vowed to erect
barriers to foreign competitors, repatriate production of key
technologies, reduce dependencies in sensitive industries such as
health, and create new digital champions.
Italian state-backed lender Cassa Depositi e Prestiti last month took a
stake in European exchange operator Euronext NV to support its buyout of
the Italian stock exchange. Germany’s government recently demanded a 20%
stake in national flag carrier Deutsche Lufthansa AG , which was
privatized in 1997, and two supervisory board seats, in return for a $10
billion bailout.
In the U.S., both main political parties are moving toward a stronger
role for the government on economic issues. The administration and
lawmakers from both parties also are pushing for additional funding to
help the U.S. semiconductor industry keep its edge over China, offering
incentives to chip firms to build factories in the U.S. and funding
technology research. So far, Congress hasn’t agreed on funding to put
the plans into action. Should former Vice President Joe Biden prevail in
the presidential election, he has said he would put huge funding into
industrial policy efforts.
“It’s a major historical development,” said Adam Posen, a former Bank of
England policy maker who is now president of the Peterson Institute for
International Economics in Washington. “It’s a reaction to China. It’s a
reaction to Covid-19 and wanting to have more reliability and government
control.”
The changes reflect a fundamental philosophical shift away from the
market-oriented consensus dominant in the West since around 1980, which
emphasizes a reduction in state support for businesses, the removal of
regulations impeding competition, and trade liberalization.
State of PlayState-owned enterprises dominate rankingsof the world’s
biggest companies.Revenue, 2019Source: Fortune Global 500
$524 billion407384379330283281Walmart (U.S.)Sinopec Group (China)State
Grid (China)China National Petroleum (China)Saudi Aramco (Saudi
Arabia)Volkswagen Group (Germany)Amazon.com (U.S.)
Now, as Western governments wield enormous stimulus packages, they are
pouring money into industries traditionally considered beyond the remit
of the state.
Italy plans to spend 2 billion euros, equivalent to $2.3 billion, to buy
and refurbish hotels devastated by the crash in tourism. In France,
authorities plan to spend hundreds of millions of euros to buy local
stores to support quintessentially French businesses such as bakeries
and cheese shops.
In the U.K., Prime Minister Boris Johnson’s government has signaled it
will pursue an aggressive industrial policy of state aid to businesses
after Brexit, risking a rift with the EU.
“The public are prepared for the state to play a bigger role in all
sorts of things,” said Gus O’Donnell, former head of the U.K. civil service.
Across Europe, businesses and policy makers are fearful of being
squeezed out of new digital industries dominated by U.S. and Chinese
companies.
Meanwhile, the pandemic has driven Asian countries to double down on the
tradition of state intervention that has fueled extraordinary growth and
produced winning industries such as electronics manufacturing in South
Korea and Japan, and China’s solar power and semiconductor industries.
“One thing we could learn [from China] is to make a strategy and stick
to it,” especially in new digital industries, said Margrethe Vestager,
executive vice president of the European Commission, in an interview.
SHARE YOUR THOUGHTS
How do you think the West can best compete with state-backed companies
in China and elsewhere in Asia? Join the conversation below.
The Trump administration’s trade policy, which requires China to buy
more goods from the U.S., depends on Beijing ordering state-owned
companies to increase their purchases. Administration officials say they
are simply accepting Chinese economic policy as it is, rather than
trying to compel China to rely more on market forces.
There are risks to the new approach. Some governments have demonstrated
limited expertise in picking the companies and industries to invest in,
with Asian countries pouring money into such efforts over decades, some
of it without success.
In China, concerns are growing among some economists that a fresh wave
of government spending on power, gas and water-supply
infrastructure—which it hopes will lift the economy—will exacerbate
overinvestment in those sectors.
In Europe, the Common Agricultural Policy became infamous for generating
huge inefficiencies—so-called butter mountains and lakes of wine. The
Italian government has spent billions of euros trying to make airline
Alitalia a success, only for it to continue losing money.
While large-scale government and military programs helped seed important
industries during World War II and later led to the creation of the
internet, the pendulum swung back to small government in the 1980s, when
Western governments got out of businesses such as telecoms, utilities
and transport.
China is pouring tens billions of dollars into industries it has
identified as strategic priorities, such as semiconductors.
Photo: Costfoto/Barcroft Media/Getty Images
Economically successful East Asian nations including Japan, South Korea
and Taiwan have a history of government intervention and encouraging big
export industries. Close ties between governments and the private sector
are widely credited for having lifted the region out of poverty.
The aftermath of the 2008 financial crisis eased decades of skepticism
toward big government. The countries that intervened most, such as the
U.S. and China, emerged strongest, while those that were most stringent,
including Southern Europe, were hobbled for years.
Chinese state-owned enterprises doled out more than 4 trillion yuan,
equivalent to $600 billion, to build bridges, airports and other
infrastructure. Between 2012 and 2018, the value of Chinese state
companies’ assets grew more than 15% annually, well over twice the
growth rate of the country’s economy, according to the Peterson
Institute for International Economics.
“The sheer scale of China’s economic growth has raised the global
profile and attraction of the state capitalist model,” said William L.
Megginson, professor of finance at the University of Oklahoma.
Tech Decoupling: China's Race to End Its Reliance on the U.S.
0:00 / 7:09
4:10
Tech Decoupling: China's Race to End Its Reliance on the U.S.
Tech Decoupling: China's Race to End Its Reliance on the U.S.
The tech battle between the U.S. and China has battered TikTok and
Huawei and startled American companies that produce and sell in China.
WSJ explains how Beijing is pouring money into high-tech chips as it
wants to become self-sufficient. Video/Illustration: George Downs/The
Wall Street Journal
Efforts to bolster certain industries have gained urgency in the West as
China’s focus shifts from cheaper goods to the more expensive products
that U.S. and European companies specialize in.
China is pouring tens billions of dollars into industries it has
identified as strategic priorities, such as semiconductors and robotics,
while Chinese authorities use favorable policies to nurture homegrown
high-tech companies. Covid-19 has led to more trade protectionism,
prompting Beijing to speed up efforts to reduce dependence on foreign
core technologies.
In Germany, businesses are calling on the government for help advancing
in future technologies as the nation’s large auto sector sags—and
countering an increasingly competitive China.
“In some areas we are losing ground to China, such as the electronics
industry,” said Toralf Haag, chief executive of Voith Group, a German
engineering company. The huge investments needed to foster new
technologies are “too big of a project to lift for companies alone.”
China is using favorable policies to nurture homegrown tech companies.
Photo: Cai Yang/Zuma Press
In Brussels, European lawmakers are pushing to relax rules limiting
state aid in a bid to spur the creation of national champions.
Meanwhile, Asian countries are focusing on the state-centric model.
South Korea in July unveiled a plan worth 5 trillion won, equivalent to
$4.4 billion, to protect its supply chains against disruptions, which
includes incentives for firms to repatriate production. Japan is
spending $2 billion on efforts to bring production back from China or to
diversify it into Southeast Asia.
Chinese state-owned enterprises including China Mobile Ltd. and China
Railway Group Ltd. created more than one million new jobs earlier this
year as private businesses cut spending, according to state media.
Still, some economists argue that China also has a poor record of
picking winners, and that its stunning economic growth has been driven
by the private sector.
“Many of the Chinese interventions…have been failures, but China has
enjoyed enough success in promoting key industries such as solar power,
steel and artificial intelligence that it is perceived as winning,” said
Mr. Megginson.
Businesses—especially in export-oriented countries such as Germany,
Italy and South Korea—worry that renationalizing trade and supply lines
will increase costs while hurting innovation and productivity.
Recently departed Japanese Prime Minister Shinzo Abe put the
government’s muscle behind an effort to export infrastructure such as
nuclear-power plants and bullet trains to Europe and developing nations,
an effort that ended mostly in failure as the recent collapse of a
Hitachi Ltd. -led nuclear-power project in Wales shows.
“I’m not sure the government has a particular knowledge in terms of
which sector might expand. Industrial policy leads to bureaucracy,” said
Carlo Cottarelli, a former Italian government official who headed an
ill-fated attempt to cut government waste.
—Eun Young Jeong contributed to this article.
--
So many immigrant groups have swept through our town
that Brooklyn, like Atlantis, reaches mythological
proportions in the mind of the world - RI Safir 1998
http://www.mrbrklyn.com
DRM is THEFT - We are the STAKEHOLDERS - RI Safir 2002
http://www.nylxs.com - Leadership Development in Free Software
http://www.brooklyn-living.com
Being so tracked is for FARM ANIMALS and extermination camps,
but incompatible with living as a free human being. -RI Safir 2013
_______________________________________________
Hangout mailing list
Hangout-at-nylxs.com
http://lists.mrbrklyn.com/mailman/listinfo/hangout
|
|
