by Philip Giraldi, The Unz Review:
Look carefully at the chart above. What do you see?
You see the development of a high-speed rail system that is unrivaled anywhere on earth. You see the actualization of plan to connect all parts of the country with modern-day infrastructure that reduces shipping costs, improves mobility and increases profitability. You see a vision of the 21st century in which state-directed capital links rural populations with urban centers lifting standards of living across the board. You see an expression of a new economic model that has lifted 800 million people out of poverty while paving the way for global economic integration. You see an industrial juggernaut expanding in all directions while laying the groundwork for a new century of economic integration, accelerated development and shared prosperity.
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Is there a high-speed rail system in the United States that is comparable to what we see in China today?
No, there isn’t. So far, less than 50 miles of high-speed rail has been built in the United States. (“Amtrak’s Acela, which reaches 150 mph over 49.9 miles of track, is the US’s only high-speed rail service.”) As everyone knows, America’s transportation grid is obsolete and in a shambles.
But, why? Why is the United States so far behind China in the development of critical infrastructure?
It’s because China’s state-led model is vastly superior to America’s “carpetbagger” model. In China, the government is directly involved in the operation of the economy, which means that it subsidizes those industries that enhance growth and spur development. In contrast, American capitalism is a savage free-for-all in which private owners are able to divert great sums of money into unproductive stock buybacks and other scams that do nothing to create jobs or strengthen the economy. Since 2009 US corporations have spent more than $7 trillion on stock buybacks which is an activity that boosts payouts to rich shareholders but fails to produce anything of material value. Had that capital been invested in critical infrastructure, every city in America would be linked to a gigantic webbing of high-speed rail extending from “sea to shining sea”. But that hasn’t happened, because the western model incentivizes the extraction of capital for personal enrichment rather than the development of projects that serve the common good. In China, we see how fast transformative changes can take place when a nation’s wealth is used to eradicate poverty, raise standards of living, construct state-of-the-art infrastructure, and lay the groundwork for a new century.
Here’s more from a report by the Congressional Research Service on “China’s Economic Rise…”
Since opening up to foreign trade and investment and implementing free-market reforms in 1979, China has been among the world’s fastest-growing economies, with real annual gross domestic product (GDP) growth averaging 9.5% through 2018, a pace described by the World Bank as “the fastest sustained expansion by a major economy in history.” Such growth has enabled China, on average, to double its GDP every eight years and helped raise an estimated 800 million people out of poverty. China has become the world’s largest economy (on a purchasing power parity basis), manufacturer, merchandise trader, and holder of foreign exchange reserves…. China is the largest U.S. merchandise trading partner, biggest source of imports, and the largest foreign holder of U.S. Treasury securities, which help fund the federal debt and keep U.S. interest rates low.
… China’s Economic Rise: History, Trends, Challenges, and Implications for the United States, Congressional Research Service
Here’s more from an article at the Center for Strategic and International Studies titled Confronting the Challenge of Chinese State Capitalism:
China now has more companies on the Fortune Global 500 list than does the United States… with nearly 75 percent of these being state-owned enterprises (SOEs). Three of the world’s five largest companies are Chinese (Sinopec Group, State Grid, and China National Petroleum). China’s largest SOEs hold dominant market positions in many of the most critical and strategic industries, from energy to shipping to rare earths. According to Freeman Chair calculations, the combined assets for China’s 96 largest SOEs total more than $63 trillion, an amount equivalent to nearly 80 percent of global GDP. Confronting the Challenge of Chinese State Capitalism, Center for Strategic and International Studies
And here’s one more from a report by the IMF titled “Asia Poised to Drive Global Economic Growth, Boosted by China’s Reopening”:
China and India together are forecast to generate about half of global growth this year. Asia and the Pacific is a relative bright spot amid the more somber context of the global economy’s rocky recovery.
As the Chart of the Week shows, the region will contribute about 70 percent of global growth this year—a much greater share than in recent years.” Asia Poised to Drive Global Economic Growth, Boosted by China’s Reopening, IMF
In short, the Chinese state-led model is rapidly overtaking the US in virtually every area of industry and commerce, and its success is largely attributable to the fact that the government is free to align its reinvestment strategy with its vision of the future. That allows the state to ignore the short-term profitability of its various projects provided they lay the groundwork for a stronger and more expansive economy in the years ahead. Chinese reformer Chen Yun called this phenom the “birdcage economy”, which means the economy can “fly freely” within the confines of the broader political system. In other words, the Chinese leadership sees the economy as an instrument for achieving their collective vision for the future.
