East and West: the twain meet
The conventional wisdom seems to be that China needs to keep its economy growing at more than 7 per cent a year to prevent the resentments and frustrations of its population from boiling over into civil unrest against corruption and autocracy - and to drag along the rest of a recession-hit world (forget about global imbalances just as long as there's money somewhere).
China has problems, we all agree.
It is less often said which part of the Chinese population is likely to bring down the house of cards. Will it be the hard pressed FoxConn worker or the frustrated wheeler-dealer with the illegal helicopters hidden in his warehouse? Because China has telescoped a few centuries of western European social and economic development into a few decades (leaving out the political bit) it is difficult to tell. Which is tragedy and which is farce? In this country the middle class commercial interests got their legitimate place in the scheme of government long before industrialisation and urbanisation transformed the make-up of society and so some sections of it could work for the great social reforms of the nineteenth century that stabilised society as the economy expanded and urbanised dramatically. Not so in China, whose breakneck speed of expansion the west is ever keen to stoke up with incendary industrial and financial devices, whilst below offering a low murmur of distress at the destruction of historic culture and at the impending environmental collapse.
Meanwhile, in the west, as economic growth sinks in more and more countries into negative figures, the question is again how can popular civil unrest and violence be avoided. We have democracy (which at times we tell ourselves it is patronising to assume the Chinese people want - they just want to be able to keep on making mobile phones for us, don't they, like we just want to be able to keep on buying them?), but increasingly, as governments fail to respond to popular discontents and as they accept the impositions of unelected international bodies, democracy is perceived as a sham and an excuse for the accelerating transfer of wealth from the poor to the rich.
So where lies the path to the sunlit uplands for us? A leading official of the Chinese sovereign wealth fund knows. Ironic? Perhaps not: the Chinese sovereign wealth fund needs markets like almost no-one else. China, which has been buying in Greece, plans to bury the West in a different way to that which Mr Kruschev threatened: not in a pile of thermo-nuclear rubble, but in a growing mountain of largely plastic consumer goods, durable only in their powdered detritus in the world's oceans. According to Mr Jin, Europe needs to moderate the pace of austerity - if that is not too bizarre a concept. Austerity must continue; it just needs to be a little less severe, and to go on for longer. For ever, preferably, getting rid of those fibre-sapping and unaffordable social welfare and employment protection provisions. In other words, Europe needs to be more like China. We need 'to work a little harder and work a little longer'. Nothing too frightening, you understand. A touch on the tiller here, a touch on the tiller there. We're all, east and west, in this together: we can go on for ever. The Great Helmsman returns! But is it Mao or Ted Heath?
Meanwhile Foxconn, which, although all one tends to hear about are its vast factories in mainland China, is of course based in Taiwan, that elder child of the marriage of East and West, actually knows what the weather is like in the streets. It is finding that Chinese labour costs are growing too high for servicing the declining real-terms disposable incomes of the West (I expect someone has told Mr Jin) and is busily buying up vast tracts of land in Brazil and planning to open factories in the USA - in places like Detroit. Perhaps the Chinese sovereign wealth fund can invest in them. Yet of course American labour costs are also too high to service the diminishing purchasing power of American consumers - a problem for which Foxconn's answer is said to be making the factories purely automated. Is there still a problem there? Where is the money?
