China has to earn right to lecture world leaders
This is the blog version of my last Birmingham Post print column
I am getting a bit sick of the Chinese state strutting about lecturing us in the west about how to run our businesses and economies.
It lectured the US earlier this month: "China, the largest creditor of the world's sole superpower, has every right to demand the United States address its structural debt problems and ensure the safety of China's dollar assets," it said through a mouthpiece news agency.
It also said that the US should "live within its means", slash its deficit and end its "debt addiction".
While it mercilessly manipulates its own currency and economy to make its goods competitive in a way we can't, it also suggested a new international reserve currency.
Then, with breathtaking arrogance, it suggested that the US should slash its "bloated welfare costs".
This latter call crossed a line as far as I was concerned. Time for my lecture to the Chinese, then.
It is, instead, the Chinese government itself which should actually start to spend its own real economy's money on its own country. It should invest in its own citizens and provide a full welfare state for its own people; it should properly stimulate its own economy - it has tried this only slightly.
Instead of flooding the world with its mis-directed surplus money and foreign currency from its cheap exports to the west it should get it to work in China itself.
Invest massively more in your own economy, China, and we will all benefit. Don't ask us and our welfare state to subsidise your quick-fix, state-led, economic growth.
Perhaps, then, Chinese goods would be a bit more expensive and its currency a bit less easy to manipulate for international trade purposes.
Perhaps, then, there might be a proper, more level playing field for competition between the Chinese state's "businesses" and real, private enterprise British businesses.
Instead, our businesses have to compete with products emerging from China whose prices do not have to factor in what we have to factor in to ours.
The Chinese state has constructed over the last 20 years a pretence of a capitalist economy. It is not a real private enterprise economy. At best it is a state capitalist economy.
In particular that economy does not support a modern welfare state for all of its citizens in all of its areas.
Consequently, Chinese state capitalist businesses can pay workers peanuts. Try paying your workers much better and you might get better internal growth through your own internal markets too, China.
With peanuts wages and businesses taxed lightly, China makes products which our economy cannot compete against.
Freedom, democracy, welfare and economic and social justice cost. It is priced into our goods. It is not priced into theirs.
Consequently we subsidise the Chinese economy with ours - and in particular with our jobs - while the Chinese state lectures us in the west about our welfare state.
Chinese capitalism is short-cut capitalism - designed most to benefit whatever is the current political class or elite (as all state capitalism does) - and is absent of basic human rights and democratic accountability.
The low-skilled and no-skilled jobs which we now export to China are lifted and shifted from our economy to theirs quite easily, leaving unemployment here and quick-fire, easy-to-achieve early economic growth there.
The double whammy means that we then have to use our welfare state to pay welfare benefits for the people made unemployed by the transfer of those jobs overseas.
We are told instead to forget products which involve low-skill or no-skill jobs and compete on another level by better educating and training our people to produce products in a new, high-skilled, competitive economic model. This involves, once again, further investment in education by our welfare state.
We have sat back and allowed the lift and shift of jobs from here to there. Higher grade, added value ones are meant to replace them here. But not enough ordinary workers can (at least currently) do these jobs, even if they emerge - which is uncertain.
Non-skilled and low-skilled workers are out for the count economically.
Unfortunately our economy as it is currently structured and balanced (and historically this has been due to completely misguided and successive deindustrialisations over the last 30 years) does not have enough opportunities for the low-skilled or no-skilled.
We pay benefits until they can (if ever) become skilled in this magic, new, shiny, high-skilled economy which always seems to be just around the corner.
A large pool of unskilled and low-skilled people (of whatever age, but especially of a young age) with no businesses or other opportunities to find work is a recipe for economic and social disaster.
It is a business, economic and political priority (at least in the short-term) to preserve and create jobs for the low-skilled or unskilled and allow them to contribute to our economy and our society. They could in the past.
We have been oversold the high-skill economy.
Don't we have to start to look at having an economy that uses all our talents, yes, but also uses the work of people who are, to be frank, not talented? At least not talented from an economic point of view.
If we don't, we risk future problems by continuously and increasingly leaving large numbers with no stake in our economy.
Businesses and organisations which create real work for the unskilled and low-skilled are needed.
In the past some standard manufacturing sectors were there to do their significant bit to keep hands from being idle. So they should now.
If that means looking at ways of creating a level playing field to enable British manufacturing goods to compete, either through subsidy or tariffs, then so be it. The Chinese do it.
The Chinese use a whole panoply of such measures to protect and extend their businesses' global reach and competition while preaching free trade.
There is simply not enough global free trade worthy of the name any more to continue to protect the current model.
It is now dominated, instead, by non-private enterprise, state-run or state-championed, businesses. This is state capitalism.
State capitalist money, influence and currency manipulation (most especially now by China's communist state) ironically now determine how global capitalism works - to our great detriment.
It is time for a fight back - and that is a fight back to find ways to protect basic jobs from being spirited away from the UK and leaving hands here idle.