Evaluating Causes, Cures and Global Imbalances
CHINA: FRIEND OR FOE? An article ‘Made in China’ in Fortune (Taylor, 2006, p. 65) posed two alternatives. Will China be a beneﬁcial driver of global economic prosperity? Or should Americans be scared of it, as a threat to jobs and living standards?1 US Treasury Secretary Hank Paulson in September 2006 would seem to have opted for the ﬁrst, telling his hosts in Beijing that ‘We want you to succeed.’ He continued: ‘The United States has a huge stake in a prosperous, stable China – a China able and willing to play its part as a global economic leader’ (The Australian, 15 September 2006, p. 24). However, the second question never seems never to be far from the surface, as reﬂected in a Fortune 2005 cover story called ‘China rising – will the US be ﬂattened?’ (4 July 2005). In the 2006 article referred to above, the author notes: ‘In an echo of the demonization of Japan in the late 1980s, China is accused of gaming the world economic system to steal American jobs’ (p. 65). Such fears are fanned by predictions such as that by Jeﬀrey Sachs to the eﬀect that by 2050, China’s economy could be 75 per cent larger than that of the United States.2 Clyde Prestowitz, president of the Economic Strategy Institute in Washington in his book Three Billion New Capitalists: The Great Shift of Wealth and Power to the East (2006) chronicling the rise of China and India, provides much detail...
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