Fat Years - Chan Koonchung [100]
The 2008 financial tsunami caused him to reflect deeply on his economic theory, to reconstruct his mental image of the world economy and China’s road to development, and cleverly to incorporate his further ideas into his “Action Plan.”
He saw that the American-led developed countries, due to their two-party or even multiparty democratic political systems, had neither the ability nor the resolve to tame the monster known as globalized finance capitalism. America’s elected politicians were beholden to a plethora of interest groups: Wall Street, big business, the arms industry, local power groups, the churches, labor unions, and various public-relations lobbies; they also had to take care of popular and media opinion. So when it was necessary for them to unite to accomplish something big and important, all they could do was look around, to the left and right, and fight meaningless little battles; they didn’t dare to cut to the bone and heal the body politic, and were even less likely to take bold and decisive action. American market fundamentalists and the right wing of the Republican Party constantly dragged their feet and added to the confusion; they were completely out of touch with reality and could certainly mess things up, but they could not make any positive contributions. He Dongsheng was completely discouraged by Western representative democracy; he didn’t have the slightest hope for it. He was even less hopeful that those government financial decision-makers, with their multifarious connections to Wall Street, had the cojones to make correct decisions that would save the world economy. On the contrary, he was more and more convinced that China’s vast post-totalitarian government really did have the ability to manage and direct this historical stage of globalized finance capitalism—that is, if China had the correct understanding of the globalization of capital.
He Dongsheng realized, however, that in the Chinese system, merely having a correct understanding of any situation was not enough. This was because every level of the party-state-government was under the excessive control of interest groups and corrupt officials, and they would distort or reject even the most correct policy if it didn’t profit them directly. Thus, He Dongsheng thought that only a major, unprecedented crisis would permit the current ruling group to implement a genuine dictatorship, guarantee action at the bottom on every order from the top, and build a firm foundation for China’s Golden Age of Ascendancy that was just waiting to blossom out of the nation’s growing power.
He Dongsheng had never imagined the 2008 global crisis would happen so soon. Nor had he imagined that on the first frenetic day, the Chinese Politburo would set in motion a completely new plan for tackling the situation. The policy proposal was called the “Action Plan for Achieving Prosperity amid Crisis.” This proposal, of course, represented the collective wisdom of the entire Politburo Standing Committee, but very many of its elements were in accord with He Dongsheng’s own secret plan.
First, let’s answer the question: What about the United States? How did they start learning from our Chinese state-run system?
The United States government printed money and sold bonds, tried to save the bankrupt car manufacturers, poured money into already defunct banks … spending all that money in the wrong places. The result was that credit didn’t revive, the market continued to contract, house prices continued to plunge, the unemployment rate edged up as before, and the value of the U.S. dollar steadily declined. American investors didn’t want dollars and international investors didn’t want them either; even the central banks of Japan, Russia, and Taiwan didn’t dare to hold only American currency. American bonds, both long- and short-term, were hard to sell no matter how good their interest rates were. The dollar rose for a