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When you have a friend like Cameron, who needs enemies?

Sonny Leong

108633866 251x300 When you have a friend like Cameron, who needs enemies?As we usher in the new lunar year, the Year of the Rabbit, Chinese families everywhere will be gathering for their reunion dinner to forgive each other and pay respect to our elders.

Will China forgive Cameron for his foolish rant about ‘authoritarian capitalism’?

In his recent speech in Davos, David Cameron launched an extraordinary attack on ‘authoritarian capitalism’ as he warned businesses investing in those countries at their peril. Though he did not refer to China and Russia directly, observers were left in little doubt which countries he was referring to in his attack on ‘authoritarian capitalism’.

‘If you’re looking to set up a headquarters abroad, are you going to invest where your premises can be taken away from you? Where contracts are routinely dishonoured? Where there’s the threat of political upheaval? Or are you going to invest where there are property rights, the rule of law, democratic accountability?

Is this a case of sour grapes? China attracted record levels of foreign capital in 2010. The country’s Ministry of Commerce revealed inward investment totalled $106 billion (£66 billion) last year, an increase of 17.4 per cent on 2009. In December alone, foreign direct investment (FDI) into China stood at more than $14 billion.

Writing in the Wall Street Journal on his trip to China last October, Cameron said:

“[The trip will] provide a further step forward in UK-China relations, adding momentum to our commercial relationship and cementing an economic and political partnership that can help to deliver strong and sustainable growth and greater security for us all in the years ahead.

“On this visit alone, Britain is set to sign new contracts worth billions of dollars involving companies across the UK and cities all over China.”

Apparatchiks in Beijing will not take lightly to Cameron’s Davos statement. On one hand he wants to do business with China, coupled with warm words encourage Chinese businesses to invest in Britain and with the other slaps China in her face. There is a well known Confucius saying, “If you drink with a friend, a thousand cups are too few; if you argue with a man, half a sentence is too much”. China must be feeling so.

A former US national security adviser Zbigniew Brzezinski said, Western countries should be coming to terms with China: “(A) drift into escalating reciprocal demonisation” would be the worst outcome for Asia’s long-term stability as well as for the China’s relationship with developed economies

China has done more than any other economy to pull the world out of recession, and may remain an important engine of global growth for some years to come. According to the 12th Five-Year Plan (2011-2015), China will shift from export-led and investment-driven growth to a more balanced pattern of economic development. As a result, China’s growth rate may be significantly lower, but more sustainable.

At the same time, the rest of the world can expect China to play a more active role in areas such as fighting climate change, poverty alleviation, global infrastructure development, and reform of the international monetary system.

The essence of liberal capitalism is its propensity towards universalism. In the pursuit of profit, capitalism pushes beyond local boundaries, whether village, town, region or country. The rise of modern capitalism in the late nineteenth century erupted into the international conflict that dominated much of the twentieth century.

Capitalist development has a long history in China. Prior to the early modern period China’s embryonic capitalism was far more developed than that of Europe. China’s capitalist development took place within the context of a powerful state that, in periods when the system functioned well, shaped the pattern of capitalist development in numerous ways to meet common social interests. This was the foundation of its hugely impressive long-run economic and social development. Confucianism nurtured a deeply developed concept of ‘duty’ which was the foundation of collective action and social prosperity.

Confucianism was a complete philosophy. It combined a carefully thought out system of morality for rulers, bureaucrats and ordinary people with a comprehensive analysis of concrete ways of both stimulating and controlling the market. When the system worked well the government attempted in anon-ideological, pragmatic fashion to solve practical problems that the market could not solve.

The need for ‘constructive engagement’ is more profound now than ever. ‘Destructive engagement’ will lead to disaster. Has the global financial crisis hastened the ending of globalised capitalism?

In the search for solutions to the multiple threats there is no alternative other than to work together across national frontiers, cultures and levels of development, to find a pragmatic, non-ideological, cooperative way to overcome these threats.

Cameron might come to regret his words when China holds back on buying any future UK gilts or worse starts selling UK government bonds. As this is a period for forgiveness, let’s hope China treats his silly comments as coming from a silly boy.

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  • TheFourthHorseman

    The current crop of ideologues inhabiting the Westminster were suckled at Thatcher’s neoliberal tit. How else would you expect them to behave? – privatisation of national assets, retrenchment of the welfare state, ‘increased productivity’ from the poor plebs lucky enough to still have a job, increased liberalisation of tax regimes and trade relations combined with deregulation (or, more accurately, entrenched resistance to re-regulation of the reckless banking sector) and the increasing institutionalisation of debt via student loans and a progressive return to ‘casino credit’ for the rest of us.

    So long as we continue to act as conduit, funelling the pittance we earn back to the true and rightful owners of wealth, all will be well. Dare to challenge the order on London’s streets and the Met are waiting for you with CS gas, rubber truncheons and a nice big database for all your personal details….

  • dumbganda

    Yea Gordon Brown, Tony Blair, Ed Balls, just to name a few. Yea Chairman Mao also gave away plenty of national treasures to his ‘Big Brother’ Stalin, and caused human misery to billions by starvation. Reminds you of your heros?

  • http://ref2882.web-log.nl/ Ref.2882 RBS Legal Department

    And with these disasters RBS together with Banco Santander having £31 billion in Fraud with Comfort Card by RBS(RD Europe)BV Ref.2882 using forged contracts with falsified signatures etc. etc. Read the messages and conclude, the UK tax payer in total of £ 234 billion before bankruptcy from the Gov. UK tax money the public can decide to withdraw and go to another bank lots of credits and loans are based on false figures to get the support that never was.

  • dumbganda

    Northern Rock was specialist in granting mortgages of over 100% on fraudulent loan applications. Applicants with ‘professional services’, which is loan officer speak for unemployed, signed up with annual income of £1 million. The Bank of England concealed £60 billion loan to HBOS. Enron Brown and his other Labour ministers were part of the global banking crisis problem.

  • http://pulse.yahoo.com/_XUUADPVCGCHDGPKVG4GA2GPUZ4 Paul

    What a confused article. It seems to be little more than a personal dislike of Cameron dressed up as smug social-political analysis with a superficial sprinkling of history and economics. For example:

    “David Cameron launched an extraordinary attack on ‘authoritarian capitalism’ as he warned businesses investing in those countries at their peril.” Why is it ‘extraordinary’? Are there no extra risks investing in countries such as Russia or China. If it isn’t ‘authoritarian capitalism’ how would you describe it then? ‘Benign capitalism’ or ‘liberal capitalism’ perhaps?

    “If you’re looking to set up a headquarters abroad, are you going to invest where your premises can be taken away from you? Where contracts are routinely dishonoured? Where there’s the threat of political upheaval? Or are you going to invest where there are property rights, the rule of law, democratic accountability?” Which part of this statement do you disagree with when it comes to China? For some reason you don’t cover this point.

    “Is this a case of sour grapes?” I would have thought it would be to highlight the advantages of attracting foreign capital to the UK. You may want to see other countries direct it towards China but I’m fairly certain most people in the UK would rather see it coming here.

    “Apparatchiks in Beijing will not take lightly to Cameron’s Davos statement. On one hand he wants to do business with China…and with the other slaps China in her face.” Who or which department have you spoken to in China to confirm this statement? Or are you frightened to name names due to the authoritarian capitalist nature of China.

    “The rise of modern capitalism in the late nineteenth century erupted into the international conflict that dominated much of the twentieth century.” In fact the history of conflict in the 20th Century was far more complex that.

    “The need for ‘constructive engagement’ is more profound now than ever. ‘Destructive engagement’ will lead to disaster.” You aren’t really saying anything here.

    “Has the global financial crisis hastened the ending of globalised capitalism?” No it hasn’t. Just look at the level of borrowing on the international markets during January alone with issuance in some sectors reaching record levels.

    “Cameron might come to regret his words when China holds back on buying any future UK gilts or worse starts selling UK government bonds. As this is a period for forgiveness, let’s hope China treats his silly comments as coming from a silly boy.” So on the one hand China is stepping up to take a more mature and active role in the global economy and the next it is withdrawing support from countries because it doesn’t like what is being said about it. Now that is silly.

  • rustle

    prat!

  • rustle

    “Chairman Mao also gave away plenty of national treasures to his ‘Big Brother’ Stalin” like what?


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