Sun, Jul 03, 2005 - Page 8 News List

Break free of the `China fever' trap

By the Liberty Times editorial

"China fever" is a global epidemic. While no part of the world can escape from the reach of the disease, the devastation suffered by Taiwan is especially acute.

Is the rise of China an opportunity to strike it rich or a lethal threat? That is a question about which most people feel confused. As a result of constant brainwashing and propaganda by the media, some of our countrymen have become more deceived than others . Naturally, they also fail to detect the dangerous predicament in which they find themselves.

After Deng Xiaoping (鄧小平) initiated the reforms and opening-up policy in China, Beijing has adopted a unique political and economic system in which it assimilates capitalistic policies, appropriates land and offers preferential tax treatments. The Beijing government is doing everything in its power to lure foreign investment, which provides the engine for economic growth.

In other words, while the Chinese government continues to pay lip service to socialism, its economic path has made socialism in China little more than window dressing. It remains absolutely unshaken in the political domain, resisting democratic and human-rights ideals. Moreover, political power is concentrated in the hands of a ruling minority, and without any checks or balances or democratic representation. This is the so-called "socialist market economy," commonly known as the "bird-cage economy."

After World War II, Japan and pre-unification West Germany were two examples of economic miracles. To the fascination of many, these countries managed to rise from their post-war ruins to become the world's second and third-largest economies within a mere 20 to 30 years.

The reach of Japan's economic influence was unsurpassed. Against a backdrop of a weakening US economy at the time, US academics had no choice but to concede that "Japan is number one" and called on the aging US enterprises to learn from Japan.

Smaller economies such as the Asia's "four tigers" have also jumped onto the express train to economic development during the past 30 to 40 years.

What distinguishes China from countries such as Japan, West Germany and the "four tigers" are its massive size and 1.3 billion citizens -- advantages unmatched by other countries. As a result, China naturally has a huge market, which naturally invites much interest. Some Taiwanese businessmen and Western enterprises have fallen into the trap and transferred their capital, manpower and technologies to China in search of an illusory dream. The foreign investment in China in recent years is unsurpassed by any other countries in the world.

Backed by foreign investment, the Chinese economy has become seriously over-inflated. On the outside it may look strong, but in reality it is very shaky, challenged by problems such as massive unemployment, excessive defaulting loans, the rapidly increasing wealth gap between the rural and metropolitan areas, deteriorating social and crime problems and a large number of homeless and unemployed workers.

These internal problems could trigger much greater and more serious problems at any time, and could bring the autocratic political regime to the brink of collapse.

There has been increasing concern about the fixed exchange rate of the Chinese currency, trade frictions with China, controversies over the low prices of its manufactured goods, fluctuations in the prices of energy and raw materials in the international community and the number of foreign mergers and acquisitions by Chinese enterprises. These factors have begun to awaken the world to the threats posed by China's rise.

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