In 1997, He Qingli’s book The Pitfalls of China’s Modernization was published in China and immediately became a bestseller in the non-fiction genre, with its analysis of the shortcomings of China’s economic reform having a tremendous impact at home and abroad. He Qingli predicted the dangers of China’s economic reform, such as the loss of state assets, corrupt bureaucrats taking advantage of the reform to make quick gains, unfair social distribution, and the social dangers of peasants losing their land …….
This book, which was called “Sheng Shi Jing Zi”, was later banned in China.
Some say that all of He Qingli’s predictions about China’s economic traps have come true. However, there were also criticisms that the book was not comprehensive enough in its criticism of China and that it was too pessimistic about China’s development. In any case, in the 20 years since 1997, China’s GDP has grown from the seventh largest in the world after Italy to the second largest economy in the world, and is catching up with the United States.
Now that relations between the U.S. and China have taken a sharp turn for the worse under the Trump presidency, China is seen by the U.S. as its most dangerous long-term rival. He has been in exile in the United States for nearly 20 years now.
BBC Chinese interviewed He Qingli, the author of The Trap, to discuss China’s development and the post-election political split in the United States.
Reporter: When you first proposed the concept of marketization of power in your book The Pitfalls, is it still valid to analyze China’s problems 20 years later? Can this conceptual tool also be used to analyze the recent setback and controversy over Jack Ma’s Ant Financial Services IPO?
He Qingli: The concept of marketization of power is actually the relationship between power and market. In the West, it is mainly the supervision of the market by the power (government), but in China, there is an additional element: the distribution of resources.
Twenty years ago, the resources at the disposal of the Chinese government were the same as they are now, and the broad categories were still hard resources (compared to soft resources, which have not changed much, mainly land, minerals, forests, water resources, etc.); but soft resources have evolved with the times, and as the economy has expanded deeper and deeper, government policies have become more and more regulated (which the government calls perfect). Therefore, although the scope of Jack Ma’s Ant Financial Services IPO is still about the relationship between power and market, it is in the form of government regulation of the financial market, and the background behind it is the Chinese government’s concern about regulatory capital in the era of big data.
Jack Ma once described traditional banks as “pawnshops” in a speech, and that the future of finance should be built on the basis of “big data”. The matter itself is deeply offended by the Chinese government’s taboo, one is the Internet era, mastery of information is fundamental to control, Ant Financial Services to control a huge amount of user data, and these data unless specifically requested, usually not directly by the government. The second is that the past development of private financial, such as P2P and other forms, eventually caused financial risks, so that the Chinese government is tired of dealing with. The third is the inability of the U.S. government to deal with high-tech companies, which the Chinese government is not only concerned about, but also intends to take advantage of.
It can be summed up as follows: Jack Ma’s Ant Financial Incident is a sample of how the Chinese government deals with the relationship between capital and power in the era of big data.
Reporter: What do you think of the comment that the various aspects of capital power behind Ant Financial, hidden shareholders, etc., are themselves already part of the market-based power, because they also have the influence to influence public opinion in China’s official-based society, and even the influence to collude with the political power, the bottom line of Jack Ma’s high profile speech at the Bund Financial Forum is thought to be self-confident that there is some kind of power behind it.
Since the marketization of power is a drawback, is it not more reasonable to assume that the market determines political power, which is the model of Western market economy and democracy? If Ant Financial defeats regulation this time, is this an episode in the transition from the marketization of power to the ideal state where the market determines power?
He Qinglian: Some people speculate that his political backers want to take advantage of the opportunity to make money, so that he can step in and do something to promote the listing of Ant Group. I believe this factor exists. According to a July 2014 article in the New York Times, among the executives of the four Chinese companies that have invested in Alibaba, there are the descendants of more than 20 members of the Politburo Standing Committee since 2002, and this kind of deep-rooted and intertwined network of interests is far more extensive than Wu Xiaohui and Wang Jianlin, or even Xiao Jianhua, the super white glove. However, after reading the full text of Jack Ma’s speech at the Bund Financial Forum in Shanghai on October 26, I believe that in addition to the above factors, he also has his own unique (and perhaps vague) judgment on the world economy today. His concluding paragraph, with its hypothetical questioning of the green economy, is actually a rejection of the green economy, a pseudo-innovative economic route that Europe and other leftist countries are still clinging to, and he wants to do something in the uncultivated wilderness of Internet finance.
But he can’t defeat regulation, because Jack Ma’s e-commerce industry involves at least three aspects of consumer data protection, Internet consumer finance, financial technology regulation, etc., which can be said to account for about half of the key areas of financial regulation.
In the West, the market does not determine power, but the relationship between capital and power is more complex and relatively equal, but it cannot be called an ideal state. Capital can intervene in politics in a variety of legal and even gray ways. This year’s U.S. election demonstrated the ability and desire of high-tech capital to intervene in elections at all levels. This fact should cause the western society to be wary: the advantage of high-tech enterprises is capital, and the second is the dissemination of information and monopoly power, which is far more difficult to include in the scope of regulation than traditional financial capital.
Reporter: According to your analysis, how does this unprecedentedly divisive and antagonistic U.S. election represent the relationship between capital and power in American society, and how do Trump’s supporters position themselves within it, or what are the forces Trump represents?
Qinglian He: Globalists always call Trump an anti-globalist, and even put Britain’s withdrawal from the European Union in this category, but this is not true. In today’s world, no country can survive in isolation from globalization, whether it is the Trump administration or the UK that is withdrawing from Europe, they have always maintained close relations with the world, but there is a fundamental difference between them and the globalism of the European Union and the globalism of the left. Immigration (illegal immigration). The United States, on the other hand, advocates America First.
There is nothing wrong with the slogan America First, because all the world’s leaders advocate the primacy of their own national interests. The Chinese government, for example, is nakedly nationalistic and even demands that Western countries respect its core interest – the permanent rule of the Chinese Communist Party. Why is it that all countries in the world can claim this, and no one has ever criticized China’s nationalism, but only the United States cannot? That’s because after World War II, the United States, as a world leader, has been providing the world with the public goods of maintaining international order, and the United Nations and the rest of the world have become accustomed to it, believing that this is an eternal obligation that the United States must carry. When Trump proposed to NATO that all countries should contribute military expenses as agreed, and withdrew from the United Nations one after another, it was natural for all countries to criticize, and they all hoped that Trump would lose his re-election and the original America would come back again.
Before Obama, the Democratic Party’s base actually consisted of American manufacturing workers, and the U.S. labor unions are still Democratic Party supporters, but most union members are no longer. The base of the Democratic Party is now made up of the “Know-Nothings, the Young, the Restless”. Now, the knowledge base (media industry and education system) is heavily left leaning with most of them supporting the Democrats, the “nones” are completely welfare rather than low wage working class, and the “few” encompasses the three “lesss”. “With two-thirds of African-Americans, more than half of Latinos; a majority of sexual minorities; and faith-based socialists among the youth, the Democratic Party has become a party that is basically a combination of socially marginalized groups and tech and financial bigwigs, and a combination of intellectual groups (around 60%), while the Republican Party has become a party of middle-class, small and medium-sized business owners who respect law and order. The Democratic Party is a party of workers in the manufacturing industry.
At this stage, the structure of the Democratic Party’s electorate is unique in the world: the tech and financial elite and other mega-wealthy at the top, who are the net beneficiaries of globalization; the leftist intelligentsia in universities and research institutions in the middle, dominated by the state-funded education industry and the union elite and civil servants other than police; and the marginalized at the bottom, who need only welfare and are now working on the streets. Money for activism. This party does not need to appeal to American voters now with policies that use ideology and money as its primary mobilizing force. The last 30 years of heavily left-leaning American education (from K-12 to college) has produced a generation of communist youth that will be the future vote bank of the Democratic Party.
Like the CCP, Jack Ma is certainly a globalist when it comes to foreign expansion, but a nationalist when it comes to defending China’s interests. Most Chinese people are of this type.
Reporter: There are different views about America First and Chinese nationalism. Trump’s America First, also known as American nationalism, deviates from the past coordination of alliances and is therefore opposed within the European and American camps. Chinese nationalism or nationalism is not without criticism from European and American public opinion, such as references to core interests in terms of political systems and geopolitical interests. From China’s point of view, however, these belong to national sovereignty and are the proper spheres of influence of a great power. China’s geopolitical interests are still limited to its peripheral regions, while the United States has been defending its own interests and those of its allies on a global scale, and this remains unchanged under Trump.
Due to the dramatic increase in immigration over the past 20 years, the United States has long since changed from a “Melting Pot” to a “Salad Bowl”, with all races existing in parallel and only racial demands within the country.
Since Trump took office, he has restructured relations with his allies, and pressure has increased within the European Union. This pressure comes from the dramatic increase in Muslim immigration from the Middle East, both internally and externally, which puts great pressure on domestic security and economic development. But in the long run, there are significant benefits. As dependence easily breeds inertia, the ability of countries to survive and even innovate will burst forth once dependence is eliminated or reduced. At present, among the three major European countries, Germany’s economy has been declining since last year, and there will not be a big change in Merkel’s term of office, but France and Britain have their own responses.
France is starting to think about the French revival in two ways. On August 31 of this year, the French government announced that it had identified five major industries to implement a plan to “reduce foreign dependence and bring back strategic industries,” and it launched an ambitious 100 billion euro (about S$161 billion) economic revitalization plan to revive France’s “industrial sovereignty”. “The government’s forthcoming €100 billion revitalization plan, which sets aside €40 billion to support French industry, includes €10 billion in tax breaks for all types of production for companies starting January 1, 2021. The French government has teamed up with the Banque de l’Investissement Publique (BIPF) to open up “grant applications to all companies proposing the return of strategic industries” – a plan that when it first came out was dubbed a copy of Trump’s “Let’s get France back on its feet” initiative. The “Great” Project. In response to the recent wave of terrorist beheadings, and in response to public demands for security, Macron finally had enough and criticized “Islamism” because it was not preceded by the word “extremism,” which has sparked opposition from many Islamic countries. But France has succeeded in pushing the anti-Islamist issue within the EU, with Macron meeting with Austrian Chancellor Sebastian Coetzee in Paris on November 10 and holding a videoconference with German Chancellor Angela Merkel, Dutch Prime Minister Jean-Pierre Rutte, EU Permanent President Charles Michel and EU Executive Council President Jean-Pierre von der Leyen to discuss the threat of terrorism. Although it was a small EU summit, it was significant because it was informal and for the first time the EU officially targeted the threat of terrorism at immigrants, and directly at Islamism.
The U.K. is now facing an uncertain economic recovery due to the epidemic, and can only continue to stimulate the economy with continued monetary easing, with the Bank of England recently announcing a £100 billion increase in bond purchases, bringing the total size of asset purchases to £845 billion. In terms of fiscal policy, the British government has indicated that it will extend the financial assistance program for employees on leave to ensure that workers who are temporarily unemployed receive 80% of their wages. However, even with these difficulties, the UK has recently made a decision to increase its defense spending by £24.1 billion over the next four years, which is the largest increase in military spending in the UK government’s 30-year history. This shows that the current British government has a bit of a sense of crisis.
Reporter: Also, you mentioned earlier that the “communist youth” in the United States should be in quotation marks. After all, the left in the American political spectrum, or the “white left” in Chinese, is fundamentally different from traditional communism, and they cannot have the same economic and political ideas, such as public ownership of the means of production, class dictatorship, and so on.
In the 2016 U.S. election, Sanders, a socialist, emerged as the winner of many young voters, and like European youth, American youth are generally left-leaning. “The Foundation for Victims of Communism and polling firm YouGov released a survey that asked 2,100 Americans of all generations for their views on issues such as socialism and communism. According to the survey, 52 percent of American millennials want to live in a socialist country, more than those who want to live in a capitalist country (40 percent). A small percentage of young people want to live in a fascist society, and another 6% believe that communism is the best option.
These young adults who believe in socialism are largely concentrated in the Democratic Party.On July 3, 2018, the New York Times published an article, “Is the Democratic Party Being Socialized? The article cites a survey in which 61% of Democrats between the ages of 18 and 34, who are extreme progressives in the Democratic Party, had a positive view of socialism. Sanders used Nordic socialism to justify socialism after 2016. Because three conditions were already in place: 1) the Cold War ended in the early 1990s, young Americans born in the 1980s and later had no idea that the Soviet Union and Mao’s China were socialist or that they had experienced human tragedy. They believed that socialism was a Nordic family; 2. Sanders led the Social Democratic Collective to join the Democratic Party, which succeeded in causing the entire Democratic Party to shift to the left and finally have a political base; 3. The Democratic Party’s pluralism and welfare policies, which protected illegal immigrants and accommodated heterogeneous religions, were a suitable breeding ground for socialism.
You talk about public ownership of the means of production, which Socialist Congresswoman AOC’s green plan is one step removed from, which is why Biden can’t take it all on the campaign trail. But then, because the U.S. doesn’t need to attract voters with policies for the 2020 election, relying mainly on mail-in ballots and the Dominion system, Biden has moved more and more to the left.
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