Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
Silver Outlook Is 'Excellent' - 23rd July 19
Why The Coming Silver Rally Might Be The Greatest - 23rd July 19
We Are in for Decades of Ultra-Loose Monetary Policy - 23rd July 19
Gold & Gold GDX Stocks Ripping. What’s Next? - 23rd July 19
Stock Market Breadth Warning Signs for the Stock Market’s Rally? - 23rd July 19
U.S. Recession Watch: The Six-Cycle Forecast - 23rd July 19
US Dollar Index tightly wound between: US Bond Yields down on safety flows - 23rd July 19
Stocks Bull or Bear? The Market’s Message - 23rd July 19
This Dividend Aristocrat Is Leading the 5G Revolution - 22nd July 19
What the World Doesn’t Need Now is Lower Interest Rates - 22nd July 19
My Biggest 'Fear' For Silver - 22nd July 19
Reasons to Buy Pre-Owned Luxury Car from a Certified Dealer - 22nd July 19
Stock Market Increasing Technical Weakness - 22nd July 19
What Could The Next Gold Rally Look Like? - 22nd July 19
Stock Markets Setting Up For A Volatility Explosion – Are You Ready? - 22nd July 19
Anatomy of an Impulse Move in Gold and Silver Precious Metals - 22nd July 19
What you Really need to Know about the Stock Market - 22nd July 19
Has Next UK Financial Crisis Just Started? Bank Accounts Being Frozen - 21st July 19
Silver to Continue Lagging Gold, Will Struggle to Overcome $17 - 21st July 19
What’s With all the Weird Weather?  - 21st July 19
Halifax Stopping Customers Withdrawing Funds Online - UK Brexit Banking Crisis Starting? - 21st July 19
US House Prices Trend Forecast 2019 to 2021 - 20th July 19
MICROSOFT Cortana, Azure AI Platform Machine Intelligence Stock Investing Video - 20th July 19
Africa Rising – Population Explosion, Geopolitical and Economic Consquences - 20th July 19
Gold Mining Stocks Q2’19 Results Analysis - 20th July 19
This Is Your Last Chance to Dump Netflix Stock - 19th July 19
Gold and US Stock Mid Term Election and Decade Cycles - 19th July 19
Precious Metals Big Picture, as Silver Gets on its Horse - 19th July 19
This Technology Everyone Laughed Off Is Quietly Changing the World - 19th July 19
Green Tech Stocks To Watch - 19th July 19
Double Top In Transportation and Metals Breakout Are Key Stock Market Topping Signals - 18th July 19
AI Machine Learning PC Custom Build Specs for £2,500 - Scan Computers 3SX - 18th July 19
The Best “Pick-and-Shovel” Play for the Online Grocery Boom - 18th July 19
Is the Stock Market Rally Floating on Thin Air? - 18th July 19
Biotech Stocks With Near Term Catalysts - 18th July 19
SPX Consolidating, GBP and CAD Could be in Focus - 18th July 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

China's Great Humiliation

Politics / China Jul 13, 2013 - 06:12 PM GMT

By: Andrew_McKillop

Politics

MODERN MYTH'S OF NATIONAL TRIUMPH
Writing in 'Wall Street Journal' and saying China needs “a new national story”, Orville Schlee and John Delury basically claim China has for too long been hobbled and fettered, ideologically, by its modern history of humiliation. This was due to the so-called unequal treaties it was forced to sign with what for Chinese, were the Western Barbarians. These unequal treaties started with the British in 1842.


The cult of national humiliation was used by Mao Zedong, founding the Peoples Republic in 1949 when he said “Ours will no longer be a nation subject to insult and humiliation."

Schlee and Delury contrast that with the US and France:
“Every July, amid festivities and fireworks, the U.S. and France mark their birth as nations”. They claim that in both cases this started with triumph:  “Accustomed as we are in the West to histories that begin with triumph—the signing of the Declaration of Independence, the storming of the Bastille—it may seem strange that China, the fast-rising dynamo of the East, marks the beginning of its journey to modern nationhood in a very different way: with the shock of unexpected defeat and the loss of national greatness”.

Chinese state mythology, to be sure, makes it obligatory for every schoolchild to know China's official Before and After – Before and After the First Opium War of 1839-42. Schlee and Delury say this is comparable with Americans teaching children the preamble of the Declaration of Independence, and French forcing all schoolchildren to learn La Marseillaise, but in China's case it is a cult of national humiliation and the natural desire for revenge.

In fact all three events were revolutionary, included 'revanchist' motives, involved mass killing and were overturned and superceded by the real world. Teaching everybody, not only schoolchildren the differences between Before 2008, and After the crisis, are a lot more relevant to the modern world.

CHINA'S REBALANCING IS ALSO CULTURAL
When or if China experiences a massive financial and economic crisis comparable to that of 2008 in the US, France, other European countries, Japan, and other developed countries this may be as humilating for China as its 1842 defeat by the British in the First Opium War. It will be humiliating in the same way, but possibly not as intensely, as the deep humiliation suffered by the populations of the PIIGS countries, doomed to years (even a decade) of austerity, their youth forced to emigrate.

China's slowing economy is taken as “a danger signal”, by many in the West, only for what Chinese slowing will or can do to global economic growth.

It is usually ignored for what it is: a danger signal generated by and inside the Chinese economy and society. It warns that China can suffer a finance-triggered crash exactly like the Western economies. Very little prevents this – and the reason is because China has caught up. China is so far from a humiliated nation that, although Scheel and Delury don't exactly say this, its “170-year-old cult of national humilation” is a lot more than simply dangerous, if it affected Chinese political decisions.

This is not the case, but the reasons should alarm us even more. China has learned from the Western crisis of 2008 and its sequels. China is alarmed and perplexed, confused in the same way as Western deciders, or non-deciders. China knows this is a terminal crisis, but does not know what comes next.

The almost natural reflex action is to slow down, like driving in fog, hail or heavy rain.

National symbols, historical myths are in any case unrelated to the modern global economy. It is also arguable China has re-interpreted its 170 years of humiliation much more constructively than Americans, today, treat and mistreat the Declaration of Independence, and French fumble with the “real meanings” of the Storming of the Bastille.

All three were war-related events. All three events presaged future wars – civil wars. None of then had anything to do with the global economy's fantastic morph into uncharted waters since 2008. Inside the US and France, today, their historical relics are criticised by some as a “distraction”, even an irritation.
For Chinese, national mythology makes The Temple of the Tranquil Seas, in Nanjing, the place where Chinese forces signed a humiliating surrender deal with British forces, a “curious porthole into the bitter past of foreign incursion and exploitation”. Today, countries like Cyprus must sign with the Troika, for last-minute bailouts under humiliating conditions. Across the OECD countries and with very few exceptions, the tens of millions of additional unemployeds since 2008 must accept the humiliation of long-term joblessness.

FORGET THE FIREWORKS
As it is, this July 14, many French towns and smaller cities have quietly shelved their traditional fireworks shows. Even when produced and sold by China, as most are, they are too expensive.

As we know, both Republicans and Democrats trace their ideologies to July 4. Both Napoleon and French Republicans claimed legitimity from July 14. In China, both the Nationalists and Communists constructed their ideologies with claimed inspiration from the August 1842 Nanjing Treaty. In no case did this prevent intense conflict, even civil war. Arguments can be made that all three “founding national events” sowed the seeds of civil war.

Facing economic crisis and being unable to trace it to unequal trade treaties, dumping, currency devaluation, commodity or stock price manipulation – or any other hostile action called Economic War – the fireworks of Great Power conflict, spurred by economic war, are at present very unlikely. This is because the crisis is too grave, not the opposite.

The fact that the Asian Locomotives, following the Asian Tigers, have slowed and then slowed again, while the other BRICs and G20 former high-growth Emerging economies, such as Brazil, are almost in recession should alert us to the real situation. For China, simply because of its massive size and long history, its deep experience of the recent high-growth phase of economic globalization, the roles of rebalancing – firstly to slow the economy – are clearly understood.

The motives for this are however more complex in the Chinese case, than in the Western economies which were subjected to chaotic and unexpected slowing, turning it into an inevitable crash. China in now way wants to repeat that humiliation, dealt to and inflicted on the West by itself. China therefore plans for controlled slowing – with all the dangers that implies.

As the Western economies have slowly understood, since 2008, there is little or no symmetry between the growth economy and decline economy. They are not simple red lines and blue lines on a chart, the one canceling the other. They are different processes – understood, now, by the admission of some Western economists, if not politicians, that “restoring growth” may not be conventionally possible or may have to be “heterogeneous”, spread over a long time period, staggered, or suchlike.  This recognition is often given coded language for example “double dip and triple dip”, “negative growth”.

China rides the Dragon. The capture by British forces of a Chinese Imperial Rising Dragon flag at the Battle of Chusan, during the First Opium War, was a key event in this key war. The Dragon, in Chinese mythology, can disappear in a flash and as a mythological animal is both revered and feared. Growth of the economy, in China, may be so extremely compressible that for all intents and purposes it disappears from view.

This would be more than simply a national humiliation – it would be a global catastrophe.

By Andrew McKillop

Contact: xtran9@gmail.com

Former chief policy analyst, Division A Policy, DG XVII Energy, European Commission. Andrew McKillop Biographic Highlights

Co-author 'The Doomsday Machine', Palgrave Macmillan USA, 2012

Andrew McKillop has more than 30 years experience in the energy, economic and finance domains. Trained at London UK’s University College, he has had specially long experience of energy policy, project administration and the development and financing of alternate energy. This included his role of in-house Expert on Policy and Programming at the DG XVII-Energy of the European Commission, Director of Information of the OAPEC technology transfer subsidiary, AREC and researcher for UN agencies including the ILO.

© 2013 Copyright Andrew McKillop - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisor.

Andrew McKillop Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules