China Blamed For Global Slowdown

China’s accession to the World Trade Organization in 2001 had a far greater global economic impact than 9/11. It was one of the most important events in modern history. A warning America detailed in a 100-page report submitted to Congress by the Bush administration to mark the end of China’s five year accession to WTO on December 11, 2006. Bush and company identified “troubling indications that China’s momentum towards reform has begun to slow” according to Susan Schwab, the U.S. trade representative, who went on to accuse China that its “incomplete” reforms were “creating massive distortions that could leave the Chinese and global economies at risk.”

The fact is China has changed more than 3,000 regulations to comply with WTO requirements. It also reduced tariffs on goods of great importance to U.S. industry from an average of 25 per cent in 1997 to seven per cent today, with similarly significant reductions for agricultural products.

In addition, it has reduced or eliminated numerous non-tariff barriers, increased market access for international service providers and improved the transparency of its governmental procedures. These steps have expanded economic growth in both countries and contributed to a roughly 190 per cent increase in U.S. goods exported to China over the past five years. Today, China is America’s fourth largest export market ─ up from 15th a decade ago. Wal-Mart operated 66 stores in China at the end of 2006. Home Depot paid $100 million for a majority stake in China’s HomeWay to get a piece of China’s vast consumer market as it goes head-to-head with U.K.’s B&Q. Home Depot, like many other U.S. companies is counting on China to provide fresh growth as it runs out of room to expand in America.

When China joined WTO in 2001, its current account surplus (trade plus a few other cross-border payments) was a modest 1.3 per cent of gross domestic product. But in 2006 China’s surplus hit a breathtaking nine percent of GDP. In absolute terms, it has overtaken Germany’s surplus and even Japan’s, despite the fact that Japan’s GDP remains more than twice the size of China’s.

America’s repeated lectures to China and China’s reaction remind me of the “Chinese Sick Day” joke. Hung Chow calls into work and says “Hey, I no come work today, I sick, headache, stomach ache, legs hurt, I no come work.” His American boss says, “You know something, Hung Chow, I really need you today. When I feel like this, I go to my wife and tell her to give me sex. That makes everything better and I go to work. You try that.”

Two hours later Hung Chow calls again. “I do what you say, I feel great. I be work soon…. You got nice house.”

The fact is America’s problems were created by its career politicians, not the Chinese.

New Moral Order

A new global moral order is emerging. It is one in which morality takes precedence over the politics and diplomacy of war and peace. The former pariah Libya is a good example. Now that it has renounced nuclear weapons it is warmly embraced by America and the West. The class-action lawsuits filed by the Filipino, Spanish and Swiss victims of martial law under Marcos and Pinochet are establishing a new moral high ground. Similar action against the Japanese, Nazis and their Swiss bankers by the victims of Japanese atrocities and the Nazi Holocaust helped reach that high ground.

This moral new high ground requires us to closely reexamine the world scene today. Author Conrado de Quiros points out that there is a subtle shift in the conduct of nations occurring today, and we should be elated about it. Non-interference and respect for differences in cultures remain vital principles, and should be upheld. But that should not mean the kind of conspiracy of silence -- or tacit collusion, in the case of the Swiss banks -- that have allowed tyrants to flourish in the past. The shift isn’t really that subtle. It’s been demanded for years. It just hasn’t been acted upon. No more. Marcos, Estrada, Pinochet, Bhutto, Sharrif, Fujimori, Suharto, Wahid and Saddam Hussein confirmed our new 21st century morality. Similar actions against Robert Mugabe, Kim Jong-il, Bashar al-Assad, Hosni Mubarak, the House of Saud and their princely sons are next logical steps to confirm the new morality is here to stay.

In the 1970s, world leaders began to talk of a “new international economic order” that would distribute wealth more evenly across the globe. That did not happen. But the idea remains valid. I do not know why we shouldn’t start articulating a “new international moral order” today, one that is capable of introducing moral judgment in the conduct of nations, even while respecting different ways of life. Some things in life are universally right or wrong. Those that are wrong the U.N. can no longer stop. Those that are right it cannot enforce.

Neo-Colonialism

On August 5, 2004, the White House created in the State Department the Office of the Coordinator for Reconstruction and Stabilization -- to balance the U.S. policy of de-construction. Its mandate is to draw up elaborate “post conflict” plans for up to 25 countries that are not, as yet, in conflict. There will be “pre-completed” contracts to rebuild countries that are not yet broken. Doing this paperwork in advance could “cut off three to six months in your response time,” said Carlos Pascual the head of the new agency in a speech at the Center for Strategic and International Studies. Sounds like the Halliburton contracts in Iraq.

His office is about changing “the very social fabric of a nation,” he said. The office’s mandate is not to rebuild any old states, but to create “democratic and market-oriented” ones. The fast-acting reconstructors will help sell off “state-owned enterprises that created a nonviable economy.” Sometimes rebuilding, Pascual explained, means “tearing apart the old.”

“We used to have vulgar colonialism,” said Shalmali Guttal, a Bangalore-based researcher with Focus on the Global South. “Now we have sophisticated colonialism, and they call it ‘reconstruction.’”

I experienced it first hand celebrating New Year’s Eve 2003, in Phnom Penh, Cambodia. There I was on a five day bar and party hoping year end celebration that blended the best of all cultures and religions with hundreds of NGO directors, officers, U.N. aid agency employees, consulting engineers and bankers. All foreigners, as very few locals are employed. Expert “democracy builders” lecture governments on the importance of transparency and “good governance,” yet most contractors and NGOs refuse to open their books to those same governments, let alone give them control over how their aid money is spent. I also saw the same happen in Mongolia when it established diplomatic relations with the U.S. in the early 90s. There I partied with ladies who were second generation employees of the U.N. Nepotism at its finest.

The story repeats itself in every country being rebuilt. It could also have come from Afghanistan, where President Hamid Karzai blasted “corrupt, wasteful and unaccountable foreign contractors for “squandering the precious resources that Afghanistan received in aid.” Or from Sri Lanka, where 600,000 people who lost their homes in the tsunami, were still languishing in temporary camps for several months. “The funds received for the victims are directed to the benefit of the privileged few, not to the real victims,” wrote Herman Kumara head of the National Fisheries Solidarity Movement in Negombo, Sri Lanka. “Our voices are not heard and non allowed to be voiced.”

But if the reconstruction industry is stunningly inept at rebuilding, that may be because rebuilding is not its primary purpose. According to Guttal, “It’s not reconstruction at all – it’s about reshaping everything.” The stories of corruption and incompetence serve to mask this deeper scandal: the rise of a predatory form of disaster capitalism that uses the desperation and fear created by catastrophe to engage in radical social and economic engineering. On this front, the reconstruction industry works so quickly and efficiently that the privatizations and land grabs are usually locked in before the local population knows what hit them. Kumara warned that Sri Lanka is now facing “a second tsunami of corporate globalization and militarization,” potentially even more devastating than the first. “We see this as a plan of action amidst the tsunami crisis to hand over the sea and the coast to foreign corporations and tourism, with military assistance from the U.S. Marines.” The same holds true on the coasts of Thailand and Indonesia where the tsunami wiped the coastal areas clean of the communities which had stood in the way of hotels, resorts, casinos and shrimp farms.

Paul Wolfowitz, as Deputy Defense Secretary, designed and oversaw a strikingly similar project in Iraq: The fires were still burning in Baghdad when U.S. occupation officials rewrote the investment laws and announced that the country’s state-owned companies would be privatized. He did in Iraq what the World Bank is already doing in virtually every war-torn and disaster-struck country in the world.

Japan’s Denial

Japan’s refusal to acknowledge and apologize for the atrocities it committed during the second world war only incite anger, boycotts and riots across the countries that were brutalized by Japan, most vocally and destructively, in China and Korea. China estimates that 35 million Chinese were killed or wounded during the Japanese occupation from 1931 to 1945. Japan’s revisionist history textbooks refer to the 1937 Nanjing Massacre – in which at least 300,000 civilians were slaughtered by Japanese troops – as an “incident” in which “many” Chinese were killed. Whitewashing history and refusing to sincerely apologize provokes boycotts of Japanese goods, destructive protest marches, riots and attacks on Japanese people and property in China and Korea. “A nation that forgets its past has no future” said Winston Churchill.

Unclassified U.S. documents reveal former Japanese leaders wanted atomic weapons as early as the 1960’s. The repeated demand of Japan’s nationalists to amend the Peace Constitution so that Japan can retool its formidable industrial base into a weapons industry threatening its neighbors and possibly triggering an unprecedented arms race and another war is of legitimate concern to its neighbors.

A hospital in Haikou, China has hung a sign outside its entrance forbidding Japanese from entering unless they apologize for the Japanese army’s treatment of “comfort women” during World War II. Historians said at least 200,000 women, mostly Korean but also from China, Taiwan, the Philippines and Indonesia were forced to serve as sex slaves in Japanese army brothels. A petition with 550,000 signatures was handed to the Japanese government by four former sex slaves in 2005. Violence Against Women in War Network Japan, was set up in Japan in 1998 by Japanese women. It’s head, Rumiko Nishino, cannot sleep in her own home because of the threats she constantly receives. The organization opened a single room museum with partitions bearing the tales of comfort women.

The annual visits by Japanese prime ministers and parliamentarians to the Yasukuni Shrine to honor Japan’s 2.5 million war dead – including 1,068 war criminals from World War II who were secretly enshrined there in 1978 – must stop. Gen. Tojo Hideki – Japan’s war-time leader and its most notorious war criminal – is among 14 Class-A Japanese war criminals that were also enshrined on parchments at Yasukuni in 1978. The visits are in defiance of a Japanese court ruling that declares the visits unconstitutional. “I will continue to visit,” Japanese Prime Minister Junichiro Koizumi said shortly after the Fukuoka District Court handed down its ruling. Alternatively, remove the war criminals and return them to their original resting ground. The visits merely rekindle memories of the horrors of Japanese atrocities during the war.

Germany has acknowledged and apologized for the Holocaust and the pain and suffering it caused during World War II. America, at the dawn of the new millennium apologized to African-Americans for the institution of slavery and the practice of lynching blacks. And Pope John Paul II apologized for the misdeeds of the Catholic Church over the previous 2,000 years. Why can’t Japan apologize?

America’s decision to back Japan’s bid for a permanent seat on the U.N. Security Council in 2005, is just another example of America’s immature and unrealistic foreign policy. Millions across Asia oppose Tokyo’s pursuit of the seat and are at a loss as to why America does.

If Japan wants to be part of an integrated world community in the international arena, it can no longer play by its own solitary rules. It has to stop acting like “a divine nation with the emperor at its core” -- or maybe it will return to that.

Japan’s bid for a seat on the decision-making body of any international organization has to be rejected until Japan first acknowledge its World War II crimes and rethinks its infrastructure and overall global trading strategies. Only then can it become a true global partner. In the words of Richard Nixon, “If they want to be taken seriously in the world and share fully in the fruits of global stability, they must use their vast power to promote the interests of other countries as well as their own.”