Martin Jacques has championed China longer than most Englishmen. His foresight is sharper than most.He predicted the rise of Thatcherism. He moved out of Britain after sensing the vacuum at the heart of New Labour. He saw Asia as the future. Martin is also a sensitive soul and has been quick to point out the racism at the heart of Sino societies, a canker worm that might devour the whole barrel of red, red apples.
But he has for the last few years, ever since I saw him in Beijing in 2005, been a born again Marxist Leninist. The left lost in the Soviet Union its stick to poke the west's eyes with. Now an assortment of awkward progressives have Beijing. For these red-starry eyed uber-realists only the mandarins of the Chinese Communist Party have mastered a truly intrusive and effective state capitalism that can outrun the west.
Martin's latest piece in the Guardian is heavily-influenced by such thinking. In Martin's new world the dollar will disappear, replaced by the yuan. The G20 will become a forum of unequals - dominated by Beijing. No architect - designing cars, buildings or global finance - will move without reference to China. The Chinese people have stood up and are reading tomes extolling their coming greatness.
Yawn! China's coming out party is over and people need to sober up. China is a developing country whose GDP per capita is $3,000. It's population is rural despite decades of forced industralisation. In the mainland return on capital is pitiful. The CCP spent 15 years squeezing native talent to the extent that there is no real functioning stock market and a dearth of mainland businessmen. The political-criminal nexus is out of control.
China is a remarkable country and is full of great people. But it's export model of development is dead. And as Harvard's Marty Feldstein in today's FT makes it clear inflationary risks are building up in the US, and hence global, system. How the Chinese leadership deals with a very different world is more important than believing that the Middle Kingdom is about to ascend to the superpowerdom just yet.
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