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Peter Morici: Our current China policy is "appeasement"
University of Maryland economist Peter Morici had another excellent commentary published today by Seeking Alpha (Google and the Larger China Challenge). He discusses the relationship between free markets and democracy in China:
China is not a Western nation as, for example, Japan and Taiwan have become, nor is it in transition to a democratic state.
China has an authoritarian government with no plans or timetable for relinquishing power. By word and deed, the Communist Party assumes parental authority over Chinese citizens, and asserts sovereignty, without their consent.
China embraces market reforms only as necessary and seeks to participate in global markets only on its own terms
China accomplishes rapid growth by exploiting its working class and by appropriating other people’s technology. It openly embraces as a development strategy a hugely undervalued currency that imposes unemployment on Western nations and keeps living standards of ordinary Chinese workers artificially low. China’s prosperous middle class is built on the backs of factory labor paid less than the value it creates.
To sell in China, Beijing requires foreign companies to produce in China through joint ventures and then transfer prized technologies to local partners. Now, having extracted the knowhow it needs, China is tightening the noose on foreign companies, causing them to consider withdrawing and leaving behind formidable new competitors....
He concludes by wondering about the monster that we are creating when we appease China's authoritarian government:
It is high time to confront the fact that China is not evolving into a democratic society with a market economy, and it easily could morph into a fascist menace with global reach.
Failing to act contributes to China's success and supports its agenda.
To do otherwise is appeasement, and history has taught us the harsh wages of such a policy.
Journal of Economic Literature:
Atlantic Economic Journal: