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Stewart Paterson’s offering is one of those books which, simply put, explains everything.
He tells the story of how China joining the World Trade Organization (WTO) on 11 December 2001 has been the root of today’s geopolitical positioning.
WTO membership enabled China to export her way to becoming a global economic superpower and in doing so has cemented and legitimized the Communist party’s grip on power (an outcome, completely the opposite of the US and EU’s intention in agreeing to China’s membership in the first place). China’s GDP growth since 2001 has been almost purely export-driven, resulting from the access to global markets which WTO membership gave her.
Instead of playing by global norms, however, China’s manipulation of her currency, never allowed free trade to result in the mutual benefit that free trade intends. Rather it has turned trade into a zero-sum mercantilist game in which China has been the winner at the expense of the US, Europe and other developing nations. This situation was exacerbated by the US and European policy-makers response, as they misdiagnosed their sluggish economic performance as being the result of low demand, rather than the oversupply of imported cheap Chinese goods. The resulting low interest rate environment, made things even worse, ballooning Chinese exports further and sending domestic house prices into the stratosphere through cheap credit. We know what happened next - the 2008 credit crisis.
Now we are seeing the fall out. The United States has seen a generation of have-nots created, fed up with successive governments’ engagement with wider world at their own expense. Populism has been the result and the emergence of Trump and Brexit the consequence, as is the new policy of threatening to disengage with China through tariffs. This comes at a time when China’s autocratic export-led model is reaching the outer limits of its performance and the Chinese government attempts to pivot its emphasis away from mere wealth delivery to the creation of nationalist prestige, as the means of continuing to underpin its legitimacy. China’s Belt & Road strategy is an example of an economic policy in nationalist clothing.
How these geopolitical forces are played out in the coming years will be the story of our times. Stewart Paterson’s brilliant book provides a full explanation of the backdrop. It should be required reading for every single policy maker.
Five stars, no question.
- Hardcover: 176 pages
- Publisher: London Publishing Partnership; 1 edition (October 18, 2018)
- Language: English
- ISBN-10: 1907994815
- ISBN-13: 978-1907994814
- Product Dimensions: 5.6 x 0.8 x 8.9 inches
- Shipping Weight: 12 ounces (View shipping rates and policies)
- Customer Reviews: 4 customer reviews
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Amazon Best Sellers Rank:
#1,426,290 in Books (See Top 100 in Books)
- #315 in Political Trades and Tariffs
- #913 in International Business (Books)
- #2213 in International Economics (Books)
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