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China & the USA

Globalisation and the Decline of America’s Supremacy

Authors: Prof. Vassilis K. Fouskas, Shampa Roy-Mukherjee, Dr. Qingan Huang, Ejike Udeogu

Publisher: Springer International Publishing

Part of: Springer Professional "Wirtschaft+Technik" , Springer Professional "Wirtschaft" , Springer Professional "Technik"

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About this book

This book examines the political economy of conflict between China, a rising power, and the USA, a declining one. It provides an informed analysis as to why China is the main beneficiary of neo-liberal globalisation, a project launched in the wake of the collapse of the Bretton Woods system in the late 1960s under the aegis of the USA. Why are Huawei and other Chinese high-tech giants targeted by the USA and its allies? What is the role of the state and the Chinese political system in the development of China’s political economy, as well as its globalisation? Does China’s global rise provide a viable and sustainable alternative to neo-liberal globalisation? Since American leaders view increasingly the rise of China as a threat, how likely is an armed conflict between China and the USA? This book answers these questions by using a wealth of empirical material and debating with many theoretical schools of thought, Marxist or otherwise.

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Table of Contents

Frontmatter

Chapter 1. Introduction

Abstract

The introduction lays out the key arguments of the book and the presentation order. Against certain positions supported by such scholars as Leo Panitch and Justin Rosenberg, the book argues that China’s rise in global political economy is the complex result of: (a) the global American project of neo-liberal financial statecraft, which created unsustainable levels of financial growth and vulnerability due to the erosion of the real economic sector and loss of labour productivity—debt vulnerability is one such instance; and (b) China’s distinct path of domestic economic development, which is the result of western capital penetration since the 1980s and the relative, both political and economic, autonomy of the Chinese state to steer America’s global project and private enterprise to its own advantage.

Vassilis K. Fouskas, Shampa Roy-Mukherjee, Qingan Huang, Ejike Udeogu

Chapter 2. The Vulnerability of the American Empire-State

Abstract

This chapter deals with the rise of financialised capitalism in the West and its crisis in a historical perspective. It counters arguments that downplay financialisation as a component of neo-liberal policy-making, assessing neo-liberal globalisation as a virtuous cycle of capitalist growth, centred around the robustness of US capitalism and the capacity of the American state to integrate under its aegis other socio-economic formations: in this view, the American state is “the author of neo-liberal globalisation”, integrating China in its very system, the making of global capitalism having the colours of the American empire-state. This chapter shows that this is not the case. Further, China’s integration into the structures of global political economy from the 1980s onwards brought more benefits to China than to transatlantic economies.

Vassilis K. Fouskas, Shampa Roy-Mukherjee, Qingan Huang, Ejike Udeogu

Chapter 3. The Ordoliberal EU

Abstract

This chapter makes a statement based on previous research by the authors, namely that the EU project is based on Germany’s ordoliberal canon. EU’s ordoliberal Treaties are inspired by Germany’s model of capitalism and institutions, which themselves had to be reformed injecting even more austerity and discipline in the co-federated members-states in order to deal with the crisis and keep the EU as a whole being competitive on a global scale. Thus, the chapter shows that it is also the external combined competitive constraint articulated between the EU, China, Japan and the USA that necessitated the introduction of such unprecedented neo-colonial treaties as the Fiscal Compact and the European Semester programme on the part of the European Commission. In order to keep a competitive edge in the global division of labour, the central institutions of the EU have been forced to defend the primacy of Germany in the Eurozone.

Vassilis K. Fouskas, Shampa Roy-Mukherjee, Qingan Huang, Ejike Udeogu

Chapter 4. The “Power of Constraints” and the Convergence of the Governorates of the Left and the Right in Europe

Abstract

This chapter structures its argumentation along two points. The first (general) point it makes is that the new set of institutional-economic constraints laid out in the wake of the stagflation of the 1970s (stagnation accompanied by high inflation) forced political formations of the (mainly social democratic) Left and the Right to converge within the policy perimeters of supply-side economics. The second (specific) point it makes is that this was forced by the same party-political agencies that were previously subscribed to pro-Keynesian and pro-industrial policies via a conflation of party politics, state-bureaucratic politics and supply-side constraints. Thus, both governorates of the Left and the Right in the West are responsible for the catastrophic turn and the Great Recession of 2007–2008 that further undermined the supremacy of the USA, the hegemonic power in the western bloc.

Vassilis K. Fouskas, Shampa Roy-Mukherjee, Qingan Huang, Ejike Udeogu

Chapter 5. A First Set of Conclusions

Abstract

This chapter sums up the main conclusive points that can be drawn so far from the previous chapters. In the main, it summarises the way in which the West’s contradictory economic and political developments since the 1970s have undermined its own primacy in global political economy, clearly conceding ground to Asian economies in the 1990s. Thus, the triumphalism of the collapse of Communism in the 1990s did not last long.

Vassilis K. Fouskas, Shampa Roy-Mukherjee, Qingan Huang, Ejike Udeogu

Chapter 6. How China Rose to Prominence

Abstract

This chapter outlines the main institutional features of the Chinese political system and the state and explains its resilience and independence vis-à-vis external imperial influences. Further, it lays out the main economic policy principles that guide Chinese economic policy and discusses the ways in which China’s ruling class connect its principles of economic development with geo-economic and geopolitical expansion in Asia and beyond. In this context, the chapter sheds light, among others, on the Belt and Road Initiative (BRI) and explains how China’s mode of economic development and expansion differs from that of the West.

Vassilis K. Fouskas, Shampa Roy-Mukherjee, Qingan Huang, Ejike Udeogu

Chapter 7. Data and Analysis of Chinese Ascendancy

Abstract

This chapter focuses on contemporary empirical data and through many graphs and comparative macro-economic tools shows how China’s political economy is set to surpass that of the USA in the very near future. It argues, among others, that China’s comparative strength does not simply lie in its importance in world trade of manufacturing produce and the surplus it generates. The crucial strategic substratum of China’s ascendance has been the role of the Chinese state in guiding the country’s development inside and outside China proper. Further, the Chinese state controls the production of rare earth elements (europium, gadolinium, dysprosium, terbium etc.), which allow China to bid for a monopolistic position in global political economy undermining head-on America’s primacy in digitisation, nanotechnology, biotechnology, electronics and cyber-security.

Vassilis K. Fouskas, Shampa Roy-Mukherjee, Qingan Huang, Ejike Udeogu

Chapter 8. China’s Aggregate Demand Management Since 2008

Abstract

This chapter focuses on China’s pro-Keynesian turn after the global financial crisis, at a moment when western polities were opting to a deepening of their neo-ordo-liberal agendas. It provides evidence of rises in wages and welfare provision and compares and contrasts this with developments in the western core states. The success of the Chinese model on a global stage, prompted the USA and her allies to impose a number of restrictions and sanctions on China and Chinese companies, leading many analysts to argue—falsely in our view—that there is a new Cold War in the making.

Vassilis K. Fouskas, Shampa Roy-Mukherjee, Qingan Huang, Ejike Udeogu

Chapter 9. Neo-liberalism, China and Covid-19

Abstract

This chapter tests our findings about the strength of China’s socio-economic model by way of focusing on the global pandemic caused by Covid-19. We argue that China, along with other states that refused to follow the neo-liberal model of financialised capitalism, fared much better in containing the pandemic in their societies. Such examples include Vietnam, Cuba and China itself.

Vassilis K. Fouskas, Shampa Roy-Mukherjee, Qingan Huang, Ejike Udeogu

Chapter 10. Conclusion

Abstract

In this conclusive chapter we summarise the findings of the book. We summarise how global production networks have benefitted China more than the USA and that the slow and protracted decline of the transatlantic economies as a whole can be traced back to the 1970s. In the long run, US-led globalisation and supply chains, in particular, brought about more benefits to Chinese rather than western global corporations. Official Chinese discourse calls this “Extensive consultation, joint contribution and shared benefits”. This is why America has been seeking for some time now to replace China as a supply chain hub with India and other minor Asian countries, in an effort to isolate Chinese high-tech companies from global production networks and joint ventures. Is war, then, between the USA and China looming large?

Vassilis K. Fouskas, Shampa Roy-Mukherjee, Qingan Huang, Ejike Udeogu

Backmatter

Title: China & the USA
Authors: Prof. Vassilis K. Fouskas
Shampa Roy-Mukherjee
Dr. Qingan Huang
Ejike Udeogu
Copyright Year: 2021
Publisher: Springer International Publishing
Electronic ISBN: 978-3-030-61097-5
Print ISBN: 978-3-030-61096-8
DOI: https://doi.org/10.1007/978-3-030-61097-5