Does China Know Markets Better Than U.S.?
Growing Government: Communist China's premier has joined the ranks of those scolding Washington for its spending binge. Does Wen Jiabao now understand a market economy better than U.S. policymakers?
"To be honest, I'm a little bit worried," the chairman of the State Council of the People's Republic of China told a press conference after Friday's close of his country's annual legislative session. With China holding a trillion dollars in U.S. government debt, what Wen is worried about is Uncle Sam's massive spending spree devaluing the U.S. dollar and threatening "the safety of our assets."
He sounded not like the Communist dictator he is, but like the concerned head of an institutional investment firm warning the management of some troubled insurance company or mutual fund in which he has placed confidence to shape up and start behaving like successful businessmen.
It isn't the first time the land of the Tiananmen Square massacre has been found being more capitalist than the free world.
As former British Governor of Hong Kong Chris Patten has noted, "China has been the world's largest economy for 18 of the past 20 centuries."
In a Financial Times article last year, Patten pointed out that after Europe went protectionist in 2007 to block the import of cheap Chinese goods, "Europe found itself in the humiliating position of being lectured on free trade by a totalitarian regime."
No one in the West should fall under any sentimental illusions about Wen's underlying aim, shared by his predecessors Mao and Deng: maximum global power, economic and otherwise, for the Chinese regime.
Tens of millions perished in the Great Leap Forward and the Cultural Revolution, when the government was committed to Marxist-Leninist economic ideology, but government forces also slaughtered thousands at Tiananmen Square in 1989, a decade into China's transition from central planning to a more market-oriented economy. As the post-Mao Chinese government has often admitted, it is simply embracing "what works" economically — which is also what advances its own global competitive interests.
Nearly a half century ago during the Great Leap, with all private farming banned, two thirds of the workers at the remote nuclear weapons development base in Qinghai province were dying of severe malnutrition. Why should there be any wonder in the Red Chinese recognizing that letting Maoist agricultural policy starve those assigned the task of building an atomic bomb contradicted their regime's totalitarian aspirations?
So when Wen Jiabao (who of late has been touting capitalism's intellectual founding father, Adam Smith) warns America not to overexpand government, it's not out of humanitarianism.
It is because he understands what too many in Washington have forgotten: Reduced economic freedom can break a superpower.