Communist China To Own Canada

[jinu]

It’s been reported that Brascan Corp sold it's 42% of Noranda inc. to China Minmetals Corp yesterday. Noranda, based here in Toronto, is Canada's largest mining company, and they’ve stated in the past that Minmetals is interested in owning 100% of them. Minmetals is owned by the Chinese Government.

Brascan has wanted to unload their 42% stake in Noranda for a while, and Minmetals' did give the best offer. Any problem here? China's economy is growing and will continue to grow. They could, if they choose to, go on a massive spending spree and buy various international companies. They've been trying to secure resources like those that Noranda (employing 15000 worldwide) mines (copper, zinc, lead, nickel etc) for a while now, to fuel the countries growth. No doubt the company is going to grow alongside China’s economy.

I haven’t come across too much about China from an Objectivist perspective. They’re communists, but a different type than the old USSR. Anyone know of any references? Or what the fundamental difference is between the two empire’s ideologies..?

[DavidV]

Any problem here?  China's economy is growing and will continue to grow.  They could, if they choose to, go on a massive spending spree and buy various international companies.  They've been trying to secure resources like those that Noranda (employing 15000 worldwide) mines (copper, zinc, lead, nickel etc) for a while now, to fuel the countries growth.  No doubt the company is going to grow alongside China’s economy.

As with all attempts at centralized economic growth, state-owned companies force out private competitors and capital and thus reduce economic growth in China. Since China lacks an effective taxation system, it depends on military-owned industries propped up by state-enforced monopolies and state-owned banks to maintain power and mooch of the real drivers of China’s economic recovery – foreign and domestic entrepreneurs.

There is no significant difference between China and Russia today. China’s economic potential is better because its political system is stable, the competition between the ruling party is more formalized, and there is more widespread recognition of the benefits of economic investment - the last being a result of cultural differences, I think.

Both countries are in a gradual flux, as businessmen with newly-found economic freedoms demand political freedoms– but neither government is going to give up power without a fight. I think the historical situation is somewhat unprecedented because there is no credible ideology to justify the expansion of state power. The possibilities for these countries are much the same as those facing America: religious authoritarianism, national socialism, or capitalism. I think that the kind of moral leadership the United States offers in the next decade will play a large role in determining the political landscape for the next century. Whatever the outcome, the chaotic intellectual void we face today is unlikely to last.

(Btw, I blogged about this post.)

[jinu]

This may a strategic step in the creation of a worldwide market centered on the U.S. and China – our best bet for making the 21st century less bloody then the previous. The fact that John Kerry is more likely to push trade restrictions is one of the few reasons (few because both candidates are pathetic) that make him a worse candidate– and make his presidency is more likely to lead to war, despite all his talk of “alliances.”

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I think that the kind of moral leadership the United States offers in the next decade will play a large role in determining the political landscape for the next century.

GC, interesting post & blog, I think I agree. One concern: wasn't Ayn Rand's position that America should not trade with communist Russia at all..? (They're evil and trading with them is sanctioning that evil, America should just let them implode..) China is a government that punishes its citizens for having more than one child (four children is out of the question). A populace that accepts that can potentially accept anything. And I'm sure there's plenty of other 'sacrificing the individual for the good of the state' going on there too. They're communist. You're suggesting that America should just ignore that for now and trade away, right?

[jinu]

This may be a stretch: I completely agree with DR. Brook regarding the 'Morality of War' thread. Is rejecting a trade-restriction with China an instance of not having an altruistic foreign policy? Why should we care what kind of brutalities are going on inside China. The prosperity of America (and national defence?) may depend on continuing relations with them, they're going towards a free market, and a partnership will not only strengthen our economy in the future decade, but may be the deciding factor to eventually push them towards (at least somewhat) a rational revolution.

In other words, sending troops to a war zone America is not concerned with is altruistic. Is that equivalent to not allowing American businessman to trade with evil empires..?

[DavidV]

They're communist.  You're suggesting that America should just ignore that for now and trade away, right?

There are two criteria to decide whether the trade is immoral: (a) will the gains from the trade be used to initiate force against you ( was the value you are getting obtained by force, such as by slave labor. In the case of a communist regime such as Soviet Russia, both of these conditions were true – in the case of today’s China, neither will be, unless you are trading with prison camps or selling technology with military applications.

There are other cases – such as the companies that sell China censorship technology and the American companies that censor the services they provide in China.

[DavidV]

Why should we care what kind of brutalities are going on inside China.

Because a regime that has no qualms about murdering its own citizens will not hesitate to murder the citizens of others - or support individials that to. Furthermore, since statism is self-destructive, a totalitarian regime is dependent on looting the wealth of others. The more aggressively it loots its own populace the sooner it must steal from others.

[WorthyLoverOfExistence]

There's a free ebook available here, called Poisonous Deceit that is allegedly written by a high-ranking Communist Chinese government official. It may be fiction, but given the record, it does seem plausible that such an author would need to remain anonymous to avoid persecution.

Two things I found interesting about this book are:

1. the author appears to have a very rational view of the role of government, and seems virtually silent about Communism.
   
2. the very existence of this book indicates an undercurrent of anti-dictatorial dissent within the government itself.
   

On another note, I've heard rumors that there is an effort now to translate major Objectivist works into Chinese.

[Godless Capitalist]

There are two criteria to decide whether the trade is immoral: (a) will the gains from the trade be used to initiate force against you ( was the value you are getting obtained by force, such as by slave labor.  In the case of a communist regime such as Soviet Russia, both of these conditions were true – in the case of today’s China, neither will be, unless you are trading with prison camps or selling technology with military applications. 

But in many cases (including Minmetals) the "company" we are trading with is owned by the Chinese government. The profits go directly to the government, which not only violates rights in China but has threatened the US.

My view is that China is a growing threat to the US. One of the biggest things we could do to reduce that threat would be to cut off all trade. We would have to pay a little more for toys, shoes, etc. but their economy would be seriously damaged, which would greatly reduce their military capabilities.

[Charlotte Corday]

But in many cases (including Minmetals) the "company" we are trading with is owned by the Chinese government. The profits go directly to the government, which not only violates rights in China but has threatened the US.

My view is that China is a growing threat to the US. One of the biggest things we could do to reduce that threat would be to cut off all trade. We would have to pay a little more for toys, shoes, etc. but their economy would be seriously damaged, which would greatly reduce their military capabilities.

There is no reason to suppose that China's government would collapse or even become less militaristic following a U.S. trade embargo. History argues the contrary. The Soviet Union didn't fall during the several decades that the U.S. refused to trade with them. It fell when trade between the two countries was flourishing.

[Godless Capitalist]

Charlotte, are you arguing that there is a causal relationship between trade with the USSR and its collapse? I don't see it. Anyway, what "flourishing trade" did we have with the USSR? I grew up in the 70s and 80s in Canada and don't remember any products made in the USSR except a few Ladas.

China's government might not collapse if we blocked trade, but it would be starved of the funds and industrial capacity it would need for military action. Until recently China was a poor, mainly agricultural country and most of its military was infantry with rifles. Now they are industrializing rapidly and that industrialization makes it much easier to mass-produce tanks, guns, bombs, planes, rockets, etc. It is not just "technology with military applications" that is the problem; it is not that hard to convert an auto plant to make military vehicles.

[PossiblyParanoid]

There are two criteria to decide whether the trade is immoral: ...

(B ) was the value you are getting obtained by force, such as by slave labor. 

In the case of a communist regime such as Soviet Russia, both of these conditions were true 

in the case of todays China, neither will be, unless you are trading with prison camps or selling technology with military applications. 

I recommend you take a look at Harry Wu's Laogai Research Foundation (Laogai is the vast network of Chinese Communist re-education camps) and see some of the clever ways that Chinese "businessmen" set up front companies through which to "launder" goods obtained from the 4-6 million prisoners of these camps. Do you trust people today (like the former execs at Enron) to have the integrity to diligently examine their Chinese business partner's possible connections to Laogai ?

There is no reason to suppose that China's government would collapse or even become less militaristic following a U.S. trade embargo.  History argues the contrary.  The Soviet Union didn't fall during the several decades that the U.S. refused to trade with them.  It fell when trade between the two countries was flourishing.

Intelligence experts, such as Anatoliy Golitsyn (see New Lies for Old, and The Perestroika Deception) hold that the Soviet Union has never fallen - that the "fall" was a well executed propaganda ploy, along the lines of the "New Economic Policy" of the 1920's, to entice heavy Western investment, only to eventually nationalize it all.

Did any else see the story about the 25 advanced Russian Mig-25 Foxbat fighters that our troops found buried in the sand - cached - around the Iraqi desert ? Who are we really fighting in Iraq ?

I guess you can trust Dan Rather to answer that.

[Charlotte Corday]

Charlotte, are you arguing that there is a causal relationship between trade with the USSR and its collapse?

No. I’m merely pointing our that U.S. trade embargoes have been notoriously ineffective at bringing down or softening dictatorships. Look how well it has worked on Cuba.

I don't see it. Anyway, what "flourishing trade" did we have with the USSR? I grew up in the 70s and 80s in Canada and don't remember any products made in the USSR except a few Ladas.

By 1991 U.S. annual grain shipments to the USSR were at the $1.5 billion level. That same year Bush I signed a reciprocal most-favored-nation tariff treatment with Gorbachev.

China's government might not collapse if we blocked trade, but it would be starved of the funds and industrial capacity it would need for military action. Until recently China was a poor, mainly agricultural country and most of its military was infantry with rifles. Now they are industrializing rapidly and that industrialization makes it much easier to mass-produce tanks, guns, bombs, planes, rockets, etc. It is not just "technology with military applications" that is the problem; it is not that hard to convert an auto plant to make military vehicles.

China won’t starve if it loses U.S. trade. It will still be able to sell its products throughout the rest of the world. If anything, a U.S. embargo would only strengthen the hand of Chinese hard-liners against those who favor a more open society.

What have trade barriers accomplished in, say, Iran?

[Godless Capitalist]

Charlotte:

I think you are missing my point. No, a trade embargo would not collapse China's government, but it would certainly weaken their economy. How would they replace the income from all the products they sell in the US?

What did the US get for all the grain it "sold" to the USSR?

Intelligence experts, such as Anatoliy Golitsyn (see New Lies for Old, and The Perestroika Deception) hold  that the Soviet Union has never fallen - that the "fall" was a well executed propaganda ploy, along the lines of the "New Economic Policy" of the 1920's, to entice heavy Western investment, only to eventually nationalize it all.

Good point about the Laogai. The above, however, seems like too much of a conspiracy theory to me. I do think that Russia is not really a democracy, though, and that a nationalization program could easily happen.

[A.West]

I wrote a fairly in-depth report on China that reflects on business and culture. I think China's collectivist culture which doesn't see non-contradiction as a rule will ultimately limit its progress.

I would not call its government stable, I'd call it brittle. I've watched investments in China over ten years now, and I've never seen an investment there that didn't disappoint in the long-term. China's primary tax-collection system is its state-run banks. Chinese people's savings are being treated like taxes, being directed to "welfare" by supporting failing state owned enterprises. In terms of size, the Chinese economy almost certainly has the largest dollar value of corruption.

I suspect that China's economy could eventually face distress like Indonesia, and its political system could fall in the same way, except China is much more likely to go militaristic and blame foreigners for their crisis. China's not a communist country, and unlike the views of some libertarians, it's not capitalist, it's a fascist country. It has enough of a market to allow gains through trade in the short term, it has enough fascist elements to provide a long-term threat.

Wal-Mart and most American shoppers would suffer mightily if trade with China were halted.

[PossiblyParanoid]

The above, however, seems like too much of a conspiracy theory to me. I do think that Russia is not really a democracy, though, and that a nationalization program could easily happen.

Golitsyn, having worked in the KGB, expertly outlines the propaganda strategies of the Soviets, and shows how they haven't changed substantially, but how their tactics have improved. He also laments that the strategy of disinformation is difficult for Westerner intelligence agents to imagine, let alone effectively identify and track, due to our familiarity with and expectation of an environment of free speech. We'll have to see how Putin proceeds with his new "war on terror".

Wal-Mart and most American shoppers would suffer mightily if trade with China were halted.

And justly.

[Charlotte Corday]

Charlotte:

I think you are missing my point. No, a trade embargo would not collapse China's government, but it would certainly weaken their economy. How would they replace the income from all the products they sell in the US?

I read your original point in Post #8: "My view is that China is a growing threat to the US. One of the biggest things we could do to reduce that threat would be to cut off all trade."

Yet I see no reason to believe trade restrictions would have any effect on China's military spending. Under Brezhnev the Soviet Union was economically in worse economic straits than China in 2004 and yet it managed to continue its annual increases in the defense budget.

If we are going to adopt a policy, are we not entitled to some empirical evidence that it will work? So just where have trade sanctions against a dictatorship been effective? Did current sanctions against Iran persuade it not to develop a nuclear energy program? What about North Korea?

What trade restrictions can "accomplish" is the destruction of international commerce. Bear in mind, World War I was largely the result of the collapse of 19th century free trade and the rise of economic nationalism. As the great Frederic Bastiat predicted, "When goods cannot cross borders, armies will."

What did the US get for all the grain it "sold" to the USSR?

The same thing that Pepsi got for the soft drinks it sold there: $

[Godless Capitalist]

Yet I see no reason to believe trade restrictions would have any effect on China's military spending.  Under Brezhnev the Soviet Union was economically in worse economic straits than China in 2004 and yet it managed to continue its annual increases in the defense budget. 

I'm not following your logic. I'm not saying China would have no money whatsoever, just less.

If we are going to adopt a policy, are we not entitled to some empirical evidence that it will work?  So just where have trade sanctions against a dictatorship been effective?  Did current sanctions against Iran persuade it not to develop a nuclear energy program?  What about North Korea? 

No, but it deprived them of income (same goes for Cuba).

What trade restrictions can "accomplish" is the destruction of international commerce.  Bear in mind, World War I was largely the result of the collapse of 19th century free trade and the rise of economic nationalism. As the great Frederic Bastiat predicted, "When goods cannot cross borders, armies will."

I don't see how WWI is relevant and I don't agree it was caused by "economic nationalism." IMO It was caused mainly by German aggression.

[Al Kufr]

What trade restrictions can "accomplish" is the destruction of international commerce.  Bear in mind, World War I was largely the result of the collapse of 19th century free trade and the rise of economic nationalism.  As the great Frederic Bastiat predicted, "When goods cannot cross borders, armies will." 

So youre saying we should supply this enemy with goods then?

And dont worry China wants to cross borders whether we trade with it or not, just ask Taiwan what they think about China.

[A.West]

I'm attaching a paper I co-wrote on China a couple years ago. It combines business/economics/cultural analysis. It's not "Objectivist" but I included some points that would be meaningful to Objectivists. The "terracotta warrior" theme is disposable, imposed upon the students by a professor who demanded that kind of "thematic" background. There were a few items I disagreed with provided by my classmates, but I edited out most of them.

chinaconsol_round_5.doc

[ex_banana-eater]

Just read in the paper today, a Chinese company called Sinopec (which is an energy company so likely state-owned) might make a major investment in the oil sands in Alberta in order to bring oil back to the expanding Chinese market.

http://www.theglobeandmail.com/servlet/sto...Story/Business/

Can't we just entice the leaders of China to open up more markets (like they're already doing) in exchange for more trade with the US? Chinese leaders seem to be becoming more business orientated already. As for the 1 child rule, they don't punish anyone beyond the taxes that are taken from everyone. They just do not provide education money for additional children.

[Charlotte Corday]

So youre saying we should supply this enemy with goods then?

Who gets to decide who is the "enemy"?

[Charlotte Corday]

I'm not following your logic. I'm not saying China would have no money whatsoever, just less.

What you have not shown is that the suspension of U.S. trade with China would necessarily produce a reduction in China’s military spending. In fact, it could very well have the opposite effect. The Arab world’s boycott of Israel certainly did not cause the Israelis to slash their defense budget.

QUOTE(Charlotte Corday @ Sep 28 2004, 05:04 PM)

If we are going to adopt a policy, are we not entitled to some empirical evidence that it will work? So just where have trade sanctions against a dictatorship been effective? Did current sanctions against Iran persuade it not to develop a nuclear energy program? What about North Korea?

Godless Capitalist :

No, but it deprived them of income (same goes for Cuba).

Fine. It deprived them of income. The vital point is that the embargo did not bring about any reduction in military spending by the Cubans, did not undermine the communist dictatorship there, did not liberate one single Cuban citizen.

I don't see how WWI is relevant and I don't agree it was caused by "economic nationalism." IMO It was caused mainly by German aggression.

I recommend Ralph Raico’s essay, "World War I: The Turning Point" in The Costs of War: America's Pyrrhic Victories, Edited by John V. Denson, Second Expanded Edition (Transaction, 1999, xxxii + 535 pgs.)

[Al Kufr]

Who gets to decide who is the "enemy"?

well China has done a good job at declaring it by themselves,if i were the president i would decide that,since nobody else in the goverment has the guts.

Or are you actually suggestion that its impossible for anybody to place any judgement on china and say that they are an enemy of any freedom loving person?

[Al Kufr]

What you have not shown is that the suspension of U.S. trade with China would necessarily produce a reduction in China’s military spending.  In fact, it could very well have the opposite effect.  The Arab world’s boycott of Israel certainly did not cause the Israelis to slash their defense budget.

Fine.  It deprived them of income.  The vital point is that the embargo did not bring about any reduction in military spending by the Cubans, did not undermine the communist dictatorship there, did not liberate one single Cuban citizen. 

I recommend Ralph Raico’s essay, "World War I: The Turning Point" in The Costs of War: America's Pyrrhic Victories, Edited by John V. Denson, Second Expanded Edition (Transaction, 1999, xxxii + 535 pgs.)

you keep missing the point,who said thats the goal? the goal is NOT to help those government, who cares if they spend more or less on the military? If wars gonna happen then its gonna happen, just a lot faster.

And like ive said on other threads,if youre just gonna place an embargo on cuba and expect that to change anything then youre dumb, you got to take it a step further and do more than just an embargo,like putting a bullet in castros head and so on.

And who said my goal was to liberate cubans citizens? you almost sound like george Bush now. I dont care if one more or less cuban is free, as long as the threat is gone.

[Godless Capitalist]

What you have not shown is that the suspension of U.S. trade with China would necessarily produce a reduction in China’s military spending.  In fact, it could very well have the opposite effect.  The Arab world’s boycott of Israel certainly did not cause the Israelis to slash their defense budget.

You keep bring up irrelevant analogies. Israel's economy was not heavily dependent on trade with the Arabs; China's economy IS heavily dependent on trade with the US.

Anyway, suspending trade is justifiable purely on the moral gounds that we should not be cooperating with our enemies. (Anybody who points ICBMs at us and makes veiled threats to use them is an enemy.)