Fairy stories about China's 'economic crisis'
- By John Ross
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China.org.cn, December 14, 2011
Why, therefore, are such economic fairy stories published, why are they are publicized, and how to profit, not purely monetarily, from them?
One reason they appear, of course, is simply that people make wrong analyses. But the reason they are publicized is different. Take for example Gordon C Chang. He wrote a book in 2001 entitled 'The Coming Collapse of China'. This argued 'A half-decade ago the leaders of the People's Republic of China had real choices. Today they do not. They have no exit. They have run out of time.'
In the ten years since China's economy more than doubled in size. After such radically wrong predictions you might expect that Chang would find it difficult to obtain coverage for his analysis. But instead he is regularly published by Forbes magazine with articles posing such questions as 'Can Beijing rescue a stumbling economy'. Some 'stumbling' with nine percent GDP growth! Such analyses have nothing to do with reality but fit the politics of Forbes - which specializes in analyzing the ultra-rich in the US and is hostile to China. In short such analyses are not objective but spread anti-China propaganda.
Business people caught up in such political maneuvers can lose huge sums of money. For example, in a case rather similar to the one of China at present, those backing a particular political grouping in Russia in the 1990s persuaded US hedge fund manager George Soros to become involved in a takeover battle around a Russian telecommunications company Svyazinvest. I was retained as a consultant by others involved and concluded Svyazinvest was a terrible investment. Therefore Soros was being pulled in for reasons of political maneuvers and not serious financial analysis. Soros lost approximately a billion dollars.
Companies rightly analyzing that China's economy will continue to grow, GE and Goldman Sachs immediately come to mind, are those most successful in business in China. Equally there are Western analysts who correctly predicted China's growth over the last period - Goldman Sachs Jim O'Neill, who invented the term BRIC, and the specialized consultancy Dragonomics for example. But at present the same 'neo-con' political groups that, for example, attempt to escalate tension with China over issues such as the South China Sea, are attempting to spread a myth that not only the EU and US but also China face 'economic crisis'.
This gives a major opportunity to those engaged with China's 'soft power'. Businesses following the erroneous view that China's economy is going to drastically slow or enter crisis will lose money. Those who rightly predict China's economy will continue to grow rapidly will gain credibility.
Therefore China has a major opening to establish a reputation not only for economic growth but for analysis. It requires accurate reporting - not pretending there are no problems in China's economy but correctly contextualizing that these are far less than in the US and EU.
'Soft power' is sometimes thought to be about clever techniques in propaganda or advertising. It is not. The core of 'soft power' is telling the truth accurately and skillfully. The achievement of China's policy makers in bringing its economy more successfully through the international financial crisis than other states demonstrated 'hard power'. The current factually inaccurate attempt to deny China's economic reality in sections of the international media now provides a major opening for those working on the 'soft' side of China's development.
The author is a columnist with China.org.cn. For more information please visit: http://www.china.org.cn/opinion/johnross.htm
Opinion articles reflect the views of their authors, not necessarily those of China.org.cn.
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