Reference Material: The Economic Threat from China

While the people of the world are surprised at the explosion of China’s economy, no one has noticed that danger has already arrived at their doorsteps. More and more cheap products from China are nibbling away at their employment.

Economic markets in their own countries are becoming smaller and smaller due to the transfer of money, enterprises and factories from their country to China. The low exchange rates and super cheap labour costs in China have led to extremely unfair competition in International Trade. The economies of countries other than China, especially those of the developed countries, seem to be exhausted. More and more investments are leaving economic cycles in their own countries.

Recently, European countries as well as the USA and Japan have requested China to raise its exchange rate, in order to restore a rational and fair condition in world competition. Although it is too late, it's still worth doing. Anyway, developed western countries have only seen the surface situation. Some other important things are still being overlooked. The low exchange rate of the Chinese RMB is only the visible evidence of dumping and nibbling. There are also some other invisible pieces of evidence, which have yet to be seen.

An invisible cause for concern is the extremely cheap labour costs in China. Everyone knows that in China the rights and interests of workers are seldom safeguarded. They have no trade unions and are not allowed to have trade unions. Most workers do not even know how to protect themselves from being injured and the worst is even if they do know, they have no way to deal with it, because nobody wants to help them. Laws are for suppressing the workers rather than safeguarding them. For most people, ignorance is better than despair. Millions of people are working under cruel conditions; many of them have been put into prisons, labour camps, etc.. How can western democracies, where human rights are highly respected, compete with China, where human life is worth nothing? It is a pity that such problems are excluded from economic negotiations with China. However, the negative effect of overlooking the bad condition of human rights in China appears clearly in developed countries. Quickly rising unemployment, more and more social conflicts, struggles between parties, high crime rates, increasing numbers of psychiatric patients while decreasing the intake of state revenue by the reduction of Tax, passive reform etc. These problems are invisibly wasting large sums of resources, both in these states and in China every day, because China uses a large part of the money from foreign countries to suppress their own people and to finance the corruption of certain officials. For developed countries, some enterprises earn small money at the cost of severe injury to the national economy. In China a small section of people collect money for it to end up in their own pockets, which is to the detriment of others. That is the truth behind the myth of China and a tragedy of the economic world.

The story does not end there. There is still the problem of China’s food consumption. The World Energy Organisation is worried that if the scale of the Chinese economy increases as expected by four times after twenty years, the earth will no longer be able to afford the consumption of these resources. Other countries may have to go hungry as a result, according to renowned economist Klaus Toepfer.

We urgently need to take emergency measures to limit the expansion of the Chinese economy, not only in view of exchange rates, but also in view of human rights and environmental protection. Human rights and environmental protection are not only the duty of Human Rights Organisations and Energy Organisations, but also the duty of every government and enterprise; they should not exclude these growing problems from the world economic dialogue or from the economic and foreign policies of every country affected by today’s globalisation policies. The harsh reality should no longer be avoided. One has to consider right now the rest of the world, not just China.