The mainstream media has been reporting for some time now that Mainland China is in the throes of an economic crisis that could lead to the onset of a Recession. This is noteworthy information worthy of mention, even though I am not at all surprised by the implications alone. Much of Mainland China’s economic growth over the past few decades was sustained by an export-driven trade policy that relied on extensive trading with the Western world. Once some form of economic turmoil happens in the West, Mainland China’s economy becomes vulnerable by extension. It should not be too surprising that the recent downturn over there is the consequence of economic problems here in America and the broader Western world.
There can no longer be any doubts at this time that a Recession is underway. After years of anticipation, I am convinced that it has already begun, and it remains to be seen if China and the Western world will overcome its effects. From what I can tell, the Chinese are in Recession, except their Fractional-Reserve Banking System cannot convince people to borrow enough to get out of the Recession with low enough Interest Rates. It is far more preferable to hoard Kapital than it is to spend Kapital. The Schuld is simply not worth the trouble, it seems.
What I am curious to find out is how this Recession will impact the current state of affairs inside Mainland China’s Socialist Market Economy. Its national economy is essentially a birdcage, where the State and Social Enterprises coexist with Private and Foreign Enterprises. The former is given greater emphasis over the latter. The tolerance of Private and Foreign Enterprises is only done to ensure that there is enough Kapital going into the PRC’s coffers. In a Recession, it is possible that the Private and Foreign Enterprises will diminish in economic clout, allowing State and Social Enterprises to amass larger influence over the national economy. As the metaphorical birdcage goes, the “bird” shrinks whilst the “birdcage” grows in size.
Of course, I have no information to indicate that this is in fact the direction that Beijing wishes to pursue. I doubt that the CPC would repeat the mistakes of the CPSU by condoning greater Economic Liberalization to resolve a Recession. After all, Perestroika was justified on the basis of a Recession in the former Soviet Union. A Recession caused by the Price of Petroleum led to economic reforms that brought about the return of Neoliberalism in Russia. I am anticipating Chinese State and Social Enterprises to gain greater influence over the Private and Foreign Enterprises through some combination of economic policies, a portion of which will be in respond to the changing trade policies of the US.
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