American financial monopoly at core of Chinese containment

By Zhang Jie Source:Global Times Published: 2013-3-31 18:13:01

Strategic competition between China and the US is manifested not only in the economic, political and cultural arenas, but also in the realm of government management, opening-up, soft power and development path.

Of all of these, sustaining advantages in economic competition has become the basis for all US strategies.

The reason, above all, is that the democratic system, which the US prides itself on, is based on a strong economic foundation.

With a growing income gap, the US government is still able to safeguard social stability and keep its democratic system ticking over. One of the important reasons is that the US government has economic interests worldwide that it can deliver on its promises to voters about social welfare.

After all, increasingly sharp contradictions inside the US are showcased by appeals to varied interest groups. These contradictions can only be solved and balanced through US economic development.

The global hegemony that the US painstakingly maintains is set up to control economic interests. In many American minds, the existing resources and economic growth across the world cannot maintain the lives of the two billion people to live as those in developed countries.

Therefore, they believe that economic growth in developing countries is bound to challenge the economic interests of the developed world.

Quite a few high-ranking officials in the US judge that China's economic development came as a result of the third wave of globalization that the US hasn't profited much from.

But in fact, those multinational enterprises and international buyers, which master global brands, have the best marketing channels and the greatest innovation capability, are the biggest beneficiaries of globalization. What China has gained is only the status of "world factory," which may have provided jobs for the Chinese people, but no sustainable power for China's economy.

Fortunately, China has an internal driving force of development which depends on expanding its local market demand to gain an engine of economic growth. It does not need to rely on the US for its economic and political strategies as Japan and South Korea do, due to a lack of domestic demand to support economic development.

Even if the US thinks it can look for another market for new profits, China can oppose this by showing up the attractiveness of its own market. 

The author is an associate professor at the Institute of China's Economic Reform & Development, Renmin University of China.

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