Newsline

National Security , Newsline

Communist China Stumbles

Posted on Tuesday, October 5, 2021
|
by AMAC, Robert B. Charles
|
52 Comments
China

Is Communist China overextended? China’s “command and control” economy – much like the former Soviet Union’s – suffers structural flaws. They stem from centralized decision-making, in contrast to capitalism, which leaves most decisions to citizens. Contrary to rosy pictures and leftist efforts to centralize the US, Communist China is stumbling. Simple, but true.

Nobel-prize winning economist Milton Friedman wrote: “A major source of objection to a free economy is precisely that it gives people what they want instead of what a particular group thinks they ought to want,” and “underlying most arguments against the free market is a lack of belief … in freedom itself.” That would be China.

Adam Smith, the 18th-century economist who wrote “Wealth of Nations,” gave us the best metaphor for capitalism. An “invisible hand” – or unseen forces – guide free people in a free economy to their best social benefit. The contrast is communism’s iron fist.

History proves millions of freely made decisions by millions of free people deliver a stunning outcome – supply and demand balance, prices and trade flow, minimal intervention required.

While regulation of trade, averting monopolies, modest expenditures for the common good, laws for ordered liberty, security, and correcting irregularities modulate trade, people – not governments – are best left consuming, producing, investing, saving, and correcting.

That is the difference between a free economy and command-and-control communism; the former leaves most decisions to individuals, latter aggregates power and dictates decisions.

All this may seem like theory, but theory – in practice – has consequences. While China can centrally dictate economic changes, they can also shut down whole cities, demand anything of anyone, surveil, imprison, prosecute, reeducate, limit births, force abortions, harvest organs, suppress speech, religion, and all human rights – and do.

By contrast, a free nation understands liberty resides with the People, not as a collective but as individuals, each with sacred rights and duties protected by limited government. In other words, minimizing government intrusion maximizes social good, even if a “safety net” is important.

This brings us to China – now. Few are saying so, but trouble is afoot in that dragon’s lair. Their economy has grown for decades, chiefly because Western nations imagined more economic freedom – trade preferences, chances to catch-up – would produce political freedom.

The sad truth is – it did not. Instead, China took the West’s money – trade preferences, indulgences, interdependence – with impunity and ran.

While suppressing individual liberties, they modernized their military, extorted smaller countries, developed space weapons, artificial islands, a larger navy, more ballistic missiles, stole intellectual property, pushed cyber espionage, and now – want “global dominance.”

All this is disturbing, why President Trump said: “enough” began seeking accountability – even before the Wuhan virus spread globally. He focused on rebalancing trade, even terms, fairness.

Interestingly, just as Ronald Reagan began “truth-speaking” about the Soviet Union – and those truths echoed – Trump’s truths echo.

But today – if you look closely – Communist China’s command-and-control economy is stumbling.

First, since 2008, they have assumed mass debt – from 150 percent of GDP to 290 percent. While the US is leveraged, China lacks the flexibility of open markets, which naturally assess, price, buy, sell, inflate, deflate, modulate, redirect capital, and resolve. See, e.g., These charts show the dramatic increase in China’s debt.

Second, everything China produces, everything they export, and meeting the needs of their large, suppressed population – depends on energy. China is failing at energy. While long-term trends are elusive, command-and-control economies fail because they cannot manage all decisions from the center. In China’s case, they cannot replace billions of decisions by 1.4 billion of people, accurately matching supply and demand, or even vaguely match preferences to production.

Thus, we are seeing a Chinese economy skid, miss gears, grind through a mismatch of supply and demand, not least in energy. Media – left and right – are beginning to see skid marks. Even CNN reports “China’s manufacturing industries are in trouble,” as The Guardian reports: “China’s factory activity has shrunk unexpectedly amid curbs on electricity use and rising prices for commodities and parts, raising more concerns about the state of the world’s second-biggest economy.” See, It’s official. China’s manufacturing industry is in trouble; China’s factory activity in shock slowdown as energy crisis hits home.

Often prescient, The Economist reports “the latest shock to China’s economy” is “power shortages,” as “at least 19 provinces have suffered power cuts in recent weeks.” See, The latest shock to China’s economy: power shortages.

The Business Insider reports Chinese restrictions on property and energy, debt and defaults, mismanaged coal and natural gas production, imperil growth. See Evergrande and energy shortages are shaking China’s economy. Here are the most exposed countries.. Even the latest Foreign Affairs predicts “the end of China’s rise.” See The End of China’s Rise.

What are the implications? Will China’s high debt and energy weakness have political effects? Could disaffection grow into organized objections, as happened in the former Soviet Union? Does the failure of a command-and-control economy mean political reform?

Given communism’s iron hand, not likely in the near term. But three implications do-follow. First, those dependent on China are vulnerable, so supply chains across Asia, Russia, and Europe will shudder. Second, China may have to rethink their beeline for “global dominance.”

Finally, America should take a lesson: Socialism, mass debt, runaway spending, and centralized power are wrongheaded, dangerous to individual liberties, and impair social wellbeing. Simple, but true.

We hope you've enjoyed this article. While you're here, we have a small favor to ask...

The AMAC Action Logo

Support AMAC Action. Our 501 (C)(4) advances initiatives on Capitol Hill, in the state legislatures, and at the local level to protect American values, free speech, the exercise of religion, equality of opportunity, sanctity of life, and the rule of law.

Donate Now
Share this article:
Subscribe
Notify of
guest
52 Comments
Most Voted
Newest Oldest
Inline Feedbacks
View all comments
PaulE
PaulE
2 years ago

RBC,

If you remember, before the west embarked on its grand experiment with China by opening up trade and other avenues with the country, the CCP was barely able to feed its population. It was technologically backward and lacked any real means to extend its reach beyond its borders. Yes, it had developed some nuclear bombs, but had no way to deliver them with any degree of accuracy over any great distance. Tens of millions had died under Mao’s Cultural Revolution, China was primarily an agrarian society and the primary mode of transportation was the bicycle for those that could afford it. The few cars in the country were reserved for the high ranking members of the communist party. China, under communism, had indeed created a society were equality of means and outcome had truly succeeded in producing a society on the verge of collapse. Left alone, the Chinese communist party would have eventually collapsed as conditions within the country would have likely worsened over time.

You are correct that the grand experiment to throw money, trade and every other benefit imaginable at the CCP, while asking for little to nothing in return, all in the hopes they would magically realize the error of the ways and abandon communism and their unilateral power over their people for capitalism didn’t work out as western leaders thought it would. Instead we not only propped up a economically dying country, but we built it up to become the second largest economy and military power on the planet today. A China that is now openly promising to over-take the United States both economically and militarily in the near future. Talk about extremely bad political decisions indeed.

Yes, China is facing some real challenges as President Xi seeks to rein in some aspects of the Chinese domestic economy, to give the CCP more direct control over what it sees as too western an approach to the economy, but as you’ve no doubt seen it is focused on a few sectors so far. He is a big proponent of Mao of course and feels the domestic policies need to be “adjusted” to give the CCP greater influence in certain current economic matters. Areas that he feels might weaken the CCP’s grip over the population too much. Now if President Xi were to extend this adjustment to all facets of the economy, then we’re talking a real problem for China long term. However, so far the decisions as to which sectors of the economy will be affected and which will be exempt don’t indicate President Xi is making that mistake yet. He seems to understand he needs to maintain the industrial, manufacturing and technological sectors of the economy as is to meet his long-term goals of economic and military supremacy. Still it is an area worth keeping an eye on for future developments.

As to socialism in the United States, it is pretty clear the Socialists that run the Democrat party have no interest in reining in their appetite for it here. Socialists have never been students of history nor expressed any firm understanding or concern for what socialism has consistently delivered elsewhere. Their overwhelming drive for socialism has always been firmly rooted in their lust for unlimited power and personal wealth via the confiscation of OPM.

BillT
BillT
2 years ago

China is producing all of our goods and we are extremely dependent upon them for almost everything, that’s a problem for us and with this compromised commander and chief it’s now extremely dangerous for our and many other countries (COVID-19 is a large part of all of this) our former president was well on his way to getting our manufacturing facilities back and would have stopped China from manipulating everything in there favor. Taiwan I’d in peril right now and extremely vulnerable to a total takeover and Biden will do nothing to stop it . How are we going to last another year with this compromised president who is allowing China to get away with whatever they want . The nafta agreement was a huge mistake and we’re now paying the price for it. China should have stayed the sleeping giant forever but that’s a long story

Victoria Harris
Victoria Harris
2 years ago

I hope the masses of Americans read this article, and realize what a catastrophic choice socialism would be for America. We need to find our way back to God, and continue to be the beacon of light & hope to the world. I love and miss President Trump!

Bill on the Hill
Bill on the Hill
2 years ago

Very well written RBC… The writing is on the wall where China is concerned & how their manufacturing collapse can or will effect the rest of the globe’s economies, including here in the states…Is it possible China was nothing more than a ” paper tiger ” all along? Only time will tell on that score…
Trump I believe was on the right tract with China with respect to tariffs & luring companies back home with tax incentives & other things making it advantageous for them to return to America…
I’m reading SONY is now leaving China for Cambodia or Thailand I believe…Japan is closing shop in certain industries in China as well… All these things are telling signs for what is on China’s horizon…Our military is conducting exercises over Taiwan again as I can’t help but assume it is to give China some pause with respect to their entertaining any thoughts of invading Taiwan…Is the current faux potus involved in any of this? I’m inclined to think not directly.. JRB is currently experiencing a fallout of the American people themselves with all the endless mandates & being told what they can or cannot do in their personal lives, i.e. his foundation is cracking…
Bill on the Hill… :~)

Stephen Russell
Stephen Russell
2 years ago

Following Biden too closely on Economy??

Eddie Van Halen
Eddie Van Halen
2 years ago

I got “nooz” for you: China owns a ton of ‘stuff’ here: Major hotels – companies and a whole lot more. They must be brought to their knees by Pres. Ron DeSantis in 2024.

Hal
Hal
2 years ago

Should the USA continue on the DemonRat path to Communism (Socialism with a self-sustainin power hold on RULE), this Nation is in for some extremely hard times … and maybe it will lap over into the entire world. The Nation has prospered over two Centuries with a Constitutional Democracy. Yes, there have been bad eras (e.g. the Civil War), but the Nation has prospered and grown wealth for its citizenry…. not to mention bailing out Europe in two World Wars to keep Europe from falling to tragic Nazi rule.

Ralph Roy Ramirez
Ralph Roy Ramirez
2 years ago

A good look at what most people don’t see or hear or read about Communist China and the Marxist socialist central government that controls China.
A thorough look would include a look at their ghost military and the central government’s payoffs to the military fiefdoms that dominate today’s Communist Chinese military. An additional insight could look in-depth at the duality of controls that are a requirement in any business or government function in today’s CCP. A business leader and an equal control at the same level with the CCP functionary being able to override and veto any function that could tangentially affect
the CCP.
Without the inclusion of all of the above into the storyline in which the CCP must be viewed, a cross-sectional view of today’s China is not possible. I sincerely believe that most American and other country’s investments in China would not have been made if a thorough awareness of the quagmire of the CCP were made known. A pie in the sky view, in the past, is what was wrongly viewed. The money and investments that will be lost or tied into knots are what most outside investments and investors are left holding without recompense. I believe that China will fold and cave in and India will be the new dominant economy in Asia and the sub-continent.

Al Wunsch
Al Wunsch
2 years ago

““A major source of objection to a free economy is precisely that it gives people what they want instead of what a particular group thinks they ought to want,” and “underlying most arguments against the free market is a lack of belief … in freedom itself.” That would be China…” That would be the current Democrat Party as well.

Robert
Robert
2 years ago

Supply chains are already being majorly disrupted in the U.S. These chains have origins in China because all they do is export. They will continue to get aggressive on the world stage as their economic problems slowly mount. You can expect them to look for reasons to intimidate and overpower others in order to to feed their appetite and ambition. Go out of your way to buy buy American made products that are made here, domestically, not abroad.

Robert
Robert
2 years ago

The Wu-flu came about purposely and as a direct result of the punishing tariffs Trump appropriately imposed on the fiefdom that is RED China.

Jim
Jim
2 years ago

This is concerning in the fact that if they are over extended, they will eventually come knocking on our door demanding repayment of the Trillions in Debt we have with China.

ShellzNcheez
ShellzNcheez
2 years ago

If the CCP dictates the flooding of America’s economy with less expensive Chinese goods, it stands to reason they will be in debt-at least until they crush competition here in the US. Amazon is contributing to their success, of course and on many levels. No doubt Chinese sellers are provided with deep discounts on the back end. Nonetheless, profits can’t be made if the cost of production (including logistics) exceeds consumer purchase price.So my question is this: Is the rising debt a result of hopelessly myopic mismanagement or the natural consequence of ruthless market manipulation and therefore temporary.

Constant de Calonne
Constant de Calonne
2 years ago

PS American politicians who advocate reckless spending will cause .huge AMERICAN ECONOMIC PROBLEMS EVEN WORSE THAN CHINAS REPORTED PROBLEMS AND IT WILL CAUSE GLOBAL IMPACT AND EFFECT ! THESE GOVERNMENT OFFICIALS ARE NOT ACTING IN GOOD FAITH PERSONALLY I VIEW IT AS TREASON TO THE COUNTRY AND TO ANERICANS!

Donald L Schmidt
Donald L Schmidt
2 years ago

We shall see if communism or the wests’ preoccupation with profits win out.

Rik
Rik
2 years ago

It’s time for We the People to “Prevent Domestic Communism” that Comrade President Jackass Joe Biden, Liar in Chief, is Forcing Upon the American Citizenry!
The Progressively Communist Democrats AREN’T even HIDING Their AGENDA!

Douglas Ross
Douglas Ross
2 years ago

Well said!

Mark
Mark
2 years ago

Democrats don’t care about any of this. They want iron fisted rule in the US although they don’t understand the consequences.

johnh
johnh
2 years ago

Thanks for lots of interesting & thought provoking info.

Joe Dixon
Joe Dixon
2 years ago

The article is spot on; THE CCP’s failure cannot happen fast enough for me!

Rush Glick
Rush Glick
2 years ago

We can’t just sit around and wait for China to collapse. We are heading fast toward our own collapse at the hands of America-hating leftists. We need to get serious about our own loss of liberties here on our own soil.

Luke
Luke
2 years ago

The next war will likely begin in the South China Sea over oil. It will then escalate to a land war in the middle east. . .over oil. Coal is going to take CCP only so far. After that, it’ll be a war to steal oil. America will be in no position to object or defend at that point.

Diane Rall
Diane Rall
2 years ago

Dr

Bruce
Bruce
2 years ago

As Dennis Prager has said, “before you decide anything, ask what is the cost. (Consequences).

Robin Walter Boyd
Robin Walter Boyd
2 years ago

Communism is a result of extreme Socialism. We, in the U.S., can see how Socialism has adversely affected free capitalism as we have lost free capitalism over the past century. The more government intervention and involvement there is in business, the more corrupt and expensive doing business becomes. The Socialist chant is always; “We are doing it to protect citizens.”, but that is almost always a deceit designed to have Socialist minded politicians funnel tax dollars into Socialist organizations.
Taking notice of Communist China’s issues with not having a free capitalist business model just magnifies how bad business in the U.S. has become as we have lost free capitalism to Socialist regulations.

Kevin
Kevin
2 years ago

Socialism, Fascism and Communism Does Not Work!The democratic party Does Not Know That, Because they Make Up their Own History. According to the know it all left-haters, if we give away all Our Freedom and give all power to biden and his cronies, We will be in the great utopian Godless World. they say and think Religion has killed more people than what they aspire for. I know it’s hard but get a Real History Book. More have been Murdered by communists, fascist and what they long for in this God Blessed U.S.A. socialism. We don’t Need God, We Have joe biden? Good Lord Have Mercy On The U.S.A…Lord Intervene and Save Us from Ourselves. In Jesus Name We Pray.

Charles Nolan
Charles Nolan
2 years ago

When things fall apart, communists (Stalin) and socialists (Hitler) tend to start really bad wars. With Cut & Run Biden, China will most likely soon use nuclear weapons to win a quick war in Asia, while Biden will send Kerry to negotiate our surrender. Communist and socialist governments are generally run by dictators, which Biden sees as very much like himself.

Becky
Becky
2 years ago

Start using the correct term, media! What we are seeing globally is Communism, not socialism.
Hopefully China will fall. It should have decades ago, except corrupt governments like the US’ kept it propped up.
As the Global elite wanted China and it’s Communism at the front in world leadership, this will be a fascinating lesson in Greed.

RICHARD D SANDERS
RICHARD D SANDERS
2 years ago

Even AMERICANS who are just slightly POLITICALLY SAVY should see the connection between our aspiring left leaning would be oligarchs and the creeping Chinese commercial involvement that has been seeping gradually into our economy as a result of “feather brained liberals”, mercenary leftists and “BLACKMAILED GOVERNMENT OFFICIALS” So if many Chinese citizens are rejecting the heavy handedness by Bejing , as was evident in Hong Kong we should think back to the recent Cuban upheaval here; recognize Biden’s very un American like response to their plight; in fact we should draw a parallel here to the plight of Hong Kong, and Bejing’s actions toward Taiwan. Can we recognize that “Black mailed Biden” and Xi Jinping have populations who want the rights that Nature’s GOD has given to us all: And that now is the time to identify and crush evil people who have despotic aspirations and not one iota of their falsely proclaimed benefits under the always failed socialism. Americans, it’s time for us to RECALL the mute, complicit and purposely power hungry and evil everywhere from the township board to the Congress.

RICHARD D SANDERS
RICHARD D SANDERS
2 years ago

In the present SOCIAL-ECONOMIC FRAMEWORK, CHINA will be forced to play their hand and exercise some form of military action against our U.S.A. If they can cripple us by whatever means, the rest of the world will fall in line. Right now our Pentagon “leadership” are “anesthetized” to planning a preventative military action. Austin and Milley should be stripped of their power and shuttled aside to confinement . IT IS A FACT THAT ANY MILITARY PERSONNEL IS SUBJECT TO COURT MARTIAL. Charges need to be brought yesterday. NOW IS NOT TOO LATE! ! !.

gerald serlin
gerald serlin
2 years ago

Excellent article. I do not know if I agree with it because it represents my life view, or if it is because of the conclusions it reaches. Either way, I agree fully.

Thomas Koller
Thomas Koller
2 years ago

President Richard Nixon opened the door and broke the ice in China. Why not? China had a massive population eager and willing to work. $$$$$, and not sugar plums, danced in the minds of American Capatalists eager to profit in what the Press thought would be the very medicine the CCP needed as a prerequisite in joining the world’s First

An older blonde women laughing in the kitchen with a grey haired man.
AMAC’s Medicare Advisory Service
The knowledge, guidance, and choices of coverage you’re looking for. The exceptional service you deserve.
The AMAC App on 3 different iPhone
Download the AMAC App
The AMAC App is the place to go for insightful news wherever you are and whenever you want.
Demonstration for stop the persecution Falun Gong in China. New York, USA - September 23, 2014:Stop the persecution of Falun Gong in China in 47 street and 1st Ave.
Ronald Reagan makes a dapper picture with a boutonniere in his lapel. The occasion was Reagan`s address before the Chicago Council on Foreign Relations on St. Patrick`s Day, March 17, 1980. At the time, the former movie actor and two-term California governor was running for the Republican Party nomination for president.
Usa and Venezuela Realistic Half Flags Together

Stay informed! Subscribe to our Daily Newsletter.

"*" indicates required fields

52
0
Would love your thoughts, please comment.x
()
x

Subscribe to AMAC Daily News and Games