[Marxism] China's growing economic power

Louis Proyect lnp3 at panix.com
Sat Aug 28 06:59:41 MDT 2004

NY Times,: August 28, 2004
Across Asia, Beijing's Star Is in Ascendance

NEWMAN, Australia - Chris Dunbar watched as a front-end loader carved into 
a 60-foot wall of iron ore glinting in the red dirt of a vast open mine in 
the big sky country of northwestern Australia. "This is as good as it 
gets," said a satisfied Mr. Dunbar, 47, a manager with more than 20 years 
of experience.

He was boasting about the richness of the blue-black ore at the Mount 
Whaleback mine, but he might as well have been bragging about the boom that 
has propelled economies across the Asia-Pacific region. These days, 
Australian engineers - like executives, merchants and manufacturers 
elsewhere in the region - cannot seem to work fast enough to satisfy the 
hunger of their biggest new customer: China.

Not long ago Australia and China regarded each other with suspicion. But 
through newfound diplomatic finesse and the seemingly irresistible lure of 
its long economic expansion, Beijing has skillfully turned around relations 
with Australia, America's staunchest ally in the region.

The turnabout is just one sign of the broad new influence Beijing has 
accumulated across the Asian Pacific with American friends and foes alike. 
 From the mines of Newman - an outpost of 3,000 in a corner of the outback 
- to theforests of Myanmar, the former Burma, China's rapid growth is 
sucking up resources and pulling the region's varied economies in its wake. 
The effect is unlike anything since the rise of Japanese economic power 
after World War II.

For now, China's presence mostly translates into money, and the doors it 
opens. But more and more, China is leveraging its economic clout to support 
its political preferences.


China's rapid gain in influence in the Asia Pacific region ranges so 
broadly that it can be measured at the extremes, in countries as divergent 
as rich and distant Australia and impoverished but strategically important 

The military government of Myanmar is no favorite of Washington. The Bush 
administration has tried since last year to use trade sanctions to coerce 
Myanmar's generals to share power and release the opposition leader, Aung 
San Suu Kyi, from house arrest. But the logic of the sanctions did not 
impress even a local Burmese restaurant owner on the road from Mandalay to 

With ceiling fans powered by scarce electricity whirring gently, he drew a 
rough map of Myanmar on a bare wood table top for a recent visitor. India, 
Thailand, Laos, China, he said pointing to the neighbors.

"As long as China remains friendly nothing will change," said the man, who 
did not want to be named for fear of Myanmar's ruthless military 
intelligence service. "China can provide everything the country needs from 
a needle to a nuclear bomb."

China has in fact capsized Washington's policy with its own trade deals, 
which far outweigh the value of the American penalties. The State 
Department estimates that Myanmar lost about $200 million in the first year 
of the ban on imports to the United States. At the same time, it said, 
trade between China and Myanmar amounted to about $1 billion in 2003.

Here is where economic leverage translates into political preference. For 
China, Myanmar provides is too important as a gateway to energy and other 
natural resources to be thrown overboard. Not only has China offset the 
American sanctions and kept Myanmar afloat with easy credit and trade, but 
it has taken Myanmar's military leaders under its wing.

On a visit this spring to Myanmar's capital, Yangon, formerly Rangoon, 
China's deputy prime minister, Wu Yi, pledged to expand trade to $1.5 
billion in 2005. In July, Myanmar's new prime minister, Khin Nyunt, paid an 
eight-day visit to China, where he was treated like an old friend.

He returned with a raft of accords on railways, a fertilizer factory and 
mine exploration, as well as $150 million loan for telecommunications and a 
$94 million rescheduling of debts - relatively small amounts that show how 
easy it has become for China to serve as Myanmar's patron.

Chinese officials have also been willing to finance vital hydroelectric dam 
projects in the absence of lenders from anywhere else. And they recently 
proposed that a pipeline be built from Myanmar's west coast port of Sittwe 
to Kunming, the capital of China's southwestern Yunnan Province, allowing 
China more direct access to Middle East oil.

Closer to the border, the trade is in smuggled teak, a wood prized for its 
beauty and durability by China's surging furniture manufacturers. The teak 
trade is as illustrative as any of the symbiotic relationship between the 
Chinese and Burmese authorities.

"China needs Burma's natural resources to fuel development on the border 
and in Yunnan Province as a whole," Simon Phillips, the author of a report 
on the trade published last year for Global Witness, a British 
nongovernmental organization, said in an interview.

After China banned logging on its side of the border in 1998, Chinese 
companies moved their workers - tens of thousands of them - into Myanmar, 
he said. With the backing of political patrons in the Myanmar military, and 
in separatist militias, the loggers carried on their work with impunity.

The benefits flow both ways. The provincial government in Kunming depends 
on the companies for revenue. On Myanmar's side, aside from the money 
lavished on local Burmese political patrons, there was the added advantage 
that the Chinese built roads.

One of the most important highways that China has helped improve is the 
main artery from the border to Mandalay, the old royal capital. These days, 
the traffic is varied. Huge trucks, many of them 40-year-old hulks with 
exposed engines, still haul outsized teak logs to China. Smaller vans, 
piled with crates of live crabs from Myanmar's Indian Ocean ports, ply a 
profitable 48-hour journey delivering delicacies for Chinese epicures.

 From China, a vast assortment of cheap consumer goods for local markets 
comes down the road, particularly to Lashio. On a recent day, the city 
market was packed with Chinese electronics, clothes and food.

But local people, like the restaurant owner, who have watched the traffic 
flows, say they mostly go one way - into China.

"Myanmar is the resource pit of China," the restaurant owner lamented. "We 
send our best wood to them, our best gems, our best fruit. What do we get? 
Their worst fruit and their cheapest products."

full: http://www.nytimes.com/2004/08/28/international/asia/28asia.html

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