There is no question that the circumstances surrounding the “balloon affair” between the United States and China are dodgy. Burlesque does not belong to China’s diplomatic toolbox. China never used balloons to browbeat adversaries.
Unsurprisingly, expert opinion largely tends to go along with the Chinese contention, which implies that Beijing had no need to resort to such outmoded and difficult-to-control means such as a gas-filled balloon hoisted at 60000 feet above ground propelled by the winds to conduct surveillance over America’s super secret nuclear weapon sites when it has as sophisticated means as Americans would have to spy other countries through satellites. That seems a credible rationale, isn’t it?
We have had a very successful congress. We have done three things. First, we have decided on the line of our Party, which is boldly to mobilize the masses and expand the people’s forces so that, under the leadership of our Party, they will defeat the Japanese aggressors, liberate the whole people and build a new-democratic China. Second, we have adapted the new Party Constitution. Third, we have elected the leading body of the Party–the Central Committee. Henceforth our task is to lead the whole membership in carrying out the Party line. Ours has been a congress of victory, a congress of unity. The delegates have made excellent comments on the three reports. Many comrades have undertaken self-criticism; with unity as the objective unity has been achieved through self-criticism. This congress is a model of unity, of self-criticism and of inner-Party democracy.
When the congress closes, many comrades will be leaving for their posts and the various war fronts. Comrades, wherever you go, you should propagate the line of the congress and, through the members of the Party, explain it to the broad masses.
As Atlanticists continue their commitment to a future shaped by energy scarcity, food scarcity, and war with their nuclear-capable neighbors, most states in the Persian Gulf that have long been trusted allies of the west have quickly come to realize that their interests are best assured by cooperating with Eurasian states like China and Russia who don’t think in those zero-sum terms.
With Chinese President Xi Jinping’s long-awaited three-day visit to Saudi Arabia, a powerful shift by the Persian Gulf’s most strategic Arab state toward the multipolar alliance is being consolidated. Depending on which side of the ideological fence you sit on, this consolidation is being viewed closely with great hope or rage.
Xi’s visit stands in stark contrast to US President Joe Biden’s underwhelming ‘fist bump’ meeting this summer, which saw the self-professed leader of the free world falling asleep at a conference table and demanding more Saudi oil production while offering nothing durable in return.
Each quarter, Patreon Plus supporters can ask Michael questions. Here is a transcript of the most recent one, just in time for our next Q&A this Thursday. Please support Michael’s work via his Patreon page.
Karl Fitzgerald: Alright, let’s get into it. We’ve got lots of good questions. Welcome, everyone. My name is Karl Fitzgerald. I’ve been Michael’s webmaster for over a decade now and yes, we’re so lucky to have Michael Hudson with us today. We’ve all read his books. We’ve all seen his whirlwind approach to unveiling the reality of economics so yes, Michael, great to have you here. I wanted to start off with just a nice easy one. I’m sure you could answer this in your sleep but for you, what are some of the guiding principles that listeners should really grasp in terms of just how rigged our economic system is today? What’s the handful of principles that you think are a useful barometer for people to grasp just how off-kilter our economic system is?
Michael Hudson: I’ve been working on a vocabulary to describe these principles. There are a number of seemingly opposing forces at work. I think we should call the inflation, The Biden Inflation, because the inflation that we’re seeing is almost entirely the result of Biden’s inaugurating a new 20- to 30-year cold war with Russia. He’s announced that it’s going to take 20 or 30 years. He said Ukraine is only the opening. His sanctioning of Russian oil, gas and food is pushed up by inflation by about at least 10% from Europe all the way to the United States. So, on the one hand, this inflation that people are saying is the problem has led the Federal Reserve to say, “Well, there’s a cure to that Biden inflation. Let’s have a depression and lower wage rates. If only we have more unemployment, we can cure the inflation.”
China’s Congress of the Communist Party takes place this week. This is an important event not only for China, but globally. The Western media have concentrated on the fact that current party leader Xi Jinping will be confirmed for an unprecedented third term as party leader and thus also continue as President of China when the National Congress meets next March.
Naturally, the Western pundits are strongly opposed to Xi having a third term. The FT’s Keynesian guru, Martin Wolf reckoned Xi’s continuation in power would ‘dangerous’ for China and the world. “It is dangerous for both. It would be dangerous even if he had proven himself a ruler of matchless competence. But he has not done so. As it is, the risks are those of ossification at home and increasing friction abroad… Ten years is always enough.. It is simply realistic to expect the next 10 years of Xi to be worse than the last.” And apparently, that has been bad enough.
In part one of my analysis of China’s economic future, I dealt with the claims that China would slow towards stagnation because its investment rate was too high, the working population was falling fast and the economy needed to become like mature Western capitalist economies based on consumption-led growth. I argued that the Western capitalist model was hardly great shakes, given its regular and recurring crises and the much lower levels of consumption growth. Anyway, in an economy, consumption does not lead investment and national output. On the contrary, it is investment that leads in capitalist economies just as much as in China.
Even as Xi Jinping was promising China’s Communist Party’s national congress that China would “resolutely win the battle” in key areas of technology, employees of technology companies in China and elsewhere were being told to down tools. Dozens of the hundreds of executives and engineers with US citizenship or green cards who work in or with China’s semiconductor sector, many of them born in China, have been told by their employers – whether those are foreign or Chinese companies – to stop work while their employers seek clarification of a new US rule that bars US citizens and residents from supporting China’s advanced chip-making industry without a licence.
The instinctive attitude of the United States towards the Chinese Revolution was of course one of hostility. In a protracted war between progress and reaction, between the future and the past, the governments of the US and the People’s Republic of China were, and are, are on opposite sides of the barricades. Hence shortly after the formation of the PRC in 1949, the US maintained a strict embargo on China.
With the move towards rapprochement in the early 1970s and a tacit agreement to ‘peacefully coexist’, the embargo was finally removed. Then with China’s strategic shift to integrate into the global economy, the trickle of trade and investment gradually expanded into one of the largest and most important economic relationships in the world, with bilateral trade volume currently standing at just over half a trillion dollars annually. Thousands of US businesses have generated enormous profits from their investments in China and (particularly in recent years) from selling to a vast and growing Chinese market.
European countries, as well as the United States, continue to be imperiled by an economic crisis following the imposition of sanctions on Russia. The policy has backfired spectacularly and has had worse economic ramifications on those levying the sanctions, than those being sanctioned. In this week’s episode, Lowkey speaks to respected U.S. economist Dr. Richard Wolff, discussing the links between the war in Ukraine, inflation, and the class war at home.
Before exploring the people’s definition of inflation, Dr. Wolff contextualizes the economic crisis currently unfolding across the West.