This weekend only, when you donate $90 or $8/month, you can snag our cozy new Marketplace zip–up hoodie. Don’t wait –– this offer ends Sunday at midnight.
TEXT OF INTERVIEW
Bob Moon: After all that discouraging economic news we topped the program with, now we turn to a place where business is booming: China.
Is it possible we could learn something from the Chinese? They seem to think so. After all, we’ve been telling them what to do for quite a while.
But now, guess what? They’re pointing their fingers right back at us.
Our China bureau chief Scott Tong is back in the states for a quick visit, so it’s a good time for a chat about this.
Scott Tong: Hi Bob.
Moon: So what are we talking about here with all this finger wagging?
Tong: Two things principally. One is the subprime crisis and the problems in America are obviously affecting China. The more problems Americans have, the less stuff they buy and we all know where the stuff comes from, so we know the export sector in China is taking a hit. Issue number two is the dollar and currency. For the longest time, members of Congress and Treasury Secretary Paulson have been screaming at Beijing to lift the value of its currency, which many think is artificially low and China’s response has always been “We’re going to control it nice and slow and make sure things don’t get out of hand.” And so now they’re saying look at the dollar; it is getting out of hand and it’s affecting us too because the dollar is connected, according to many, to inflation and that’s issue number one all over Asia: China, Vietnam and the Philippians. So China is worried that what they consider Washington’s mismanagement is having ripple effects all the way out there.
Moon: So where is all this headed? Is this just a philosophical debate or is it more than that?
Tong: Well, it’s a lot of rhetoric right now and the pattern has been when Washington is perceived as proselytizing about how to do things, it devolves into this playground equivalent of “I am rubber, you are glue,” and we’ve got kind of that situation now and China is feeling kind of proud now. Their system, you put them next to each other, China’s looks a little better right now and China’s hosting the Olympics and they’re feeling proud of what China has accomplished and rightly so, according to many. I mean, the economy is the number four economy in the world right now and it’s about to pass Germany as number three and it came out of nowhere exactly 30 years ago when the economic reforms started.
Moon: So what’s China’s interest in this? Are they pushing some kind of agenda?
Tong: Some people in Washington think China is, that there is kind of this alternative economic model that China has and is trying to export into different parts of the world. The people I talk to in China tend not to buy that. They say if there’s any agenda or grand plan in Beijing, it’s pragmatism. Deng Xiaoping, the former Chinese president who was the architect of the modern China’s economy, was said to have said, “It doesn’t matter if it’s a black cat or a white cat so long as it catches mice.” In other words, so long as we get rich, we’re going to kind of feel our way and see if this works and if it doesn’t work, try an alternative approach. So for all this rhetoric, most people think China is just moving in the same direction that Washington wants it to go; it’s just going to go at its own pace.
Moon: But you know that there have been a lot of complaints here that it’s going too slowly. What’s the danger that this could escalate into protectionism, let’s say?
Tong: Well, there’s talk of protectionism in Congress, that China isn’t proceeding quickly enough. From China’s perspective, the technicians who are trying to tweak the economy, most people tell me that this push back rhetoric right now at least is not going to lead into protectionism from the Chinese side, that what motivates them principally is political stability and if they can go in the right direction in a way that’s politically stable, they’re going to keep going in that direction and for all the rhetoric and finger wagging globally, it’s going to be motivated by domestic concerns first.
Moon: Our Shanghai bureau chief Scott Tong giving us the view from over there, today joining us in Los Angeles. Thanks, Scott.
Tong: All right, Bob, nice to talk to you.
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.