the chinese challenge

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By THOMAS PIKETTY*

Neoliberalism, abandoning power to the richest and weakening public power, in the North as in the South, only reinforced the Chinese model

The Chinese Communist Party (CCP) is already celebrating its centenary and Western countries have not yet managed to define their attitude towards the Beijing regime. Let's be direct: the answer lies in putting an end to Western arrogance and promoting a new emancipatory and egalitarian horizon on a world scale – a new form of democratic and participatory, ecological and post-colonial socialism. If they insist on their usual moralistic stance and an outdated hypercapitalist model, Western countries will run the risk of encountering great difficulties in facing the Chinese challenge.

Authoritarian and oppressive, the Chinese regime certainly has many weaknesses. According to the newspaper Global Times, its official journal, Chinese-style democracy would be superior to the Western electoral supermarket as it entrusts the country's destiny to a motivated, determined, selected vanguard, representative of society – the PCC has around 90 million members –, and much more involved in the service of the general interest than the average, versatile and influential voter.

In practice, however, the regime increasingly resembles a digital dictatorship so perfect that no one wants to imitate it. The CCP's model of deliberation is even less convincing, since it leaves no trace behind. Meanwhile, the establishment of widespread surveillance of social networks, the repression of dissidents and minorities, the brutalization of the electoral process in Hong Kong and the threats to democracy in Taiwan are becoming increasingly clear.

The ability of such a regime to seduce the opinions of other countries (and not just its leaders) seems limited. It is necessary to include in this list the sharp increase in inequalities, accelerated ageing, the extreme opacity that characterizes the division of wealth, and the feeling of social injustice that stems from it and that cannot be eternally appeased by some concealments.

Mixed economy

Despite its weaknesses, the Chinese regime has solid advantages. When climate catastrophes come, he will easily blame the former powers that, despite their limited population (the set that includes the United States, Canada, Europe, Russia and Japan concentrates around 15% of the world's population), represent about 80% of the accumulated carbon emissions since the beginning of the industrial age.

Generally speaking, China does not hesitate to remember that it industrialized without taking advantage of slavery or colonialism, of which it itself suffered the consequences. This allows it to gain some points against what is perceived as the eternal arrogance of Western countries, always ready to teach the entire planet lessons when it comes to justice and democracy, while showing themselves incapable of facing the inequalities and discrimination that undermine them. ; making a pact with all the powerful and oligarchs that benefit them.

On the economic and financial level, the Chinese State has considerable assets, far greater than its debts, which gives it the means for an ambitious policy, both domestically and internationally, particularly with regard to investments in infrastructure and in the energy transition. Public authorities today own about 30% of what can be owned in China (10% of the real estate sector, 50% of companies), which corresponds to a mixed economy structure that is not entirely different from that found in the West of the "Glorious Thirty".

On the other hand, it is shocking to see where Western states find themselves, at the beginning of the 2020s, with almost zero or negative heritage positions. For not having balanced public accounts, these countries accumulated debts, at the same time putting a growing part of their assets up for sale, so that the former ended up surpassing the latter.

Rich countries, poor states

Let's be very clear: rich countries are rich in the sense that private equity has never been so high; their states are poor. If they persist in this path, they could end up with an increasingly negative public equity, in a situation in which the holders of debt securities will own not only the equivalent of all public assets (buildings, schools, hospitals, infrastructure, etc.), but also the right to withdraw an increasing share of taxes from future taxpayers. On the contrary, it would be possible, as was done in the post-war period, to reduce the public debt in an accelerated manner by absorbing part of the largest private assets, thus increasing the public power's margins for manoeuvre.

It is at this cost that we will re-establish an ambitious investment policy in education, health, environment and development. It is urgent that vaccine patents be suspended, that multinationals' revenues be shared with the countries of the South and that digital platforms be put at the service of the general interest. More broadly, it is necessary to promote a new economic model based on the sharing of knowledge and power at all levels, in companies and international organizations.

Neoliberalism, abandoning power to the richest and weakening public power, in the North as in the South, only reinforced the Chinese model – just as it did with pathetic Trumpist or modist neonationalism.

It's time to move on to the next one.

*Thomas Piketty is director of research at the École des Hautes Études en Sciences Sociales and professor at the Paris School of Economics. Author, among other books, of Capital in the XNUMXst century (Intrinsic).

Translation: Daniel Pavan.

Originally published in the newspaper Le Monde.

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