By Alejandro A. Tagliavini *
As the prominent economist Roberto Cachanosky wrote, in a column titled “The Present State Plunges the Population into Poverty”, most of the people “… believed that politicians had a monopoly on solidarity and that, with them taking care of the population, everyone would have… health…, etc.… they were going to provide the population with the best living condition ever seen…. This perverse system of the present state… has transformed the state into something unmanageable…”.
This false belief facilitated the «Chinese tale», literally, that the health of countries could be «cared for» with government repressions of personal freedom and markets. As I said in a previous column («China consolidates as a power«), the result was the destruction of the global economy.
But the red giant, with the same authoritarianism with which it imposed these confinements, lifted them while the West continues to debate whether to remove them or harden them. And, thus, it is the only power that grows: its economy shot up 11% in the second quarter, while those of the US and Germany fell -9.5% and -10.1% respectively.
As Chinese industrial production and consumption begin to recover. It really looks like the reds won the «Third World War«.
The Red Dragon weighs more and more and nobody knows how far it will go. For now, as Rosalind Mathieson wrote in Bloomberg, the world is treading cautiously on the tightrope between the US and China, and she recalls the story, popularized in the film directed by Robert Zemeckis, from the Frenchman Philippe Petit that, in 1974, walked about 400 meters above the ground on a cable between the Twin Towers in New York.
Today, governments balance two superpowers. A single misstep would be very dangerous. It can be seen in the speeches of countries that are not interested in being caught up in a new Cold War. And it was seen during a recent call between China’s Xi Jinping and European Union leaders trying to finalize an investment deal this year.
And we will see who wins the US elections, because if Washington continues to toughen up against the Chinese in terms of more retaliation – which, strictly speaking, like tariffs on imported products, American citizens end up paying – it will lose while the red economy grows… as its military power.
For example, due to the agreement of Nvidia Corp. to buy the English Arm Ltd. for US $ 40,000 million, are now under the control of a US company the chip designs and the Arm’s instruction set, the code used by chips to communicate with the software, which are a key part of smartphones, autonomous vehicles, millions of sensors, data center servers and laptops.
Its clients include Qualcomm, Intel, AMD, Apple, Samsung, Google, Amazon, Microsoft and many Chinese companies including Huawei, which has been in Washington’s sights for months. The agreement to purchase Arm will require approval from China, the UK, the European Union and the US, a process that can take up to 18 months.
Anyway, at the moment, in this cold war there are no dead spies like in the movies, but some are irresponsibly calling for war like the Global Times of China that says that China must be militarily and morally ready for a potential war.
* Senior Advisor at The Cedar Portfolio and Member of the Advisory Council of the Center on Global Prosperity, de Oakland, California