This book vividly describes how China's rise in the early 2000s led to rising profits and declining labor income everywhere, ultimately resulting in the global financial crisis. Under Deng Xiaoping's policy of 'reform and opening up' in the 1980s, China quickly became the world's factory floor...but powerful political leaders envisioned a world in which the market economy would be trapped within the confines of a planned economy. With China's admission into the World Trade Organization in 2001, almost a billion people joined the global workforce, driving down the real wages of blue- and white-collar workers in the US and Europe while also lowering interest rates, which fueled housing bubbles and destabilized the financial sector. This book explores China's significant influence on western economies by focusing on the links between the labor market, corporate profits, and interest rates, using Arthur Lewis's framework for economic growth with unlimited supplies of labor to argue that by 2010 the world economy - and political situations - had been set back almost one hundred years.
'The Chinese Birdcage' is a thought-provoking book. The real content is powerfully described in the subtitle of the book. 'How China's Rise Almost Toppled the West' is the undertone in the entire story. Until a few decades ago, China's economy was mainly focused on agriculture and heavy industry. When. in the 80s, the Chinese leader Deng Xiaoping hinted that showing entrepreneurial spirit and thus also making profit was no longer prohibited, China quickly became one large factory for all kinds of goods that the West found necessary. At one point the assortment of the large American retail store behemoth Walmart consisted of 80% Chinese goods.
In normal circumstances, this turbulent economic growth would lead to inflation. More and more factories were producing more and more products and more workers were needed for the production. But China had an inexhaustible amount of cheap laborers who moved into the city from the countryside to find a better life. Moreover, the Chinese currency was kept artificially low. The money that flowed into China was reinvested in US bonds. Nowadays, China is the largest donor of the debt-ridden US economy. Should China stop, then America will come to a sudden standstill.
Western companies couldn't possibly compete with the influx of cheap Chinese products. We bought ever more Chinese manufactured goods, which was to the detriment of Western producers. In order to (re)stimulate the economy, interest rates were reduced, leading to a housing bubble. That bubble eventually broke the back of the financial sector.
It might seem we have arrived in somewhat calmer waters, but that is an illusion. Read 'The Rise and Fall of the Great Powers' by Paul Kennedy and you will understand that the power and wealth of America is faltering. China is on the verge of (again) taking that leading position.
'The Chinese Birdcage' is a gloomy prediction of a future. Read it and be prepared.
Vind het boek achterhaald, en erg in waan van de overtuigingen van de schrijfster zelf. Ook maakt ze behoorlijke missers in haar culturele vergelijkingen die ronduit discriminatie zijn. Het komt mij over dat mevrouw Nijkamp alsnog dus haar gefaalde thesis van de Erasmus universiteit probeert te verkopen alszijnde waar en geslaagd. Dat was en is het dus zowel absoluut als relatief dus niet. Waardeloos bevooroordeeld boek zonder enige unieke intellectuele toevoeging en / of overdenkingen.