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This post was edited by abramicus at 2016-7-25 09:12|
DENG WOULD HAVE SAID, "BLACK CAT OR WHITE CAT TO CATCH MICE -- NOT A RACCOON @#$%!"
At heart, "structural reform" is constitutional, legal, regulatory reform to make it easier for multinational companies to extract what is cheap from one country and sell at a profit to another country, without sharing the profit with the country selling or buying what it trades. For example, current complaint of the EU against China on its export quotas and tariffs on rare earth metals under WTO rules, is a form of structural reform, that the EU claims unfairly disadvantaged its companies against Chinese competitors, even when the total value of what China gets in return for its global export of rare earth metals annually is a measly $1.3 billion dollars. At such firesale prices, why on earth is China mining all this rare earths for, when the mining process is labor intensive, and environmentally destructive? So, why is China participating in this charade that only makes Chinese coolies work harder for less money, extracting rare earth metals that the West can just as easily do, but refuse to do so because its real cost is higher than what China is getting paid?
But "structural reform" only starts there. There is no end in sight to what can be dragged into the folder of "structural reform" as defined by the term's creators, which are the EU, IMF and the Economist, none of which has defined what they mean by "structural reform" in plain English or Chinese. Never mind that China is disallowed access to high-tech products on the basis of their "defense" nature. Since "structural reform" requires constitutional, legal and regulatory reform, which applies to monetary policy (as in the upvaluation of the yuan exchange rate and fixing it above the market rate) and fiscal policy (as in the matter of export taxes on rare earth metals), it is a BLANK CHECK to political and constitutional reform, without anybody knowing what "structural reform" really is.
You know how to wreck any set of equations, such as that used to model national economies, of which Wharton boasts its claim to fame? Introduce an undefined variable in every equation, called SR (for "structural reform"), and then create a complex tree of SR(i, j, k, l, m . . . z), with each index referring to one aspect of the economic-social-political construct of the country. Just place the variables in every parethesis, in every equation, without defining them except as "structural reform variables". Then, as in a controlled demolition of a skyscraper, you force one of the variables to assume a certain value, such as for example, the Yuan exchange rate. Empirically, it is evident this was the chosen variable as it affects the most parts of the Chinese economy, society and political stability. Just tell your buddies at the Chinese leadership that the Yuan exchange rate must remain stable at current rates, knowing that "current rates" mean 6.20 yuan/dollar, because "exchange rate stability and transparency are necessary pillars of 'structural reform'", and they will set it as you say. All of a sudden, Chinese products become overpriced in dollars abroad and in yuans at home, Chinese manufacturing begins to pile up inventory, Chinese manufacturers begin to be unable to service their debts, Chinese banks begin to feel the risk of bad debt defaults, Chinese SOES that create the primary industrial products for use by its secondary industries selling finished goods begin to become unprofitable. But don't panic, things will get better, they say. Yeah, Greece has been undergoing structural reform for so many rounds, you gotta believe its economy is now much, much better. STRUCTURAL REFORM is POLITICAL REFORM, and one aimed at destroying the sovereignty of its victims, territorially, monetarily, fiscally, and commercially, in a systematic, orderly and comprehensive fashion, similar to CONTROLLED DEMOLITION of a skyscraper. Sure, China needs to constantly improve its economy, which is what Deng advocated 45 years ago, but it is based on the welfare of China's poor, China's under-educated, classes, to raise them up from poverty, not based on making profitable companies make more money by selling out their countrymen to foreign powers.
The Western powers know the SOES are the defenders of the livelihood of hundreds of millions of the under-educated who can make ends meet by a blend of company benefits and low skilled wages. In the name of making them earn more money in hi-tech jobs, they intend to wipe out the SOES that employ them in low tech jobs, knowing that they will not be able to qualify for the hi-tech jobs in most cases. What are they trying to create? Labor unrest, social upheaval, and regime change. This is also "STRUCTURAL REFORM" which is what PERESTROIKA did to the USSR. And did it affect its sovereignty at all? Look at the number of pieces it turned into, thanks to Gorby the Chef.
The main reason China's economy is healing up is because the Yuan exchange rate could not be propped up by the PBOC any longer. It had burnt through a trillion dollars, and allowed the country to become indebted to other countries by two trillion dollars, in two years. And when the Yuan exchange rate dropped to 6.50, things began to turn around. It is now at 6.68, "thanks" to the PBOC's efforts to prop it back up from 6.70, and so the economy is heading back to the ICU in another month or two, and China will be fifty to a hundred billion dollars poorer for doing it.
"Structural Reform?" What is STRUCTURAL REFORM? Nobody knows. If its proponents clothe themselves in the cloak of STRUCTURAL REFORM, then we can say, "Gee whiz, these fellows have no clothes" even when they parade proudly among the big wigs of the world like royalty.
NOW, IS THIS THE "CAT" OF STRUCTURAL REFORM?