Good riddance to Chinese triumphalism as economic disaster looms

The sheer absurdity of the recently expanded Brics consortium of developing nations becomes evident when considering India's alliance with China, and even more preposterous, Saudi Arabia's partnership with Iran. It's important to note that both sets of countries are currently engaged in a virtual state of conflict or at war.

Despite being seen as a resistance against the presumed hegemony of the G7 in global economics, the Brics association appears to lack coherence. It raises the question of why Egypt has been invited to join while Nigeria and Indonesia, which possess significantly more influential economies, appear to have been overlooked.

If the Belt and Road Initiative is simply a disguise for Chinese control in developing nations, it is essential for participating countries to approach it with great caution. Moreover, its mere presence seems to legitimize Vladimir Putin's unlawful intervention in Ukraine. By joining this initiative, nations are essentially expressing their indifference or even support towards these actions.

However, it is the possibility of China's domination that should concern other countries the most. China's remarkable economic growth over the past 45 years, since it began its process of opening up to the global community, cannot be denied. It is truly impressive and there are numerous aspects that others can look up to and try to replicate.

Despite any advantages that wealthy economies may have gained, the positive effects of China's involvement have been difficult to discern. In the case of Western nations, China has presented itself deceptively. Additionally, interactions with China have not been without challenges even for many developing countries.

We have to exercise caution in this matter because, for the most part, and as per the Ricardian concept of comparative advantage, international trade without restrictions is highly beneficial. It enables countries to focus on their strengths and expertise while obtaining goods and services from others that they may not excel at.

However, it is important to ensure that free trade is also conducted in a fair manner. Western countries have recently started to understand that relying heavily on foreign parties for essential economic resources can lead to security issues becoming a significant cause for concern.

China has shrewdly acquired a firm grip on crucial sectors of manufacturing and resources, and ambitiously seeks to expand its influence even further.

The extent of the vulnerability of the Western countries has become blatantly evident during the disruptions in the supply chain caused by the pandemic. It became evident that we are heavily reliant on external sources for the production of essential goods required to sustain a thriving modern economy.

Let me clarify. It is impossible for any economy to be completely self-reliant. Such an approach is completely illogical in today's world, and if widely adopted, would only result in unnecessary duplications, inefficiencies, retaliatory protectionism, and an increase in global conflicts.

We shouldn't resent China's economic advancement either. On the contrary, it should be recognized as a remarkable achievement of our time, as it has helped lift hundreds of millions of people out of poverty.

However, it's not only the escalating competition between superpowers or the negative impact of China on Western employment and abilities that we should worry about. Another aspect of concern is the excessive pride and arrogance displayed by China.

The feeling of Chinese supremacy can be traced back to the economic downturn a decade and a half ago, when Wang Qishan, who was China's finance minister at that time, told Hank Paulson, the finance minister of the United States: "You used to be my mentor. However, now I am in a position of power, and when I look at your system, Hank, I am unsure if there is anything left for us to learn from you."

Mr. Wang's subtly expressed observation quickly transformed under President Xi Jinping into - and let me emphasize, this is an exaggerated representation - "we no longer seek knowledge from you since our methods of governing and managing the economy are clearly superior to yours."

The apparent stability and organized development of the Chinese economy would consistently be compared to the apparent disorder and downturn of the Western world.

In the beginning stages of the pandemic, this was widely accepted as the dominant storyline, as China served as a model for governments on how to address a potentially lethal infectious disease. We all took cues from China, flipping the roles of teacher and student without any confusion.

China set a new benchmark on how to handle a pandemic. Their approach combined strict measures, well-suited for an autocratic regime but contrary to the principles of a democracy that values freedom, with widespread testing. This strategy was incredibly successful in controlling the spread of the disease and was proudly endorsed by President Xi as further proof of China's superiority.

In the United Kingdom, it feels like we faced the most unfavorable circumstances. We underwent a government-enforced lockdown like China did, resulting in a significant economic and social toll. However, it can be argued that the outcome was not as impactful as expected.

It became evident that the country was completely ill-equipped to handle such a massive danger; the healthcare system was faltering and lacked a coherent approach to effectively managing the crisis.

The rest of the democratized countries faced a similar situation. Apart from South Korea and Taiwan, almost everyone else seems to have made significant mistakes.

However, when it comes to the financial aspect, Britain appeared to be the most affected. If Xi had formulated a cunning strategy to weaken the Western countries, it is unlikely that he could have devised anything as successful as this. The lockdown imposed had devastating consequences for our predominantly service-oriented developed economies.

However, the situation took a different turn, and ultimately, implementing measures to restrict economic activities in order to combat Covid-19 has had equally detrimental effects on China's economy, much like in America and Europe. From the current perspective, it even appears that the consequences might be more severe for China.

As the Western countries excelled in their abilities and swiftly developed vaccines and medications to combat the illness, China remained stagnant in a state of outdated thinking, enclosed within the strict boundaries of Xi's zero-Covid strategies. Their pride and an inherent belief in Chinese uniqueness hindered them from acknowledging the harmful consequences of their approach.

Just like in Western countries, the enforced slumber of lockdown has served as a breeding ground for all the vulnerabilities present within the economy.

After succumbing to mounting public discontent and being compelled to give up their zero-Covid strategy, China's anticipated swift recovery did not materialize, leaving them vulnerable to a potential wave of business closures, decreasing prices, and an excess supply of various goods like housing and automobiles due to the declining demand.

The Chinese development narrative, apart from its tremendous scale and rapidity, has never been exceptionally distinctive, relying instead on the commendable diligence of the Chinese populace.

However, just like any other rapid expansion, it was constructed on an inverted pyramid of mounting debt in a Ponzi-like fashion. With the credit bubble currently deflating, one can't help but question how much longer this facade can be sustained by simply implementing more of the identical strategies.

Many might argue that it is satisfying to witness China facing consequences.

Misinterpreting the risks is a possibility. A financially insecure China could potentially pose a greater danger to the welfare of the West compared to a rejuvenated one.

However, if I were India, Brazil, or any of the recent entrants to the Brics gathering, I am well aware of the strategic areas where I would invest my resources.

After enduring years of disgraceful disregard from the West, China would still surpass their expectations.