As I wrote in response to your question in the previous thread, why is there a need to accumulate trade surplus?
All of that $1 trillion worth of Chinese goods could sink at sea during their shipment and it would not matter one bit for the financial situation in China. It’s just a number, or think another way, a high score in a video game.
It is a choice to tie your own financial situation to the score you get in a video game. Just like you can still live completely normally if you don’t get a good score in a video game today, there is literally no need for the Chinese government to do so, except for a belief in neoliberal ideology.
Put another way, Chinese labor and resources are being spent on creating something that the Chinese people themselves could not enjoy, but merely getting in return for the equivalent of a high score in a video game. A misallocation of capital, labor and resources.
Export is meant to exchange for goods you cannot produce at home. But in the post-Bretton Woods era, under neoliberal ideology, it has become a belief system that you need to accumulate a certain number before you can invest domestically, otherwise you will run a high deficit which is very bad. The price is the working class in the Global South having to work harder and lowering their own domestic purchasing power in exchange for a number they cannot use, and will never use. An imperialist extraction of the surplus values from the Global South.
The problem is not just China though - it’s everyone wanting to run a trade surplus because they have bought into the IMF ideology (“you need to reach this score in the game before you’re allowed to eat dinner!”), and this is what makes the dollar hegemony so powerful, because the dollar is that score, of which any number can be easily typed simply through keystrokes.
This is fundamentally different from the previous Bretton Woods and gold standard eras when accumulating foreign currencies through trade surpluses actually get you gold, which is a tangible and finite commodity. The dollars can be created simply out of thin air, and this is what allows the US to get unlimited free lunch. The key to the solution is to stop believing in this nonsense, which the world finds very difficult to pull themselves away from.
Then why not directly allocate the labor and resources to prioritize the domestic sector? Why not use it to raise the living standards of the people directly?
Why would you need to spend a significant portion of your labor and resources on creating cheap goods for Western consumers to earn their currencies before you are allowed to prioritize your own people?
And we’ve seen the outcome of this export-led growth strategy: deflation, wage stagnation/reduction, low purchasing power, which ultimately led to low domestic consumption. Meanwhile, foreign countries are enjoying the cheap goods Chinese labor are breaking their backs to produce while enduring longer working hours and increasing retirement age, with near zero annual leave.
It looks like the leverage is on the US hands, who simply has to put up tariffs to force China’s export sector to divert elsewhere. Meanwhile, the mercantilism is sending every other country to sell their goods to the US in desperation to make up for their growing trade deficit with China. I don’t see any geopolitical leverage at all. It is the Chinese people who are absorbing the costs.
Honestly, I suspect a lot of Westerner leftists support China because they secretly enjoy the cheap goods from China, and not really support the Chinese workers to get the fair share of their own labor.
Anyone here seriously believe that working 26-28 days a month for 10-12 hours is a good deal? If your impression of China stops at the flashy infrastructure, then you’re missing a huge part of the picture. These are the people who make your iPhones and all the cheap gadgets you are consuming. Shifting away from the export sector will actually allow the workers to get more rest and recreation time to spend with their families.