Shutdown by Adam Tooze

Shutdown by Adam Tooze

Author:Adam Tooze [Tooze, Adam]
Language: eng
Format: epub
Publisher: Penguin Publishing Group
Published: 2021-09-07T00:00:00+00:00


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The Greater Bay Area was exemplary of the vision of streamlined state capitalism that Xi and his team had been pushing since 2013.41 The core motivation of this project was political. It involved securing for the CCP a strong hold over the most dynamic economy in the world. Across China, party-led committees were planted in tech enterprises and chic private condominiums. The incorporation of Hong Kong was part and parcel of this process. So too was the humbling of Chinese tycoons, whether in Hong Kong or on the mainland. Even global stars like Jack Ma were not immune, as he discovered in November 2020 when the record-breaking IPO of Ant Financial was stopped in its tracks and Ma himself disappeared from public view. There would be no more “expansion of capital without order.”

The broader project went beyond direct political control to an effort to tame China’s rampaging growth. Key to this was financial regulation and monetary policy to curb excessive credit growth. There would be no recurrence of the near-miss financial crisis of 2015. It was a formidable assertion of Communist Party control, but it went hand in hand with a vista of economic growth and comprehensive prosperity so large that it changed not only Chinese society but the balance of the entire world. In 2019, China accounted for 27 percent of total global economic growth.42 In the process it overtook the United States to become the largest consumer market in the world.43 In 2020, it was the only major economy in the world still growing. That was irresistible.

Since the 1990s, American financial interests had led the charge into China, and the repression in Hong Kong in 2020 did not put them off. Indeed, the fondest hope of Wall Street was to break out of the Hong Kong beachhead defined by “one country, two systems” to gain access to the vast market of mainland China. No one was more explicit about this than Ray Dalio, the legendary founder of Bridgewater Associates, the largest hedge fund in the world, with $160 billion under management. “This ain’t your grandfather’s communism,” he told the viewers of Fox Business news from Davos in January 2020. “Some Chinese like capitalism more than Americans do.” As the year began, Dalio was worried about the mood back home. Bernie Sanders and Elizabeth Warren, running strong in the Democratic primaries, were stirring an “anticapitalist” mood.44 And it wasn’t only America’s socialist tendencies that worried Dalio. Even more concerning was the Federal Reserve. Among American moneymen, Dalio is known for his interest in history. After studying the rise and decline of financial empires over the last five hundred years, Dalio was convinced that a fundamental shift was under way. The United States, he warned, was “creating a lot of debt and printing a lot of money, which in history was a threat to reserve currencies.” “The fundamentals are undermining the U.S. dollar.” The conclusion could not be dodged: the future belonged to China. As Dalio remarked somewhat defensively, “People have accused me of being biased, naive, and in some cases unpatriotic.



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