China, the fragile 21st century mercantilist state

The wheels are falling off

Beijing fails to comprehend that ongoing success of mercantilist philosophy in a global economy becomes increasingly reliant on the patience, co-operation and consumer demand of its trading partners.

The Google saga merely exposed rising resentment of many of China's trading partners against Beijing's arrogant policies, blatant cyber attacks, and ongoing IT piracy. This is now spreading into the global institutions. There is growing evidence that China's trading partners are at the point where they consider enough is enough.

While Google was about freedom and security of the internet, other factors are coalescing against China's one-sided policies.

India's revolt

To increase security following the Mumbai terrorist attacks in 2009, India banned importation, sale and use of Chinese cell phones that lacked ID codes, drawing a furious response and trade sanction threats from Beijing.

Despite China's much trumpeted policy of non-interference in other nation's affairs, China repeatedly interferes in India's domestic affairs. Beijing blatantly violated India's sovereignty by issuing loose-leaf visas for Jammu-Kashmir residents.

Chinese troops regularly cross the two Lines of Actual Control and have destroyed Indian property. China however, continues with major infrastructure and military installations development along the entire China-India border. Beijing even attempted to block an Asian Development Bank loan for urgently needed infrastructure in India's Arunachal Pradesh.

India has had enough and recently handed a diplomatic note to China protesting against China's trade policies. But India is not the only one growing tired of China's antics.

China's client states rebel

The China ASEAN Free Trade Agreement is under threat. Thailand, Indonesia, Vietnam, and Malaysia are complaining, seeking delays, and amendments. Constant procrastination and China's poor record in trade relations compliance has created widespread distrust in China's reliability to abide by rules.

Japan is now taking a firm stand against China's territorial activities in the East China Sea. Vietnam and Japan are also objecting to China’s claims to oil reserves within their territorial waters as well as in disputed waters.

Vietnam lodged complaints of unskilled Chinese migrant labour displacing locals from major Chinese "aid" projects. "Thousands" of Chinese migrant workers are reportedly staying illegally and working in the rising number of new China towns that spring up around new China invested projects.

Developing countries around the world are discovering that China's aid and investment comes at a price to local industry, employment, resources and future economic welfare. "Anti China incidents" are increasing in several regions across Africa, southwest Asia, central Asia and northern Asia.

Enough is enough

Developing nations are not the only ones who have had enough of China's arrogant attitudes. The EU is starting to respond to China's mercantilist policies of currency manipulation, trade imbalance, piracy, investment constraints, tactics, pollution and human rights abuse. China's demolition of Copenhagen appears to have been the tipping point for developed nations' tolerance of China.