Mercantilism in China

This week, at the United Nations Climate Change Conference in Copenhagen, 2009, a Chinese diplomat was mad at an American envoy after he learned that China would not get money from America, for this American envoy said that “I don’t envision public funds, certainly not from the United States, going to China.” By this, this negotiator from China acted like a sophist and retorted that “I don’t want to say the gentleman [the US envoy] is ignorant. He is very well educated but he lacks common sense or extremely irresponsible. I would ask him or any person who is interested in the climate change issues between China and United States to read the joint statement when President Obama visited China three weeks ago.”

It appears to me that this Chinese diplomat is either lacking education or is not a well self-taught pundit. “[T]he joint statement when President Obama visited China three weeks ago” is at most a consensus between US and China; it is far from being a common sense. In Mathematical Logic, a consensus could be “union”, or “intersection”, or “complement” to a common sense, but they are not necessary identical. In the Enlightenment, the enlightened persons were referred as the “public”, while the un-enlightened persons were referred as the “people”; thus a common sense among the “people” was obviously not the same as the one of the “public”. In Mercantilism (the European economic policies from the 16th to 18th century), the common sense on “wealth” was very different from the concept of Adam Smith (1723 – 1790, founder of the classical liberalism).

Mercantilist regarded the gold bullion or currency reserves as wealth. It encouraged to export its manufactured products to other nations, but limited to import the goods from the others, except the raw materials. It believed the trade between nations is a “zero sum game”. Adam Smith was a leading thinker of against Mercantilism. In his An Inquiry into the Nature and Causes of the Wealth of Nations, Smith observed that the Mercantilism was:

That wealth consists in money, or in gold and silver, is a popular notion which naturally arises from the double function of money as the instrument of commerce, and as the measure of value. In consequence of its being the instrument of commerce, when we have money we can more readily obtain whatever else we have occasion for, than by means of any other commodity. The great affair, we always find, is to get money. When that is obtained, there is no difficulty in making any subsequent purchase. In consequence of its being the measure of value, we estimate that of all other commodities by the quantity of money which they will exchange for. We say of a rich man that he is worth a great deal, and of a poor man that he is worth very little money. A frugal man, or a man eager to be rich, is said to love money; and a careless, a generous, or a profuse man, is said to be indifferent about it. To grow rich is to get money; and wealth and money, in short, are, in common language, considered as in every respect synonymous.

The Mercantilism lost its mainstream status because of its stagflation, not just because of Smith’s opposing.

Now, China accuses other nation “extremely irresponsible”, that won’t make China to get rid of the name of “irresponsible” nation on the climate change issues. The world knows that China is one of these nations who are reluctant to take part in this calling for reducing emissions. China regards this calling as a “zero sum game”, especially when it would not get reparation pays. China claimed that it is not a rich country, except it is not the richest country; China accused the old developed countries of taking too few responsibilities, ignoring it is the emissions-most country; China wishes India will stick the same ground with it, but India eventually responds more responsibly.

The Mercantilism in China is regarded an improving sign by those “Yodas” in America, these “Yodas” believe they have the abilities to manage China. But be aware of that Mercantilism once fueled the colonialism and that brought many wars