Archive for April 30th, 2010

Friday, April 30, 2010

Zero-Sum Games and Suffering Flesh

Fan Gang, Beijing University professor and the Chinese Economic Research Institute, explains his view of China’s trade deficit in March in a guest article for Der Standard, Austria.

China has recorded a trade deficit of 7.2 bn Dollars (5.4 bn Euros)  in March, the first one since April 2004. And still, at the same time, the U.S. Congress has denounced China as an alleged exchange manipulator and accused the Chinese leadership of keeping the RMB pegged to the Dollar to save the bilateral trade surplus.

One of Fan’s arguments: if America and the European Union lifted their export ban on high-tech products to China, their trade deficit would be reduced by at least 40 per cent – and in that light, the exchange rate was a secondary issue.

Fan doesn’t explicitly mention the arms embargo against China, imposed after the June-4 massacre in 1989, but it is most probably included in his argument.

Meantime, Germany’s Wirtschaftswoche believes China’s March 2010 trade deficit is just an age-old trick – the ploy of the suffering flesh.

Wikipedia lists the stratagem as #34. Of course, it can be useful to know these ideas. The funny thing is that business people in China – both Chinese and foreign – seem to be the stratagems’ biggest fans. For that reason alone, it can be useful to be aware of the list.

Obviously, I will have missed the operation of such strategems once in a while, when they were applied in a subtle way. But from what I saw of it, people who put a lot of emphasis on the use of strategems mostly wasted everybody’s time (their own included). It was a nuisance to see them at work. Just like war, stratagems usually make only one side win, at the cost of the other. And they lead to a lot of suspicion – Chinese people often seem to see themselves surrounded by scary and hostile specters – even during a Sunday meal in a Burger King restaurant.

In an interview with Der Spiegel in 2005, the late economist Paul Samuelson described war as a zero-sum game. The rise of Bismarck came with the decline of Napoleon III, but after the 1870/71 war, both France and Germany fared well in terms of economic growth.

Stratagems in business life? That’s a zero-sum game, too. They are in the way of productive problem-solving.

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Related
Hermit: Happy New Agreement Year, February 7, 2010
The End of Globalization, Der Spiegel, Nov 12, 2007

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