When analyzing the economic history of the last 70 years—specifically the contrast between the American and Chinese models—we must first understand a fundamental economic fallacy regarding government intervention and production.
1. The Fallacy of Forced Demand: When Politics Overrides Markets
A core economic question is: How does a nation solve overproduction? Imagine a scenario where a government forces every household to purchase a low-quality dining table for 1,000 yuan to stimulate the economy.
- The Political Wish: The government hopes to create revenue and clear inventory.
- The Economic Reality: If households do not need tables, they are essentially taxed 1,000 yuan for a product worth perhaps 200 yuan. The market becomes flooded with unwanted wood, fostering a secondary industry of recycling low-quality materials, creating an illusion of activity.
This is not a benefit; it is the accumulation of debt. The 1,000 yuan comes from taxpayers, while the cost is low, allowing privileged insiders to skim the difference as profit. This destroys legitimate low-cost manufacturers and increases unemployment, proving that political "wishes" cannot override the necessity of organic market demand.
2. Two Empires, Two Flows: The US vs. China (Past 70 Years)
The divergence in how the US and China have managed global economic flows defines the modern geopolitical landscape.
The Chinese Model (The Belt and Road Initiative - Post-2016): China’s strategy involves lending RMB to foreign nations, which is then used to hire Chinese companies for infrastructure projects.
- The Flow: It is a "left hand to right hand" transaction. Money leaves Chinese banks and returns to Chinese state-owned enterprises, bypassing the local economy of the recipient nation.
- The Goal: The primary objective is acquiring strategic resources (like oil from Iran) and purchasing geopolitical stability (UN votes), rather than economic return on investment.
- The Consequence: This resembles 19th-century economic colonialism but is less effective in the modern knowledge economy. Cheap Chinese goods destroy nascent local industries in partner nations, leaving them with debt and no productivity to repay it.
The US Model (Cold War to Present): The US approach has historically been different, rooted in market integration.
- Cold War Era: The US integrated allies (like Taiwan and South Korea) into its supply chain. Influence was built through shared education, military ties, and genuine market exchange. Crucially, the goods produced by allies had to meet market standards; they could not simply sell "junk" back to the US at inflated prices.
- The Shift (Clinton/Obama Era): Post-Cold War, the strategy shifted towards "soft power" via NGOs, human rights organizations, and globalist ideals to influence foreign internal affairs.
- The Trump Disruption: The Trump administration attempted to revert to a transactional, industrial-focused foreign policy, moving away from the NGO-heavy approach of the previous decades.
3. The Corrosive Impact of Corruption
Corruption is the mechanism that turns political strategy into economic poison. In the Chinese model described, the "left hand to right hand" flow allows elites to extract massive commissions. The "forced table purchase" analogy applies here: funds are allocated, but the value delivered is minimal, with the surplus pocketed by intermediaries.
- The Debt Trap: Because the recipient nations (often small African or Asian states) lack genuine productivity or strategic resources (unlike Iran), they cannot generate the revenue to repay loans.
- The "Credit Tax": The system relies on constantly issuing new debt to cover old lies—essentially taxing the future for 99 years to maintain stability today.
Conclusion: The Reality of Exchange
The ultimate lesson from 2018 to the present is that economies rely on genuine exchange. You must trade something of value to receive something of value.
- The US Strength: Even during decoupling attempts or the COVID-19 pandemic, the US market absorbed costs because it is based on consumption power and high-value exchange.
- The Chinese Weakness: Investing in nations with high default risks and low productivity creates a hollow economy.
When a system relies on internal circulation ("left hand to right hand") to simulate growth, it generates wealth for the commission-takers (corruption) but leaves the state and its partners drowning in unpayable debt.
