Lowtax Network Update

Dear Subscriber,

China is continuing its trade friendly policies towards less-developed regions of the world. And it recently agreed terms with Taiwan for an ECFA (Economic Cooperation Framework Agreement). It has been pouring money and aid into resource-rich African countries for some time. Now what does all this remind you of? That's right, Great Britain in the 19th century, or for that matter, the US of A in the 20th century. It's the behaviour of a Great Power in the making.

From a trade perspective, it will probably be a case of The Flag Follows Trade, rather than the oft-quoted and incorrect Trade Follows The Flag.

The UK picked up India because of the activities of the British East India Company; then they invented Imperial Preference, which gave their assorted dominions the right to buy the products of Yorkshire and Lancashire at reasonable prices in exchange for allowing in fairly mingy quantities of their own products at very low tariffs. Imperial Preference had primarily a trade purpose, but it also had the useful result of tying the colonies to Mother England with an umbilical cord which neither side wanted to cut.

Now what does that remind you of? Yes, China. It's particularly interesting that China has apparently decided to try to woo Taiwan back into the fold with the weapons of trade rather than those of military aggression. That is very pragmatic, grown-up behaviour, and increasingly it is China that is winning encounters with other powers in the world through carefully-constructed and patiently delivered strategies.

In the short term, anyway, China's one-party system, with all its accompanying human rights offensiveness, allows it to pursue international policies pretty much regardless of domestic opinion.

Cut to 1800. No universal suffrage in England, horrific scenes in the mines and factories, child workers, the whole paraphernalia of a state driven by an international imperial economic agenda with little or no domestic opposition. Voices like Burke and Fox were beginning to be heard, though.

When will there be a Chinese Charles James Fox? They need a real Parliament first, I suppose, so don't hold your breath. And in the meantime the Chinese will keep on winning. For them it's 1750.

Ciao, Kitty.

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