Chinese Whispers May 5, 2010Posted by markswill in Navel Gazing, Politics, Schmolitics.
My last blog before the election is written as clouds of volcanic ash again threaten British airspace, an oil slick the size of Belgium (or at least Yorkshire) threatens the Gulf of Mexico and a Tory election victory threatens to return Blighty to the dark days of the Thatcher government (© G. Brown). Of these, the danger that concerns me most is the one augured by the ruptured undersea oil pipe off the coast of Louisiana, although that other slick, the one that characterises the leader of the Conservative party, comes a close second. And there are parallels between the two that might be usefully drawn.
I understand that Louisiana’s major industry, namely fishing, will be irreparably damaged, even ended for good, if the umpteen thousand barrels of oil thus far chucked up reaches the shoreline, as will many species of wildlife, many of them rare and threatened. And if the Tories get a majority, we can pretty much expect that what remaining manufacturing industries we have left in this country will be allowed to wither on the vine with little or nothing put in place to mop up the massive unemployment that will follow. And that rare but noble species, the arts administrator, will also largely disappear if predicted cuts to cultural budgets materialise, as they surely will. (Subsidies for opera will of course remain intact, because Tory grandees do like a nice bit of Cosi Fan Tutte). These two changes will, in my view, be responsible for the biggest and most destructive changes to our social and ultimately our economic landscape since the war (la Thatcher’s Falklands War, that is).
I’ve already written about the decline of UK’s manufacturing base (They Don’t Make ‘Em Anymore – Oct 6th 2009) and its consequence for our balance of payments, and since then the continuing decline of the pound, and indeed the Euro mean that this (im)balance – already the largest of any developed nation – will inexorably increase during the term of the next government. For those concerned about our slow descent into Third World Nation status, and I just know that means you, recent news from China support some of my October doom-mongering inasmuch as wages settlements in what is now clearly the manufacturing base of choice for all Western nations have risen by an average of 20% in the last year and will continue to do so. This in turn means that China is increasingly having to turn to making luxury goods, e.g. cars, to maintain profitability, luxury goods that more and more if its own citizens can now afford.
This is having a profound effect on the Yuan, the Chinese currency which its government freed from the yoke of dollar parity some years ago and is now rising fast. This not only means that Western countries who’ve abandoned their manufacturing base are having to pay more and more for the goods they once bought cheaply for the Far East, but also that China’s foreign investment programme continue to march ahead, outstripping that of most Western nations, particularly in countries which have dodgy governments and human rights records (e.g. Burma, Chile, Nigeria) but which have plentiful reserves of minerals such as lithium, copper and of course oil which it needs to fuel its increasingly consumer-oriented economy.
And call me gloomy or alarmist, which I know you will, but as seasoned yank financial commentators predict the ultimate collapse of the Euro following the Greek bailout, and the IMF being stretched beyond its original remit as more and more Western economies approach it cap-in-hand, can the day not be far off when China becomes the bank of last resort for broken economies? This isn’t crude xenophobia – indeed I can see some benefits to having China as the word’s most pre-eminent economy – but how Britain will adapt to becoming a low-wage satellite of an oriental cultural powerhouse is anybody’s guess. All I can be happily sure of is that it won’t be in my lifetime (unless that bottle of snake oil I just bought off the interweb actually works).
Which brings me back to the last day of electioneering and Gordon Brown on the Today programme mouthing off about Labour’s commitment to manufacturing and their creation (their creation?!?!) of a squillion apprenticeships to that end. It’s all horseshit of course and not that I expect any of you who read this are wavering voters, but should it possibly be the case, I’d advise you to put your ‘X’ elsewhere, preferably Monster Raving Loony.
And on that note we must await Friday’s result with the encouraging dictum, god help us all.
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