Five aspects of today’s global capitalist system:

1.       We can recognize the persistence of US economic hegemony without denying the remarkable expansion of the Rest—especially the Brics—in twenty-two of the twenty-five sectors.

2.       China is the only country that can be described as a serious contender to join the advanced capitalist world.

3.       While some emerging markets now have a presence in branches of the economy not linked to raw materials, none can boast China’s sectoral diversity.

4.       A slowdown of emerging markets is also to be expected, as the commodities super-cycle appears already to have peaked.

5.       The ‘middle-income trap’: the apparent glass ceiling faced by middle-income countries when they attempt to join the developed capitalist world.

National accounts tell us very little about the structure of each political economy in a context of globalization:

Whether or not the equation ‘gdp = power’ was meaningful in the 1950s, the globalization of capital in recent decades has clearly rendered it problematic. When a substantial, often growing proportion of economic activity within a country’s borders is directed by foreign capitalists, we need to rethink the way that we measure national power.

In particular, the emergence of China on the world stage—or re-emergence, if one has a longer time-scale in mind—is seen as heralding the dawn of an ‘Asian Century’. It greatly exaggerates the fading of the US as the world’s leading capitalist power. Emerging markets’ poses even less of a challenge to US leadership than the revival of Western Europe and Japan in the post-war decades.

Growth rates of emerging markets may have peaked around 2011, without altering their basic dependence on commodity exports to Western economies (with the partial exception of China).

It is useful in this respect to compare the past rise of Japan with the present rise of China:

Japanese electronics and automobiles began flooding Western markets in the 1960s and 70s strengthening of Japan’s major corporations. Japan in trading companies (peculiar sogo shosha).

China, meanwhile, has seen its trade accounts and gdp soar in the age of globalization:

Not been matched by the emergence of Chinese firms.High-technology exports is actually produced by foreign-owned companies.This production is controlled, directly or indirectly, by outside interests.

As they have been unable to escape from commodity-export dependence Brazil, Russia, India and China produced 47 per cent of the Rest’s G in 2002 and 63 per cent in 2012:

While they all had similar GDP levels in the early 90s, by 2012 China’s GDP was four times greater than that of any other Bric.

·         BRI are without sectoral diversification, exposed to price fluctuations.

·          Russia is the most vulnerable in this regard, as its economic revival has been almost entirely driven by rising fossil-fuel prices.

·          India and Brazil have a scattering of industrial niches, the former in auto, truck and parts and computer hardware and software (both 3 per cent), the latter in aerospace and defence (1.2 per cent) and conglomerates (3 per cent).

The BIG “C” of briC- After the crisis China strengthened its state-owned enterprises. Thus China, on the other hand, now ranks in the global top five across twelve sectors:

1.       auto,

2.       truck and parts;

3.       banking;

4.       computer hardware and software;

5.       construction;

6.       forestry,

7.       metals and mining;

8.       heavy machinery;

9.       insurance;

10.   oil and gas;

11.   real estate;

12.   telecommunications

·         Whether China can shift the balance of its economy from state investment to domestic consumption without serious social upheaval.

·         State Owned Companies (SOEs) linked to the investment-driven growth model will most likely decline over the next five years or so—and consequently their global rankings, especially as Chinese debt continues to soar and over-capacity grips many sectors. And without challenging the now deeply entrenched elite interests that stand behind the current growth model. This is one of the great uncertainties in global capitalism today

American firms still held the lead by 2013: eighteen out of twenty-five:

·         US Leadership had increased in absolute terms across five sectors :

1.       Business and personal services;

2.       Casinos,

3.       Hotels and restaurants;

4.       Computer hardware and

5.       Software; financial services; and media

Germany in

1.       Auto,

2.       truck and

3.       parts

Chinese peculiarity lies in the following paradox:

ü  It is at once one of the most closed and most open to foreign capital.

ü  Many American firms are in a strong position to benefit if China does succeed in redirecting its growth model towards domestic consumption.

ü  American firm’s control over the global supply chain and its ownership of the highest value ‘modules’ (brand, marketing, innovation, research and development).

ü  Chines companies as their competitive edge derives largely from cost-cutting, reducing their ability to take the risks involved in developing their own branded designs and global marketing campaigns.

ü  The PRC´s top 200 exporting companies are foreign-owned

Computer hardware and software is a measly 2 per cent meanwhile American share of 72 per cent

World’s largest automobile market in 2009 remains stuck at 5 per cent the ‘Big Three’ Toyota, Volkswagen and General Motors the dominant players.

Pepsi and Coca-Cola account for 87 per cent of Chinese soft drink sales.

Wal-Mart controls 8 per cent of the Chinese retail trade—easily the largest portion of a highly fragmented market 86.4 per cent in 2012.

Boeing alone supplies more than half of China’s commercial aircraft fleet.

In 2010, components of the iPhone 3 cost Apple $172.46 (two-thirds going to Japan’s Toshiba, Germany’s Infineon and South Korea’s Samsung), while final assembly cost the firm just $6.50 (all of which went to Foxconn). Depending on the retail price, Apple’s profit on each phone could be hundreds of dollars.

Hon Hai struggle to climb up the value chain but Hon Hai itself does not lie in Chinese hands: it was founded by the Taiwanese billionaire Terry Gou

US corporations still occupy the commanding heights of global capitalism:

·         Who owns those corporations?

ü  In July 2013 the average American ownership of the top 100 US corporations—as ranked by Forbes—was 85 per cent

·         Possible emergence of a ‘trans-national capitalist class’ (tcc) represent ‘American power’?

·         China is the only country among the Rest with a significant (and growing) national share, challenging Japan’s no. 2 spot in 2012

Future trends in the distribution of global economic power:

Consider is whether the balance of innovation is shifting from the West to the Rest:

·         While the American share declined, Japan’s increased, ensuring that the two countries together accounted for the same proportion—56.8 per cent—in both 2007 and 2011.

The continued dominance of the US, the extraordinary rise of the Rest (China in particular), and the tight correlation between that rise and the raw materials price index

http://newleftreview.org/II/87/sean-starrs-the-chimera-of-global-convergence