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The Effects Of Capitalism In China

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No longer one world
The end of the Soviet Union seemed to presage a better era, but those hopes are fading

After the fall of the Berlin Wall in 1989 it was widely believed that America would enjoy ‘unipolar moment’. Instead of the world being divided into capitalist and communist, the mix of capitalism and democracy was held to have won. The phrase employed by the historian Francis Fukuyama, “the end of history’ seemed apt enough.
Almost two decades later, it looks like this unipolar moment is coming to an end. America still has the world’s largest economy, but China is catching up fast. Even if China’s growth slows – as seems likely, if only because such spectacular wealth creation has to slow at some point -- it is still likely to
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China is countering this dominance in two ways. One is to fix the yuan to the US dollar, which has meant that the currency cannot be attacked by traders using the US dollar, removing the impact that such volatility can have on an economy.
China has also moved to change the rules of the financial game. It has established the China International Payment System (CIPS), which will be an alternative to Society for Worldwide International Financial Telecommunication (SWIFT). This has been extremely important to Russia, for example, which has used the new system to evade some of the more punishing effects of the West’s economic sanctions.
It has founded the China-initiated Asian Infrastructure Investment Bank (AIDB), which will be an alternative to the World Bank, and is well funded. The New Development Bank, based in Shanghai, has been set up as an alternative to the IMF for the BRICS countries. And although it is mainly of symbolic importance (oil trade is only in the hundreds of billions, not trillions) the US dollar is no longer the primary oil currency because China is buying its oil in yuan and China is the largest consumer.

Debt
There are some troubling signs in America. One is the impact of debt. In 1980, total government and personal debt in the United States was just over the $US3 trillion; it is now $US41 trillion, a 14-fold increase since Ronald Reagan’s first election. According to 720 Global, the
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