Yanis Varoufakis: China is Far More Humanistic Than USA

SUMMARY

Yanis Varoufakis, former Greek finance minister, addresses audience concerns about China's rising economic power and influence in Africa, arguing that China is more humanistic and non-interventionist than the US, fostering global synergy.

STATEMENTS

• China did not force Apple to manufacture iPhones in Shenzhen; it was Steve Jobs' decision to seek cheaper labor there.
• China purchasing a third of US national debt was not demanded by Beijing but resulted from American fiscal needs, preventing severe economic trouble.
• In 2008, China's credit expansion averted a new Great Depression for the US and global economy by sustaining demand.
• The US, China, and EU form a synergistic economic triad essential for billions, including most Americans, whose disruption would cause widespread suffering.
• While critical of the Chinese Communist Party's authoritarianism domestically, Varoufakis notes vibrant local democracies in China where citizens overthrow corrupt officials.
• China pursues influence abroad without military ambitions, contrasting with Western colonial histories in Africa.
• In Ethiopia in 2004, China invested in infrastructure like airports and railways without strings attached, as soft power to access potential oil resources.
• Chinese firms, like COSCO in Greece's Port of Piraeus, showed flexibility in renegotiating deals to improve worker conditions and investments when challenged.
• Western powers historically combined investments with imperialism, troops, and destruction in Africa, unlike China's approach.
• Global concerns about China supporting non-democratic regimes ignore similar US actions, like alliances with Saudi Arabia.

IDEAS

• Economic interdependence between the US and China was largely initiated by American corporations seeking profits, not Chinese aggression.
• China's purchase of US debt stabilized the American economy, acting as an unwitting savior during fiscal vulnerabilities.
• The 2008 financial crisis was mitigated globally because China inflated its credit bubble to buy Western goods, preventing collapse.
• Local Chinese governance features dynamic, grassroots democracy that empowers citizens to remove corrupt leaders, challenging perceptions of total authoritarianism.
• Unlike the West's history of military interventions in resource-rich regions, China builds infrastructure in Africa purely as soft power diplomacy.
• Ethiopia's 2004 infrastructure boom from China—airports, railways, roads—was provided for free, fostering goodwill ahead of oil discoveries without invasion.
• Renegotiating exploitative contracts with Chinese firms like COSCO revealed their willingness to adapt for better labor rights and investments, unlike rigid Western corporations.
• Hypocrisy in criticizing China's African engagements overlooks the US's own support for undemocratic allies and imperialistic past.
• Synergistic ties between China, US, and EU are fragile; ignoring them risks suffering for billions tied to this economic web.
• China's non-interventionist foreign policy prioritizes economic influence over military conquest, marking a novel approach to global power.

INSIGHTS

• True global economic stability relies on acknowledging mutual dependencies rather than viewing rising powers like China as existential threats.
• Soft power through infrastructure aid can secure resources more sustainably than military force, as demonstrated by China's African strategy.
• Local democratic experiments within authoritarian systems reveal complexities in governance that defy simplistic narratives of oppression.
• Western critiques of Chinese influence often mask self-interest, ignoring how American decisions fueled China's rise.
• Renegotiable business practices in international deals can lead to equitable outcomes, highlighting flexibility as a strength in diplomacy.
• Historical patterns of imperialism versus modern economic humanism underscore evolving paradigms in international relations.

QUOTES

• "They are far more humanistic than the United States ever was."
• "The Chinese never asked Apple to go to Shenzhen and produce all the iPhones. It was um Steve Jobs that decided that."
• "If in 2008, China had not cranked up their credit bubble, you would be in... a new great depression."
• "We would like to build some new airports, um upgrade your railway system, create a telephone system, and rebuild your roads. And we'll do this all... for free. No strings attached."
• "Okay, can you imagine if that was a German company or an American company?"

HABITS

FACTS

• China holds approximately one-third of the US national debt, stabilizing American finances without demand from Beijing.
• In 2008, China's expansion of credit prevented a global Great Depression by maintaining demand for Western exports.
• Ethiopia discovered oil after China's 2004 infrastructure investments, which included free upgrades to airports, railways, and roads.
• Local elections in China have led to successful popular overthrows of corrupt regional bureaucrats.
• The Port of Piraeus deal was renegotiated from 67% Chinese ownership to 51%, with added 180 million euros investment and better labor protections.

REFERENCES

• Steve Jobs and Apple's decision to manufacture iPhones in Shenzhen.
• 2008 global financial crisis and China's credit bubble response.
• Ethiopia's 2004 infrastructure projects by China, including airports, railways, telephone systems, and roads.
• COSCO's acquisition and renegotiation of Greece's Port of Piraeus under EU and IMF guidance.

HOW TO APPLY

• Recognize mutual economic benefits: Assess how your country's trade with China, like debt purchases, has stabilized your economy to reduce unfounded fears.
• Evaluate foreign investments critically: When reviewing deals like infrastructure projects, prioritize those with no military strings, similar to China's African approach.
• Advocate for labor rights in negotiations: Challenge exploitative subcontracting in international contracts, proposing renegotiations for fair shares and investments as Varoufakis did with COSCO.
• Support local democratic mechanisms: In discussions of authoritarian regimes, highlight and encourage grassroots successes, like China's regional overthrows of corrupt officials.
• Foster global synergy: Promote policies that nurture interdependent ties between major economies to prevent disruptions affecting billions.

ONE-SENTENCE TAKEAWAY

Embrace China's humanistic economic influence to nurture US-China synergy, avoiding conflict that harms global prosperity.

RECOMMENDATIONS

• Scrutinize Western hypocrisy in foreign policy critiques by comparing US alliances like Saudi Arabia to China's African engagements.
• Invest in understanding local Chinese democracy to appreciate the nuances of its political system beyond national authoritarianism.
• Prioritize soft power strategies in international aid, building infrastructure without intervention to gain long-term influence.
• Renegotiate unfavorable global contracts proactively, ensuring commitments to worker rights and substantial investments.
• Acknowledge historical Western imperialism when evaluating China's resource pursuits, promoting equitable alternatives.

MEMO

In a candid exchange at a public forum, Yanis Varoufakis, the former Greek finance minister and outspoken economist, confronted an audience member's unease about China's economic ascendancy. The questioner fretted over the transfer of Western wealth to Beijing through consumer spending on cheap goods, which has empowered China to extend its reach into Africa, funding ports and infrastructure that could foster dependency on non-democratic regimes. Varoufakis, with his trademark blend of erudition and provocation, dismissed these fears, asserting that China operates with a far more humanistic ethos than the United States has ever mustered. "They are far more humanistic than the United States ever was," he declared, flipping the narrative on its head.

Varoufakis traced the roots of Sino-American entanglement not to Chinese cunning, but to Western choices. It was Steve Jobs, he noted, who dispatched Apple to Shenzhen for iPhone production, not Beijing luring manufacturers with subsidies. Similarly, China's vast holdings of U.S. debt—about a third of the total—stemmed from Washington's borrowing spree, a lifeline that averted fiscal catastrophe. Peering back to the 2008 financial meltdown, Varoufakis credited China's credit-fueled spending spree with staving off a second Great Depression, as Beijing's appetite for imports propped up faltering Western economies. This symbiosis, he argued, binds China, the U.S., and the European Union in a delicate triad, where rupture would impoverish billions, including most Americans reliant on affordable goods and stable markets.

Yet Varoufakis did not romanticize the Chinese Communist Party, decrying its authoritarian grip on domestic freedoms. As a democrat, he voiced discomfort with Beijing's treatment of its people, though he spotlighted an intriguing counterpoint: vibrant local and regional democracies where citizens have toppled corrupt officials through popular action. Abroad, China's footprint lacks the militaristic shadow of Western interventions. Take Ethiopia in 2004, where Varoufakis witnessed firsthand Beijing's overtures. Suspecting oil beneath the soil—a resource China craves for its industrial machine—Chinese envoys offered to overhaul Addis Ababa's infrastructure gratis: new airports, upgraded railways, a modern telephone network, rebuilt roads. No troops, no conquest, just soft power to nurture goodwill for future deals when black gold was indeed struck.

This non-interventionist bent extends to business practices, as Varoufakis recounted from his ministerial days. Upon inheriting a lopsided deal selling Greece's Port of Piraeus to COSCO for a song—brokered under EU and IMF pressure—he confronted the Chinese firm. "You're paying too little," he told them, proposing a revamp: drop to 51 percent ownership at the same price, funnel the rest to Greek pensions, commit 180 million euros in swift investments, and enforce union bargaining without labor exploitation. To his surprise, they agreed. "Can you imagine if that was a German company or an American company?" he quipped, underscoring China's pragmatic flexibility against Western intransigence.

Varoufakis's message resonates amid escalating U.S.-China tensions: fear-mongering obscures shared vulnerabilities. By nurturing this economic interdependence rather than demonizing it, nations can sidestep the pitfalls of rivalry and chart a path toward mutual flourishing. In an era of geopolitical flux, his perspective invites a recalibration—from adversaries to essential partners in a precarious global order.