Washington - The so-called China model is designed to treat the developed countries as a new type of colony and use them for commodity dumping. This statement will make many "patriotic" angry Chinese youths feel triumphant: now here comes the revenge, we are a sovereign state able to dominate them as colonies. Ever since the anti-imperialist cultural and political movement of May 4, 1919, the propaganda by the Chinese intellectuals that was distorting history and inciting hate is still poisoning the minds of many. However, the dreams of a fool's paradise by these angry youths are not as great as they seem.

Although the developed countries have become dumping grounds like colonies, the newly emerging industrialized countries have not become sovereign states ruling over these developed countries. The reason is because people's incomes in China and other newly emerging industrialized countries have not significantly improved, and their domestic markets, infrastructure and technological levels are not increasing simultaneously. Instead, the markets are flooded with low-quality goods. The quality levels have been declining globally. This is the era that one can make a lot of money without advancing science and technology, or improving quality. What one needs to do instead is to maintain a low human rights standard among the laborers, rather than a high-tech advantage. The global politics under the control of global capital are all at work to maintain this "advantage" of a low labor rights standard. The people in the newly emerging industrialized countries have much less income than those of the "colonized" markets, along with even lower human rights and even lower consumption. They are even less than these people in the colonies. They are the slaves for the colonies.

So who is the exploiter, who has the sovereign rights over the colony markets? The answer is: transnational capital. Nowadays, the capitalists do not oppose the Chinese Communist Party (CCP). The CCP is capitalist itself. Their slogan is "let all the capitalists in the world unite, so that some people enjoy a prosperous life." The premise allowing some of these people to get prosperous is the global free trade under unfair conditions. Its foundation is the deprived human rights of the people of these emerging industrial countries. Its consequence is the economic recession in the developed countries, as they move closer to the less developed countries. Its method is not rent-seeking of the capital, but a controlled politics that is well planned and well organized by capital to serve for the lower human rights standards and unfair trade. Global free trade has been transformed into a tool of transnational capital for excess profits. It has lost the functionality it once had for promoting the global economy after World War II.

The most important variable in this transformation is the so-called China Model. Despite the name of global free trade, it has already deteriorated into a global unfair trade. For the developed countries, unfairness is reflected in the low human rights standards of their competitors. The authoritarian political system guarantees unfair low labor cost. Coupled with unfair measures of market access, high-quality merchandise is only squeezed out of the market by the inferior goods. To the newly emerging countries, unfairness is reflected in the income of the working-class, which is not synchronized with the growth of the economic development. An undeveloped domestic market inhibits economic development, inhibits technological progress, and contributes to political corruption. This phenomenon can be seen in almost all the newly emerging industrialized countries.

With both developed and emerging countries being harmed, will this global trade economy be sustainable in the long term? The answer is no. That is because the scale of global consumption growth is less than the actual growth in production. Production rate will be difficult to maintain. The financial surplus-induced recession is only a beginning, and a warning. If there is only a financial surplus, then inflation will automatically balance it. But the reason for the financial surplus is because of the excessive profits due to the global trading system. Therefore, the market cannot automatically balance it. The result of the self-balancing becomes a starting point: on balance the next round will continue downward, which means continued economic decline.

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