politics

You’re comparing two different things.

Western neoliberal countries have been infested with finance capitalists that want to maximize rentier profit. These countries, especially America, have had enough dealing with trade unions in the 20th century so they chose to de-industrialize to crush the workers movements at home, while allowing the rentier class (finance, insurance, real estate) to flourish. Using their “high income” status and favorable exchange rate, they extract surplus from the Global South to maintain an elevated living standards for its population. In both America and Europe, some critical industries were still retained although they are increasingly hollowed out by private equities etc.

The developing world is different. In the 1980s and 1990s, they sent their best students to attend Western universities to learn their economics, who returned to hold important policymaking positions and introducing neoclassical economics to their countries. China’s policy since joining the WTO in 2001 has been, for the most part, a perfect adherence to the IMF export-led growth strategy. China’s budget deficit almost never went above 3%, except for one year during Covid and I think they are going to increase to 4% this year due to the deflation issue.

This has been possible because China has been able to leverage its huge labor pool to undercut all the other exporting countries and dominate the export sector, selling cheap goods for Western consumers to enjoy in exchange for foreign currencies. It is the huge surplus of these foreign currencies that allowed China to keep its budget deficit to 3% of its GDP. This is precisely what the IMF intended - developing countries should send cheap goods to the high income countries, and only then, can they use those revenues to invest in their own countries. It is designed to benefit Western imperialist countries. There is nothing that says you have to accumulate a trillion dollar trade surplus each year, since you are utilizing precious labor and resources to send goods to other “wealthier” countries. You should export to earn enough foreign currencies to import essential goods and commodities and services, but the accumulation of trade surplus is the prescription of the IMF.