A Philosopher's Blog

China

Posted in Politics by Michael LaBossiere on May 28, 2011
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Since 2001 the United States has been almost pathologically obsessed with terrorism. Our security and intelligence (such as it is) has been focused on terrorism and we have launched two (or more, depending on how you count) wars in the name of fighting terrorism. Meanwhile, China has been growing in strength and influence.

While China does not seem particularly interested in having a cold-war style confrontation with the United States, they are in a position to become our most serious competitor in the world. While we have been happily buying their exports and accepting their money, we do not seem to have an effective and focused China strategy (unless it is secret). This, I submit, has been an error.

While I do not think that we should create a cold-war with the Chinese, we certainly need to change our focus. Instead of obsessing over a handful of poorly armed and poorly funded terrorists, we should focus on China. After all, China has over a billion people, a real military, nuclear weapons, billions of dollars and global influence. Focusing on terrorists seems a bit like worrying about a rat when there is a dragon nearby.

The Chinese strategy does not seem to be primarily military based (although they have been building their forces and capabilities) but instead primarily economic. Our strategy seems to be that we buy their stuff and accept their money. This hardly seems like a winning game plan. Our companies do, of course, try to sell the Chinese stuff. One thing that we have going for us is that Western goods are still looked at as being prestigious. However, China is changing.

One key change is that the Chinese “middle class” is emerging an expanding. This has the potential to change things in very significant ways for the United States. On the negative side, if China becomes more “middle class”, then it will be harder for American companies to find cheap labor to make products. This will mean that the companies will need to find a new source of cheap labor to exploit. Fortunately (or unfortunately), the world is not lacking in poverty and we might see Africa becoming a new source of cheap labor. Or, if the American economy continues to flounder, the United States might provide a viable cheap workforce. On the positive side, a  more “middle class” China (a middle class Middle Kingdom) can mean an even more lucrative market for American products (perhaps made in Africa). It could also lead to political changes in China that could improve relations with the United States. Then again, Chinese nationalism might result in a worsening of relationships. What might occur is a competition between the United States and China that recreates the competition between the European powers just prior to World War I (complete with a new round of imperialism in Africa, perhaps).

It is also well worth considering that people have been overestimating China and that political turmoil or some economic disaster will result in her downfall. We should, of course, be ready for that as well.

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2 Responses

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  1. T. J. Babson said, on May 28, 2011 at 6:49 am

    Piracy and counterfeiting are a good place to start.

    http://arstechnica.com/microsoft/news/2011/05/ballmer-piracy-costs-microsoft-95-percent-of-potential-chinese-revenue.ars

    Speaking on Wednesday at the opening of Microsoft’s new Microsoft Asia-Pacific R&D Group headquarters in Beijing, Microsoft CEO said that the company earned revenue in China amounting to only five percent of that earned in the US, in spite of comparable sales of personal computers between the two countries. The reason for the difference? Piracy, unsurprisingly.

    Ballmer rejected the common claim that software is too expensive. Though acknowledging that PCs were too expensive for many in the country, he argued that “if you can [afford a PC], you could afford the software”—and hence that rampant piracy in the country was a product of slack enforcement of intellectual property rights rather than software priced out of reach of users.

    • Michael LaBossiere said, on May 29, 2011 at 1:11 pm

      I recall that some American companies sell DVDs for the equivalent of $1.50 in China on the view that getting that $1.50 is better than getting nothing.

      China does need to step up on enforcing these laws-all part of being a member of the international community of respectable nations.

      I do think that Windows is too expensive, though. Of course, you can get around that legally by buying OEM versions for much less. That is what I’ve done on PCs I’ve built.


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