Its a good article… I tend to like this guys writings and have read many in the past. Some general counter comments (with quotes from the article) for the sake of discussion:
When it comes to business and politics, China will always win but not for the reasons mentioned in the article. Its much more then just “economics.” The reasons are multitude but the largest factor is much of the rest of the world is just simply not ready for China’s way of doing things. Ill prepared, naive, fearful of giving constructive criticism and prey to profit and flattery when required and as well as fatally clinging to the belief that people are generally all the same with similar ideals and goals. In many ways the world has reversed course and returned to 200 years ago when kowtowing to the emperor was a prerequisite to trading with the middle kingdom.
China marches to the beat of a different drummer - one which is not constrained by any of the normal factors the rest of the world considers from ethics to human rights to pollution to mutual respect. In many ways China (and thus its people) are like amoebae - able to morph into any shape that suites the situation. Masters at drawing comparisons between apples and oranges when it suites them. Able to blur the line until even the original point is a grey haze. Almost like the perfect virus which multiplies and adapts without funny notions like morals, mutual respect, long term thinking or win-win.
Because it makes so many of the goods the world isn’t buying now, China stands to be worse hit than the rest of the world —just as America was during the Depression, when it was the world’s sweatshop. But like America then, China will use tough times to design innovative products that will get it the high profits and the high-value jobs Americans kept to themselves for decades
China manufactures mass quantities of low quality garbage which is resource intensive and highly polluting. Yet criticize them about this, and the Chinese response will be “its your problem since we make it for you.” The outside world yes yet to remind them, that they manufacture this by choice because it turns them a tidy profit - in fact, made them rich. And what about the fact that they also NEED all the even poorer quality items which have failed quality control in order to sell domestically at even lower prices. If China was not manufacturing garbage for the rest of the globe, it would have nothing to sell domestically to the local population which buys primarily based on lowest price. Stores are filled with low quality cost goods mainly from factories that can’t pull themselves up to make export quality.
Chinese quality has improved, mainly due to foreign investment and huge amounts of blood sweat and tears in the factory teaching them how to do it right. And patience. Lots and lots of “patience” and “we will get right next time.”
Giving factories incentives to go green is a lost cause - most factories would simply find ways to “pocket” that green money. In fact, I am sure they would prefer the world just clean everything up for them. That would be the ideal situation since the rest of the world would both fund their factories through investment and at the same time pay for the cleanup. For China this is the definition of win-win.
When China needs to, its a poor rural “developing nation” - especially when it comes to contributing to the world bank and carbon emissions. Other times, like when it comes to having a say in world affairs, it suddenly says its a rich and developed place with modern cities.
With human rights, the US is the terrible aggressor which China qill be quick to point out when criticized yet comparing Guantanamo to a Chinese prison is like comparing the Hilton to a tin shack with a dirt floor, leaky roof. The US is getting criticism from a country with mobile execution units, closed trials and horrors unmentionable here.
"At the Davos conference in January, Premier Wen Jiabao made the point by outright scolding America for dragging down everyone with its excesses. "
Without investing in foreign and US government bonds their currency would instantly appreciate causing their manufacturing sector to collapse. Sure, China is the largest holder of US foreign debt but lets not forget that this is intentional. They NEED to buy that debt to keep their currency undervalued. Nor can they invest this money domestically as it would have the same effect. Amazingly though the Chinese PR machine paints themselves as doing America a favor by buying its debt. Its almost a bit like the Stockholm syndrome - the hostage actually believing the hostage taker is acting in their best interests… Someone should scold them for not investing more of that money into things like rural hospitals, education and pollution controls.
Layoffs and stagnant wages? People have seen worse. Last summer my wife and I went through villages in Sichuan province where refugees from earthquakes prepared for the next few years of residence in temporary shelters and tents.
Interesting that no one is mentioning there is pretty strong evidence that this earthquake was caused by the three gorges dam. (Dams are one of the most common causes of man made earthquakes).
“The real counterpart to Smoot-Hawley would be Chinese protectionism… - as with its recent pressure on China’s airlines to cancel outstanding orders for Boeing and Airbus airplanes.”
Isn’t China building its own airplanes now meant to compete against Boeing and Airbus? Canceling orders in order to become a competitor i’s not protectionism.
Don’t get me wrong - I love China and have devoted 1/3 of my life to it but I think its about time the rest of the world starts getting smart and leveling the playing field. Its good for us and its good for China who will sooner or later need to mature. Besides, its always good to look at both sides of the coin.