During the ‘cold war’, a term used to describe the tension between communist and capitalist countries, which lasted from 1947 to 1991, one of the fears was that a military conflict between Russia or China and the US did not happen. Instead, the potential for a military war was transformed into an economic war. The United States was certainly winning for a long time, but not so much anymore.
It used to be that the US was #1 in almost everything; education, technology, standard of living, economic and military strength, admired world leadership. He was leading the rest of the world into the future with the demonstrative power of democracy and free markets, new technological advances in automation, computers, communications, energy, medicine, space travel, to name a few. In recent years, several countries have surpassed the US in specific areas, including consumer income, standard of living, and health care. But the economic power has been China. Some of the stats, and the speed with which they have changed, have been kicking off.
Over the past ten years, China’s economy has surpassed those of Canada, Spain, Brazil, Italy, France and Germany, and is expected to overtake Japan this year to become the world’s second-largest economy, behind The US Whether it’s manufacturing efficiency, high-speed rail technology, nuclear power plant construction, clean air energy technology, education, China is making impressive global strides, even in areas where the US has lost power. it still has significant dominance. Much of it has to do with China’s massive population, about which the United States can do nothing. For example, while US Internet companies dominate global headlines, China now has the world’s largest Internet market as measured by the number of users. However, Internet use has only penetrated 22% of the population versus 75% in the US.
Meanwhile, American internet giants like Google, Yahoo, eBay, Amazon, Facebook and Expedia are experiencing problems trying to move their domain to the Chinese market. Part of this is the obstacles placed in their path by the Chinese government, in support of China’s state-controlled corporations. The result is that Chinese Internet companies like Tencent and Baidu cannot help but become world leaders. Here is a more important statistic. American universities will graduate 150,000 engineering students this year, while Chinese universities will graduate more than 500,000. Some people have told me that this is an unfair comparison since China’s population is larger by about the same proportion. But that’s not the problem. At issue is the extent to which China has placed higher education among its top priorities, and the fact that 500,000 new engineers a year are likely to come up with more high-tech innovations than 150,000.
China’s Great Leap Forward has been going through the same phases that the US experienced early on, as it worked to become the world’s dominant economy. When we criticize China for its treatment of its underpaid and overworked labor force, we sometimes forget that in the early years, the US fields, which gave the country its low-cost initial economic boost. It seems that China is beginning to move out of that phase and into the next one, of treating its workers better. Last year, Chinese workers were allowed to form unions and strike for higher wages and fewer hours at several auto and electronics plants. The West would probably like to think that it is due to the pressure put on China to improve human rights.
However, China has never shown any inclination to bow to pressure in any area. The fact is that the next phase of China’s economic development must be, as it was in the US, to develop a strong domestic economy. To do so, it needs to have a more prosperous consumer population, rather than relying on low-cost exports to other countries. Meanwhile, China can be said to be eating America’s lunch, never taking its eyes off the target, while we bicker among ourselves, paying no attention. That’s unfortunate. As Sam Houston said in the United States Senate in 1850, “A nation divided against itself cannot stand.” Yet for the past 15 years, the US has been divided into increasingly bitter and energy-consuming political arguments – President Clinton’s morality – whether or not to wage war to remove Saddam Hussein from power in Iraq – whether the country’s current problems are due to the depth of the economic hole dug by the last Administration, or the inability of the current Administration to dig the economy out of the hole. Meanwhile, China has kept its eye on the goal. Not only is it making great economic strides, but financially it has become the world’s largest creditor nation, even as the US has become the world’s largest debtor nation, with China in possession of vast part of your debt. America needs to stop their angry divisiveness and insults long enough to admit to the gatekeeper what’s going on. Unfortunately, in this particularly acrimonious midterm election year, that’s not going to happen.