I didn't get a chance quite often enough to speak with my Indian pals about their country's rivalry with China. I once drank the Chinese koolaid but only for a year. The more I got to know about the place and the people, the less sanguine I became about its prospects for the world domination Americans often put in China's future. Thomas Barnett adds to the unconventional thinking on my side of the equation:
Japan's rise and decline should serve as a grim warning to China right now.
Japan got old, but China will get older faster. Japan kept its environment relatively clean, China is trashing its own. Japan built its manufacturing power on excellent goods, China is fly-by-night by comparison (reading a book on that now).
In sum, China has so many huge hidden deficits incurred during its rise, that I think it will suffer future stagnation that makes Japan's seem tame, especially since China's political system is so brittle and unimaginative.
My standard answer about China is that they will have a devastating civil war long before they threaten anybody else. I don't believe their sort of capitalism scales. But if it does, it will be very much like what I percieve Czech capitalism to be, thinking of second world goods, like Russian automobiles and other irretrievably unfashionable staples of modern urban sustenance. Since when did China innovate, and to whom would they sell innovative goods? It certainly wouldn't be for domestic consumption. I cannot imagine that sort of hunger being fed domestically. No China does a good job harvesting their own cotton and sending it to West African textile mills to be woven, then someplace else to be stiched into T-shirts. All for pennies, but they can only sell for dollars in American markets like SnorgTees and that's what makes for the innovation. Labor in that supply chain doesn't wear throwaway goods like that, if they know what's good for them.
You've got to ask yourself a simple question. How is it that Samsung, the South Korean electronics company has come to dominate in the American flat screen TV market, where nothing out of China has? Samsung started here in 1996. I remember very vividly because I hung out at their pavillion at the Atlanta Olympic Games. For all of China's buying of American securities, they are only reducing risk and playing currency games. That's not the kind of imagination that makes for world leadership.
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