July 10, 2024
The Dragging Red Dragon
Timothy Birdnow
Here is why I have always believed China is a paper tiger and will fail as soon as it meets any real competition.
We've coddled China for decades now and made her into a world power. But China's economy is incapable of real innovation or growth. The people have little incentive to think for themselves and there is little reward in innovation in a communist system. China has ridden the crest of a wave implemented in Bush I for "free trade" and exploited it because they could provide cheap labor and little in the way of environmental or labor regulations. But without innovation that will peak and decline in time. We are seeing that now.
China's success is all derivative; they steal technology oand perhaps make some minor improvements but in the end won't ever really invent anything new. Their minds just don't work that way. Statist societies stop people from free thinking. Free thought is a systemic thing; you must have it in all avenues of life. Repress it in a couple of areas and you wind up repressing it everywhere.
Yes, there are some innovative thinkers in China, just as there were in the Soviet Union (anyone rember the Russkies landed a probe on Venus and actually snapped a picture of it's surface? That was before the U.S. landed Viking on Mars and was WAY more difficult.) But overall the whole system lacked flexibility and incentive, and by and large there was little in the way of innovation.
The Soviets prospered for a time then declined. I have always believed these same systemic contradictions would bring down China - especially if the West would quit propping them up at our own expense.
FTA:
China is running out of options and will have to resort to the oldest of all solutions - imperialistic foreign adventurism. They will need to force people into their economic sphere to both sell goods and buy raw materials.
And Chna has another problem. The One Child policy created a generation of only children - male children. They are no doubt quite restive and will grow more so over time. Meanwhile population growth will slow and eventually start to decline, and China has been predicated on population growth for centuries now. They will quickly run out of money when they have more mouths to feed than people to feed them with.
In the end a people taught to obey are incapable of invention and innovation by and large. One is either a free thinker or not.
Socialims of any stripe inevitably leads to dull wits and lethargy.
Socialism is the political and economic version of opium. Opium destroyed China as you may remember.Socialism will do likewise in the end, although it may take some time as socialism has been an epidemic in the West as well and is destroying our culture and economy for decades now. But sooner or later some Third World countries will figure it out and become the new powerhouse. Argentina will if it stays the course it is on, for instance. (Argentina was thought to be the coming power during the early 20th century as it had as many natural resources as the U.S. but Peronism derailed all that.) Maybe an African country will emerge. Some former Soviet republic. Perhaps Hungary?
At any rate I think world hegemony is slipping through China's fingers. china will be most unpleasant in it's decline as they have long thought this was their time. Their time appears short.
That's why I think we had best take the Chinese threat seriously; there will come a time when they will still be powerful but realize the brass ring slipped by, and they will try to take what they want by force.
The King of the East is mentioned in the Book of Revelations. I really can see that.
Here is why I have always believed China is a paper tiger and will fail as soon as it meets any real competition.
We've coddled China for decades now and made her into a world power. But China's economy is incapable of real innovation or growth. The people have little incentive to think for themselves and there is little reward in innovation in a communist system. China has ridden the crest of a wave implemented in Bush I for "free trade" and exploited it because they could provide cheap labor and little in the way of environmental or labor regulations. But without innovation that will peak and decline in time. We are seeing that now.
China's success is all derivative; they steal technology oand perhaps make some minor improvements but in the end won't ever really invent anything new. Their minds just don't work that way. Statist societies stop people from free thinking. Free thought is a systemic thing; you must have it in all avenues of life. Repress it in a couple of areas and you wind up repressing it everywhere.
Yes, there are some innovative thinkers in China, just as there were in the Soviet Union (anyone rember the Russkies landed a probe on Venus and actually snapped a picture of it's surface? That was before the U.S. landed Viking on Mars and was WAY more difficult.) But overall the whole system lacked flexibility and incentive, and by and large there was little in the way of innovation.
The Soviets prospered for a time then declined. I have always believed these same systemic contradictions would bring down China - especially if the West would quit propping them up at our own expense.
FTA:
During the Great Leap Forward, one of the stories was that when Mao Zedong mandated increased steel production, backyard furnaces would melt down household goods to meet local steel production quotas. This had no impact on new steel as it merely melted existing metal objects and was of no use for industrial use, given its low quality. Still, it helped demonstrate that local groups met centralized quotas.
We witness a similar dynamic in modern China. Beijing announced it wanted to stimulate semiconductor manufacturing, and there was a flood into semiconductor manufacturing. Companies of all types, whether related to technology, flood into semiconductors seeking government assistance. This is followed by the inevitable collapse and wave of bankruptcies. Even the surviving firms continue to demand large-scale subsidies to stay afloat.
This gets to one of the primary issues of China’s inability to innovate as an economy. In a centrally planned economy, innovation and product quality are less valued than securing the favor and largesse of the public sector. This actually matches what economic research shows. Young firms in China demonstrate high levels of innovation and efficiency. The older a firm gets, the more it stagnates and becomes dependent on financial investment and state funding.
As the Chinese say, much of the innovation in China revolves around the Chinese Communist Party. For example, with the Party mandating increased focus on "Xi Jinping Thought,” workers take time out of their day to study his ideology rather than the needs of their business and how to improve.
The problem is not that the Chinese, either as people or as a country, are incapable of innovating and doing great things. The problem is that the incentives and structures of the Chinese authoritarian economy discourage and make innovation incredibly hard.
And we have been seeing this on an increasing scale in recent years as the Chinese economy has struggled to keep up with consumer demand and with population growth. Currency manipulation has about run it's course in China (and for twenty five years now they've managed the illusion of prosperity by such tricks.) We witness a similar dynamic in modern China. Beijing announced it wanted to stimulate semiconductor manufacturing, and there was a flood into semiconductor manufacturing. Companies of all types, whether related to technology, flood into semiconductors seeking government assistance. This is followed by the inevitable collapse and wave of bankruptcies. Even the surviving firms continue to demand large-scale subsidies to stay afloat.
This gets to one of the primary issues of China’s inability to innovate as an economy. In a centrally planned economy, innovation and product quality are less valued than securing the favor and largesse of the public sector. This actually matches what economic research shows. Young firms in China demonstrate high levels of innovation and efficiency. The older a firm gets, the more it stagnates and becomes dependent on financial investment and state funding.
As the Chinese say, much of the innovation in China revolves around the Chinese Communist Party. For example, with the Party mandating increased focus on "Xi Jinping Thought,” workers take time out of their day to study his ideology rather than the needs of their business and how to improve.
The problem is not that the Chinese, either as people or as a country, are incapable of innovating and doing great things. The problem is that the incentives and structures of the Chinese authoritarian economy discourage and make innovation incredibly hard.
China is running out of options and will have to resort to the oldest of all solutions - imperialistic foreign adventurism. They will need to force people into their economic sphere to both sell goods and buy raw materials.
And Chna has another problem. The One Child policy created a generation of only children - male children. They are no doubt quite restive and will grow more so over time. Meanwhile population growth will slow and eventually start to decline, and China has been predicated on population growth for centuries now. They will quickly run out of money when they have more mouths to feed than people to feed them with.
In the end a people taught to obey are incapable of invention and innovation by and large. One is either a free thinker or not.
Socialims of any stripe inevitably leads to dull wits and lethargy.
Socialism is the political and economic version of opium. Opium destroyed China as you may remember.Socialism will do likewise in the end, although it may take some time as socialism has been an epidemic in the West as well and is destroying our culture and economy for decades now. But sooner or later some Third World countries will figure it out and become the new powerhouse. Argentina will if it stays the course it is on, for instance. (Argentina was thought to be the coming power during the early 20th century as it had as many natural resources as the U.S. but Peronism derailed all that.) Maybe an African country will emerge. Some former Soviet republic. Perhaps Hungary?
At any rate I think world hegemony is slipping through China's fingers. china will be most unpleasant in it's decline as they have long thought this was their time. Their time appears short.
That's why I think we had best take the Chinese threat seriously; there will come a time when they will still be powerful but realize the brass ring slipped by, and they will try to take what they want by force.
The King of the East is mentioned in the Book of Revelations. I really can see that.
Posted by: Timothy Birdnow at
01:49 PM
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