Monday, September 10, 2012

The Problem of China, part something

China is a massive country with a growing industry and middle class, emulating almost perfectly the United States route to dominancy. It started with cheaper and faster industrialization backed by government protection and even funding, it has been fighting the growth of its own middle class while exploiting them as a market and it will, like the US at the end of the industrial age, have a massive banking and currency collapse. It won't, however, be as bad. China has one challenge that the US did not: a truly global market.

While Chinese companies and the government of China attempt to exploit smaller, weaker countries the way Europe and the US did, they are running out of places to go. The mercantilistic and imperialistic methods of past industrialized nations won't work out as well in an interconnected world. The highly protectionist policies that have enabled some Chinese companies to better exploit the growing consumer class in China won't hold up as long. For example, their first to file patent and copyright system allows local companies to file obviously false claims, like a company now claiming the iPhone 5 in preparation to sue Apple when they release it in China. Google's Android may lose out to a local phone OS because Google services are severely limited by an autocratic an paranoid government. A system built on bribes and business ownership of local governments, worse even than the US, has built a highly protected atmosphere, but the Chinese people won't have to put up with it. They have alternate markets, alternate sources of goods. Chinese goods are not necessarily the cheapest now, and brand identity, such as Apple's, makes the consumers there demand genuine iPhones, not knock offs built to abuse a terrible patent system.

On a side note, the US patent system is supposed to change to first to file as well, opening up the same mess as in China where patents favor the filer with money and local offices rather than the inventor.

China is emulating the western method of industrialization, and while it is working now the collapse will have a very different recovery. The military industrial complex that was built in the US, the arms race and world wars being absent, won't truly be able to build up. I consider this an excellent thing, allowing China in a few years, after the communist government collapses with the currency they have artificially propped up and deliberately used to slow their own middle class growth, will be able to show the west how to build a modern economy and infrastructure. They may, if we are lucky, pass on US and Japanese style patent systems and copyright enforcement, where jail time and outrageous lawsuits are the norm. They will have a chance to build a consumer class from the ground up, competing fairly with a world market.

Or they could try to copy our obviously broken system. Either way. In the long run the US system is doomed to fail. It increases wealth disparity, reducing the flow of currency and growth. We have built a patent and copyright system built to prevent competition and eliminate consumer rights. We have tried to all but destroy worker rights. While China slowly moves towards sanity, we move towards insanity. The system of imperialistic abuse is almost completely dead, and a truly global economy will allow no more hiding places for the wealthy, no more tax dodges, no more exploitable cheap labor. We can only hope China is a catalyst for the new system to be built, and we can only hope the collapse they suffer right before that isn't too harsh.

Logic Priest

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