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
Showing posts with label China. Show all posts
Showing posts with label China. Show all posts
Monday, September 10, 2012
Sunday, July 22, 2012
The Problem of China
I was in the bookstore today, and I noticed while browsing the current affairs section (for a laugh, I love seeing all the "Obama is the worst thing ever" books) I noticed several books on China. Reading the titles and descriptions of each, they all treated China as some alien threat. Using buzzwords like communism and even some McCarthy era "red menace" terminology, they all claimed to explain the "threat" of China. I have actually read a few of these books, but some of my favorite are the counterpoints to these xenophobic, racist claims. Which is what they are, since the claims
tend to be built around communism, alien cultures and imaginary threats of someone else invading or just having money.
The basic claims nowadays, compared to the Cold War version, comes down to economic warfare. In an increasingly international marketplace, conservatives love to whine about globalization. As the United States has shifted from an industrial to a consumer based economy, conservatives do what they do best: fear change. And make a fuss about it. Originally it was a fear of spreading communism, and while you may see that word used often enough the complaint now seems to be about China's successful industrial age capitalism. Talks about the Chinese economy and industrial base, complaints about their increased need for resources starting to finally compare to ours, complaints that they will overtake us or steal "our" resources and "our" jobs as if the US owns prosperity.
Aside from the idea that America owns prosperity, that the US deserves all the wealth, there is a deeper point. Politicians go on and on about China stealing jobs, implying they do not deserve economic growth and only we do. It is an old, mercantile and imperialist attitude, that the rest of the world exists only to serve our wealth. The real issue, though, isn't even the inherent arrogance and xenophobia surrounding this fear mongering about China, is a basic misunderstanding of how economics and its developments work. China is the greatest industrial nation still around, and it doesn't matter. The US economy is not industrial based and it hasn't been for a while. The jobs we lose have been replaced by other jobs, such as service industry and managerial jobs, such as stock brokers and middlemen, developers and engineers, while the Chinese economy is akin to our World War II economy, building machines, factories everywhere and a small consumer economy growing but quickly. They make but are only beginning to consume, and while the economic struggle for resources may cause issues, the job differences will not.
In fact, China gets the short end of the stick. They have stagnated their own change into consumerism with an artifically deflated economy, with an oligarchical and conservative government also struggling to stay in an industrial age keeping their currency kept low by purchasing bonds to keep much non liquid, to keep prices low and wages lower. Chinese companies make some money, but the workers make almost none, though more than they would otherwise. They have a growing class of middlemen, like our middle class, but they too are kept smaller than they should. And most important of all, while they make the goods, they do not profit much from them. For an example, look at Apple Computers. All of their goods are made by various East Asian companies, yet Apple themselves, an American company, bring home all the profits. Apple was the most profitable company on earth last year, and less than ten percent of the money went to manufacturers out of country. Their executives, their supply and distribution in all countries, brought back all the money.
The US doesn't get cheated by Chinese industrialization, China is being cheated by our economy. When the west industrialized it controlled its own profits, but with China, they don't get much of the money at all. China is on the bad end of the deal. The "threat" of China is manufactured, invented the by the same people who constantly blather about Muslim terrorists while 2/3 of terrorist attacks are from domestic sources. These people need us in fear, and this is just one more line of attack. The US middle class has suffered at the hands of US executives, who bring in the money they used to, more in fact, but no longer pay the middle class employees fairly. US wealth has grown with the shift in economies, but mostly at the top. The problem is not a lack of jobs, but unfair pay, unfair lending, unfair credit. We haven't lost anything to China, we have only lost out to other Americans, who wave a scary, non white and alien entity at us to fear.
Logic Priest
tend to be built around communism, alien cultures and imaginary threats of someone else invading or just having money.
The basic claims nowadays, compared to the Cold War version, comes down to economic warfare. In an increasingly international marketplace, conservatives love to whine about globalization. As the United States has shifted from an industrial to a consumer based economy, conservatives do what they do best: fear change. And make a fuss about it. Originally it was a fear of spreading communism, and while you may see that word used often enough the complaint now seems to be about China's successful industrial age capitalism. Talks about the Chinese economy and industrial base, complaints about their increased need for resources starting to finally compare to ours, complaints that they will overtake us or steal "our" resources and "our" jobs as if the US owns prosperity.
Aside from the idea that America owns prosperity, that the US deserves all the wealth, there is a deeper point. Politicians go on and on about China stealing jobs, implying they do not deserve economic growth and only we do. It is an old, mercantile and imperialist attitude, that the rest of the world exists only to serve our wealth. The real issue, though, isn't even the inherent arrogance and xenophobia surrounding this fear mongering about China, is a basic misunderstanding of how economics and its developments work. China is the greatest industrial nation still around, and it doesn't matter. The US economy is not industrial based and it hasn't been for a while. The jobs we lose have been replaced by other jobs, such as service industry and managerial jobs, such as stock brokers and middlemen, developers and engineers, while the Chinese economy is akin to our World War II economy, building machines, factories everywhere and a small consumer economy growing but quickly. They make but are only beginning to consume, and while the economic struggle for resources may cause issues, the job differences will not.
In fact, China gets the short end of the stick. They have stagnated their own change into consumerism with an artifically deflated economy, with an oligarchical and conservative government also struggling to stay in an industrial age keeping their currency kept low by purchasing bonds to keep much non liquid, to keep prices low and wages lower. Chinese companies make some money, but the workers make almost none, though more than they would otherwise. They have a growing class of middlemen, like our middle class, but they too are kept smaller than they should. And most important of all, while they make the goods, they do not profit much from them. For an example, look at Apple Computers. All of their goods are made by various East Asian companies, yet Apple themselves, an American company, bring home all the profits. Apple was the most profitable company on earth last year, and less than ten percent of the money went to manufacturers out of country. Their executives, their supply and distribution in all countries, brought back all the money.
The US doesn't get cheated by Chinese industrialization, China is being cheated by our economy. When the west industrialized it controlled its own profits, but with China, they don't get much of the money at all. China is on the bad end of the deal. The "threat" of China is manufactured, invented the by the same people who constantly blather about Muslim terrorists while 2/3 of terrorist attacks are from domestic sources. These people need us in fear, and this is just one more line of attack. The US middle class has suffered at the hands of US executives, who bring in the money they used to, more in fact, but no longer pay the middle class employees fairly. US wealth has grown with the shift in economies, but mostly at the top. The problem is not a lack of jobs, but unfair pay, unfair lending, unfair credit. We haven't lost anything to China, we have only lost out to other Americans, who wave a scary, non white and alien entity at us to fear.
Logic Priest
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