Centerfield

Why We Worry About China Too Much

The bottom line is that they'll have to become enough like us not to be a worry to catch up with us, and even so, take a while to do so. But we do love to worry about China - it was selling papers and books like hotcakes a hundred years, and it still sells, albeit in forms relevant to the times. The basic reason, of course, is that it's the most populous country on earth. This post is motivated by an interesting Drezner post on Chinese soft power.

One reason we worry today is that their economy's growing very quickly. If you take the last few years' trend line and project it, you'd have to worry. But that would be a stupid way to bet. MANY developing countries have a similar kind of GDP trend line; it's much easier to improve quickly when you're starting with very little per person. Their growth is almost certainly going to level off alot as they grow more developed; that's what's happened to every country so far.

China had been static and increasingly punching below its weight, population-wise, since its political unification in the late Middle Ages until Deng Xiaoping started capitalism going in China. Now they're catching with a swiftness that does them credit. Now they're building some interesting things (rail to Tibet, Three Gorges Dam, pebble-bed nuclear reactors), and even able to copy and adapt moderately advanced Western designs like Red Flag Linux and the 90s-vintage MIPS R3000, an innovative, very widely-used and deeply versatile processor chip at the time.

One reason why China's improved so much is that it's now an oligarchy instead of a monarchy or dictatorship as it was before Deng came to power. Like most oligarchies, they have mediocre soft power; they're more trustworthy than conquerors like Saddam Hussein, but nobody expects Chinese occupying troops to move out of places just because they aren't wanted, for example.

Chinese culture and lack of human rights is leading toward big R&D disadvantages. A good scientist or engineer must put facts and scientific method first, even if if conflicts with what seniors, elders, or Party say. Although I can't find the links now, I've read evidence-filled articles suggesting that that question is a real problem for China. To give them credit, they are improving the situation by strengthening insitutions and convincing far more of their foreign-trained scientists and engineers to return. And, your R&D works alot better if scientists and engineers don't have to worry about what happens to their families if they contradict doctrine or write too much about SARS, say.

So far, there's nothing like our Silicon Valley - there are plenty of small startups and a fair amount of capital, but no startups are innovative in the sense Google and Intel have been. And, so far the successful startups have been run by people popular with higher authority, suggesting a limitation of the pool. Plus, you still have to worry about keeping palms greased, though many feel China's less corrupt than India.

Although FABS are built in China, for several reasons, no chip company trusts China with their highest-end, leading-edge FABs. And, so far, Indian-based computer research labs have been outperforming Chinese-based ones.

Yet another boring conclusion I come to about China is that they aren't aggressive. Yeah, they do get plenty of aggressive nationalistic rhetoric out the door. But so do all non-democracies, and even some democracies (hi, George II!). They're quite volatile on Taiwan and Tibet, but the day they get aggressive like Mao was, I expect to see Burma fall to China, since Burma has no friends atall. They're the good ol' canary in the mine, as far as I'm concerned.

Only one oligarchy in history has ever kept up with economic/research/soft power of democracies. That was the Roman Republic toward the end 'til its fall. They did it by adding democracy to their constitution. I think China will have to do that very same thing to keep up with the democracies.