As long as we keep listening to hostile Western China experts like the ever-wrong Michael Pettis, we keep drifting towards irrelevance. Let us count the ways:
1. China’s massive subsidies and other unfair practices? Massive subsidies are unfair in competitors' eyes. See the billions in subsidies that continue pouring into Boeing-Airbus and a thousand 'strategic' industries.
2. "China’s unbalanced economy"? We know that China's economy is growing for the same reason we know a sprinter is accelerating: imbalance is an essential aspect of growth. Europe's economy is balanced. It's also dying.
3. "China’s edge would now have to be found elsewhere: its deep industrial base?" China's edge is, has always been and will remain its 6-point advantage in median IQ over us and its 1500-year habit of allowing only men with IQs above 140 (enough for a PhD in theoretical physics) with uncommon energy and integrity to govern. Even the average Beijinger enjoys a 10 point advantage over, is much healthier and more energetic, and will live 10 years longer than the average Washingtonian.
3. "The US, for one, remains a font of cutting edge innovations; its launch of industry leading large language models is a case in point"? LLMs have yet to contribute anything real to the economy. Outside the VC hoopla, China is so far ahead of the US in every scientific discipline that the competition is essentially over. Seven of the world's top ten research institutions are Chinese. One is American.
4. “the EU’s comparative advantage in green technologies is increasingly challenged"? If it ever had an edge, Europe has none now. 70% of indigenously produced 'European' wind generators comes from China, as do 90% of its solar panels. And China is two generations ahead of the world, ex-Russia, in nuclear power.
The author has addressed some important points, but Fox News headlines are not a useful basis for doing so.
The theory of comparative advantage simply ignores the role of learning; it’s perfectly legitimate for a developing country seeking to move to the technology frontier to subsidise learning and knowledge acquisition by its own population. In fact, that’s what we do as individuals. Our parents subsidise our learning activities, so we become more productive later in our lives.
Well written and interesting. Although, I would say that China's advantage, from the 1980s to at least 2015 fully and at least still mostly now, had been its "free markets", in the sense of that meaning of that word as we use it in America. Xi and co are trying to change this. The 3rd Plennum spoke again about renewed attempts to eliminate local area trade protectionism and local capital market fragmentation, but have they done well with them? The USA used to have both of those things until they were done away with between the latter 1970s and mid 1980s (the local area trade protectionism had been greatly chipped away a for 15 years prior though) and we had much more firms in a much more competitive and diversified economic environment and we had much more scientific research and development etc. If China's national center succeeds in centralizing the economy as we did, they might just knock China of just as it was on the cusp of greatness...
As long as we keep listening to hostile Western China experts like the ever-wrong Michael Pettis, we keep drifting towards irrelevance. Let us count the ways:
1. China’s massive subsidies and other unfair practices? Massive subsidies are unfair in competitors' eyes. See the billions in subsidies that continue pouring into Boeing-Airbus and a thousand 'strategic' industries.
2. "China’s unbalanced economy"? We know that China's economy is growing for the same reason we know a sprinter is accelerating: imbalance is an essential aspect of growth. Europe's economy is balanced. It's also dying.
3. "China’s edge would now have to be found elsewhere: its deep industrial base?" China's edge is, has always been and will remain its 6-point advantage in median IQ over us and its 1500-year habit of allowing only men with IQs above 140 (enough for a PhD in theoretical physics) with uncommon energy and integrity to govern. Even the average Beijinger enjoys a 10 point advantage over, is much healthier and more energetic, and will live 10 years longer than the average Washingtonian.
3. "The US, for one, remains a font of cutting edge innovations; its launch of industry leading large language models is a case in point"? LLMs have yet to contribute anything real to the economy. Outside the VC hoopla, China is so far ahead of the US in every scientific discipline that the competition is essentially over. Seven of the world's top ten research institutions are Chinese. One is American.
4. “the EU’s comparative advantage in green technologies is increasingly challenged"? If it ever had an edge, Europe has none now. 70% of indigenously produced 'European' wind generators comes from China, as do 90% of its solar panels. And China is two generations ahead of the world, ex-Russia, in nuclear power.
The author has addressed some important points, but Fox News headlines are not a useful basis for doing so.
The theory of comparative advantage simply ignores the role of learning; it’s perfectly legitimate for a developing country seeking to move to the technology frontier to subsidise learning and knowledge acquisition by its own population. In fact, that’s what we do as individuals. Our parents subsidise our learning activities, so we become more productive later in our lives.
Well written and interesting. Although, I would say that China's advantage, from the 1980s to at least 2015 fully and at least still mostly now, had been its "free markets", in the sense of that meaning of that word as we use it in America. Xi and co are trying to change this. The 3rd Plennum spoke again about renewed attempts to eliminate local area trade protectionism and local capital market fragmentation, but have they done well with them? The USA used to have both of those things until they were done away with between the latter 1970s and mid 1980s (the local area trade protectionism had been greatly chipped away a for 15 years prior though) and we had much more firms in a much more competitive and diversified economic environment and we had much more scientific research and development etc. If China's national center succeeds in centralizing the economy as we did, they might just knock China of just as it was on the cusp of greatness...