China: An Emerging Superpower
Friday, October 12th, 2007The highlights on a visit to China for us were not what we saw, but what we experienced. Sure, China has its share of interesting museums, pagodas, and the Yangtze and its Three Gorges were beautiful. And the Terra Cotta warriors deserve to be a “Wonder of the World.” In this posting, though, I’ll focus on how our visit affected my view about China’s role in the twenty-first Century.
I didn’t spend time in China on business issues. Today, though, China is a hotbed of entrepreneurship. The “Silicon Valley” of Beijing (at right, photographed from the Emperor’s Summer Palace), has lots of start-ups, many quite successful. Chinese entrepreneurs are talented and dedicated. In Silicon Valley (U.S., not Beijing), some 1/3rd of all start-ups involve Asian-American founders, and many of the most successful start-ups in the U.S. were founded by Chinese entrepreuers.
We met many young Chinese and learned a lot about their education. Over and over, we observed smiling, confident, and very bright kids, many of whom speak excellent English (note, China will soon have more English-speaking citizens than the U.S.!). And school schedules go far beyond what U.S. schools require. The school day in China typically calls for 45 to 85 hours a week in the classroom. United States, take note!
I have long taken it as a given that a capitalist system is efficient, while a Communist system is bumbling and corrupt. I don’t have enough new information yet to completely throw out that view, but I saw some impressive things in China. Everywhere we went had a brand new (less than ten year old) airport, and
flights were always on-time — far better than our free-market air transportation system. Need a fast way to get people to the Shanghai airport — build a magnetic levitation train that goes 431 kilometers/hour! Need a major source of clean electricity — dam up the Yangtze River, displace and re-locate 1.3 million people, and complete the project way ahead of schedule! In contrast, U.S. public works projects are often dumb things like the $400 million bridge to nowhere in Alaska, or the ineptly-managed $20 billion “Big Dig” in Boston, reflecting all the negatives of “pork barrel” politics.
China is investing a higher percentage of its GDP in education or national R&D than the U.S. Their investments in core R&D have increased 17% per year for the past decade, the fastest increases in the world. They graduate three times as many engineers as the U.S. does. Their economy has been growing much faster than the U.S. economy, running a trade surplus – without piling up a huge deficit or pouring endless resources into foreign-policy quagmires. Make no mistake about it, China is locked and loaded on becoming the world’s biggest economic power.
While China is a Communist country, it’s clearly a new brand of Communism. Government entities are being privatized. Individuals can form and own their own businesses, and realize most of the gains from their efforts (the tax rate is around 16%!). Somehow, it’s ok in China tor an individual to make a billion dollars on something (e.g., Baidu) — which sure isn’t the Communism I studied in college. Yet people in China can only lease, not purchase, land, so we never once saw a “McMansion” as we traveled throughout in China.
China has its challenges, though. Everywhere we went, people were amazed that we had TWO children. Most of China has in place a “one child” rule, and it’s become increasingly expensive to “buy” the right to have a second child. So the basic math of population dynamics says that, over time, China’s 1.3 billion population (level for years) will include an increasing number of elderly, and they’ll have to be supported.
China, while moving fast, still has a long way to go. We got a great introduction to primitive toilets (see right for a good example), and the combination of cigarette smoke and toilet stench was often unbearable. And smoking is ubiquitous — some 1/4 of all Chinese die from lung-related diseases.
We went through many neighborhoods, and even the better-off people still live basically. The dominant mode of living in many of the big cities is an apartment in a high-rise, and we talked to many people who lived pretty high up in a building (up to ten stories) without an elevator. So while their standard of living is on the rise, it has a long way to go.
The quality of the environment in China is abysmal. In most of the locations we traveled, the air was constantly hazy, and everything seemed blurry. I’ve never been anywhere in my life with such a total lack of wildlife. After the fifteenth person told me that the reason there are no birds in China is because they’ve all been hunted and eaten, I became convinced. After three weeks in China, we were excited to see a house sparrow! At China’s growth rate, especially as more and more of its population convert from bicycles to cars, their pollution problems will become even more acute.
In many parts of China, we couldn’t access our own website, the highly-subversive www.dintersmith.org, or lots of other sites censored by the Chinese government (wikipedia most notably). It was an emphatic reminder to us throughout our stay of how intrusive the Chinese government is in the daily lives of its people. It was eery to have to whisper in our hotel room about what we observed during the day, for fear that our room was bugged. Our children definitely picked up on these issues, wondering why no one in this heavily-Buddhist country has a picture of the Dalai Lama in their home (he was expelled from China in 1959, and anyone caught with a picture of him can be — and often are – put in prison).
I’m old enough to recall a period in the 1970’s when the popular press in the U.S sounded alarm bells that Japan would soon eclipse the U.S.. economically. Well, it never happened. So is China the next “Japan”? I don’t think so. Many Chinese have an entrepreneurial drive that is rarely seen in Japan. With a deep and technically-skilled workforce, and a hunger for achievement, China will be the world’s next superpower. Can the U.S. stay ahead? I’d love to say yes, but I doubt it. Our educational system is badly broken, our governmental priorities bollixed up beyond belief, and our population is far too complacent. Our strength is that we’re a nation that responds to challenges. But China may bolt past us so quickly that by the time we respond, there’s no chance to regain the lead.