David P. Goldman, Deputy Editor of Asia Times, and Washington Fellow of the Claremont Institute wrote an opinion paper in Newsweek (7/31/2023) entitled, ‘China Was the World’s Greatest Economic Miracle and It Will Be Again’. Goldman clearly presented the reasons for China’s rise as seen from its steady growth of GDP from 1979 (GDP per capita $404) to 2015 attributed to Deng Xiaoping’s opening China’s economy to the world and turning farmers into industrial workers. Then with the right policies to usher in the digital economy sustaining continued economic growth to reach a GDP per capita of $11,560 in 2022. China is now leading in advanced 5G technology and robotic and AI-assisted manufacturing.
China’s impressive success compared to India can be correlated with China’s massive investment in education program which produces the world’s largest STEM manpower and its inclusive trade policy which focuses not only on the developed countries but also reaching to developing economies including the Global South. Goldman also discarded the ‘China collapse’ promoters by arguing that population decline does not equate to economic demise at all as evidenced by South Korea’s transformation from cheap labor to hi-tech contender. Goldman points out that China’s post-COVID 21% unemployment among college graduates is a high-class problem that eventually will be turned into a productive force to support the world economy.
What Goldman did not say as a main thrust for driving its rapid rise is that China has a positive national program with huge forward momentum to lift its people out of poverty and accumulate wealth. Any external negative program targeting stopping China’s growth and development momentum will only pump up China’s energy to work harder for achieving a better life. The Chinese government’s strategy of creating even wealth distribution for the poor has succeeded in elevating the majority of the population. The increase of the number of Chinese tourists found worldwide is a piece of evidence. The U.S. anti-China trade and economic policies did not slow down China’s economic growth but hurt its own industries.
Goldman used the U.S. orchestrated worldwide sanctioning Huawei policy to illustrate the above point. “The Chinese telecom giant Huawei claims to have 6,000 contracts to build enterprise 5G networks to support factory AI applications, Huawei offers a Cloud-based AI system to enable firms to create their own applications.” Due to the U.S. sanction on chips, Huawei can’t sell a competitive 5G smartphone, but Huawei is leading in other industrial applications of AI running very well on the chips made by China at home. It is no surprise that Chinese factories, ports, airfields, and mines are far more efficient than any others in the world.
China is the largest market for many products from agriculture, consumer goods, and industrial applications, including robots. China’s rapid advances in EV manufacturing and export (Goldman cites Model-T automobile industrial revolution for analogy) do suggest that China may lead a fourth industrial revolution offering a $10,000 electric vehicle as the lead product. The anti-China rhetoric has little impact on China’s progress and the negative sanctioning tactics at best will slow China a bit but in the long run they only make China more self-sufficient. Goldman’s comments on China’s quantitative and qualitative success in education and STEM manpower creation offer a piece of strong evidence. One should not be surprised that China is breaking new frontiers in many technological domains including its own global positioning system and space transport.
Goldman’s warnings or predictions are credible, but his suggestions for what the U.S. should do are too casual. He suggested we need a crash program to rebuild industry and regain our technological edge, on the scale of JFK's Moonshot or Reagan's Strategic Defense Initiative. No, we don’t. Although China is advancing in its space program, it is not a major thrust but more a prestige or PR project. The U.S. national debt situation and U.S. currency credibility concern do not warrant our heavy investment in moonshot or any offensive military capability (in the name of defense). What we need is an economic policy based on economic principles to produce a win-win outcome favoring the U.S. By win-win, it calls for collaboration.
Let’s use simple language to illustrate the ‘win together’ argument. Let’s say, the U.S. and China each invest $100B in a collaborative joint venture which yields an annual return of $10B (a reasonable 5% return). This means nominally every Chinese will get $3.57 ($5B divided by 1.4 B people) and every American will get $15.1 ($5B divided by 330M people), which is not a bad deal for Americans. Can we find such programs? Sure, we can, healthcare solutions are one category, green energy is another, and the farming and agriculture industry another obvious one. There are many more even in competitive AI and manufacturing sectors. Apple and Tesla can make billions of dollars of profits working with the Chinese is proof of ‘win together’ ideas. Goldman’s prediction can be expected to happen, but the U.S. can peak again with China is also believable.
There are numerous opinions about U.S.-China relations and its future course, but unfortunately, the current mass media has adopted an unjustified ‘politically correct’ anti-China attitude and stance. This is a poisonous attitude that will eventually hurt the U.S. and China both even to the world. The ‘win together’ concept is far more a correct political philosophy, not only for China and the U.S. but also for the entire world. It is time for American think-tank scholars to break out of the legacy bondage of Thucydides’ Trap to welcome the ‘win together’ notion. In fact, post WW II, the U.S. attracted many talents from all over the world simply because it offered lots of win-together opportunities for the foreign immigrants. Today, the U.S. has changed as shown by its policies, it has become more selfish and less confident. For example, the infamous 'China initiative' policy targeting Chinese American professionals working in academic and industrial institutions has created a chilling atmosphere in the most creative and innovative work environment. We must let our politicians understand that China peaked and will peak again with good reasons, and the U.S. can also peak again by finding and creating win-together opportunities and collaborating with China.
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