Posts Tagged ‘Tiger Head Snake Tails’

The powerful and precarious rise of China

September 26, 2014

The rise of China is one of the most important historical events, maybe the most important, of our time.

Jonathan Fenby, an experienced reporter and former editor of the South China Morning Post, gave a good account of China’s rise in his 2012 book, TIGER HEAD, SNAKE TAILS: China Today, How It Got There and Where It is Heading.

I finished reading Fenby’s book a week or so ago.  It reminded me of histories of the United States in the late 19th century, the era of the so-called robber barons.

Like the USA then, China has sweatshops, child labor, pollution, slums, suppression of minorities and rampant bribery and corruption.  But also like the USA then, China is full of energy and optimism, growing in wealth and power, and a land of opportunity for its entrepreneurs.

fenby.tiger.headWhen I was a boy, most Americans thought China was eternally doomed to upheavals, poverty and famine.

From the Opium Wars to the death of Mao Zedong, that was China’s fate.  But during the past 40 years, the Chinese leaders have made their country one of the world’s great economic powers, brought population growth under control and provided a basic subsistence to all and prosperity to many.

From 1978 to 2012, China’s economy grew 17-fold.  China’s economy is the second-largest in the world, although still far smaller than the United States.  It has a positive balance of trade.   It is the largest trading partner of Australia, the largest trading partner of Africa and a growing presence in Latin America.

Chinese companies compete and expand worldwide, while China’s own territory attracts industry from the USA, Europe and Japan.

The Chinese challenge, however, is much different from the Japanese challenge of the 1980s.  The Japanese challenge was that Japanese companies made products of a higher quality than U.S.-based companies.  This resulted in a competition for quality that was good for both the United States and Japan.

This is a different from the Chinese challenge of making products more cheaply than U.S.-based companies.  This results in a race to the bottom which is bad for most countries.

While many Chinese companies make world-class products, others cut corners.  Chinese companies are noted for cheap imitations of foreign brand name products.  Violation of copyright and theft of patents are common.  Fenby reported that 80 percent of counterfeit goods seized in the USA and Europe originate in China.

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