Where is our relationship with China going?

 

In a very interesting speech at the National Conservatism 4 Conference in Washington, D.C., Asia Times Business Editor David P. Goldman had quite a lot to say about China's plans, progress and possibilities.  I'll embed the 15-minute video below, followed by an excerpt from an abridged transcript of his speech.  I very strongly recommend that you read/watch at least one, if not both.

From the transcript:

The world’s scarcest resource is young people who can work in a modern economy. Empires of the past fought over territory. China’s goal is to control people. 

In 1979 China took a nation of farmers and turned them into industrial workers, and multiplied GDP per capita 30 times. Now it plans to turn a nation of factory workers into a nation of engineers — think of South Korea. That’s a messy and costly transition. But China is doing it.

In 2020 I wrote of China’s plan to Sino-form the Global South. It knows a lot about getting people who make $3 a day to make $10 or $20 a day.

China’s population has been in decline, but its highly educated population is growing:

Ten and a half million university graduates, up 60% in 10 years, 2X our total – and a third are engineers. That’s more engineering graduates than the rest of the world combined. 

South Korea quintupled industrial production between 1990 and 2010 while its factory workforce fell by a fifth.

Will China collapse? Compare the US and China aggregate debt burden: the US is 262% of GDP, and China is 278% of GDP –

But China lends the world a trillion dollars a year and we borrow a trillion dollars a year. Countries with positive growth and big current account surpluses don’t have financial crises.

. . .

The other big thing China got right is the transformation of the Global South. It doubled exports to the Global South since Covid – now exports more to the Global South than to all developed markets. Assimilates billions of people into its economic sphere. It did this with 200 soldiers deployed outside China versus our 230,000. 

We spent $7 trillion on forever wars. China spent $1 trillion on Belt and Road Initiative investments. Who got more influence?

Forty countries have applied to join the BRICS group.

This isn’t about authoritarianism versus democracy. China’s exports to democracies like India grew as fast as exports to Russia. The Chinese are incurious about how barbarians govern themselves. They want to make the world dependent on Chinese technology and supply chains.

There's much more at the link.  It's essential reading to understand how strong China has become in the world economy, and how much ground we have to make up to catch up.  Of course, China faces internal problems of its own, including a shrinking workforce, debt crises and others - but it's built up an economic "cushion" that's enabling it to tackle those problems step by step, rather than having to deal with them all at once.

I hope the Trump administration is aware of these issues, because they're going to drive US foreign policy for years to come, whether we like it or not.  We may have different priorities, but we're going to have to spend so much time reacting to China's priorities that we may not have much available to act on our own.

Peter