Tuesday, March 26, 2019

Big, Scary, and Inevitable?

I'm not saying that Chinese 5G technology isn't a threat to the rest of the world if China builds the infrastructure; I'm just saying I don't see it as evidence of China's alleged long-range thinking.

Okay, first we have this:

The Chinese economic model is only a souped-up, bigger and more ruthless version of the Asian model that began with Japan’s restoration of the Emperor Meiji in 1868, and was replicated by South Korea and Taiwan: Move subsistence farmers to the cities and build factories for them to work in. While its per capita GDP rose 35 times, China moved 550 million people from the countryside to the cities, and it built the equivalent of all of the cities of Europe to house them.

Which is fine. I bring it up to bolster my credibility since I argued exactly the same thing for their "miracle" which has been impressive but hardly unique:

Until now, much of China's growth has been based on the "Lewis turning point" that reflects direct inputs of new workers rather than more efficient use of existing workers. Once the direct input slows, wages rise and the comparative production advantage erodes. As I liked to say, take the most efficient peasant and take him from a farm and put him in the most inefficient factory and the GDP he produces goes up.

Back to the article which says China is trying to export its model to the developing world with the catch that the 5G tech will allow dictatorships to more effectively control their people (and allow China access to the information flows where they build the infrastructure). Yes, that is a threat to us and a threat to freedom in those developing regions. But is this true?

In making such offers, Chinese planners are thinking a generation ahead. The scarcest resource in the world is labor, specifically workers who can read an instruction manual, learn skilled or semi-skilled jobs, and show up for work on time. Virtually all of the world’s population growth during the 21st century will take place in sub-Saharan Africa and the Indian subcontinent—this last mostly in Pakistan, where the average female has four children compared with 2.2 in India.

Is it really thinking ahead to follow the skilled and semi-skilled workers if robotics can replace a lot of those jobs?

I ask because I absolutely do not think that the Chinese have some inbred ability to plan ahead as so many people in America claim out of envy that America can't even be China "for a day" at least. In this post I joyously quote a passage from China's Futures which looked at Chinese publications meant for the Chinese to assess China's future:

The market mechanism does not function comprehensively to allocate resources, most notably for land, energy, and financial capital. ... Gao [Shangquan, Director of the China Society for Economic Reform] notes that local government officeholders will be in power for only a few years but will auction off land to be used over many decades. The incumbent government will want to see results from land auctions now, even if this means the land will be abused or polluted and therefore lose future value. The same is true for minerals, whose artificially low prices encourage overexploitation. At the same time, the shortsighted governments refuse to make investments in education, public health, or sustainable agriculture because the payoffs from such projects can come only many years into the future, by which time today's officeholders will have moved onto other jobs, in other locales.

The Chinese are a military and economic threat. And possibly a threat to freedom itself if their example is followed. But their alleged long-range planning ability didn't lead them to dominate the 20th century the way America did in a much shorter time frame with our so called "next quarter" planning ability.

The Chinese are betting on 5G telecommunications technology and developing-world labor to dominate the world a generation down the line? Maybe.

If 5G technology and not something we haven't thought of yet is the wave of the future.

If labor is the key to future economic growth.

If the Chinese communist party can ride the tiger of popular will through Dystopian State thought control without being thrown to their political death.

And if the rest of the world can't follow the technology path China is blazing (without the Dystopian State oppression) the way China followed a path blazed by others to get to 2019.

Seriously, I don't think the problem is that the West of today "chronically underestimates Asians." Do you not see the China worship prevalent today? Do you not remember how Japan was going to pass us by in economic dominance? Pointing out mistakes made in 1905 or 1941-1942 about Japan just isn't going to cut it any more.

Work the problem. Don't panic and despair of competing with the ancient Chinese secret of prosperity.

UPDATE: An interesting take that aside from active malice on behalf of China, China's Huawei 5G network is riddled with "deeply problematic flaws in its product code that create security risks" that make intrusion rather than Chinese control the real problem.

Interesting. That flawed technology is the basis for China's diabolically clever long-range plan to dominate the world?