Thoughtful exchange on China – US

The conversation about China and the US is as polarised as the conversation between China and the US. Which is a pity, because it is the international relations problem of our time and it deserve a corresponding amount of thought and care. Both were on display in a recent episode of The Economist’s Drum Tower podcast. Here’s an excerpt from a discussion about US technology controls:

Simon Cox: One of the tragedies of course is that America has confirmed d China’s world view. America has confirmed the fact that it does want to contain China which obviously China always believed and now it feel justified in that belief. It’s a very striking thing to say to a country that we’re going to try and limit your technological development in this way. I feel very ambivalent about it, I don’t particularly want China dominating the industries of the future either. But what’s very striking about the controls as they’re conceived and as far as we understand them is that they’re not merely trying to maintain America’s edge not merely trying to say there will always be a gap between America and china. they’re trying to hold china to an absolute ceiling of technological development….

David Rennie: Look the thing about a vicious circle right and of course Chia is going to try and escape these controls but to try and explain how the Americans see this which is why would we let China make the People’s Liberation Army (PLA) stronger and more capable of doing things that we don’t want like invade Taiwan using American technology or American money. Again, I think back to my time covering the Obama administration in DC, you saw them trying these really targeted export controls… we’re going to tell an American company Intel that they cant sell the most advanced chips so the PLA can make these supercomputers but what happened was that because of civil military fusion, this big Chinese government idea of blurring all the lines between the military and civilian companies and harnessing everyone to this grand national endeavor, those chips that were supposedly never meant to go near a PLA university of supercomputer, China got them anyway. What you’re seeing from the Biden administration is now you know if you’re going to make it impossible for us to only target military end users, then you leave us with no choice but to block all of this and you’re right Simon, it’s extremely aggressive but I think the alternative from the American perspective is naively continuing to allow the PLA to build weapons that can kill Americans and invade Taiwan with American chips….

And finally, Simon again in response to a question about whether the Chinese Communist Party can be trusted

I just think that if the two economies [China and the US] do decouple, especially if China were able to decouple from Taiwan, I don’t think anyone else is safer as a result.

Please do listen to the whole thing.

Made In ?

Companies are considering moving out of China because of tougher politics and higher wages. The Economist looks at an alternative:

The question for Dell, Samsung, Sony and their peers is: where to make stuff instead? No single country offers China’s vast manufacturing base. Yet taken together, a patchwork of economies across Asia presents a formidable alternative. It stretches in a crescent from Hokkaido, in northern Japan, through South Korea, Taiwan, the Philippines, Indonesia, Singapore, Malaysia, Thailand, Vietnam, Cambodia and Bangladesh, all the way to Gujarat, in north-western India. Its members have distinct strengths, from Japan’s high skills and deep pockets to India’s low wages. On paper, this is an opportunity for a useful division of labour, with some countries making sophisticated components and others assembling them into finished gadgets. Whether it can work in practice is a big test of the nascent geopolitical order. This alternative Asian supply chain—call it Altasia—looks evenly matched with China in heft, or better. 

Do read the whole thing. It’s an interesting take but I don’t think a China v. alternative binary helps us understand what’s going on. But more on that tomorrow.

China’s Youth

The Economist has a new special report out on China’s youth. It is fully of anecdotes and analysis on: “the jiulinghou, or “post-90s”, a shorthand term for those born between 1990 and 1999. They number 188m—more than the combined populations of Australia, Britain and Germany.

The question lurking beneath the special report is why the jiulinghou show little interest in the liberal ideas that boiled over into Tian’anmen Square only a generation ago. The answer is a combination of renewed national pride, economic growth, repression, and diversion into socially progressive (but politically inoffensive) causes like the environment or LGBTIQ rights.

Its a compelling explanation of the status quo, but one The Economist thinks is unlikely to persist:

The Communist Party has shown a remarkable ability to adapt. Yet its tacit deal appears to be morphing into one that leans more heavily on brute repression and nationalism. If that is the bargain, self-assured young Chinese will at some point balk. Participants in every pro-democracy outburst in China have raised high the banner of patriotism, from 1919 to 1989. This tendency is not lost on Mr Xi, as much a manipulator of nationalism as he is afraid of it. But the party sees a useful distraction in teeth-baring patriotism. One day this may come back to bite it

Two deep assumptions power this familiar call and response. First, that political liberalisation follows economic liberalisation – perhaps we possess an innate urge to freedom. Second, regimes which resist that dynamic are fundamentally unstable.

I’m not so sure. History is surprise, and the more time that passes, the less comfortable I feel with analogies from the past. What would even constitute a falsification of those hypotheses?

I am reminded of a line from Adam Tooze’s chartbook on Chinese state capitalism:

A few other snippets I enjoyed:

Close to one in two red-tourism trips [trips related to China’s communist past] are made by Chinese under 30, says Ctrip, China’s biggest travel firm.

Women in Shanghai marry on average at 29, later than Americans and a jump of six years in a decade. Even in rural areas the age is 25 and rising.

A survey in 2019 by China Youth Daily, a state organ, found that three in four of those born after 1995 think China is “not perfect, but always improving”

Finally there is a Chinese show which look like “who wants to be a millionaire,” where all the questions are about Xi Jinping.

Its well worth reading.