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Should the US Be Worried About China?

China is not much of a threat, says Lee Kwan Yew,
in a conversation with Charlie Rose.  According to Yew, the man who
shaped Singapore during 31 years in power, the US is the only mover and
shaker, the only real leader on the globe.  Yew dissects China’s real
agendas with a scalpel.  China is the second-largest economy, but she
has no world-wide interests.  Because of its history, the Chinese
culture is notoriously self-centered.  (We might be too, if we’d gone
through all they’ve experienced.)  Her interest is in herself, and so
she concentrates on those areas where she needs oil and other
resources.  Yew believes that it will take China more than 20 years to
become a technological power.

So what, according to Yew, do the Chinese need?

  • China needs the US market.  It has a growing middle class, but the
    inequalities and poverty in China outside the coastal cities are
    profound.  The social disparities are so significant that the
    politicians always worry about civil disorder and severe discontent.
  • China needs US technology.  To a high degree American technology
    grows out of its entrepreneurial culture.  It’s well known that the
    Chinese culture is not entrepreneurial, but driven by state capitalism. 
    Not a formula for adventuresome technologists.
  • China needs to have students go to the US.  Without a backlog of US
    trained grads China will be cut off from information and technology.

Perhaps the better question is what the US should do.  One thing for
sure is that Washington should not cut off research support, one of the
first moves of the new congress.  Somebody needs to challenge that
political idiocy whenever there are attempts to limit student support,
university and research funding. That’s not an issue of can’t support
the institutions, it’s an issue of gutlessness and lack of strategy.  I
expect that of two-year wonders in the House of Representatives, but not
of the Senate.

Many business leaders talk out of both sides of their mouth about
taxes, but when it comes to supporting research most of them are not too
upset over a shaking down.  After all, business gets more tax subsidies
than the population.  I will never understand how the population stays
so unaware of the tax advantages and subsidies government provides to
business.  I believe that business tax advantages have gotten far too
large.  The only remedy will be tax reform to remove the thousands of
loopholes.  The business tax loopholes are a far larger piece of the
deficit problem than taxpayers realize.

So should the US be worried about China?  Not especially.

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