Once Upon A Dreamer: July 2006

The issue of China versus US is of great interest to me. Two giant rocks with Taiwan the soft egg in the middle. Since I am Taiwanese the interest is not merely academic but also personal.

It is with no small alarm that I see US becoming more and more like the old china - acting with secrecy and lack of regard for personal rights. It is with irony I see China acting more and more like US - relaxing economic market for relatively free competition and spending ten's of billions on equalizing rich-poor standards.

There is a majority of voice that thinks China will become a superpower within this century, along with US. There is a minority of opinion that China will replace US as the world leader. Then there are the doubters, few in number, who think China will collapse under its own weight and lack of infrastructure.

Reading through New Economist's "Can China Overtake US?", FAS.org's "The Emerging Super Power", Wikipedia's "China-US Relation", "Potential Super Power - China", and "Economy of China" a broad view on the issue was gained.

China has the great fortune of actually having a smart leader at the moment whose immediate attention is not on personal gain but on national welfare. The 20th century has been a turbulent time for China, from Japanese occupation to civil war, from the painful emergence of Communism, from the clash of much more technologically advanced western nation culture and unfamiliar ideology. China is not used to being technological inferior. Majority of its 5000 year history China was the Super Power in its own known world. It is the shifting and breaking of a 5000 year mold that marked the last 2 centuries. The slow and painful decline, the shame and confusion. The First Opium war was the beginning of the first lesson, and perhaps the most important. Trade is important in this world, foreigners will go to war and sell drugs for financial gain. The Second Opium War reaffirms the idea.

The past two centuries planted this desire in Chinese for China to become great once again. It is a collective consciousness. Perhaps it is because much of the shame and lost can be traced to foreign profiteering, China embedded the desire to combat universal greed. Through that eagerness and simple-minded plan, it is not too surprising China took the step towards Communism. In theory it is a plan of universal equality, different from the invaders who act on profit, and vastly desirable to a nation who is seeking to change and grow. Little did China know that first step was too big, like a child who tries to run before learning to walk. So she stumbled.

The second step came around 1980, the Great Economic reform, and the world is still seeing its impact 26 years later. Since 1980 China has been growing on average, even adjusting for inflation, at 9% for 26 years. The shortcoming of being a 5000 year civilization is the difficulty to adapt on the fly, too much culture, too many baggage. It takes a while to figure out which to obsolete. Yet the plus side is China tends to think long terms. Infrastructure for the country was planned 50 years and centuries at a time. In fact, just last week the 50 year project to connect Tibet to china through the world's highest railway was completed. The project took 4.2 billion dollars and was invested at the earliest time - right after ROC retreated to Taiwan at 1949. As soon as People's Republic of China has the mainland to itself it started thinking and starting multi-decade long project. Three Gorges Dam is another good example and just recently finished. It would produce a good portion of electricity for the growing China.

China, fortunately, has Hu Jintao as leader at the moment. He is a brilliant man, reportedly with a near photographic memory. Yet more importantly, he has an engineering background - a builder. In fact, all top 9 leaders of China at the moment are all graduates of engineering discipline. It is one of the key factors of amazing growth for a developing China.

Many people compare China's rise to Japan back in the 1950s. There was the fear that Japan will overtake US and become a superpower. It didn't happen. The fastest growth of a nation is at the industrial stage, which China is going through at the moment. Japan, once it hitting 75~80% of US Per Capita GDP, dramatically slows its growth. If China where to follow Japan's track, its amazing growth will end in about 35 years. It makes sense, it is easy to follow the leader and its footstep. But once China is near US in GDP, it will have to discover its own path and find out what works and doesn't work. Experimentation takes time, money, and an educated work force. So it is with a certainty that the slow down of China's economic growth in relation to US will occur.

Yet look at PPP for a moment. China has 1.3 billion people, US has 0.3 Billion. Even if China only has 50% of US GDP, its overall spending power as a nation will be twice that of US. So it is not hard to argue China will be a superpower looking from a pure economic standpoint. In fact, by 2020 China will match US in absolute spending power. Money, however, is just one form of influence.

In terms of military spending and power, China is only about 20% of US. Even with the largest standing army in the world, it has little capability in terms of Navy and Air. It has inferior means of transporting troops and lack air or sea superiority. Further more, it is not in China's interest to build up and match its military in the next 20 years. US has been pretty paranoid about military build-up and difference in ideology; Judging from Vietnam, Iraq, and Korea. Furthermore, with Soviet Union as lesson, it shows that military arms race is neither profitable nor desirable. A developing nation needs and wants a stable environment. It is in China's interest to maintain peace, to continue trade, and to catch up on technology. China will modernize its military, because it is suicidal to be rich in resource and products but weak in military, as it has learned from Opium War, but it will not start an arms race. In terms of military, US will likely still reign supreme in military.

Superpower also indicates superiority in technology. China is a historically inventive nation, inventor of gunpowder, paper, compass, soccer (world cup season, thought i would mention it), pizza (Marco Polo brought pizza back to Italy), printings and more. What China is horrible at is implementing devises once it is invented. Chinese tends to build one prototype, document its existence, and then go on to other things. There was little external pressure for it to turn the ideas into practical use on a national scale. It is more likely China will match in research output in 20 years, but lagging in capitalizing its finding.

People point out many factors that China will never become a super power. One of the great concerns is China's political system. I am not sure. I tend to agree communism can easily lead to corruption, judging from the fall of Russia and China's Great Leap failure prior to 1979. Yet it is hard to explain how China can be doing so well now if communism is not working. Is it still communism that China practices? It is open for free trade and competition since 1980. Maybe there is another more precise term for China's political system now than simply communism. All I know is China is throwing hundreds of billions of dollar into infrastructure, education, and equalizing both rich and poor. The news source is even from the west's own newspaper like Times, Tribune, Reuter...etc. I have the habit of typing in China into Google News and read the first 10 major news. Try the same, and judge for yourself what China is doing. I also set my Google News to US version and read everything, it is kind of upsetting I see mostly bad news the past 5 years. I am hoping US will do better once the next president comes into office.

One Child policy, I think, will harm China in the long run. It means that the intelligent and/or law-abiding citizen will only be producing one child. While the ignorant and/or comparatively less rule conscious people will produce 2~3 children. The result is a slow down of population growth that will have to support a vast number of elderly in about 50 years. Just about 15 years after the probably slow down of Chinese economy. It might be one reason for China to be so actively pursing Space Technology. After modernizing China, where clean air, energy, and water is no longer a concern for population. China would likely recall the policy, estimating around 2050. At which time the only limiting factor would be land. The possibility of utilizing moon eventually for living space is a very very very long-term solution to China's population problem. Then again, China tends to think long term.

Ironically, the disproportion of male and female ratio, which people proclaim will hurt China drastically is what I think might save China. One Child policy means that in a male favored society like China, people would often abort the child and retry just to get a male. The result is that 117 male to 100 females born. In our monogamous world, that means 17 males having to find a mate outside China, or the death of his gene. That is direct evolution competition - escalated evolution competition. In general humanity pick the better mate when possible. The one that is smarter, better looking, funnier, or taller. It is this internal pressure that I think will give China the edge for the next generation.

Other people even argue China's giant 1/5 world population will be the weight that pulls china apart. 700 million peasants is alright during agriculture revolution and even industrial revolution because of the cheap labor. But for Technological revolution, information revolution, and biotech revolution it is not the number that counts. It would be the worker's skill and intelligence. China, even during its century of civil war and complete transformation from Emperor Dynasty to Republic of China, then to People's Republic of China retained a 91% literacy rate. Not great when comparing to developed nations (99.9%), but definitely above world's literacy rate of 84%. In fact, the controversial study of racial intelligence indicated that East Asians' average IQ is 106. 6 points above the mean. For real world example - At Harvard, Asian American and Jewish students together make up 51% of the student body, though only constituting roughly 6% of the US population.

If there are no major war conflict with China involved for the next 20 years, and the government doesn't become corrupt. It is inevitable that China will become a superpower. Similarly, unless another George W. Bush gains US office for the next 20 years, and another stupid pointless war gets started, US will remain a superpower. The balance will most likely result in the second space race. In the main time, India will also quietly become a third world power some time after China. The concentration of Economy will be dominated on the side of Asia, with China, India, and Japan contributing significantly. Like Wall Street replacing London to become world's most powerful financial center, a similar shift will occur in China within this century.

Lastly I offer one last food for thoughts on Why China will rise to become a superpower in the world: