 Understanding
the New China
Tanstaaf1
October 11, 2004
The Oct 4 issue
of Fortune was a China intensive, with a lot of articles centered
on the thesis "Inside the New China." While all the
articles are worthwhile, to get to the heart of the Chinese strategy
the article on "Shanghai Auto" is especially telling:
"Shanghai Auto Wants to Be the
World's Next Great Car Company With GM and VW as partners, China's
biggest automaker has grown up fast. Now it is hatching its own
brand."
Basically,
this article describes how China is playing one western company
against another in order to get the absolute best technology
and know-how and facilities the world has to offer. If VW tries
to protect the most modern models or technologies, Shanghai goes
to GM. If GM balks, Shanghai goes to a third company. Eventually
someone caves, for short term advantage, and the technology is
"Shanghaied." This is basically the game of: "We
can do this the hard way or the easy way (for you, for now)."
Great fun. The goal, for Shanghai Auto at least, is to become
a world-class manufacturer, in its own right, of its own autos.
At which point, it is doubtful that Shanghai will have much need
for these "joint ventures."
I believe this
is the situation playing out in virtually every area of manufacturing
and technology. All Western companies which have a near competitor
in terms of technology are implicitly being given an ultimatum:
teach us *everything* we need to know to displace you tomorrow
or we will displace you today by making a deal with one of your
competitors.
While it is
better to have the Chinese participating in "freely trading"
goods than in trading nukes, and one cannot blame them for wanting
what is best for their people, under the circumstances this is
a zero-sum game economically. I guess the Western hope -- and
that's all it is -- is that eventually China will tire of winning
everything and will want to "share"?
One can hardly
blame China. They are just playing by fair fiat rules. Surely
we could and would act the same if the situation was reversed.
That is, we would go mono-manically after all the chips if we
were also 100 years behind the times, our only major resource
was unemployed billions of people, and we had a benevolent dictatorship
(as China currently appears to have). The biggest problem isn't
Chinese "hunger" and low wages but that we are stuck
with a "Democracy." A benevolent dictatorship is capable
of intelligent, focused long-range planning; patient saving and
forbearance; and painful, willful action. A Democracy is not
capable of any of these virtues -- nor any other virtue I can
think of.
While our original
Republic -- mandating a hard currency mechanism and no "minimum
wage" or other silly restrictions on Ricardo's Law -- could
give any other country a run for the gold, we hocked both the
Republic and the gold a long time ago. Republics and hard currencies
are simply no fun! Republics and hard currencies are strict disciplinarians
which force citizen-children to eat their vegetables, clean up
their rooms, and finish their study before they go out to play.
That doesn't get the children's' vote!
I believe that
looking back from twenty or fifty years in the future it will
be common knowledge -- as it was to the Founding Fathers -- that
in a contest between a "benevolent dictatorship" and
a "Democracy" a benevolent dictatorship is FAR the
superior form of government. The danger most of the Founders
saw was simply that we would become what we have become: a mere
"Democracy." "We've given you a Republic, if you
can keep it," father Franklin warned. Our promoting and
forcing "Democracy" around the world will be seen as
the ridiculous act of a seriously puerile and hedonistic society.
There is a
global game of chess underway, that is for sure. But while the
Chinese are planning strategic moves many steps out, we aren't
even clear of the nature of the game. Maybe we think they aren't
playing for "keepsies" or that this is all just make
believe? We are too used to playing only with other drooling
"Democracies" and NON-benevolent dictatorships.
What we should
do, if we want any hope of even a "draw," is pretty
clear but pretty painful. We should put the brakes on ALL further
technological transfer, not by directive but by restoring our
country's Constitution and hard money system. But, of course,
we are incapable of doing what must be done as that would not
be "fun." So, instead, we will comply while the Chinese
do to us as they will.
It is enough
to make a grown man cry.
October 11,
2004
-Tanstaaf1
Tanstaaf1@myway.com
321gold Inc
|
