Wednesday, 27 October 2010

China's bubble

I'll remind Sunny Hundal of this when China has its democratic (if they're lucky) revolution. China is not "Leaping ahead of us", it is catching up, because the choke-hold of communism has been released a bit and the natural entreprenerialism of the Chinese is being allowed to flourish. Slightly less savage repression has led to rapid growth, not because savage repression is a good thing, but because savage repression is merely a bit better than the savage repression AND insane economic policies which went before.

Name something the Chinese has invented*? No? All China is doing to "leap ahead" is putting together things designed elsewhere, from the iPad to rubber dog shit. They are able to do this because the Chinese government is keeping the currency low. This means the chinese worker is denied the fruit of his wages in the form of any imported goods. The Chinese political class Sunny Hundal admires is using currency manipulation to keep an artificially low currency, which keeps Chinese workers relatively poor. This is done to further the mercantilist designs of the Chinese political class. Mercantilism is a failed economic creed (unless you listen to Paul Krugman, who's descending into Keynsian self-parody).

There is not the tradition of the freedom of thought which brings inventions, progress, problem solving. You have the gradiose schemes of the tyrant, and none of the advances of the free society. So they can build a pretty stadium, and get thousands dancing in time during the opening show. But it is the Indians who are taking the higher value jobs from westeners. BECAUSE they're free. India has seven times the number of Nobel Laureates of China. India is producing original science. Chinese in the diaspora are also producing original science. In terms of the thought that is going to solve mankind's problems, China's a back-water, and will remain so until the Chinese government tears down that fire-wall.

I'll believe the Chinese are leaping ahead of us when I am using consumer electronics designed in china by a chinese-owned company. When Chinese scientists with Nobel prizes outnumber the number of Asian-American scientists with Nobel Prizes. When the outcome of a Chinese election is unknown in advance.

For the vast majority of people living there China is, and remains a slave-labour camp. For some it presents opportunities to become camp guards, but "ahead of us". Only the kind of fool who would have admired Stalin 50 years ago could have been capable of saying that China is ahead of us now. Sunny Hundal is just such a fool.

*a bit more recently than "paper" or "Gunpowder".


SSH said...

Go buy a cheap Android phone: both ZTE and Huawei are doing exactly what you describe...

John B said...

SSH has something halfway to a point. Huawei are no longer just a content-nicking device manufacturer, they do actually design their own clone-phones, because China does have engineers and designers who know what they're doing - it's not just a cheap labour centre for foreign companies in the way that Vietnam or the Philippines is.

However, they don't do the basic innovation - a Huawei phone still has a UK- or US-designed processor and a US-designed operating system. And I think that, in a culture as totalitarian-output-focused as China, that final step is going to be the hardest economically - even ignoring the social pressures and unrests that'll surface more as prosperity increases.

SSH said...

Saying that using an ARM-based CPU or US-designed OS means you're not doing basic innovation is like saying that Ferraris aren't really Italian innovation because they use tyres made by Dunlop and run on fuel from the Middle East.

Speaking as a westerner working in China, some of my colleagues here are waaay ahead of their US counterparts in the same company in terms of innovation.

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