
For the U.S. And China, a Technology Cold War That’s Freezing Over - fspeech
https://www.nytimes.com/2018/03/23/technology/trump-china-tariffs-tech-cold-war.html
======
foodislove
People see a cold war as a rivalry between equals. That's not the case. The
Chinese are more adept at adopting existing tech and adding scale than
creating it. This cold war is mostly one way. Their tech champions' strengths
come from a potent mix of state-funded and support with local business acumen.

The attempts by the government to shift growth away from low-level
manufacturing towards tech requires tech and innovation. Things that require
the sort of the people the rigid propoganda infused education system is ill-
equipped to produce.

The shortcut is to simply to let others develop tech, then copy. That's the
essence of the forced technology transfers.

20 years ago, companies and governments believed them that the forced
transfers is purely for the Chinese market and a fair deal. After that turned
not to be true (read: forced tech transfers for the bullet train that China
now uses to undercut the original in foreign markets), but that's not the case
today.

If Trump, who I detest, can get the key European tech countries + Japan on
board, they can dramatically increase the time and cost for the Chinese to
pivot their economy. Delay enough and China's demographic time bomb of rapidly
ageing people plus Xi Jinping's Maoist madness could well result in the
Chinese economy stalling similar to the Japanese circa 1980s or worse. We'll
have to wait and see it all turns out

~~~
madez
Why is the economic and technological rise of China a problem?

~~~
foodislove
It's not.

It's the zero-sum thinking of a totalitarian dictatorship that's a problem.
For example, simply letting the Taiwanese live their own free and happy lives
is too much of "a problem" to let go without threatening invasion on a weekly
basis :)

Also, there is geopolitics at play. The Thucydides Trap is real.

~~~
wyattpeak
While I agree that their attitudes towards Taiwan are inappropriate, it's a
stretch to suggest that this is an issue of totalitarian government. There's
not a major government on earth (and probably not a minor one), of any
political persuasion, which hasn't faced and rejected an attempt at secession.

~~~
factsaresacred
> an attempt at secession.

Please. Taiwan is not a part of the PRC. What would they be seceding from?
They're a sovereign State founded by the losers of China's civil war. (That
the Nationalists lost is one of China's great tragedies given the horrors that
Mao and the ruling party inflicted on the Chinese people and their
traditions).

Anyway, take Japan and the Senkaku islands as another example of Chinese
bellicose jingoism fueled by a policy of nationalism designed to detract from
threats to its legitimacy.

~~~
wyattpeak
> Taiwan is not a part of the PRC

According to Taiwan. How does this theory play with the American civil war?
The confederate states didn't consider themselves part of the union. Was the
North therefore imposing sovereignty on a foreign nation?

They were both fighting for sovereignty of all of China. After the war they
both continued to consider themselves to be sovereign to all China. Indeed, to
this day they both make that claim.

For what it's worth, I agree that to all practical intents they are separate
nations and should be such. I think both nations should drop their claims on
each other. But only due to the fact that it's been the de facto situation for
seventy years. I see no reason why the losing side of a civil war is instantly
granted nationhood on cessation of fighting.

~~~
mafribe
The ROC is doing itself no favours by sticking to its interpretation of the
_One China Policy_ which entails that the ROC leadership is the solve
legitimate ruler of the mainland, too! When the PRC was weak, there was
probably an opening where the ROC could have dropped its pretensions towards
ruling the mainland, in exchange for PRC acceptance of ROC nationhood. But I
suspect its too late now, since the PRC is so powerful now.

I also think the _real_ reason why the PRC leadership is bullying the ROC is
that the ROC is a _clear example_ that democracy, wealth and Chinese culture
are _perfectly compatible_ \-- thus falsifying the communist's party's
justification of its claim to power.

~~~
wyattpeak
I agree, I really don't see what they get out of it. It seems only to
legitimise the PRC's claim on Taiwan by making it a mutual disagreement.

I don't know about the concerns re democracy, the Chinese people I hear
speaking about it don't seem to have much interest in Western democracy
whether or not they could live under it, but I don't have a strong enough
understanding of the issue to really claim to understand.

And I suppose the fact that their people don't care wouldn't necessarily
assuage a sufficiently paranoid government.

~~~
YorkshireSeason

       what they get out of it
    

My interpretation is that the ROC sees this as a bargaining chip, to be given
up in exchange for something else, at an opportune moment. The ROC doesn't
have much else to offer to the mainland at the moment

------
madez
I think this is good news. Advanced technologies like chip production must not
be the domain of only part of the world. Also, I hope the EU would also take a
similar stance so it would be possible to buy European chips.

That the US sees this technology as a matter of national security is all the
more a reason to push for more independence to stay sovereign.

~~~
lettergram
Lol... Ugh the EU in itself was an exercise in becoming a non-independent,
non-sivereign state for all parties involved. It's why the U.K. peaced out.

Not saying, it wouldn't be good to have chip production there. On the
contrary, I support the idea. However, I don't really think the EU is about
independence.

~~~
madez
If one can let go of nationalism, one can see that the EU is about
independence. It's not about your governments Independence, though, but of the
Bloc as a whole. After all, national governments are just a tool in a big
machinery. Tools can be enhanced or replaced, if there is something better. So
far, I like a lot of what the EU is doing.

~~~
mobilefriendly
It is a strange independence the demands the destruction of local democratic
governance.

~~~
barrkel
Subsidiarity is a core principle of the EU, FWIW.

There's another way to look at freedom: freedom from, rather than freedom to.
Governments are generally instituted to ensure the former rather than the
latter. They put restraints on some freedoms to increase other freedoms.

Thus, for example, the specific standards that goods are produced to and
services are provided at may be set centrally, removing _freedom to_ vary at a
local level, but adding freedom to sell across the whole union with very low
barriers to trade (i.e. _freedom from_ variance in standards). Since freedom
to vary on standards at the local level frequently ends up with beggar-thy-
neighbour policies, or anti-competitive regulations, it's not a bad trade.

~~~
RobertoG
Freedom from democratic governance sounds like a suspicious kind of freedom to
me.

~~~
yorwba
EU officials are appointed either by the democratically elected governments of
the member states of by the democratically elected European Parliament. Unless
you reject all kinds of representative democracy, the EU seems pretty
democratic to me. And most EU states are only democratic in the representative
sense anyway.

~~~
RobertoG
In theory, but the reality of the issue is very different.

The European Parliament is all powerful except for the important things. The
real power is in the hands of the commission, which, in practice, it's not
more than an international forum, where, as in all the international forums,
the will of the stronger states is the law.

The state members are bond by treaties that, in practice, are impossible to
change by the population and that, in fact, are used to limit what the
population could choose.

In theory, the EU could be a democratic institution, but there is not the will
for that, quite the opposite, in my opinion.

The population is slowing awaking to those realities and the relevant
institutions would do well addressing all those problems before is too late.

~~~
madez
While the commission is not directly elected by the people, it is indirectly.
That is in accordance to how many governments are formed.

Every country can send just one member of the commission. Decisions are made
by majority vote. Every member has the same weight, except the president,
which is a tie-breaker. How again does the stronger country impose rules on
the weaker?

The EU binds countries just like countries bind regions and cities. Why don't
you complain about that? Well, because it is helpful if the government acts in
the interest of the population.

A required part of understanding the EU is letting go of irrational attachment
to notions of nationalism.

It is good that we have several governments working in our collective interest
on many levels. Be it the city mayor, the regional government, the countrywide
government or the European Commission.

~~~
RobertoG
Tell that to the Greeks, where the "independent" Central European Bank,
theoretically also the central bank of the Greeks, was used as a weapon
against then.

Tell that to the countries in the south that are financing the exports of the
north and that have to implement crazy pro-cyclical economic policies.

A part of understanding the European Union (and even more so the Eurozone) is
letting go of fairy tales about how Realpolitik and national interest is dead.

If you want a real union just create a fiscal union controlled by the European
parliament, but that, it's not going to happen.

------
dis-sys
At the same time, US asked China not to stop importing American garbage for
recycling.

This seems so _free_ trade to me - make your competitor's products more
difficult to sell in your country while making your garbage & pollution easier
to be shifted to your competitor's home.

[https://www.reuters.com/article/us-china-environment-
usa/u-s...](https://www.reuters.com/article/us-china-environment-usa/u-s-asks-
china-not-to-implement-ban-on-foreign-garbage-idUSKBN1GZ2WI)

------
ianai
Kind of an interesting read. They’re essentially describing current trade
pressures between the US and China. Over the years,I’ve come to the opinion
that these pressures were foreseen by the US administrations. But they chose
this outcome as preferable to any other option. Essentially, I hypothisize
this as their mindset: that the over 1 billion citizens of China were going to
grow their per capita GDP to levels elsewhere. That’s enough for them to be 3x
the size of the US. So the US chose to keep trade as near to free with China
as possible. If business in the US was effectively at the level of business in
China then the US wouldn’t be pushed too far below historical GDP.

~~~
adventured
> That’s enough for them to be 3x the size of the US.

Your math doesn't work and it assumes an outcome that is more likely wildly
unrealistic.

At $20,000 GDP per capita (they're at half that now), which would be a
tremendous outcome for a nation as large as China, their national GDP will be
$28-$29 trillion. The US economy will be that large in about 12 years.

If we're talking that sort of timeline: 3x US GDP would be $84-87 trillion in
2030. ~80%+ of the entire global economy at that point. Even if you shift the
figures out another decade, it remains equally silly and impossible.

You might as well say instead that the US will soon push its GDP per capita up
to $120,000 magically and more than offset China's population benefit
difference with a continued per capita superiority. That scenario is about
equally fantasy driven to the notion of China somehow magically having ~80% of
all global economic output.

The US exports more annually than China does. Few people realize that. For
China to keep growing like they did in the past, they're going to need to find
another planet earth to export the next $2+ trillion in goods to, and fast.
Those markets for consumption don't exist. They're already over-producing on a
lot of industrial goods by 50% to 100% - such as steel - to artificially prop
up their economy. That can't continue. Service economies grow dramatically
slower than low-wage industrial economies that are filling in extreme slack,
which again points to China having a far lower growth rate in the near future.

Put another way, China's easy growth is long since over. That's why they
shifted to massive debt binging to keep the fake growth going, taking on $30
to $40 trillion in new debt in just eight or nine years after the great
recession. That's a classic signal an economy is running out of easy growth.
Their growth return on debt plunged off a cliff many years ago at this point.
And their debt is very expensive compared to developed nations, so much so
that for every $500 billion in new GDP they've been creating, they're paying
$150 to $200 billion just in _new_ debt interest. In short, their economy is
being swamped by interest costs, another classic drag-you-down on growth.

It's so bad, China's central bank has begun talking about muni bankruptcies in
the style of Detroit:

"China needs Detroit-style bankruptcy as debt problems remain: central bank
official"

[https://www.reuters.com/article/us-china-economy-
debt/china-...](https://www.reuters.com/article/us-china-economy-debt/china-
needs-detroit-style-bankruptcy-as-debt-problems-remain-central-bank-official-
idUSKBN1EJ065)

Now does that sound like a country still in its prime on growth, or more
likely near the end of an over-extended growth boom?

And all of that recent growth came at a high political cost: their
mercantilist one-sided trade approach has alienated all of their biggest
customers, so now the US and EU are locking down China's access (including to
acquisitions), further dampening China's future growth potential.

China is just as likely to get stuck in a middle income trap, particularly as
their demographics rapidly age and we enter the era of AI + robotics + higher
automation (ie their population increasingly becomes a liability). And given
what's going on there politically with their new dictatorship, vast re-
education camps, the erosion of what little speech & expression they had,
becoming the world's most indebted nation, etc - these things point more to a
negative outcome than a positive one. They look a lot more like Japan
economically right before Japan hit stagnation, than anything else.

Historical question: name all the economically very successful dictatorships
of the last 200 years.

~~~
zombieprocesses
> China is just as likely to get stuck in a middle income trap

Japan wasn't a middle income country. They didn't get stuck in the middle
income trap. In the next sentence you say that china is like japan right
before they crashed and here you claim china is going to get stuck in the
middle income trap. Those are contradictory assertions.

> They look a lot more like Japan economically right before Japan hit
> stagnation, than anything else.

How? Japan's urbanization rate in 1980s was over 90%. Japan's GDP was near
parity with the US with half the population. China is at 50% urbanization.
Their GDP is near parity with the US with 4X the US population. China today
and Japan in the 80s are nothing alike. Not even close.

> Historical question: name all the economically very successful dictatorships
> of the last 200 years.

Every european country ( colonial power ). Saudi arabia, UAE, kuwait, etc.
South korea, Taiwan, Chile, etc.

Also, you conveniently ignore the fact that there are far more economically
poor democracies in the world.

