Normally for an industry to kill off its competitors, it takes years, even decades to be able to take over just specific sectors. The Japanese took decades to take over car manufacturing from the USA. Same for the Japanese taking over the electronics industry and shipbuilding from the USA.
In turn, the South Koreans took years to pry away the Japanese domination of the electronics sector like high-definition TVs, shipbuilding and infrastructure construction.
But the speed of China taking over many industries is at warp speed, which caught the USA, EU, Japan and South Korea by surprise and instilled un-nerving fear in them. China did not ever indicate openly to the USA or the West that it was trying to dominate industries, which probably did not even cross the minds of the USA and the West at all. China had been looked upon as a nation of unprogressive cooks and laundrymen. But the quiet domination of China in many sectors of industries was really nerve-wracking for the USA and its allies when the reality confronted them.
The USA, EU and Japan are now closing more and more car factories, probably the last legacy of their illustrious domination, due to falling sales and inability to compete arising from costly labor, expensive energy, lack of skilled labor stifling innovation and productivity. The West blamed everything on subsidies. We know that long term subsidies cannot be sustained and will bankrupt China in no time. How is that a reason for every car manufacturer in China to be subsidized when China is not at liberty to print money like the USA.
Many economists have touched on the fact that it took centuries for Western countries to industrialize and dominate particular industries. China just took 30 to 40 years to do what the West took centuries to do in the past. That is the kind of fear that China is posing to the USA and the West.
Anonymous
One other aspect of what China is doing has more or less escaped the eyes of many watching the geopolitical and economic changes going on around the world. Most of the talk had been about China dominating more and more of the manufacturing sectors in almost every domain, except creating wars, printing money and instigating regime changes.
ReplyDeleteChina is also diverting its agricultural imports and meat from the USA and Europe in a big way, but subtlety of course, migrating towards Brazil, Russia and other Global South countries. The beauty of such a move is tying this to the BRICS de-dollarization movement, dispensing with the need for the US$. This is depriving USA farmers from getting information about what to grow for next season.
Besides that, Chinese domestic agricultural and fishery growth have been ignored largely by the West. The old adage that food shortage and famine will befall countries like China and India have fallen out of fashion, and enough food is found to be available for Asia. Coupled with this scenario is the expectation that global population will stabilize at 9 billion. In fact, the rapid growth of agricultural sectors for the China market from less traditional sources, the reality is that its growth is even decimating the agricultural sectors of USA and Europe. The real food crisis might happen in the USA and EU, when farmers cannot sell their products, has to grow less and less and even go out of business, which may contribute even to food security issues that could develop in the biggest monolithic agricultural nation, the USA. This is not an exaggeration, but denial is always conveniently available. Of course, using subsidies to help them survive may work, but for how long? Indefinitely?
Decades ago, Myanmar (Burma) was dubbed the rice bowl of South-East Asia, producing much of the rice feeding today's ASEAN. Today Myanmar is not even able to export rice, being overtaken by Thailand and Vietnam. This is the kind of situation that is developing in the USA and EU. Never say never, or impossible.
What the USA wants is China to stop its manufacturing, its infrastructure building, its technology research and development, its GDP growth and let the USA, its allies and cronies catch up.
ReplyDeleteThe way they did with Germany and Japan?
DeleteUSA GDP growth is fake, all based on unlimited money printing. While India's GDP growth includes cow dung in its calculation, the USA includes money printing in its GDP calculation. This is a new formula for calculating GDP going forward, just like recession.
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