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I’VE WONDERED WHAT HAPPENED to the bonhommie of not that long ago between the U.S. and China: GM built and sold five times more Buicks in China than here in the U.S. Don’t forget Apple iEverythings. And our inexpensive Chinese shoes, shirts, and other stuff.
These days, Beijing saber-rattling has U.S. officials calling China “a most consequential threat.” And, in October 2022 Biden drew a hard line on selling advanced semiconductors to entities within China.
What went wrong?
Friedman Cites Diminished Trust. In his Opinion piece “America, China and a Crisis of Trust,” The New York Times, April 14, 2023, Thomas L. Friedman says, “The new, new thing has a lot to do with the increasingly important role that trust, and its absence, plays in international relations, now that so many goods and services that the United States and China sell to one another are digital, and therefore dual use—meaning they can be both a weapon and a tool.”
In Parts 1 and 2 today and tomorrow, tidbits are gleaned from Friedman’s article.
Changing Times. Friedman observes, “China’s Communist Party government has a stronger grip than ever on its society, thanks to its police state surveillance and digital tracking systems: Facial recognition cameras are everywhere. The party crushes any challenge to its rule or to President Xi Jinping.”
Yet, China has had a steadily increasing standard of living.
A Parable: High-speed Rail. A colleague tells Friedman that “some 900 cities and towns in China are now served by high-speed rail, which makes travel to even remote communities incredibly cheap, easy and comfortable. In the last 23 years America has built exactly one sort-of-high-speed rail line, the Acela, serving 15 stops between Washington, D.C., and Boston. Think about that: 900 to 15.”
No Substitute for Freedom. Friedman stresses that high-speed rail is no substitute for freedom. However, “It’s a regime that takes both absolute control and relentless nation-building seriously.”
What’s more, Friedman notes, “Just when trust has become more important than ever between the U.S. and China, it also has become scarcer than ever.”
Tomorrow in Part 2, Friedman introduces the concepts of shallow and deep goods, with the latter requiring increased trust between trading partners.
© Dennis Simanaitis, SimanaitisSays.com, 2023