Shallow Goods, Deep Goods. From roughly 1980 until recently, Friedman notes, “China largely sold America what I call ‘shallow’ goods, shoes, socks, shirts, and solar panels. Meanwhile, America and the West tended to sell China what I call ‘deep goods’—goods that went deep into their systems and were dual use—namely software, microchips, bandwidth, smartphones and robots. China had to buy our deep goods because, until relatively recently, it could not make many itself.”
Political Implications. Friedman says, “As long as most of what China sold us was shallow goods, we did not care as much about its political system—doubly so because it seemed for a while as if China was slowly but steadily becoming more and more integrated with the world and slightly more open and transparent every year.”
“But then, about eight years ago,” Friedman recounts, “we got a knock on our door and there was a Chinese salesman. He said: ‘Hi, my name is Mr. Huawei and I make 5G telephone equipment better than anything you have. I’m starting to install it all over the world, and I’d like to wire America.’ ”
Hold On, There. Friedman says, “What America essentially told this Huawei salesman, as well as other rising Chinese high-tech firms, was this: ‘When Chinese companies were just selling us shallow goods, we didn’t care if your political system was authoritarian, libertarian or vegetarian; we were just buying your shallow goods. But when you want to sell us ‘deep goods’—goods that are dual use and will go deep into our homes, bedrooms, industries, chatbots and urban infrastructure—we don’t have enough trust to buy them. So, we are going to ban Huawei and instead pay more to buy our 5G telecom systems from Scandinavian companies we do trust: Ericsson and Nokia.”
Eroded Trust. Friedman cites Xi Jinping’s moving away from Deng Xiaoping’s “pragmatism—whatever would drive economic growth—above Communist ideology.”
Friedman’s evidence is extensive: “Combined with China’s failure to come clean on what it knew about the origins of Covid-19, its crackdown on democratic freedoms in Hong Kong and on the Uyghur Muslim minority in Xinjiang, its aggressive moves to lay claim to the South China Sea, its increasing saber rattling toward Taiwan, its cozying up to Vladimir Putin (despite his savaging of Ukraine), Xi’s moves toward making himself president for life, his kneecapping of China’s own tech entrepreneurs, his tighter restrictions on speech and the occasional abduction of a leading Chinese businessman — all of these added up to one very big thing: Whatever trust that China had built up with the West since the late 1970s evaporated at the exact moment in history when trust, and shared values, became more important than ever in a world of deep, dual-use products driven by software, connectivity and microchips.”
Friedman emphasizes that “trust” is the key word. He cites the words of American statesman George Shultz: “Trust is the coin of the realm.”
“Never has that been truer than today,” Friedman says, “and never has China been more in need of embracing that truth.” ds
Xi Jinping is far more dangerous to world peace/security than Putin.
If someone told you the conflict started out of incompetence, grievances, miscalculation, and (un)certainty, would they be describing the Great War, Operation Barbarossa, Iraq, the “special military operation” in Ukraine, or (hopefully, never) Taiwan?
Great blog post! Friedman’s analysis of the change in US/Chinese relations and the erosion of trust between the two countries is quite enlightening. Do you think there is any way for China to regain the trust it has lost with the West, particularly in regards to deep, dual-use products? Great blog post! Friedman’s analysis of the change in US/Chinese relations and the erosion of trust between the two countries is quite enlightening. Do you think there is any way for China to regain the trust it has lost with the West, particularly in regards to deep, dual-use products?