Steve Bannon Was Right About North Korea and China, by John Hayward.
Writing at Asia Times, David P. Goldman salutes his friend Steve Bannon … for his perspective on the threats posed by North Korea and China. Goldman argues the world owes Bannon thanks for heading off a military confrontation with North Korea, but warns a longer, colder struggle against China is the “main event.” …
“The economic war is not a matter of dumping steel or aluminum, or even pirating American technology: China is establishing a dominant position in high-tech manufacturing, including a new US$50 billion plan to build a domestic semiconductor industry,” he writes, backing this up with an excerpt from his own article in the Fall 2017 edition of American Affairs:
China and, to a lesser extent, other Asian competitors employ the full resources of state finances to fund capital-intensive manufacturing investment in the way that the West subsidizes basic infrastructure. In addition, China will commit $1 trillion to building infrastructure overseas to support its foreign trade, including exports as well as raw material supplies.
The problem is not merely the dumping of artificially cheap goods into American markets, but a state-supported capital investment program that erodes returns for American investors.
As a result, investment in the United States seeks capital-light venues such as software and avoids capital-intensive sectors such as chip production. We are being shut out of the global market for high-tech exports.
China is putting a lot of money behind a plan that would leave America largely exporting intangible intellectual property like software… which can be easily stolen by hackers and pirates, Chinese and otherwise.
Goldman advises against emulating the Chinese approach, which is what people on the left who worry about America’s position in the global marketplace usually recommend. He suggests supporting research that could inspire entrepreneurial innovation instead – research on the scale of the moon shot or the Reagan-era Strategic Defense Initiative.
Not only is the Chinese level of government control over private industry and the personal financial resources of citizens incompatible with American ideals of “political and economic liberty,” as Goldman notes, but it’s inefficient and hidebound, especially when the crud of American-style corruption and political neurosis is factored in. Say what you will about China, but they’re not prone to letting environmentalist groups paralyze huge industrial projects for frivolous reasons. …
The Western world is aging, as younger demographics surge in the Third World, and yet those aging Western populations have lost the ability to endure short-term hardship for long-term gain. This can be easily seen in the political debate over ending just about any U.S. government subsidy or welfare program, no matter how inefficient or counterproductive it might be; the number of people who would “lose” something in the process is cited, usually a number absurdly inflated by demagogues, and the conversation is over. That’s a cultural problem, a big one. It can only be addressed by people willing to shake up the culture and endure the backlash they will surely receive.
hat-tip Stephen Neil