Russia or China?

One thing you can be sure about, if America’s radical culture warriors are rushing to the barricades to fight the good fight against Vladimir Putin, if they are up in arms about the danger posed by Russia, Russia, Russia… the truth must be that the true threat to America’s place in the world is… China.

Beyond the fact, noted here yesterday, that Democrats and Obama administration flunkies are screaming as loud as they can at Trump’s Russia policy because they do not want us to form a judgment about Obama’s Russia policy, I suspect that what really bothers Democrats about Russia is that it the nation’s name sounds like Rush. 

They might hate Russia, but not as much as they hate Rush. After Fox News the true danger to their retaking of America is a man named Rush. I suspect that many of them imagine that Rush is a Russian agent. Why else would he be called Rush?

Anyway, David Goldman puts the Russia issue in perspective by explaining that, on the world stage, Russia is barely a blip. If it did not have nuclear weapons and if Obama had not allowed it to expand its sphere of influence, Russia would be a nothing country:

Russia has an economy the size of Italy; Putin has managed his slender resources cleverly and made himself something of a pain in the neck, but Russia's diminished position in the world makes any problem with Russia soluble in principle.

China, however, is a different story. Since we often ignore its importance and its power, Goldman reminds us:

China has four times our population and an economy that is already larger than ours on a purchasing power parity basis, and it represents a formidable challenge to American preeminence.

The American foreign policy elites missed the point on China. First among them, a man who still appears constantly on television as a China and Korea expert, one Gordon Chang. Being wrong all the time makes for good television. And then there is Steve Bannon who has joined Peter Navarro in advising President Trump that China would cave under American trade pressure:

The US elites didn't anticipate the rise of China because they couldn't believe that a country so different from ours with a repugnant political system could succeed. Gordon Chang first published his book The Coming Collapse of China in 2001 -- since when China's economy has quintupled in size. China succeeded, and kept succeeding. Yet we continue to hear (for example from Steve Bannon on CNBC yesterday) that China's currency and economy will collapse if we give them a swift kick. Steve is a friend, but in this case he's catastrophically wrong.

We underestimated China because we bought the idea that only a liberal democracy could sustain a free enterprise economy. Apparently, such is not the case. China’s economic expansion over the past four decades has been spectacular:

China is entirely different. Its per capita GDP has risen 45 times (that's 4,500%) since Deng Xiaoping began China's economic reforms in 1979. Although its growth rate has cooled from double digits to between 6% and 7% a year, China's economy still doubles roughly every ten years. China now graduates four times as many STEM bachelor's degrees and twice as many STEM doctorates as the US. During the past two years, moreover, Chinese applications to US graduate schools (where foreign students comprise about 4/5 of all students) have dropped by about half during the past couple of years, because Chinese universities are roughly on par with America's in math, physics and computer science. One out of 3 Chinese university students majors in engineering. The number in the US is one out of 14 (and that counts Chinese foreign students at US universities).

Goldman continues that our concern for China’s unfair trading practices is misplaced. The problem today is that China is becoming an superpower in technological innovation:

What worries me is NOT that China plays dirty. Yes, China steals all the technology it can. But what worries me, and should worry you, is that China now is inventing a lot of its own technology. China's second-largest telecom company, ZTE, was about to shut down when the Trump administration banned the sale of the Qualcomm chips that power its handsets (ZTE paid a huge fine and agreed to U.S. government supervision to settle U.S. charges that it had flouted the embargo of Iran and North Korea).

America, he continues, is no longer doing very much innovation. You might console yourself with the thought that STEM students are becoming more diverse, but America is beginning to lag China:

Our problem is that we are still living off the basic innovations of the 1960s and 1970s -- fast and inexpensive integrated circuits, LEDs, semiconductor lasers, solid state sensors, flash memory, liquid crystal displays and solar panels. The big money made in U.S. tech has been in software (think of Google, Facebook, Netflix) or design (Apple), not in manufacturing. There's virtually no venture capital going into actual, physical production of goods. We are the geeks in a new Roman Empire. We're addicted to entertainment driven by powerful electronics provided by the Asians--China, Japan, South Korea and Taiwan. Our biggest import from China is smartphones. The second biggest is computers. Making Americans pay more for selfies and Grand Theft Auto won't solve our problem.

Not an encouraging picture.