On China

Beamis wrote an enlightened post yesterday entitled “Perpetual Warfare”: I encourage you all to read it. http://pinyonpine.blogspot.com/

But I disagree with the prediction at the end of the post. While our attention is drawn to those who fight in the name of Allah, there is a greater danger building farther to the east.

On Monday morning I had a conversation with a business associate about commerce in China. Her forecast was that the Chinese were going to be the first ones to successfully marry European know-how and American-style marketing which will further boost their economy. Yesterday in another meeting, we discussed the problem of the total disdain for the laws of intellectual property amongst the Chinese, and how the Chinese actually make friendly visits to research and production facilities elsewhere in the world, surreptitiously take photographs and then copy any useful technology. Why worry about patents if you don’t have to?

On Wednesday at dinner, Olive and I were discussing what the Chinese had very cleverly done in the Ruhrgebiet, the area of Germany in which she lives and which used to be Europe’s industrial coal and steel centre. Sometime after the decline of the steel industry in the 1970s, the Chinese went to the Ruhrgebiet and bought everything they would need to produce steel. They disassembled machinery and structures and shipped them all back to China. And, of course, steel production has become more important again. Germany was still ahead of China in steel exports in 2004: Germany 27.3 million tonnes; China 20.1 million tonnes, but while Germany was up only 10% on its 2003 exports, China was up 140%. In 2004 China produced 272 million tonnes of steel; 2005 production is projected to reach 330 million tonnes.

China is already the second largest economy in the world after the US (measured in purchasing power parity). China has a large armaments industry and a space programme. Its environment is in terrible shape; they have lost one-fifth of their agricultural land since 1949. China has been developing military and economic co-operation with both India and Russia. China’s population is approximately 1.3 billion. They have compulsory military service and the largest army in the world.

What scares me is that while attention is focused on the Middle East and “rogue” states like North Korea, China will just quietly go about its business becoming more powerful. And one day, although perhaps not for another 20 years or so, China will suddenly explode.