Guest Post: What America needs to learn from China

This is a post from my friend in Taiwan Bill Stimson. It doesn’t necessarily reflect the opinions of The Peking Duck.

What America Needs to Learn From China
by William R. Stimson

It is evident now from this business of the rare earth elements, and from the way Beijing is handling its green technologies in general, that America can no longer afford to see China merely as a cheap labor force or a huge market to exploit. That phase is over. This hardly means America should view China as enemy or competitor, even though China’s military harbors that unenlightened attitude. That China poses a crisis to America cannot be denied – but it happens to be exactly the crisis America needs at this point to get itself up out of the rut it’s stuck in.

To not waste this important crisis must be America’s first order of business today. To rise to the occasion, it must begin to approach China and the Chinese people with the attitude that it has something to learn from them. Like China has done, America needs to make certain essential changes to its system without altering its fundamental beliefs – and, like China, it needs to do this by laying aside old dogmas. And, as China has taken ideas from America, so America needs to take ideas from China.

For all America’s recent failings in the Mid-East and at home, still democracy, human rights, personal freedom, and private entrepreneurial genius remain the cornerstones of the American way of life and the cauldron of its amazing track record of creativity and success. These will inevitably prevail over the authoritarianism, censorship, indoctrination, corruption, and injustice of the Chinese system – but only to the extent America manages to wrench itself free from some of its most cherished dogmas.

The market system is not all it’s cracked up to be. In the same way that America’s market has failed to generate a new generation of antibiotics to fight emerging superbugs (AIDS and cancer drugs are more profitable for pharmaceutical companies because patients take them for the remainder of their lives instead of just for a few weeks), it is now failing to protect and sufficiently promote Silicon Valley’s edge in the green technologies. Rather than crying “Unfair!” when the Chinese government affords fledgling green industries the support and advantages they need to get on their feet, the American government should be doing the same for its upstarts. In the end, these vulnerable new industries will benefit the entire country. America cannot allow them to migrate to China. In the same way a dab of free enterprise saved Chinese Communism, a dab of government responsibility and oversight can save American Capitalism. The government had no qualms about bailing out the big bankers. Why should it balk about bailing out the green start-ups? What’s un-American about helping the small guy?

Similarly, the whole globalization mantra blithely misses the point that giving away jobs inevitably leads to giving away the grassroots experience that feeds innovation, creativity, and the development of new expertise and products. By closing down its own biggest rare earth element mine and letting that operation go entirely to China, the United States forfeited its leadership in an entire technology – and maybe much more. Just as the market worshippers in Detroit failed until it was too late to see that the big gas-guzzlers were a thing of the past, Washington today can’t seem to grasp that across-the-board globalization serves the interests of the few richest Americans at the expense of the country as a whole. To feed the creativity and innovation that is the American system’s greatest advantage, America needs a full diversity of its own industries within its own borders, and it needs a full range of its own labor on all levels to be accomplished by American hands and American minds. To export the little jobs inevitably leads to giving away the big ones – and becoming a second-rate country. If the U.S. government wants the next Google, the next iPhone, or the next whatever to happen in America, it’d better keep more jobs there, and put more highly-qualified people back to work there – even if this means products become more expensive and the nation can’t continue to pursue its gluttonous and wasteful lifestyle.

Not America but China and the Chinese are in the lead today in certain essential ways. America has busied itself arrogantly talking down to both. Essentially it’s been right in what it’s been trying to get across to the Chinese. Only it hasn’t had the basic humility to notice the things the Chinese are doing that are superior and it hasn’t had the fundamental enlightenment to emulate them in these areas. Ancient Chinese texts teach that every crisis is an opportunity, not to be wasted. The opportunity for America in the crisis China presents today is to learn before it’s too late how to lay aside certain of its own outdated dogmas, adapt to new and challenging realities, and move ahead again blazing new trails by doing what America does best.

Only if America adapts this tact will America and China both emerge victorious – as cooperating partners, not vicious competitors; and as systems that are converging, not trying to replace one another.

* * *

William R. Stimson is an American writer living in Taiwan. An earlier version of this piece appeared in the Taipei Times.

The Discussion: 13 Comments

America needs to stop clinging to low-wage jobs which are well suited to DEVELOPING COUNTRIES with an oversupply of labor,and push easy access to higher education, so the graduates can work in the high tech and services industries. My 5 毛。。。

November 23, 2010 @ 4:44 pm | Comment

Is he essentially calling for mercantilism by the US? Beggar thy neighbor is bad enough for the world when China is the main practitioner.

November 24, 2010 @ 12:28 am | Comment

No, America doesn’t need to learn anything from China. Americans should keep criticizing everything Chinese. That is the one and only way the world’s supposed to work. Let the Chinese take the time learning from America which is No.1!

November 24, 2010 @ 9:28 am | Comment

Jane Jacobs wrote an interesting book, “The Life and Death of Great American Cities,” and another “The Economy of Cities.” A question she asked herself is “Where does new work come from?” i.e., she looked at a city like Brooklyn and wondered why it could be so productive of new businesses. Her answer was “New work comes wherever people are already doing work.” In other words innovation arises from people who know the particular job they are doing, or the particular business they are carrying out. For this reason it’s so important for America to keep a good representative cross-section of all its businesses at home so that the country can benefit from the creative explosions that happen now and then. This is America’s strong point, the source of its prosperity — that its freedoms let new things happen faster and better than they ever could in an unfree place like China — and if America continues to export all its jobs, just for the superficial reason of price, then it’s going to lose the real jewel at the core of its economic system, which is its generativity and its creativity. Places like Silicon Valley, Seattle, parts of Texas, etc. are the growing green buds of its economy. It needs to tend to them, keep them alive and well — even if that means the government must step in to help out. In this respect America should copy China. Not just China, but also Korea, Japan, Taiwan, etc. It’s something the Americans might learn from the Asians. In other words America can improve its own system. I don’t know why this hasn’t occurred to America’s leaders.

November 24, 2010 @ 10:36 am | Comment

[…] Guest Post: What America needs to learn from China » The Peking Duck […]

November 24, 2010 @ 11:50 am | Pingback

Well-spoken. America has long been the global leader, but t has done so by educating the brightest students and hiring the best employees from around the world. Now that the gap between the US and the rest of the world (specifically China) is narrowing, the strategy must adjust also.

November 24, 2010 @ 5:55 pm | Comment

Great post, William. The problem, as I see it, is America is copying China in all of the wrong ways- and none of the right ones:

The wrong ones:

State-owned companies: Traditionally, there’s been a pretty determinate gap between “private sector” and “public sector”- an organization was either fully government-owned or fully private. While there were some iffy parts (Federal reserve, Fannie May/Freddy Mac/Farmer Mac, heavily subsidized agribusiness, the military-industrial complex), the division seemed pretty clear.

Then came the bailouts and buyouts. Wall street. Government motors. Suddenly, America had embraced full-on, Euro-style national socialism. Or, perhaps, Chinese style.

Paranoia against minorities: The Chinese make the Uighur and the Tibetans strangers in their own countries. Now millions of Hispanic-Americans are headed to the same place.

Murdering thousands of central asians: China and Russia were past masters at this; now America holds the crown. The suppressions of the XInjiang riots can’t hold a candle to what we’ve been doing in AfPak the last few years.

The right ones:

Attracting foreign labor: Hey, foreign college grads! China wants you- judging by how easy they make it to get a work visa or set up a company! Rather than the cumbersome H1B process, America should take advantage of it’s position as a beacon of freedom- and lure the talented hordes of asia to their shores. Give year-long renewable residence permits to legitimate college grads with no strings attached. Let them come to the US and look for work- or set up their own business and hire local workers!

Renewable energy, rail and mass transit: This one is obvious. China installed over US$100 billion in high speed rail last year. The world’s lunch is being eaten in this department.

Efficient bureaucracy: This is another one that always amazes foreigners in China. Getting the basics done- business licenses, visas, marriages, divorces, and the like- is less painful than going to the DMV. Bureaucracies are run like businesses, and it shows. They’re not hamstrung by rules. Obviously, tort reform would have to come first, but a bureaucracy that works can be built even with a strong legal system and well-compensated bureaucrats at first-world wages- witness Singapore.

I could go on, but you probably get the point. America is Sinifying in all the wrong ways.

November 24, 2010 @ 6:21 pm | Comment

A great post. However I have a different take on this. I see that America has avoided a world depression (substantially of its own making) and at first I thought that the federal reserve was crazy (I am a conversative ex-banker)but there is madness in their method. They are engaging in mercantilisism, they will create inflation and make there national debt whole by making it worthless. If nations do not realise this they will be crushed economically, the danger for countries like china is that if they hold on to long to a peg to the dollar they will find themselves in the same position as barings bank in the 90’s long and totally out of the money on a short position (the USD having the same value as the old Italian lira) and the pain of adjustment will be worse than what happened to japan. Japan was forced eventually to increase the value of the yen in the 80’s and had a golden spring where they were rich and could buy everything but their real competitiveness was a low cost productive workforce, once they were no longer low cost they were history in the 90’s. I fear china is going along the same road which as china is not at the stage of development japan was at in the 80’s will be more painful and we and the chinese people will suffer.

November 26, 2010 @ 12:44 am | Comment

Interesting points, but I think people need to remember that the US (and the West in general) continues to be in the lead because of one critical factor. That is innovation. The Chinese have become very successful by slowly opening up the economy to forms of capitalism adopted from the West. They’ve done a good job of implementing this economic model and have crafted some very intelligent economic policies. However, I would argue for the reasons below that China is going to continue to play catch up for a long time, and while there are definitely lessons that America can take away from them regarding how to implement economic policies, etc., China is not going to “take over” anytime soon.

I don’t want to sound like I’m making unfair generalizations, so let me just state that what I’m about to say is not a generalization. It’s a fact. China does not have a culture of innovation, and it hasn’t had one for at least the last hundred years. China has made incredibly important contributions to world culture, but most of these were in the distant past. There is a reason for this, and just so I don’t sound like a complete jerk, let me point out that it isn’t a lack of ability or potential on the part of the Chinese people. The government is what is holding the nation back.

Let’s try this exercise: name an important piece of art that China has produced in the last hundred years. Now name 5. Name 10. Yes, these exist, but my point is that artistic innovation has been greatly limited in comparison with other countries. There are 1.6 billion people in China. How many Chinese film directors are there? How many musicians? How many artists? Does it occur to anybody that, proportionally, the number of these people is infinitesimal? This is directly caused by the Chinese government discouraging these kinds of activities in every way it can. They ban books and music and movies, and I’ll also state that failing to protect intellectual property rights has made it practically impossible to make money as any kind of artist in mainland China, unless you’re so popular that people overseas get interested.

Although I guess it may not seem like it on the surface, this has everything to do with economic development. The Chinese governmental and economic model does not encourage people to come up with innovative ideas. It encourages or even requires people to go work in factories or on farms and to do what they are told without speaking up about possible improvements or changes that, if allowed, could have positive results for everyone. This is changing, true, but currently the entire Chinese model fails to recognize the value of innovation. In fact, it is rightly recognized that allowing too much innovation could result in the collapse of the Chinese system as it is now.

The government smartly recognizes that the same kind of thinking that leads people to come up with new inventions, new business models, new manufacturing techniques, etc. involves a freedom of thought that people might also choose to apply to religion, government, or politics if given free reign. China has been successful because it has emulated the Western model while stripping out the freedom of choice it implies or in some cases requires. We can learn from them in terms of the flexibility and policy implementation, but to say that they are in the lead now or will be anytime in the near future is just wrong. There is a lot of potential in China, but it’s going to remain latent until the power of innovation is more fully recognized and is allowed to flow freely and invigorate the economy as well as the culture.

December 4, 2010 @ 1:11 am | Comment

“Interesting points, but I think people need to remember that the US (and the West in general) continues to be in the lead because of one critical factor. That is innovation. The Chinese have become very successful by slowly opening up the economy to forms of capitalism adopted from the West.”

Some points:

Adam Smith, the “father” of modern economics, said this about China: “China is a much richer country than any part of Europe.”

I don’t see how anything is being learned from the West, rather Communism (a Western mental disorder) is being unlearned.

Forgive me for being to the point but your entire post can be disregarded if we mention the fact that works of art and scientific discoveries take resources to create. They don’t just spring out of nowhere from the heads of farmers who need to work 12 hours a day for subsistence.

If China does poorly in terms of innovation it is because they are not funding it enough. But it should be said that China is far more innovative than any country at its level of wealth. A basic proxy of this is to check trends in patenting and the publishing of well-referenced scientific papers.

December 4, 2010 @ 5:03 am | Comment

It’s kinda fun watching people insist that they are not racist but with the disclaimer outta the way they continue saying racist things.

December 4, 2010 @ 5:34 am | Comment


Hmm, which part of my comments did you find to be racist? I think I was commenting more on a political/economic system than a race of people, so I’m not sure how you got that interpretation out of what I said.

December 4, 2010 @ 6:21 am | Comment

This just came out today in the New York Times:

In terms of the wind energy business the article says the American manufacturing sector had been so weakened in recent decades that for some components there were no American machinery companies readily available. China is taking the market over, probably already has taken it over.

It seems pretty clear that their blind greed for short term profit in China is blinding American businessmen to the damage they are doing long-term to the American economy and American way of life.

If China were a democracy, or even a benign dictatorship it probably wouldn’t matter so much. But as this interesting article reveals, it’s anything but benign.

America’s own economic dogma of globalization will be its undoing. I don’t think this would be bad if the benefits were distributed among the smaller needy countries around the world. But it seems clear this won’t have a chance to happen. China is intent on grabbing everything for itself, in the same way it’s trying to grab all those little islands from surrounding countries.

December 15, 2010 @ 11:01 am | Comment

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