China a developing nation? Not!
Posted on 16. Dec, 2009 by scott in general musings
I am so tired of hearing TV and radio analysts talking about China as a developing nation. It affects the way we (and others) think of them and deal with them.
It is not right to consider China a developing nation in 2009 and beyond.
This was the case when I first started doing business there. An example from the past.
Once, on my first morning in Ningbo, China, I got up early (jet lag can be a real *&@%) and found that there was no electricity and no water. I walked down to the front desk and was told that electricity and water were always turned off between 10pm and 7am. Now, that was a developing nation. But it was also twenty years ago and times have changed.
Chinese leaders love to play on their ‘developing nation’ status. Gives them credibility for all the social/political and economic decisions they make without any real debate. You can’t say twenty-first century politics are involved because all critical decisions are made at the top by leaders who have no higher authority (the people) to worry about. That’s the beauty, if you care to call it that, of Communism in its Chinese form. Decisions are easily made, quickly implemented and subject the decision makers to few if any consequences. But those decisions often violate human rights and economic fairness.
It works for them, but because of generations of communist policy the Chinese leaders can’t effectively relate to America or Americans. And we don’t really understand them all the time.
For example, once I was met with a high-ranking local Communist party official (with his cadre of about 10 ‘assistants’) to discuss ‘terms’ for making my patented products in their fine city. Turns out he was also was the President of the local factory that wanted to make our products for us (where me met). This was a dingy dickensonion kind of place that just didn’t feel right to me. No heat at all in the conference room of the executive building. Nor was there any heat provided on the factory floor. And can’t even bring myself to describe the toilet facilities.
Boy was I naive, I learned later that the factory was owned and operated by the Red Army. It ‘employed’ people who were housed in dorms on site (8 or ten to a room), worked 12-14 hour days seven days a week and apparently never left. The big iron gate was always closed and guarded and the ten foot high brick fence around the factory and related property was topped with a three foot section of barbed wire that would have scared away Brer Rabbit). Draw your own conclusions but mine was all about ‘forced’ labor. No wonder they could offer prices that were a fraction of those in Taiwan or Hong Kong. And the profits went to the military, no doubt.
This local leader began by joking that if America believed China was abusing its people then we should let more of them emigrate to California (a place most Chinese think is like heaven). He suggested we start with two or three hundred, then he smiled and added million. Three hundred million? Yes, he replied. Then he added that they wouldn’t even be missed in China.
Boy did that give me some perspective.
The factory’s idea of quality control was something that barely worked. Mine of course was something that worked well, was made of really good raw materials and looked real good.
We never could get together.
I hope this is giving you a sense of the enormous divide that separates our two nations . . . philosophically, economically, politically and socially.
Yet, in spite of all the immense differences China should NOT be considered a developing nation and should NOT be given the free rein developed nations allow those who are disadvantaged.
China must be held socially accountable — and this goes double for economic and military issues.
Their refusal to float the Renminbi (the ‘peoples’ money’) or Yuan (the name of the currency denomination that is equivalent to our dollar) provides an unfair trading advantage. It increases their exports (because good are cheaper) and decreases their imports (‘cuz our goods are more expensive) thus contributing to the incredible trade imbalance between China and America (think in the neighborhood of half a $trillion per year–or one good Obama stimulus package).
China’s defense of such unfair practice? “Oh, but we are a developing nation. It is necessary for us to level the field.”
Tiresome to our diplomats.
How does one measure developed and developing nations anyway? Putting the gross economic issues aside (average wages, for example), how about the availability of consumer products and especially luxury items. Think cars, cell-phones, TV’s, computers and such. This measure sure reflects reality in places that lack such (we consider) amenities.
And so the news last week that China has passed the United States as the biggest market for cars. Chinese sales are expected to be 12.7 million in 2009, while U.S. sales are forecast at 10.3 million. Oh, and by the way the Chinese total is an increase of 44% over the previous year!! Cell phones? China has more in use. Computers? China. Students in technical Universities? China. Miles of high-speed rail? China (by thousands of miles).
But this car deal is big. Think of the implications to fuel usage, the cost of oil, pollution, green house gases, steel and other raw material costs. Huge, baby! And then there are the jobs, factories and suppliers to make all that possible. Wow!
Developing nation? Baloney. China’s military power is second only to ours. China’s technology is third to the U.S. and Russia. China’s population is first (4 times the U.S.’s). China’s economy is first right now in every meaningful way, with near double digit growth and holdings of more than $2 trillion of other nations currencies (yes they have a surplus — something other ‘developed’ nations can only dream of right now).
The infamous G7(or 
is nearly irrelevant now (the largest economies in the world — i.e. Global 7). The real decisions are at the G2 level and those two are China and the U.S. No other nation is really close.
Developing nation? Baloney. We, and the rest of the world have to stop even thinking about China as a developing nation — they are not.
China has put men into space, has nuclear weapons and the delivery systems to drop them anywhere in the world, a military (in terms of soldiers) the size of Russia and the U.S. combined.
Drop the pretext. The four or five most developed nations in the world today include China in just about everybody’’s reckoning.
China has to be taken seriously, held to developed nation accountability and treated as the most powerful ‘partner’ of the United States (remember Obama doesn’t want to think in terms of enemies or friends — not such a bad idea really).
Oh, and by the way, Russia is devolving under Putin (and his puppet Medvedev). The first of what I will call undeveloping nations (although Cuba probably sets the standard there). I don’t think they want to be anybody’s ‘partner’ and that egoistic and Machiavellian approach is part of their problem.
Thanks for the photo to flickr’s francisodiez
Honors and Recognitions
This website uses IntenseDebate comments, but they are not currently loaded because either your browser doesn't support JavaScript, or they didn't load fast enough.