China? A Planet within our Planet

National emblem of the People's Republic of ChinaImage via Wikipedia
Lately there's been an avalanche of news about China, ranging from the best to the worst. Fantastic skyscrapers and olympic shows to floods, strikes and police massacres of Tibetans and Uyghurs. Not to mention tussles with neighbours, in particular Taiwan (the "special relations") and Vietnam (over the Paracels islands).
But China is also a trade giant, credited by some with saving the world from the Great Recession. 

A Gentle Giant.


I'ts becoming increasingly evident that China doesn't need the rest of the world. It grows fast - exponentially fast with little help from outside. And whatever technology it needs, it can buy. Chinese used to go abroad to get it - no more. Now they import from the West whatever brainpower they need. And unlike the Western Capitalist Model, the key agent for change is not business but the government.

It's in the process of becoming a planet within our planet.

Just one example among many: in 2009, sales of digital content in China reached $1bn and they are growing at an estimated 40% annually. Predictably, the Chinese authorities are paying attention: in 2010, the largest state-sponsored publishing conglomerate, China Publishing Group, launched Digital Media Co. Ltd., a new digital media subsidiary. To understand just how amazing this is, imagine the US Federal Government moving into the new roaring e-book market and setting out to compete with!

Where does that leave us? Are we going to be overrun by the Chinese? Their goods flood our markets and in some areas, like solar energy, they are holding (literally) the winning chips, because the needed material is mined almost exclusively in China. By end 2010, China is expected to produce two-third's of the world's solar panels. And, although not as good, they're half the price of the Germans. It's a price war - not a technical one, and the Chinese tend to win every time, here and elsewhere. The world is awash with shoddy Chinese stuff...

Should we worry? There is a sense of déjà vu - when Japan surged forward after World War II, they flooded us with cheap goods and kept their own market closed. Just like China today. But, remember, nothing disastrous resulted from the Japanese Tsunami. We got used to it, they improved quality, and a new equilibrium was reached.

China however is a HUGE market and every businessman worth his salt is salivating to get in. Some do, but it's difficult. Google famously clashed with the authorites and  has learned its lesson. Today it's way behind the Chinese-owned search engine Baidu. And eBay has been driven out by Dangdang and Zhuoyue. It would seem that Western businesses who wish to enter the Chinese market need a Chinese partner. And must learn to toe the political line. That's how GM has managed to sell more cars in China than in the US. It has a dormant partner, Shanghai Automotive Industry. Unfortunately, dormant partners have a way of waking up as soon as they learn the ropes. They become rivals, and Shanghai Automotive plans to enter the Indian market alone...

The upshot? The Chinese are big and getting bigger. Are they going to be tempted to control the world? I know a lot of people worry. My mother who's 96 is convinced the the 21st Century will be Chinese. She has this old-fashioned vision of yellow hordes galloping across Europe, Genghis Khan-style.

Not quite. The Chinese are busy at home growing and don't need anybody. Again, one example among many, going back to the one reported in Publishing Perspectives (July 22, 2010). The consensus in the industry is that few if any Chinese publishers would ever think of going abroad because of the immense opportunities at home. Essentially because there's no need to venture outside to become a success.

It's like saying China is so big it doesn't need anybody. We can all agree it's not like Queen Victoria's England that needed Trade (and War) to build the British Empire, giving us the unique spectacle of a tiny island that "ruled the waves". China is not a bit like that. It's a continent and has no interest in ruling the waves. And never had. This is the country that invented the compass in the 4th century BC but never used it to sail any further than the China South Seas. 

Mmmmm...maybe. Do you agree? I have to admit I'm only half-convinced myself. Actually, I'm constantly on the look-out for signs of Chinese...imperialism. By that I mean a political desire to impose their own ideology on the rest of the world. For the time being, the Chinese Brand of communism sounds pretty bland. I just hope it stays that way...

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