How Big a Competitive Threat Is China, Really?

Rebuttal to:
http://blogs.hbr.org/cs/2012/02/how_big_a_competitive_threat_i.html?cm_mmc=npv-_-AWAREN-_-BECKLEY_POST-_-022912
Fascist economic models are not " economic miracles". That is just a word for a person who has no clue about economic models. Japan's model was just like the German Socialist the Soviets and so is the Communist Chinese. It is a fascist economic model based primarily on a centralized economic structure that controls the majority of the economy. This is like having just a King run the country it makes the countries macro policy much stronger while micro spread of wealth is horrible. 

" China is unlikely to repeat Japan's success. Most important, China is developing in a far more challenging international environment than Japan faced in the second half of the 20th century. As a result, its economy will remain more compatible than competitive with America's for the foreseeable future."

The idea that China is unlikely to repeat Japan's success is not a smart statement to make after stating "miracle economy" population ten times with a based on statis economy, as statist economies are based on very low to slave labor for the SOE's to thrive, thus meaning if the Communist Chinese are a statist economy with ten times the population of Japan they will not only redue the fascist economic model but make it ten times more successful. As for more challenging. I really do think so. Japan had to grow in a time when they had just got done trying to genocide a whole culture and take over the world. I do not know anything challenging to a country than to trade with the world after it just got done trying to kill them all. Along with that the Japanese had to deal with a very strong challenge for the west world who just got done with a major manufacturing boom after the war. Where as Communist China has destroyed the worlds economy and it sits facing a scorched earth ready to move in and seed it. 

"Japan had the good fortune to rise during the Cold War. At that time, industries were mostly self-contained within countries, allowing Japan to cultivate internationally competitive companies through targeted investment and trade barriers. The United States, which needed allies against the Soviet Union, not only tolerated Japanese protectionism but also transferred advanced technology to Japan and subsidized Japanese firms."

Today the US is not doing it on purpose but the same thing is happening for Communist China. As the majority of the worlds companies are still very self contained in countries with their abilities based on things like who owns the resources, what the taxes are and how high is inflation due to deficit and high overhead like gas. Today the US is also transferring high technology to Communist China. This is done by allowing firms to be bullied under the innovation technology policy, that forces companies to their land to build things by having a monopoly on resources, then once they are there bullies their intellectual property from them if they wish to have access to the monopolized resources. While also subsidizing the Communist Chinese firms much like Secretary Chu and Secretary Gary Locke allowed to do with over 80% of the US green tech stimulus going straight to international Communist party member's bank accounts and business. Which then destroyed the US green tech sectors. 

"China, by comparison, is rising in the WTO era. The world's wealthiest countries no longer tolerate the sorts of protectionism Japan employed during the Cold War. Far from granting China special exemptions, the United States aggressively pries open China's economy through WTO litigation and bars other countries from selling "dual-use" technologies to China."

Japan's protectionism if you did a line by comparison of issues is nothing compared to the Communist Chinese. Again as japan had to make friends as it just came out of a war it lost. The Communist Chinese are today the worlds 6th highest protectionist country. With the WTO case load not even being able to keep up with the Communist Party use of their 1 billion people population. Knowing that the majority of the violations will be able to go through and allowed as they can't be enforced on. Japan's economy was to small to not be enforced on and must every case of protectionism was dealt with in Japan. Only around 3% of protectionist issues with Communist China is being dealt with. That is why the President Obama has just started a new agency to deal with that case load. 

"China, by contrast, is simply open" I can tell you have studies communist china for about a day maybe. Communist China is not simply open. Their main centralized institution the SASAC works to make Communist China's SOE's the worlds biggest Statist champions. Thus not only shutting out their own citizens economy but the world from its markets as per SASAC control over the GDP of the Communist Chinese economy, 75% of the Communist Chinese economy is SOE's. While 25% are still heavily controlled by party politics and government issues. In which they act more like the Soviets 25% free enterprises that where just for show case but really all where owned by the KGB. Much like North Korea's show case of culture when you go there they act like they still have a culture and that the Communist party has not culturally destroyed all Korean culture in North Korea. 

"China's FDI stock equals 8% of its GDP; more than 70% of that FDI consists of wholly foreign-owned enterprises (as opposed to joint ventures); and foreign firms produce half of China's exports and more than 90% of China's high-tech exports."

That is a very tricky statement it seems you wish to make it look at the end like 90% of China's exports as a whole are owned by foreign companies. Again the majority of business going on in Communist China is owned by the state and controlled by the SASAC. You speak on FDI but obviously do not realize that 50% of the world direct development contracts, loans and markets which is all FDI is all owned by communist China. So in reality their FDI stock is much higher than 8% of their GDP. As that is their GDP pure export's and FDI to gain more exports. 

You state China is unlikey to repeat Japan's success then state that the Japanese had a much hard time with their economy than the Communist Chinese do

"Exposed to foreign competition, many Chinese firms eschew long-term investments in innovation and instead focus on lowering costs in existing manufacturing activities. For the past 20 years, Chinese firms' R&D spending as a percentage of sales revenue has remained seven times below the average for Japanese firms. When Chinese firms import technology, they spend 25% of the total cost on absorbing the technology, far less than the 200% spent by Japanese firms when they were trying to catch up to the West in the 1970s." So their sales revenues are less but the cost of overhead is drastically much higher. Thus meaning that it is obvious that they are already beating the success of the Japanese fascist economic model. 

"In the 1980s, Japanese leaders spoke openly about bankrupting American firms and turning the United States into an economic backwater." Again this seems like you have no clue about Communist China or what just happened. The Communist Chinese leaders wrote a book called Unconventional Warfare. It was directed at the USA. In which it told Osama Bin Laden to attack the world trade towers, drive the US into an economic implosion guerrilla war. Then to have the Muslim mercenaries constantly attack stock markets and trade routes in the middle east. So after the war was done the US had gained no economic stability in a land it was dragged into by a book written by Communist Chinese leaders. Which also is the fact they state openly they want their massive SOE's to destroy free markets like Das Capital states has to happen for any country wishing to dominate the world under one flag. 

"But China will remain poor and technologically underdeveloped for many years." You are very under researched. The Communist Chinese have surpassed the US on super computers, nano technology, bio technology and the only thing the US has which the Communist Chinese have not yet stolen or blew past us in R&D is space. Which the US has just had to basically destroy its funding for. As the Communist Chinese being to start to fly past us in that too. 

"But China will remain poor and technologically underdeveloped for many years." This statement if false. Over the last 30 years the US economy has shrunk in GDP percentage growth each year, jobs each year, ability to gain surplus each year and has withered literally with regards to the world having US business exports to them and US business personnel. The US has not grown in this relationship. The US has a trade deficit that trumps any trade we do with Communist China by hundreds of billions of dollars. Which means we are not growing we are each year shrinking further into debt and deficit. While the Communist Chinese fascist economic model out due Hitlers SOE advance in Europe to create weight points for their military, way out does the Soviets SOE centralized proxy wars and economic take over, along with the tiny success of Japan not even close to German Socailist success or the Soviet success is way overshadowed already by what Communist China's fascist economic warfare model of militarized economy has been allowed to do. 

Rider I

I have a web site tons of books research articles and other things on communist China. You should read some. Rider I Anti Economic Warfare blog post