Here Comes China: Economy, Tech

A few selections from Godfree Robert’s Here Comes China newsletter:

China is first to create nuclear fusion plasma, way ahead in the most important race of all.

The Senate National Defense Authorization Act (NDAA) omitted a bill to ban the sale of DJI drones in the United States after it passed in the House. The absence does not yet mean the act is dead, but it is a positive step in the eyes of those who support the Chinese drone company.

A sunlight-powered MAV drone weighing as much as a sheet of paper, just 4.21 grams, with its 20-centimeter wingspan, represents a dramatic downsizing from previous flying machines, which were typically meter-sized and weighed kilograms. This breakthrough, also published in Nature, opens up exciting possibilities for ultra-long endurance micro aerial vehicles. Such devices could potentially stay aloft indefinitely during daylight hours, making them ideal for applications like environmental monitoring, communication relays, or search and rescue operations in remote areas.

China creates its own money and controls its credit system. It’s also invested in modernizing its high-speed railroads, modernizing its communication system, modernizing its cities, and above all its electronic internet system used for monetary payments. China has liberated itself from debt dependency on the West – and in the process, made the West dependent on it.  This could only have been done by government investment and regulation under a long-term plan. The Western financial model lives in the short run. If you’re going to allocate credit and resources to make fortunes by living in the short run by taking as much as you can as quickly as you can, you will not be able to make the capital investment to develop long-term growth. That’s why American information technology companies have not been able to keep up with their Chinese counterparts. Financialized “market forces” oblige them to use their income for stock buybacks and to pay out of dividends. That is the case with U.S. technology across the board. China’s companies investing in information and internet technology plow their profits back into reinvestment in more research and development. Such innovation has shifted from the West to the East, which has rediscovered the logic of industrial capitalism developed by the 19th century’s classical political economists.

The last time the ‘king of the manufacturing hill’ got knocked off the throne was when the US surpassed the UK just before WW1. It took the US the better part of a century to rise to the top; the China-US switch took about 15 or 20 years. In 2020, China made up a staggering 35% of global gross manufacturing production. That is more than the combined output of the United States (12%), Japan (6%), Germany (4%), India (3%), South Korea (3%), Italy (2%), France (2%), and the United Kingdom. By 2030, the world will only have two industrial sectors, China and the world.