Companies (Page 6)

Some people are unsure whether the 21st century will turn out to be the Taiwanese Century because of the insultingly stupid economic self-harm and slow descent into authoritarianism. New York Times journalist Thomas Friedman&nbsp, says yes:

A Chinese business said,” There was a time when people came to America to see the future.” ” Then they come these”.…

President Trump is focused on what groups National trans athletes can competition on, and China is focused on transforming its companies with A. I. so it can outrace all our businesses. Trump’s” Liberation Day” approach includes doubling the amount of tariffs and gutting our nation’s academic institutions and workforce, which encourage innovation in the United States. China’s liberation strategy is to open more research colleges and double down on A. I. driven development …

[ W]h is the reason China’s production behemoth is today so powerful: it makes things cheaper, faster, better, smarter, and more filled with A. I. China places an emphasis on STEM schooling, including science, technology, engineering, and math. Each year, the nation produces some 3.5 million STEM graduates…]T] he best are world class, and there are a lot of them…

Over 550 Foreign places are connected by high-speed road that makes our Amtrak Acela look like the Pony Express.

Matt Yglesias also recently tweeted ( and then deleted ):” For the first time in my life, I really just think America may be cooked and it’s gonna be the Chinese century.”

Tyler Cowen&nbsp, has his questions, arguing that Chinese victory free-rides on a bunch of American-provided people products:

China’s advancements in the field of technology are amazing. BYD has the best and cheapest energy vehicles…Chinese AI, in the form of DeepSeek and Manus, has shocked many Europeans with its inventiveness…Yet American and most of all American identity is not over yet. These breakthroughs by China are true, but they rest on a foundation of American values and corporations more than it might seem at first …

The uncomfortable fact is that China’s size depends on British power and influence. The Chinese trade system, for example, requires a relatively free world buying order…If the world breaks down into deeply selfish protectionist trading blocs…where did the Chinese sell the rising output from their factories? …

The Chinese growth and stability type also requires relatively stable power supplies…If the Western alliance program collapses, who is to keep the Middle East somewhat stable…China scarcely seems up to that task…Another danger on the horizon is atomic proliferation…The more nuclear powers inhabit the world, the more China is hemmed in with its foreign policy ambitions…

There is much to rue in the first few months of Trump’s foreign and economic policy, but China is far from being able to take the baton. They are coming in second and doing a fantastic job of doing that because Americans still hold the lead despite our flaws.

Surprisingly, I think Friedman is more right than Tyler here. Over the past few years, I’ve written a few articles about this subject, and I believe that when we look back on the 21st century, we’ll probably refer to it as the Chinese Century, or at least the first half of it.

But the reason I say this is because what it means for a century to “belong” to a specific country will change from what it meant in the 20th — and often in ways that will not be very pleasant.

What does it mean for a century to “belong” to a country?

There is no one reason why the 20th century is frequently referred to as the” American century.” It’s just sort of a gestalt impression that the US was the most important country during that century. There were many dimensions where this was accurate:

• The US had the largest economy in the world, and was the dominant manufacturing nation.
• The US was militarily dominant, having the world’s most powerful military for almost the entire century.
• The US set the standard for how a modern lifestyle should look in one of the richest and richest economies.
• The US was a technological leader, producing by far the largest share of the scientific discoveries, breakthrough inventions, and commercial products that changed the world.
• Through its output of movies, music, television, games, fashion, and ideas, the US was culturally predominate.
• The US was geopolitically central, it played a key role in creating and sustaining various international institutions, created the world’s largest and most powerful network of alliances, and provided global public goods like freedom of the seas.
• The US was historically central, playing the most important role in shaping many of the key global events of the 20th century — the World Wars, decolonization, the Cold War, and globalization.

In fact, I think that America’s unusual significance in nearly every area of the 20th century influenced our entire modern conception of recognizing countries as centuries. It’s hard to think of other historical examples where one country has had such broad-spectrum dominance.

The United Kingdom in the 19th century, which led to the Industrial Revolution and the creation of a globe-spanning empire, has come closest to being on par with this country. But even the UK was never as militarily or culturally dominant as America was in the 20th century.

As for older comparisons, only the Mongol Empire in the 13th and early 14th centuries really measures up. For one nation or empire to overshadow all the others, the globe was typically just too fragmented and technological advancement was too slow. Even the Roman Empire, the Abbasid Caliphate and the Tang Dynasty were more regional superpowers than global ones.

Anyway, the point is that there is no justification for us to assume that anyone will rule the 21st century, just like America did in the 20th. The historical norm is&nbsp, multipolarity, with different countries and empires having modest leads in various different dimensions for various periods of time.

Now, you can argue that globalization and continuous technological progress are both here to stay, meaning that future centuries are permanently more likely to have one dominant country. That’s probably true to some, some, and some extent, in my opinion. But as I’ll explain, I also think that the nature of both globalization and technological progress are changing in ways that will bias the 21st century toward multipolarity.

And some of these changes will result from the power transition from the US to China. Simply put, 20th-century America&nbsp, invented&nbsp, the game that it won, whereas China will use its power to invent ( and win ) a different sort of game.

China’s greatness will be different from America’s greatness

You might not be aware of this, but I believe that China and the US are very similar culturally rather than as two distinct” Eastern” and” Western” civilizations. 1&nbsp, But I’m not much of a cultural determinist, I think technology and institutions tend to matter more. Here, the similarities far outweigh the differences.

One area where China already far surpasses America is in&nbsp, state capacity. This is from&nbsp, a post I wrote back in 2023:

In his book,” China’s Economy: What Everyone Needs to Know,” ( which is excellent and highly recommended ), Arthur Kroeber presents a grand, unified theory of the nation’s economy, arguing that it can mobilize a lot of resources quickly and effectively but can’t use those resources in an optimally efficient way.

So in the case of say, building too many apartments, or&nbsp, failed Belt and Road projects, or wasteful&nbsp, corporate subsidies, the lack of efficiency can really bite. However, China’s resource-mobilizing approach can accomplish things on a scale no other country has ever accomplished before if we want to build the world’s largest high-speed rail system, create a world-leading car industry from scratch, or build a significant amount of green energy…

Remember a few years ago, when a bunch of people were&nbsp, sharing this map&nbsp, of a hypothetical U. S. high speed rail system? …Of course, the map and&nbsp, others like it&nbsp, were pure fantasy, in 15 years, California’s much-ballyhooed high speed rail project has &nbsp, managed to almost complete&nbsp, one small segment out in the middle of nowhere.

That’s the extent of the high-speed rail prowess of the US, but China’s authorities actually built the map! … In the last 15 years, China, starting from scratch, built a high-speed rail network&nbsp, almost as twice as long as all other high-speed rail networks in the world, combined. You can look these numbers up on Wikipedia, I’m not going to be exaggerating. As of last year, China had 42, 000 kilometers (km ) of high-speed railways in operation, with another 28, 000 km planned. That’s compared to just 2, 727 km in Japan, with its famous shinkansen.

Back in the middle of the 20th century, the US had much higher state capacity than it does today; it was able to surpass all other countries during World War 2, construct the interstate highway system, and so on. But modern Chinese state capacity vastly exceeds even America’s peak.

What other country could have maintained the kind of cruel, under-controlled Covid lockdowns that China managed to keep through 2022? Of course, past a certain point, these lockdowns were probably counterproductive, and they were certainly&nbsp, dystopian. But they were certainly a demonstration of the awesome power of the Chinese party-state.

China’s size is equal to that of the US, so if its economy grows, it will eventually become even more economically dominant. &nbsp, The UN predicts&nbsp, that by 2030, China will represent 45 % of all global manufacturing, higher than the US ever achieved, except for a brief moment after World War 2.

Keep in mind that as service industries expand, manufacturing accounts for only 5 % of China’s GDP. So unless China somehow turns out to be uniquely weak in the service sector, we can probably expect its overall economic dominance to be just as big as America’s was, or bigger.

Nor do I think the loss of US export markets will hurt China much. Tyler inquires,” Where will China sell the rising output from their factories?” The answer to that question is” China”. Contrary to popular belief, China has a less export-intensive economy than countries like France, Germany, or South Korea:

China had a brief period of export-oriented growth in the 2000s, but that’s basically over. China currently sells the majority of its products to Chinese consumers. Even the vaunted” Second China Shock” is mostly an overflow phenomenon, for example, China has become the world’s top car exporter, but the vast majority of the vehicles it makes are for domestic consumption.

In this sense, China is becoming more like the 20th-century US — a very large economy that has some prominent exports but is fundamentally domestically focused. Lack of demand from America is highly unlikely to cripple or even substantively reduce China’s economic progress, especially as the Chinese economy shifts to services.

No, China’s current real estate bust won’t likely reverse its economic growth in the same way that the Great Depression has permanently halted America’s.

With economic dominance will come military dominance. Due to nuclear proliferation and the shift in technology toward tactical defense ( basically, drones and missiles blow up vehicles and guns shoot down drones ), smaller nations of the world are now probably more able to withstand conquest and dominance by their larger neighbors.

But China’s size and manufacturing strength will allow it to overwhelm any nation that resists it and that threat will be enough to overawe most.

But the similarities probably stop there. China’s enormous size, smaller resource endowments, and inefficiently high level of government involvement in the economy are likely to prevent it from achieving the kind of world-beating living standards that America enjoyed ( and still enjoys, at least for the moment )…

China will be the world ‘s&nbsp, biggest&nbsp, economy, but only because it’s four times the size of America, it probably won’t be the&nbsp, richest. This implies that while the world’s citizens may admire China’s enormous train stations, soaring skyscrapers, and endless infrastructure, they may not be clamoring for the same quality of life as the Chinese.

In terms of technological leadership, China will certainly shine — but not in the same way America did. In a post last month, I argued that China overall is a highly innovative country, but that due to weak IP protections and other institutional factors, its innovations tend to be a blizzard of incremental improvements with few dramatic breakthroughs.

This may seem like a condemnation of China’s system to American ears, but to China’s leaders, this is probably just fine. If China simply appropriates or copies any new invention and scales it up more efficiently than anyone else can, it still comes out on top. And coming out on top is much more important to China’s leadership than advancing the overall development of human knowledge and wealth, in my opinion.

If weak IP protections discourage breakthrough discovery and invention all over the world, so what? That just reduces the risk that the rule of the Chinese Communist Party will be destabilized by the emergence of new techno-economic paradigms.

Some people might contend that AI will alter this formula. If people all over the world are able to create breakthrough innovations on their mobile phones using open-source AI algorithms, the cost of breakthroughs might come down so much that IP protections don’t really matter.

If so, the world will have reached the end of the technological era. But even in that scenario, China will likely be able to appropriate, scale, and commercialize all of those innovations. It will still be the technological leader, just not the kind the US was.

I anticipate that China will be more isolated and less powerful than America was in the cultural realm. Partly this is because of language — English is far more internationalized than Chinese will ever be ( though AI will erode this barrier significantly ).

But it’s also a result of social control. China is a deeply repressive nation, with universal surveillance, fine-grained media and speech control and ubiquitous censorship. That’s the kind of society where only anodyne, cautious artistry can flourish, except in tiny subcultural pockets too small for the government to worry about.

China’s leaders will likely continue to be paranoid about allowing in foreign ideas. They will continue to use the Great Firewall to “protect” Chinese people from the memes and ideas produced by the rest of the world.

China will only experience a weak and lag-related artistic and cultural ferment. It will be orphaned from the global discussion, and the country’s creativity will instead be channeled into the technological and commercial space.

So while I expect China to produce some hit video games and big-budget movies, I don’t think it will do much to push the boundaries of culture, despite the individual creativity of its people. Although TikTok and other Chinese tech products will have an impact on global culture, the main content will be produced elsewhere.

As for geopolitics, I think Tyler is certainly right that China will provide fewer&nbsp, global public goods &nbsp, than America did. It will be more focused on protecting its own trade than it will be on promoting international maritime freedom. Its military will make sure energy supplies reach Chinese shores, but probably won’t be interested in making energy globally abundant.

Research is another example, China’s government will make sure China dominates every frontier technology, but won’t care as much about expanding the frontier. Despite the sneers directed at America’s self-appointed role of “world police,” global security was yet another. It was more willing to fight regional conquerors than China has shown so far.

But I think Tyler overestimates the negative impact on China from the collapse of American public good provision. China’s military will be perfectly capable of doing it themselves if America stops defending Chinese shipping and energy supplies.

There is nothing unique about the US Navy, just like there was nothing unique about the British Navy. And in fact, since I predict China will guard only&nbsp, its own&nbsp, trade and energy supplies and leave other countries out to dry, the Chinese Navy may be able to accomplish its goals more cheaply than the US could.

In other words, I anticipate that China will be a much more self-sufficient power than America was in the late 20th century. It’ll be more like the US of Teddy Roosevelt’s time — mostly inwardly focused, but occasionally intervening in smaller countries ‘ affairs out of economic self-interest or desire for glory. International organizations and forums will either become irrelevant or serve as tools for China to control smaller nations.

In sum, I predict that this&nbsp, will&nbsp, be a” Chinese Century”. This may not hold as strongly in the second half, when&nbsp, China’s low fertility rates start to bite&nbsp, and India really starts hitting the top of its own trajectory.

However, I anticipate that China will be the world’s most powerful country in terms of both economic and technological terms for the next few decades, a historically unmatched marvel of size, resource mobilization, and innovation. America’s orgy of self-destruction will only hasten this future.

And yet, in my opinion, the Chinese Century will be disappointing in many ways, particularly for those who reside outside of China itself. A world where every invention gets grabbed and copied by Chinese state-sponsored companies is a world less filled with wonder ( though AI may help here ). A world where Chinese warships guard Chinese trade and leave other nations to fend for themselves is a more chaotic, less secure, less egalitarian world.

Other developing nations have less opportunity to grow, in a world where China produces everything for itself without relying on foreign manufacturers. A world where China tolerates regional conflicts and preserves peace only in its own backyard is a more dangerous, violent one. And a world in which the most important country keeps its culture a secret from everyone else is drab, less creative.

In other words, I’m more confident than Tyler about China’s ability to prosper, build, innovate and dominate in a world where America collapses in on itself. I think Thomas Friedman is right, and that unless something big changes, China is headed for at least half a century as the globe’s preeminent power.

A Chinese Century will, in many ways, be an improvement over the American Century, which makes me feel somewhat depressed. Perhaps the US efflorescence was a very rare and special thing, whose like we will not soon see again.

Notes:

In summary, America never had a single traditional culture, while China nearly destroyed it during the Maoist era. Both countries have substituted consumerism and technological progress for traditional cultural relationships.

Americans and Chinese people both dress sloppily, cut corners at work and drive to the mall in crocs and shorts, eat high-calorie greasy food and harbor grandiose, vague, usually unrealistic dreams of personal wealth and success. On the other hand, both maintain close, frequently contentious family relationships, with “amoral familism” being practiced in both locations.

Both have a passion for real estate. Both are large, diverse societies with significant social divisions, with the majority of them racial, while the majority are urban/rural and class divisions in China.

In addition, both” Han” and “white” are synthetic ethnicities created to unify large, diverse populations. Both Americans and Chinese people tend to have pride in the size and power of their countries.

I’ve made the casual observation that Chinese people adapt to American culture more quickly than other immigrant groups, and that Chinese people find me to be much more “foreign” than people from Europe, Canada, or Australia. Your mileage may vary, of course.

This article was originally published on Noah Smith’s Noahpinion&nbsp, Substack, and is republished with kind permission. Become a Noahopinion&nbsp, subscriber&nbsp, here.

Continue Reading