The New “Sick Man”? Not Quite…

On the 15th of April, Frank Ching, a regular columnist for South China Morning Post (SCMP), wrote an article called “The New ‘Sick Man’”.

The content of the article, in a nutshell, is the comparison between USA’s attitudes of late with China’s behaviour in the past. The author’s approach to make that comparison was rather unusual. In fact, Ching’s list of facts about China’s fortunes from rags to riches was so long that one gets lost halfway confused if the author’s intention was to pay unduly homage to China’s efforts or a wake-up call to America.

The author starts off by describing that for centuries China believed in its superiority over their neighbouring nations who in the Chinese eyes were nothing more than “Barbarians”. This smugness led Chinese emperors to decline trading and diplomatic relations with foreign nations. And it was precisely these cocoon policies that led China to fall behind in global stature as it stopped the flow of great minds interacting with their Chinese counterparts.

The author believes that America has fallen victim to the same sense of superiority and smugness that was once observed in China which brought this Asian country to its knees in the 19th century. Although such a statement was made, the author delivered some very weak arguments as to why USA carried smugness.

He points out that USA calls their annual baseball championship the World Series when no other nations participate in the competition. The author also points out that 150yrs ago, Chinese workers were being taken to America in conditions slightly better than slaves to build the railroads, where as now, China is offering technology and engineers to US to help build a modern rail system, which in the author’s eyes means that China can now command respect from the rest of the world, with its high-quality but low-priced products.

I have to admit that I share the same sense of admiration for China’s economic miracle. However, the text itself offered a certain favouritism towards China and as such, the arguments presented at the end showed signs of being rather biased in my view.

Has China really gained respect from the world for its high-quality, low-priced products? I beg to differ. Let’s not forget that not so long ago, the whole world heard the scandals that certain merchants in China were exporting chemically made fake eggs and baby formulas that contain melamine. Both are daily consumed products that can cause devastating health risks to humans.

Chinese economic miracle is not a unique phenomenon. We have witnessed similar cases in two neighbouring countries in Japan (60s and 70s) and then in S. Korea (70s and 80s), where both countries were able to squeeze their products in the global market by producing high-quality, low-priced products. In fact, this phenomenon was coined the Flying Geese Paradigm by Japanese economists, which points out that the rest of Asia will follow in Japan’s footsteps into economic miracle.

Ching pointed out that China had a capable government because it rebounded from the global financial crisis at a much faster rate than America. This is certainly true, but what he neglected to explain was that when the global financial crisis hit, America and China were in very different positions. America was already in deficit, engaged in two overseas wars, and had a widespread problem with subprime. China on the other hand had a trade surplus and had accumulated a massive foreign exchange reserve of 2.4trillion, i.e., 30% of world’s total. China was always in a far better position to rebound from any economic crisis than US.

The author also points out that China currently is offering to supply US with technology and engineers to build a high-speed rail lines system in California. It gives the readers a false sense that America has fallen behind China in technology.
But in reality the reason why America has fallen behind other nations in the development of Public transportation is one of logistics and lack of demand.

Cross-state travels are usually done by plane because almost every state in America has good airport facilities, besides planes are simply less time consuming and inexpensive. Public transportation was never that popular in US, with Americans preferring private cars. But as more and more Californians face congestion in their highways, some are demanding greener, and inexpensive alternative means of transportation.

China on the other hand doesn’t have a culture of using cars to commute. This is a nation where, even in today’s standards, 54million bicycles are sold per year. Also, travelling in China by plane is still an expensive means of transportation for the majority of the Chinese. The trains being state owned cost a fraction of the price.

China saw a need to develop their railway system and so went straight to the source (Germany, France and Japan). For 2 decades China has imported German, French and Japanese bullet train technology and at the same time developed their own. The Chinese have added changes and innovations, but complains have been forthcoming that their systems are just too similar to the Japanese. This could spark a patent infringement trial.

The fact that Chinese contractors are being considered is simply because they already have the technology in place, the know-how and they can do it for a much cheaper price compared to other contractors from Germany, Japan, France, etc…who are also competing for the same deal.

Ching says that America is smug and believes that they are the best and the world revolves around them, but then how does he justify that California is considering railway proposals from all these foreign businesses instead of its national ones? Surely, following his train of thought, one must deduce that America, smug as it is, would dismiss foreign proposals and go for the national proposals, just like Emperor Qianglong dismissed the foreign envoys with trade proposals by declaring that China has no reason to engage in trades since it has everything that it needs…

The article’s major flaw is that it dealt with the issue as if USA were ruled by one party alone, or that parties change but the exact same ideologies apply. In reality, the republicans and the democrats have noticeable opposing policies.

In reality Obama’s mandate, short as it may be, is very different from Bush’s. Bush’s administration is described by most as a government that was willing to go to war without an international consent, even if it meant breaking foreign relations. Obama, who has lived outside of US, is much more willing to engage in dialogues than his predecessor, and in several occasions has pledged to once again unite the world by bridging those gaps left by the previous administration.

Perhaps one major difference between the Chinese and American societies is the question of freedom of speech. With the recent health bill, fierce debates followed for months and voices were heard from both sides, those who supported the republican’s views and those who believed in the democrat’s proposal.

One might think that opposing opinions can hinder advancement, dragging proposals unnecessarily. However, it is generally accepted that open debates keep people in check making sure that administrations do not abuse their power. When they do and the people are unhappy, they simply vote for the opposing party.

Ching’s “The New ‘Sick Man’” offered a very interesting read but two fundamental flaws weakened his case. China’s economic development are facts, which are to China’s credit, few will dispute that, but Ching’s over emphasis on China’s economic miracle disregarding completely the social and political issues, gives his arguments less merit. Also, he dedicated no more than two short paragraphs to the support of his case that America is a country in decline due to their smugness. More solid evidence is needed to support this claim. In truth, despite America’s plight in the financial sector, the USDollar remains strong and the American economy is still sound. Nothing suggests that people are writing off US just yet.