Posted on 01/16/2007 2:21:31 PM PST by Paul Ross
China is threatening America's lead in technology
By Ernest Hollings and Charles McMillion
Financial Times, January 15, 2007
China's soaring spending on technology research and development now exceeds that of Japan. An authoritative recent study shows that if current trends continue, China's R&D spending will pass the European Union in four years and the US in seven. If China's spending continues to accelerate or if the US rate slows, China could be the world's leader even sooner.
Make no mistake: with China's much larger population and lower production costs, the only way the US can maintain its high standard of living and military security is to retain vastly superior technology within its borders. This does not mean global companies incorporated in Delaware but producing in Shanghai; it means companies working within US borders.
The Organisation for Economic Co-operation and Development finds that R&D spending is rising by over 20 per cent a year in China, but only by 4 per cent a year in the US.
China's stunning technological advance is central to its government's elaborate and "scientific" industrial policies.
Beijing's latest five-year plan builds on the success of the past, collaborating to gain the best expertise of the best global companies and only now starting to champion independent Chinese brands.
Unlike Japan, China's policy has drawn virtually all the world's leading technology firms to collaborate on R&D as well as production in China. Spending figures alone therefore understate its progress. China has opened pipelines into the global technological, financial and managerial capabilities of the world's leading enterprises.
The media show little interest in the $1,200bn (928bn) US trade deficit with China that has been accumulated over the past decade.
As this massive deficit has built up, the US economy - in spite of $11,000bn in new government and household borrowing - has grown at a slower rate than the world economy. China has grown three times faster.
US trade deficits increasingly reflect more than the loss of current productive capacity. They also represent the weakening of the technological superiority that kept the US and much of the world militarily safe and prosperous for more than 60 years.
Traditional US surpluses in the global trade of advanced technology goods were lost for the first time in 2002, and since 2004 the deficits in technology goods are larger than the surpluses for all royalties and fees on so-called intellectual property - including franchise fees. In other words, since 2004 the US has a global deficit in technology goods and services.
China - including the powerful global companies that produce there - is central to this historic technological shift. US technology trade deficits with China started in 1995, concentrated around information technology. They accelerated and spread rapidly, and now include most technology products.
If it were not for exports from the US of Boeing aircraft and Intel microprocessors - industries in which China is concentrating R&D collaboration - the narrowing of US technology leadership would already be much more obvious.
It is true, as one manufacturer told us, that most R&D in China remains a variation on the theme of reverse-engineering. It knows its vastly lower production costs allow "fast followers" to reap much of the financial benefit from the innovations of others.
But China has also achieved stunning progress with technology breakthroughs in such vital fields as wireless communications, permanent magnetic levitation rail transport, missile and spacecraft technology, and much more.
China's massive efforts to establish new international technical standards to allow its companies to (even more freely) bypass foreign patents - and require US companies to pay royalties to China - are among today's least understood and most important economic and military issues.
What matters most is not whether any group of politicians or lawyers can agree that China is acting "fairly" or "unfairly", or "legally" or "illegally". It is not necessary to debate motives that China's leadership may or may not have beyond assuring China's own prosperity and security.
What does matter is that one of the most crucial US national economic and security interests is to assure that vast technological superiority remains within our borders. This vital national interest is not being protected and is now in grave and immediate danger.
Ernest (Fritz) Hollings is a former US senator. Charles McMillion is president of MBG Information Services, a business information company.
Wonder what woke him up? He won't be very popular with the new RAT leadership which is fully on board with letting things get worse in a grand gesture of "bipartisanship".
Bump
Don't you just love to see a PLAN come together?
I just love the smell of burning "Buggy-Whips" in the morning!!!!!
We agree.
"Free trade" with China is a disaster.
But we have already gotten behind the power curve, and can't pull it out.
LOL!
So China's R&D spending is up to $50 million a year?
You're right. It's Nancy Pelosi's fault.
Hate to burst your bubble, but short of some cataclysmic event, China will surpass us in economic output within 25 years, and there's nothing we can do about that.
They've decided to modernize, abandon communist economic policy, and their people are both smart and hard working.
They can google up technology. And they're motivated. And they outnumber us by about 4-1.
Yep, they'll pass us. Hopefully we can keep some technological superiority.
BUY AMERICAN
If the Democrats have their way, China might surpase us in economic output by the end of the decade.
Just wait for the coming chinese civil war when all those banks go boom.
I was about to say that too. Just wait until the first group of "middle classers" default on their new apartments. Then let the snowball ROLL!
We can thank Bush 41 for getting the ship of technology aimed in their direction. Then Clinton did his share to maintain the speed and then Bush 43 made damn sure the ship didn't veer from the chosen globalist course.
Yee haw, let's all be proud of the Washington, DC version of globalism and socialism. America is collapsing as the world leader, yes siree, that is the plan.
Bring on some more illegals before sundown. America needs them!
1. Name *one* innovative product developed in China. Name ten developed in Japan, and ten developed here. Wow, those Chinese are getting their Yuan worth in R&D!
2. The U.S. is behind the world average ... that's why it's not a "developing" country.
3. The really odd situation that's shaping up w.r.t. China is this: they can't hurt us without destroying themselves, because they refuse to allow Chinese standards of living to really rise (no internal market); but if they do that, the cost of production will rise (correcting trade issues) and the emergent Chinese middle class would spell doom for the PRC political model. Just another M.A.D. standoff (in this case Mutually Assured Depression).
This 'article' is a poorly-disguised attempt to position the Rats as the guys who will come and save us from the evil global capitalists.
The bad thing is that as badly as this is done, it'll still work if our team insists on playing status quo. People are not happy with the trade situation and rightly so.
The first part is right. The Second ISN'T.
Guess who still runs the country? And it isn't in name only. They have merely become a Nationalist Socialist modification of Communism. Still a socialist enclave.
Pffft.
What has China created in the last 100 years that wasn't stolen tech?
Indeed, hence we need to get a "course correction" and take W out to the woodshed. Just as was, apparently, done about the "catch and release" illegal alien arrest practices.
This is not only apparently very likely, but has been seen coming for decades. Those who are not in engineering school and avoided math and science courses have made this possible so soon. Also, the Treaty has made private investment in the high frontier impossible. Repeal the Treaty and hope it is not too late.
So their highly aggressive "reverse engineering" isn't a real threat...? I think it is, considering that they could conceivably catch up to our level...and then using their superior manufacturing clout...out-deploy us.
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