China Has Strengths, Too

At Newsweek Joseph Nye, who coined the terms “hard power” and “soft power”, outlines why he thinks the U. S. has “a better hand” than China:

President Donald Trump describes China as the greatest external threat to American power. It is the world’s largest manufacturing country, and the leading trade partner with more countries than is the United States. China is increasing its military budget, modernizing its forces in Asia, and increasing its nuclear arsenal. Now, it seems to be closing the gap in artificial intelligence. The Pentagon describes China as “the pacing challenge.”

A serious strategy must neither underestimate nor overestimate a long-term threat. America has many problems, but overall, in the long-term competition, I would rather be playing the American rather than the Chinese hand. Imagine an entity from Mars visits Earth and sees two great powers locked in a strategic poker game. Using its x-ray vision to look into the hands of the two players, which would it bet to be ahead in 2040? Seeing that the U.S. holds seven higher-power cards in this game, it would bet on America.

The factors Dr. Nye cites as advantages of the United States are:

• Geography—we have both Atlantic and Pacific coasts and our immediate neighbors are “friendly”
• Demography—China’s working age population is actually decreasing in number
• Productivity—”China’s total factor productivity of labor and capital has been declining, while productivity in the U.S. continues to grow.”
• Technology although he acknowledges it’s “a close call”
• Finance and the role of the dollar
• American “soft power” remains stronger than China’s despite substantial efforts by the Chinese leadership to turn that around
• Our alliances

concluding:

Of course, holding high cards is not enough to predict the outcome of a poker game. The result also depends on the skills of the players. There is always the danger that they will play poorly. If Trump discards the American high card of alliances, or tries to stop rather than control immigration, or so overuses dollar sanctions that counties flee to other currencies, our imaginary Martian may lose the bet. Let’s hope that the Trump administration assesses the strategic balance clearly and does not discard any of our high cards.

I note that in his zeal to point out our advantages, Dr. Nye neglects to mention that China has strengths, too. I will mention only two: population and technocracy.

China’s population is about three times ours. That means that all else equal China has three times as many people capable of being engineers, scientists, physicians, etc. as the United States. At present about 17% of China’s population has a college degree or more compared with 44% in the United States. That’s about twice as many people. I would further assert the rather contentious claim that China’s 17% reflects the actual number of people in the country who can benefit from tertiary education. Note that admission to college in China is by competitive examination. We’re providing college educations for a lot of people here but I question how many of those degrees make sense. The odds are that the baristas at your nearest Starbucks have college educations. Do you actually need a college education to be a barista at Starbucks? Every year more journalism majors graduate from U. S. colleges than there are people employed as journalists.

Also, as I’ve tried to explain before, in China technocracy is a natural consequence of the country’s languages, orthography, and history. In the short term that produces significant advantages as China’s rapid economic and scientific development illustrates. In the long term it has disadvantages, producing significant deadweight loss as China’s sparkling new cities (not buildings, cities) in which very few people live illustrate.

Much as some in the U. S. wish it were otherwise, technocracy is not natural to the United States. That has advantages but it also has disadvantages.