GOOD MORNING FROM LONDON
A recent article in the SCMP by Winston Mok focuses on a change in the momentum of China-US economic development. China has been moving from making labour-intensive goods to technologically sophisticated products and through its Belt and Road Initiative has assumed a leading role in promoting economic development in East Asia.
China became the leading manufacturing nation in 20112 and the leading trading nation in 2013. And by 2020, China had as many new patents granted per year as the US + Japan combined. Just like Japan in the 1980’s China has emerged as a threat to US economic dominance.
The US is, today, not in harmony with market forces in its strategy to disrupt the progress of China. Politics is getting in the way of economics and the world market. In 1960 the US represented 40% of the world economy – today it is 25% and Southeast Asian nations trade with China at 2.5 times their level with the US.
The World’s Technological Centre of Gravity has shifted towards Northeast Asia. Among the Top Ten Patent Co-operation applicants in 2021 8 were Chinese/Japanese or S Korean companies while Qualcomm was the only US firm. Sweden’s Ericsson was #10.
China offers more than funds. From high-speed rail to 5G and now renewable energy China is the world leader, often far ahead of the US. US tariffs on China are an ‘Own Goal’ as they deny US consumers the benefits of Chinese imports + significantly inflate domestic US prices in the process.
Influenced by workforce shortages + rising labour costs, high-end manufacturing is being automated in China while labour-intensive operations are being moved by Chinese investors to Southeast Asia and South China. Those countries’ prosperity depends on trade and investment with China + the US and not just one or the other.
Asian countries post Western Colonialism and Japanese Occupation know how to develop their prosperity in an ever-growing multipolar world.