Martin Jacques TED Talk on China’s Economic Rise

This is a great talk and synopsis of Martin’s fabulously well researched book “When China Rules the World” which I reviewed a couple years ago on this blog.  If you’re not up for reading the 500+ page book, this is a good way to get the gist, and it’s updated with some post-financial crisis analysis.

His fundamental argument is against the conventional thought that when a country modernises it also westernises and that we can’t use Western ideas and thoughts to frame China when attempting to make sense of it.

Why Does This Have to Be So Hard?

Today the internet is protesting SOPA and PIPA, and it’s impressive to witness.  Absolutely huge sites are blacking out to raise awareness and prevent these bills from passage.  It leaves me feeling both hopeful and saddened.  I’m hopeful that this type of activism can help curb bad bills, but ultimately I’m mostly just sad.

Here are two bills that are almost universally opposed by constituents, are fundamentally flawed from both a logical and technical perspective, opposed by the entire technology industry, and are clearly funded and pushed only by rich and corrupt special interestes.  Yet the only thing preventing them from passage is massive worldwide outcry the likes of which we’ve literally never seen before?

Maybe this is democracy working, but it feels like things shouldn’t be this hard.  Particularly in a representative democracy.  Bad bills are bad bills and they should be dealt with, but I think the reality is that this isn’t even that bad of a bill when stacked up against recent travesties like the NDAA.

So maybe we can pull out of this tailspin as a country, but I’ve got a sneaking suspicion this is how empires die.

Goodbye Current Events

I’m trying something out and it only tangentially happens to correspond with the New Year.  It looks like a resolution, but it’s not.  Essentially, I’m going to unplug from most current events when at all possible.

This flies in the face of my normal desire to read and know about current events obsessively.  I may not be a full fledged news junkie, but I definitely used to read two newspapers pretty extensively, and generally spend large chunks of time reading about current events.  I even used to take daily notes of important events with the goal of being able to identify trends and analyze coverage, particularly longer running items like the 2008 Financial Meltdown or the Arab Spring.  Ultimately, I came to the conclusion that I was better off reading well researched books that came out a few months or years later.  I enjoyed the treatment of the events better, they were more informative, and the coverage more balanced, and the whole experience was of course seasoned with hindsight.

This flies in the face of conventional wisdom, but should yield the following benefits.

More Time

The idea had already been percolating a bit but was reinforced during the last few months of an international move where I literally didn’t have time to follow current events.  The end result was I didn’t care that much.  And I had a lot more time to devote to moving.  Now I’ll have more time to devote to other things.

More Accuracy

There’s a name for a phenomenon (that I don’t have time to research) where you read media coverage of an event or detailed subject which you know a lot about and realize that the article is inaccurate, missing important details, or misses crucial nuance.  You smirk as you realize the reported missed the point or didn’t do the subject justice, then move on to the next article and trust they’re getting it right on all those other subjects on which you’re not an expert.  I’d rather research things in a more classical manner and read books by experts, and challenge their ideas with research.  None of this requires a newspaper subscription or online RSS reader.

A More Informed Citizen

The upcoming presidential election in the United States will probably be one of the biggest wastes of time and money since the last one.  Here’s a great article that surfaced recently which sums up my opinions pretty well: the US political process is dominated by money (94% of the time the candidate with the most money wins) and both political parties are essentially the same.  I’ve seen one blogger call them the Coke and Pepsi parties and I’m convinced it’s true.  Both spend a lot of time telling you they’re different, but at the end of the day, most people wouldn’t be able to objectively tell.  Certainly both parties are hellbent on remaining in power and enriching themselves.  Both are consistently advancing positions that I greatly disagree with and won’t be able to affect by voting for one candidate over another.  For damn sure I could never tell you (and I’d challenge you to honestly reflect for yourself) how one party affected my life compared to another to any measurable degree.

During the previous mid-term elections, I received a polling call that went through every single office and their attendant candidates that was up for election in South Florida, and asked if my choice as a voter would be affected by learning the following information.  All of them had been convicted for some form of fraud, bribery, election campaign funds misappropriation, and more.  The third party candidate calling me made a really good point: everyone in both parties is a criminal!

Ultimately, for the last two elections I’ve ended up spending an hour or so on Politifact for all non-national races, read the presidential candidate’s books, and talked to a few people I trust and made my decision.  I’ve found that the above process educated me significantly more than the breathless campaign coverage I was reading every day.

A More Interesting Person

I’m not going to ignore current events – if people are talking about things that are happening, I’ll tell them I haven’t heard of the event, and they can explain it to me.  It’s better than talking about the weather, it avoids me monologuing on my own opinions which can be a drag to others, and it’ll ultimately make things more interesting for both of us.

A Few Exceptions

I will still maintain a daily reading of technical, work related, and hobby related blogs.  These are intensely interesting and enjoyable, and aren’t really focused around current events most of the time.  I will also maintain a daily eye on the weather and train schedules because this is how I get to work.  I will monitor financial and investment information, but will limit most decisions to being made in a minimum 3-5 year time horizon (which is what I do anyway) and not worry about current doom and gloom.  Any substantive investment strategy should always assume gloom and doom by default and prepare for it, not react to the horrors of the day.

This is Not a New Idea

This is not a new or even novel idea.  I’ve seen this discussed in the book “I Was Blind but Now I See” by James Altucher, I believe it’s referenced in “The Art of Nonconformity” by Chris Guillebeau, and when I really think about it, it’s how I lived the first 15 years of my life without internet access in Asia.  I’m not really worried.

Updated 8 Jan 2011:

Updated thanks to a comment that just came in through email.  The phenomenon I mentioned above was coined by Michael Chrichton and is the Gell-Mann Amnesia Effect.  He also mentioned this in an essay title “Why Speculate?” Thanks “jcs”!

China’s Impending Military Might: A Cause for Concern?

It’s been a terrifying couple of months for Americans.  Always suspicious of China’s intentions, things have reached a fever pitch in the last few weeks after grainy pictures surfaced from Chinese bloggers that the Chinese air force was building a stealth fighter.  Shortly after the rumors came out, we had videos of the mysterious plane taking off.  What some experts had thought would be years away from production was here.  Now.  Ruining Christmas, and just in time for New Years.This came right on the heels of an announcement from China that they were building an aircraft carrier that is part of Beijing’s plan to “build itself up as a maritime power.”  Yikes!

I enjoy hyperbole, and I’m obviously writing in a bit of a sarcastic tone, but it’s been unbelievable to witness the collective meltdown that the American news media is having over China.  Hu Jintao’s recent visit is gasoline on the fire, and we have pundits accusing China of stealing our technology, all-but declaring war against other countries, and kicking off an arms race with the United States.

The People’s Liberation Army Navy (PLAN)

However, these feelings simply don’t correspond with the facts.  Lets talk about the carrier for a minute.  For a little context, you can see a list of all known semi-active aircraft carriers in the world, broken down by country here.  The list is as follows:

  • Brazil (1)
  • France (1)
  • India (1)
  • Italy (2)
  • Russia (1)
  • Spain (2)
  • Thailand (1)
  • United Kingdom (1)
  • United States (11)

It’s important to note that all eleven of the US carriers are in fact supercarriers, which at 70,000 tons, and considerably larger than the 40,000 ton carriers that some countries have, with the vast majority of the carriers operated by other nations falling into the 20,000 ton light carrier class.  In other words, all US carriers are almost four times larger than competing offerings.Carriers are important to the American objectives of being able to project power.

Current US war doctrine assumes air superiority as a prerequisite for military success, and when you’re separated from everyone else by two oceans, you’ve got to be able to move planes around in order to move troops around to win wars. Carriers are astronomically expensive to operate, build, and deploy.  It should be noted that of the list of carrier wielding countries, a couple have trouble keeping them deployed (most notably Thailand).  Due to the challenging nature of conducting carrier operations, consistent deployment patterns are a must.  It takes years for navies and countries to get to the point where they’ve got enough in-house experience to operate a carrier effectively, and it takes even longer to be able to do it in combat, under pressure.

China’s plans for a carrier are interwoven with its plans to develop a blue water navy (one capability of operating beyond territorial waters).  Only Russia, France, the UK and US are considered to have blue water navies.  Ironically, China is very familiar with the efficacy of carriers as Qingdao, one of its main naval bases, (under German control at the time) was involved in the first naval-launched air raid during World War One when Japanese planes flew in and bombarded the German command post.

In the current context, it is almost laughable (a feeling shared by the Navy’s top officer) that the US should feel even remotely threatened by China’s current and future naval plans (there are plans for China to develop a nuclear carrier by 2020, compared to the conventional ship currently under construction).  If we’re afraid of China why not be scared or India, Italy, or Thailand?

It’s no mystery that China’s sabre rattling whenever Taiwan pisses them off is just that: sabre rattling.  The US typically moves a carrier group into the Taiwan straight and that’s that.  China has no ability to invade Taiwan, mainly due to its lack of a credible Navy.  The PLA’s main attempt to advance against Taiwan forces as a spearhead towards island invasion operations in 1949 was crushed in part by a lack of troop landing vessels and this lesson has certainly stuck with PLA leadership.

The Stealth Fighter – Credible Threat?

The stealth fighter or bomber or whatever it actually will end up being is also in the category of “who cares”.  Its engine, like most of China’s engines, is produced by Russia, which means a vulnerable and non-domestic supply chain during wartime.  It’s large and can’t super-cruise, which means it’s short range.  This narrows its effective targets to Taiwan and maybe India, which are essentially China’s main military and geopolitical priorities.  A more realistic perspective would be to put both the carrier and stealth fighter into the “interesting research project” category.

Chinese Defense Spending

Finally, lets look at the defense spending of both countries.  The United States spends over 600 billion dollars per year on its military (this doesn’t include wartime expenses for our adventures in Iraq and Afghanistan).  China spends 98 billion per year.  The United States spends more than twice as much as a percentage of its GDP than China does.  Amazingly, America spends forty percent of the entire world’s defense expenditures.  We’re spending more than the next seventeen highest spending countries combined.  It’s an astronomical amount of money compared to China.

Relative economic costs don’t factor in as much when you consider that premier weapons are almost uniformly constructed from parts or materials found outside of China.Lets close this entry with a hypothetical.  As my buddy Erik put it, if China were operating carriers off our coast, and flying a spy plane loaded with surveillance gear seventy miles off of Hawaii, Alaska, or even California, we would freak out. As in, absolutely lose it.  Probably declare war or nuke something, just to show how serious we are.  And yet, this is exactly what the United State did to China off the coast of Hainan island in 2001.  The United States routinely sails carrier groups and other naval units into the Straight of Taiwan, which is only one hundred and twenty miles wide.  If China routinely sailed battle groups into the Gulf of Mexico to underscore ongoing political objectives, we would freak out.

Is America’s obsession with China and its military little more than a national reluctance to accept the idea that for the rest of history, we may not retain number one status in all areas?  Are we really completely bought into the idea of global manifest destiny maintained by an indomitable military force?  Considering that we spend ten times as much as China and seem to relish the idea that we can do what we want, where we want, when we want, I’d say that maybe we’re just going to have to wake up and accept the fact that there’s room for the most populous country in the world to have a carrier.  Does this mean we fall asleep and not spend on our national defense?  Of course not.  But it does mean we can learn a thing or two and face facts. China spent many centuries as the world’s most advanced civilization.  The United States has spent fifty years there, and could easily spend fifty more, at least from a military perspective.  Already reports have surfaced that simply retrofitting F-15 Eagles with upgraded electronics gear will help our military easily defeat China’s first stealth offering.

The Bottom Line

Just as the Soviets faced off with the United States when designing units, tactics, and weapons systems, expect the same pattern to emerge between China and the United States.  Is this cause for alarm?  No, but it is cause for vigilance and realistic assessment of the situation.  Panic, hyperbole, and a crazed commentary on these issues helps nobody.

Update Feb 4, 2011

As originally mentioned above, our behavior towards China is nothing new and in fact continues a history of imposing double standards when military conduct is concerned.  The Cuban Missile Crisis is a great example of this: the U.S. puts 100 Thor ICBMs in Turkey that are capable of striking Moscow in 1958, then almost goes to war over the Soviets placing a similar arsenal close to American territory.  Right or wrong, good strategy or bad, we consistently insist on the implementation of a double standard in military matters.