Thanks, Robert, for a both well-written and critically important commentary on the mistake the US made by passing China PNTR.
Your second lesson there - "Second, policy processes, both in Congress and in administrations, need to be much more deliberate and averse to group think." - aligns with one of the two lessons I was told by my friend and founder of the group I am still with after all these years, or since 2008. On the first day I entered the field of investment after a decade in tech here in Taiwan, he said when considering a stock, look for a divergence of views rather than a convergence of views on it. He put it this way:
"If everyone stands on one side of the boat, the boat tips over."
Group think rather than real debate got us to where we are now, after having gone down the wrong paths on many economic, financial, technological and even military choices, and mostly in the 1990s. Some have argued America had a bad case of triumphalism then, as the Cold War had ended in our favor, the PRC was still impacted from the mistakes it made in 1989, and our tech industry led by the then-rising internet made America the clear tech leader of the world. It is when I decided to outsource myself to Taiwan, in 1996, and also goes along with what you wrote here:
"Fifth, policymakers assumed continuing U.S. tech dominance. This was after all, the late 1990s, when the U.S. technology boom was in full swing: Intel, IBM, Lucent, Microsoft, Motorola, and others. China, in contrast, could hardly afford bicycles. So, consistent with conventional trade theory—something PRC leaders never accepted—the agreement would allow the United States to specialize in high-tech, high-value goods and services, while China would supply us with t-shirts and Happy Meal toys. The fact that Chinese unfair competition helped weaken or kill Intel, IBM, Lucent, and Motorola appears to be conveniently glossed over."
Yes, indeed. Many people in business really did that our brands would always be the most valued around the world and that all they needed to do was leverage them while oursourcing production to low-cost countries such as China and, before that, Mexico. Now, Apple faces challenges from Xiaomi, Oppo, Vivo and others. Telsa faces challenges from BYD and Xiaomi. We never learned out lesson from an American auto industry that was shocked when it saw strange brands such as Toyota, Honda and Nissan suddenly become household names.
The key to the story here began in June 1989. Understanding that year and the CCP's plans after it provide many answers to the future of our economy and also our security.
We cannot afford to make the same mistake today with the PRC we did then with the collapsing Soviet Union. We assumed Russia would no longer be a threat and that it would spontaneously become capitalist and democratic. Instead, we got Boris Yeltsin first and eventually Vladimir Putin. Putin still threatens the world today. Assuming we will get a “better” leader after Xi Jinping will prove much more damaging, given the PRC’s more more powerful economy.
The only way we secure America’s future economy and security is if the CCP relinquishes one-party power. The pressure America applied on the ROC and KMT worked, and Taiwan is a democracy today in part because of it. And yet we fear pressuring Beijing, and when we are not fearing Beijing, we are trying to warm up to the party to ensure we benefit from its mercantilist economy. As I was also told on that first day at work in 2008: fear and greed drives the stock markets. Unfortunately, they are the worst emotions to rely on in many other efforts. Thanks.
Thanks, Robert, for a both well-written and critically important commentary on the mistake the US made by passing China PNTR.
Your second lesson there - "Second, policy processes, both in Congress and in administrations, need to be much more deliberate and averse to group think." - aligns with one of the two lessons I was told by my friend and founder of the group I am still with after all these years, or since 2008. On the first day I entered the field of investment after a decade in tech here in Taiwan, he said when considering a stock, look for a divergence of views rather than a convergence of views on it. He put it this way:
"If everyone stands on one side of the boat, the boat tips over."
Group think rather than real debate got us to where we are now, after having gone down the wrong paths on many economic, financial, technological and even military choices, and mostly in the 1990s. Some have argued America had a bad case of triumphalism then, as the Cold War had ended in our favor, the PRC was still impacted from the mistakes it made in 1989, and our tech industry led by the then-rising internet made America the clear tech leader of the world. It is when I decided to outsource myself to Taiwan, in 1996, and also goes along with what you wrote here:
"Fifth, policymakers assumed continuing U.S. tech dominance. This was after all, the late 1990s, when the U.S. technology boom was in full swing: Intel, IBM, Lucent, Microsoft, Motorola, and others. China, in contrast, could hardly afford bicycles. So, consistent with conventional trade theory—something PRC leaders never accepted—the agreement would allow the United States to specialize in high-tech, high-value goods and services, while China would supply us with t-shirts and Happy Meal toys. The fact that Chinese unfair competition helped weaken or kill Intel, IBM, Lucent, and Motorola appears to be conveniently glossed over."
Yes, indeed. Many people in business really did that our brands would always be the most valued around the world and that all they needed to do was leverage them while oursourcing production to low-cost countries such as China and, before that, Mexico. Now, Apple faces challenges from Xiaomi, Oppo, Vivo and others. Telsa faces challenges from BYD and Xiaomi. We never learned out lesson from an American auto industry that was shocked when it saw strange brands such as Toyota, Honda and Nissan suddenly become household names.
The key to the story here began in June 1989. Understanding that year and the CCP's plans after it provide many answers to the future of our economy and also our security.
Thanks. Good points. we suffered big time from hubris.
We cannot afford to make the same mistake today with the PRC we did then with the collapsing Soviet Union. We assumed Russia would no longer be a threat and that it would spontaneously become capitalist and democratic. Instead, we got Boris Yeltsin first and eventually Vladimir Putin. Putin still threatens the world today. Assuming we will get a “better” leader after Xi Jinping will prove much more damaging, given the PRC’s more more powerful economy.
The only way we secure America’s future economy and security is if the CCP relinquishes one-party power. The pressure America applied on the ROC and KMT worked, and Taiwan is a democracy today in part because of it. And yet we fear pressuring Beijing, and when we are not fearing Beijing, we are trying to warm up to the party to ensure we benefit from its mercantilist economy. As I was also told on that first day at work in 2008: fear and greed drives the stock markets. Unfortunately, they are the worst emotions to rely on in many other efforts. Thanks.