[Opinion] Every kid who has a smartphone watches videos and downloads apps like crazy!
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The opinion for this edition of [The Weekend Brief] newsletter is inspired by American CEOs and government leaders on doing future business in China.
I will outline some of the key messages conveyed by one of the latest public hearings on the US national security implications of China’s rise in the global economy.
US Secretary Janet Yellen gave a speech about the United State’s current foreign policy objectives, with the main focus on its relationship with China. The speech was held at the John Hopkins School of Advanced International Studies (SAIS) on 13 April 2023. Read the full transcript here.
As you can imagine, reporters, journalists and analysts of all kinds were madly writing on the subject before and after the speech. After reading through much of the content, it seems that most of them have agreed on three takeaways from the speech:
- prioritizing national security and defending human rights,
- promoting a healthy and fair economic relationship with China
- and cooperating with China to address global issues.
You can watch the full video of the speech here.
However, on the opinion side of things it gets a lot more complicated.
Like when Yellen said this:
“China’s economic growth need not be incompatible with U.S. economic leadership … We do not seek to ‘decouple’ our economy from China’s. We believe that the world is big enough for both of us.”
This caused Robert Kuttner to believe that, since Yellen had denied targeting China’s economy, that the Biden administrations was seemingly playing what he called a “nice cop/bad cop strategy.”
For instance, by taking down China’s capabilites in advanced semiconductors, the Biden administration made a red line, that it would not tradeoff US national security concerns for the chip supply chain. Because of this, Kuttner concluded that the Biden administration still needs an effective China policy — e.g., “better coherence and coordination among U.S. allies — and inside its own house.”
CGTN is a Chinese media source. They wrote up their piece after the speech called “U.S. no decoupling from China’s economy”.
Reporting for CGTN, Nathan King illustrated some of the Chinese media’s ambiguity on US foreign policy interests by discussing Yellen’s speech in tandem with the national security hearings with TikTok’s CEO.
Like when Yellen said this:
“Even as our targeted actions may have economic impacts, they’re motivated solely by our concerns about our security and values. Our goal is not to use these tools to gain competitive economic advantage.”
CGTN’s Nathan King responded with comments about the TikTok hearings:
“Some of those national security concerns are ill-defined and easily disputed…Actions speak louder than words and what Beijing will want to see concrete action…trade tariffs and some movement on all the embargos from chips to copper and beyond.”
But I must say that the opinion that got my attention the most was from Andrew Stuttaford.
The journalist starts by giving the latest figures from the American and Chinese trade of exported goods: according to the figures, the US imported $536 billion from China, while exporting $154 billion to China.
He notes that this trade margin is much higher than the one for Canada, Mexico and the European Union. For this reason, he asserts that decoupling is not happening in de-facto trade relations between the US and China.
Adopting a phrase of “conscious uncoupling” Stuttaford argues that the US should and must decouple from the Chinese economy in order to avoid future dilemmas posed by supply chain disruptions in the global economy. But he also carefully draws out the concept of “friendshoring” and what it should mean in the context of future US-China trade relations — e.g., “friendshored” could mean that China continues to manufacture plastic toys for the American market.
While I was delighted to read Sttutaford’s opinion, my concept of this nascent “friendshoring” in US-China trade relations would not have anything to do with who gets to make, buy and sell plastic toys.
As the world is aleady immersed in the digital era, I don’t think plastic toys are going to be high on the minds of most American CEOs and government leaders on doing future business with China. I would question whether, in the near-future, if American children will even continue playing with toys at all. I have lived in both Asia and Africa and every time I have been struck with how insignificant toys play a role in these societies. Yet, every kid who has a smartphone watches videos and downloads apps like crazy!
It’s clear to me, too, that the global economy is going through a revolutionary period of time during an era of Industry 4.0 (Fourth Industrial Revolution). Economists should probably take heed, sooner than later, since Industry 4.0 leadership will be the key to influencing economic and political factors in the future.
Doing future business in China revolves around a new era of Industry 4.0 leadership. This will determine how the future generations of leaders — every kid who has a smartphone — will behave from a variety of aspects.
If you like my opinion about current affairs, check out some of the previous opinions I wrote for [The Weekend Brief] newsletter below:
