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The widely respected New York Times columnist Tom Friedman has been observing and writing about foreign affairs for decades. He was recently interviewed by Ezra Klein about China, a country Friedman has visited many times, including twice in the past 4 months. He knows many well-plugged-in people there. It is well worth the hour it takes to watch it, either on YouTube or below:
If you don't have the time to watch, well, that's what we're here for. In short, if someone had designed a Manchurian candidate to do the worst possible things for the U.S. and the best for China, it would be precisely Trump. Trump is stuck in the 1970s. He thinks China is a poor backward country that makes cheap T-shirts and can only make other stuff (like iPhones) when some other company (like Apple) sets it up and all they have to do is turn the crank. He is totally off base. In terms of technology, China is not quite at the U.S. level, but surprisingly close. And its level of digitizing is way above that of the U.S. Chinese beggars on the streets have QR codes in their begging bowls so they can accept the Chinese equivalent of PayPal or credit cards.
Friedman thinks the next few decades will be dominated by AI, climate change, and disorder, and Trump is not preparing for any of them.
One example of Chinese dominance in technology is that there are hundreds of dark factories in China. Literally dark, as in no electric lights on. That is because there are no people there. The entire production process is totally automated, with intelligent robots doing all the work, without any people present. Stuff is coming off the assembly line all by itself. At 2 a.m. engineers show up to do routine maintenance on the machines (and switch the lights on temporarily). Plenty of U.S. companies would love to produce stuff with no workers, but they simply don't have the technology. And we are not talking about one experimental prototype in the mechanical engineering department at Tsinghua University in Beijing. Hundreds of them are in full production right now.
What could the U.S. do to catch up? Use tariffs wisely, not stupidly. For example, put a permanent 1000% tariff on Chinese (electric) cars, but invite Chinese car manufacturers to build state-of-the-art factories in the U.S. as a 50-50 partnership with some U.S. company. The deal would have to include technology transfer from the Chinese company to the U.S. company, the exact reverse of what happens when a U.S. company builds a factory in China.
Tariffs work for only a little while before China builds a factory somewhere else to evade the tariffs. This gives the U.S. a few years of breathing space. What Trump totally lacks is a vision or a plan for using that breathing space. For example, if business bigshots can convince him that solar panels are hugely important, then he could use that breathing space to directly subsidize U.S. solar panel plants for a few years to get them to the point where they are competitive. Since the U.S. can't compete on low wages, maybe it can compete on quality (e.g., more watts per square foot). Going along with this is that if the tariff wall is to protect key industries for a few years to get them going, Trump can't change them every few days. They have to be selectively targeted for the long run.
China does a huge amount of research to advance its technology. Huawei has a research campus for 35,000 researchers. It has its own monorail system and 100 cafes. Is Huawei a bad actor that has stolen a lot of stuff from the West? Absolutely, but Trump needs to deal with what it is now, not how it got there. And the U.S. does have a secret weapon: Absolutely world-class research at NIH, NASA, and a few dozen top universities. So is he shoveling money at them so they can produce more breakthroughs that can be transferred to industry (something the U.S. is very good at)? No, he is defunding the government researchers and trying to destroy the private universities because they are trying to hire the best people they can find, even Black women, of all things. Chinese experts can't believe their eyes when they see the U.S. actively trying to destroy a precious resource that is the envy of China and the world. The future of transportation is clearly going to be mass transit in cities and self-driving electric cars outside them. Who is going to do the research needed for this? What about all the infrastructure for them? Trump says: "We don't do EVs. EVs are for girly men. We do manly industries." Yup. He is forcing coal mines to reopen and making existing coal-fired electric power plants keep running. Also, drill, baby, drill. His calendar is set to the wrong century.
China has an interesting approach to new technology. Friedman calls it the "fitness gym." When the government's experts have picked some new technology they think is important, be it solar panels or hydrogen cells, all the big cities in China build a factory to make them, often with subsidies from the national government. They compete like hell for the domestic market. 95% of them go bankrupt, but 5% survive, are strong, and have built supply chains. This "fitness gym" is very wasteful, but it is accepted as a good idea. The survivors continue competing with each other for a bit to hone their skills. This is raw capitalism in its finest form. Then the survivors go for the global market. They are so fine-tuned at this point and have such well-oiled supply chains, that no one can compete with them. The BYD Seagull electric car costs $7,800. The cheapest Tesla is $42,500. The difference is not the wage differential, since BYD production is heavily automated. BYD is a fitness gym survivor. What is also interesting is that Chinese companies are very flexible. Huawei and Xiaomi started as phone companies. Now they make electric cars. Suppose the U.S. government threw money at Apple and Google to make self-driving electric cars. That would definitely get General Motors' attention. But Trump hates the idea of self-driving electric cars. Real men drive big trucks. For now.
Another advantage China has is government. For 5,000 years, being a civil servant in China has been a good job. To get that gig, you have to pass difficult tests. The Chinese "deep state" is very competent. Even the political leadership under Xi Jinping is quite competent. It is more corrupt than in the U.S., but if the officials are doing their jobs well, a modest amount of stealing is tolerated. Compare that with Trump's cabinet, where maybe one or two members are sort of somewhat marginally qualified for their jobs. And recently Trump fired the head of the NSA, Gen. Timothy Haugh, regarded throughout the intelligence community as the best in the business. Why? Because nitwit Laura Loomer told Trump that Haugh was woke. Xi is laughing his head off. If some nitwit gives Xi stupid advice, Xi doesn't follow it. He ships the nitwit off to Outer Mongolia. Friedman: "If you hire clowns, you get a circus."
China also understands that it can learn from other countries. There are 270,000 Chinese students studying in America. See above, on education exports, then multiply 270,000 by the average out-of-state tuition and presto, you get a big number. The Chinese students learn a lot and many go back to China with that knowledge. Very few American students study abroad and those that do a "junior year abroad" do it for their personal cultural enrichment, not to learn how German engineers build very good cars.
In the modern world, no country can do everything well. Joe Biden had a policy that wasn't exactly reshoring all the time, but sometimes getting critical industries moved to friendly countries that the U.S. can depend on as suppliers. Under Trump, the U.S. has no friends in the world anymore. In fact, when European diplomats visit the U.S. on business, they are now issued empty burner phones and laptops because their governments assume they will be spied on. They don't trust the U.S. anymore.
In China, Friedman was often asked about Elon Musk. They wanted to know if he was running a cultural revolution, like Mao Zedong did from 1966-1976. Mao let bands of young Red Guards loose on the countryside, smashing local governments, judicial systems, and public security. Tens of millions of people fell victim to their rampages. Universities were closed and professors were sent out to the countryside to clean pigsties. It nearly destroyed the country. Friedman understood why they were asking.
One of us, (V), was an invited keynote speaker at a conference in China in 2009. He was astonished at many things. Here is a little bit of the Shanghai skyline 16 years ago. China was not a backward country then and certainly isn't now:
The National Defense University (think: West Point), where the conference was held, was absolutely top-rate. (V) was careful not to say anything in his talk that was not already published and most of the talk was historical anyway. Still, he was enormously impressed by their level of expertise.
All the airports (V) saw were at least as good as the new LaGuardia. China has 25,000 miles of high-speed trains. When in the U.S., (V) sometimes takes the Metro North Railroad from Manhattan northward to Westchester County. Grand Central Terminal retains its 1913 glory, but the trains also appear to be from 1913. And their 80 MPH top speed is about 1/3 of what China's fast trains do. Unlike the NYC subways, the Shanghai subways were clean, fast, safe, frequent, and efficient. Even back in 2009, the ads on the station walls weren't paper posters, but giant monitors showing video ads. And much more.
Trump's lack of understanding of how advanced China already is and how determined and competent it is to become the strongest industrial power in the world in a decade works to America's peril. And if China becomes the world's top industrial power, becoming the world's top military power is the next step. Friedman said that he has never been so worried in his entire life. (V)