WHEN IT COMES TO CHINA, THE U.S. NEEDS TO REASSERT ITSELF
Early in the movie “Crazy Rich Asians” a Chinese-Singaporean father admonishes his young kids to finish their dinner, saying, “Think of all the starving children in America.” I’m sure that everyone of my generation in the theater laughed at that joke. After all, we’d all been raised on the line: “Finish your dinner. Think of all the starving children in China.”
That little line contained within it many messages: The first, which any regular traveler to China’s biggest urban areas can tell you, is that rich China today — its luxury homes, cars, restaurants and hotels — is really rich, rich like most Americans can’t imagine.
The second is that this moment was destined to be a test of who will set the key rules of the global order in the 21st century: the world’s long-dominant economic and military superpower, America, or its rising rival, China. And this test is playing out with a blossoming full-scale trade war.
What does such a test of wills sound like? It sounds like a senior Chinese official telling me at a seminar at Tsinghua University in April that it’s just “too late” for America to tell China what to do anymore on issues like trade, because China is now too big and powerful. And it sounds like President Donald Trump, in effect, telling China: “Says who? Show me what you got, baby!” Or as Trump actually tweeted last week: “We are under no pressure to make a deal with China, they are under pressure to make a deal with us. … If we meet, we meet.”
As Mary Meeker’s latest internet trends study noted, five years ago China had only two of the world’s largest publicly traded tech companies, while the U.S. had nine. Today, China has nine of the top 20 — Alibaba, Tencent, Ant Financial, Baidu, Xiaomi, Didi, JD.com, Meituan and Toutiao — and the U.S. has 11. Twenty years ago, China had none.
Do you see a trend? Do you hear footsteps? The total value of China’s internet economy is already bigger than America’s. And China’s economy now is so cashless that many women no longer carry purses or men wallets — just a cellphone with mobile apps — to buy anything or even donate to a beggar.
And don’t get me started on the biggest emerging work and services tool in the world — artificial intelligence. China’s plan is to catch up to America in AI and surpass it as soon as possible, and it’s well on its way. Because with AI, the more training data you can feed the machine, the faster it learns, the more patterns you can see and the more algorithms you can write to improve products and services or invent new ones. Because China has so many more people than we do, and so many more of them use mobile apps for their daily lives, China’s ability to amass giant data sets and train more machines faster is considerable.
“If data is the new oil, then China is the new Saudi Arabia,” remarked Kai-Fu Lee, author of “AI Superpowers: China, Silicon Valley, and the New World Order.”
Chinese companies are already the world leaders in computer vision/facial recognition and speech recognition, which can be used for commerce and for surveillance and societal control.
America today, by contrast, has become the unrivaled world leader in generating data about Donald Trump and from Donald Trump.
In the daily barrage of Trump news and tweets, some Trump statements are actually true, though — like the need for the U.S. to confront China’s unfair trade practices. China has grown incredibly these past 30 years with a very specific formula: hard work, unleashing capitalism, smart planning and long-range investments in education and infrastructure — but also by stealing intellectual property, forcing technology transfers and cheating on World Trade Organization rules.
We have to respond. But wisely.
ALL IS NOT LOST
It happens that we have three huge assets that China doesn’t have, and is unlikely to acquire them anytime soon. We should be doubling down on our strengths: immigration, allies and values. Instead, Trump is squandering them.
Many of the smartest and most talented people in the world — high-IQ risk-takers — still want to come to our country. And in a knowledge-talent era, where companies thrive by being the first and fastest to put intelligence into everything they make, we should be welcoming more high-skilled immigrants than ever and giving green cards to every Chinese, and other foreign students, who come to America for advanced degrees. China can’t attract the best and brightest Indian, Israeli, Arab, French, Brazilian and Korean immigrants, but we still can.
Also, we have real allies in a way China does not. China has clients, customers and frightened neighbors. It does not have real partners like Canada and Mexico. It doesn’t have the whole Atlantic alliance with the European Union or tight relations with Japan, South Korea, Singapore and Australia — which we can leverage if we aren’t doing stupid stuff, like slapping them with steel tariffs or tearing up the Trans-Pacific Partnership.
Finally, as a society, we stand for things — or at least we used to stand for things — values people admire, about the dignity of human beings, the rights of minorities and women and the virtues of freedom and the rules for fair play.
In short, a strategic president wouldn’t squander our strengths but would reinforce them by creating a stronger global network of people and countries that share our values. We won the Cold War with a strategy of containment and bankrupting the Soviet Union by outspending the Kremlin on defense. But we will “win” this standoff with China, not by brute force alone, or by containment of China’s giant economy, but by “entanglement” — entanglement of Chinese students with our schools, Chinese businesses with our values, and the Chinese government with ourallies. That is, with the broad alliances and global institutions, and their rules of fair play, that we’ve been part of since World War II.
So we have to fight for those rules, and China will fight for its versions. But ultimately, I believe, the U.S. and China together will have to play the role that the U.S. played alone after World War II — to define the rules of the new international order, from AI to privacy to trade. And our weight in that process — we must never forget — will depend on the talent we attract, the allies we rally and the values we embrace and promote.