China's Sputnik Moment

I've been away from The New World because our son, DiL and 14-month-old grandbaby have come to visit for a week, and I'd rather be with them than with you.  Sorry, no offense, but that's just the way it is.  We all have been quarantining pretty strictly since the beginning, so we can live together like this whenever we want to.

I have been reading, though, every once and a while.  There's a lot of thought and speculation about the balance of power in the new world.  I've been reading and writing with a bunch of people about this and other topics, and a Chinese participant had an interesting summary.

The US-China trade war and the supply chain disruptions caused by the COVID-19 pandemic has heightened sense of vulnerability of concentration of global supply chain from and through China, as well.*

This is nothing new.  The complex disruption of every supply chain in the last six months has been discussed extensively, and I hope we can look further into it - and its future - at some time.  

There will be efforts at diversifying from China to reduce exposure.  However, the immediately (sic) fallout from the pandemic so far has paradoxically strengthened China's (and E/SE Asia's more broadly) position as a reliable platform for the global supply chain as well as a reliable consumer market, with the generally rapid and effective (to date) responses to COVID-19 in the region, which make possible "v" shaped economic recoveries.

She goes on to describe a long process of reducing China's dependence on foreign technology, going back to the origins of Red China.  However, as a result of the chaotic disruptions of the pandemic, "it is now greatly accelerated and with strong consensus even in the Chinese corporate sector (the effort previously was a more state driven)... The Trump years and its incoherent and highly volatile China policy has been a Sputnik moment for China."  Boy, if you have to mix a metaphor, that's the way to do it.

The rise of China and the fall of America is widely documented, and this process has certainly "accellerated" in 2020.  It is ironic that the acceleration has much to do with the Chinese's eventual success with COVID, and America's apparent unwillingness to do much about it.  Even assuming a change of administration,

...there is no going back.  China and Chinese companies will still source from the US, but it will attempt to avoid situations where US technology and products is irreplaceable.  I see American companies losing market share first to European/Japanese/South Korean/Taiwanese competitors, then to Chinese competition, first in the Chinese market and then globally.

I wrote about America being "left behind" in this blog's second post, and more and more, the process by which that will happed - and the reasons for it - are becoming clearer.  We will no doubt revisit this slow-motion planetary collision.

* - I have not edited my correspondent's writing.  I could never hope to write as well in Chinese (or, for that matter, in any language) as well as she does in English.  We can live with the tiny imperfections.