Monday, 22 November 2010

Chairman Mao’s new and improved People’s Republic of China

China's emergence as a global actor on the world's stage has become conventional wisdom. The evidence supporting the notion is overwhelming.
The People's Bank of China, China's central bank, moves global financial markets with interest rate moves. Chinese finance ministry officials roil foreign currency markets with statements on China's foreign exchange reserve management policies. US and Japanese defense officials fret about the Chinese military threat to disputed Pacific islands. India worries about China's 'string of pearls' naval strategy. 
Chairman Mao proclaims the People's Republic of China on October 1, 1949

Like any successful nation state, China is not satisfied stagnating at the lower end of the production spectrum. Making textiles or footwear is not enough to move up in the world. Vietnam and Bangladesh can make such crude products too.
Pick up almost any manufactured item today and it's a good bet that somewhere there will be a sticker proclaiming, 'Made in China.' Consumers owe the Chinese a debt of gratitude for transforming luxury items, e.g. electronics, into affordable basics of everyday life.
China may be the factory of the world, a deflationary force in global economics, but there is more to China's than merely economics. In fact, it is the less noticeable aspects of the country's advance which has the established powers, especially the US, deeply concerned.
Take the supercomputer, that seminal symbol of modern technology.
As of October 2010, China operates the fastest supercomputer in the world. Located at the National Supercomputing Center in Tianjin, the 'Milky Way Number One' supercomputer is a supercomputer capable of an Rmax of 2.566 petaFLOPS or over 2½ quadrillion floating point operations per second (whatever that means!).
American spooks at the National Security Agency and the Central Intelligence Agency must be scrambling to evaluate the implications of the Milky Way within the global intelligence galaxy.
The Chinese are not stopping at supercomputers. The apogee of contemporary military technology, the unmanned aerial vehicle or drone, is part of China's military arsenal.
"The 'Dark Sword' [drone] is an unmanned combat air vehicle (UCAV) concept which was displayed as a model at the 2006 Zhuhai air show. It is obviously designed for high manoeuvrability at supersonic speeds ... a staff member called the aircraft the "future of Chinese unmanned combat aviation", emphasizing its projected ability to evade enemy radar and to engage in air-to-air combat." (Source: Real Military Network website.
Surely, China still operates like the Japan of yesteryear. The country copies foreign technologies until it has reached a sustainable technological base of its own. That day is not far away.
The first quantitative sign of China's indigenous collective brainpower came in 2007. 2007 was the year China overtook Germany in the number of new patent applications. A year later in 2008, the number of doctorates (PhDs) produced by Chinese universities exceeded that of the US. Undoubtedly, the quality of many Chinese PhDs may not yet be globally competitive but that too is changing.
One can only expect both numbers to rise in the coming years.
In the late 1960s, Pakistan's late President Ayub Khan wrote a political autobiography describing Pakistan's (client state) relationship with the United States titled 'Friends not Masters.' In 2010, with China being the largest owner of US government debt, it might be time for US treasury secretary Geithner to consider writing a sequel focusing on the Sino-US relationship, i.e. Friends not Masters (Part II).
Late Pakistani President Ayub Khan with First Lady Jackie Kennedy and Sardar (the Pakistan President's horse) in 1961

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