Jeffrey Ding on China - InvestingChannel

Jeffrey Ding on China



I’ve been amazed by the response to Russia’s invasion of Ukraine. The most militarily expansionist leader since Hitler and Stalin starts a war that threatens to spiral out of control. He leads a country with enough weapons to destroy most of the US population. He threatens to use nuclear weapons (and is scolded by China for doing so.) And in response we are told by our foreign policy establishment that “China is the real threat”.

A recent podcast provides some interesting historical parallels:

Jordan Schneider: Then in the 1980s, the concern was that Japan would overtake the US. David Halberstam — author of The Best and Brightest and Breaks of the Game — wrote in 1983 that Japan’s industrial ascent was America’s most difficult challenge for the rest of the century and a “more intense competition than the previous political-military competition with the Soviet Union.”

There was a deep consensus within the American body politic that America was losing the technological future and long-term productivity race to Japan. What didn’t Japan get right?

Jeffrey Ding: This was a very real threat in the eyes of the US. Henry Kissinger wrote an op-ed in The Washington Post saying that Japan’s economic strength and rise in high-tech sectors would eventually convert into military power and threaten the US. poll in the late 1980s found that more Americans were worried about Japan than the Soviet threat to US national security.

The trend that I see so clearly with all these historical examples is the US overhyping other countries’ scientific and technological capabilities. One reason we do that is because we don’t pay as much attention to diffusion capacity.

Japan was the real threat, not the Soviet Union?? Americans seem to have a deep-seated need to see Asians as the “real threat”, not Europeans. Recall the ethnic group that FDR put in concentration camps back in 1942.

Later, Ding points out that it’s not easy to determine what strategy toward China is best, even if we accept the premise that it is a threat:

Jeffrey Ding: We have shifted so far in the direction of US national security interests and the need to beat China in all these different forms of competition. The biggest risk is if China overtakes us on something, whether militarily, economically, or by soft power.

I’m not sure where I stand on this, but why are we not considering that the biggest national security risk for the US is a weak China and a China that can’t sustain its growth? For the longest time that was US State Department policy. A strong China is good for peace.

All this self-flagellation that’s been coming out in terms of China’s AI sector has been overhyped. China could also suffer economic stagnation. What would the national security consequences be for the US? They might not be good.

It’s not even in the Overton window. We’re not even talking about it anymore in Washington.

To be clear, both Schneider and Ding see China as a serious threat. Please read the entire interview. But at least they seem to have some historical perspective that is lacking in most other commentary on the issue.



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