Saturday, September 12, 2009

A leader emerges...

One of the strongest criticisms against climate change legislation is the fear of not moving in lock step with competitors, especially China.  If we stop emitting, it won't matter because we can't save the world alone.

Laying aside for the moment the problem of how our self-directed nation, which goes it alone all the time if we see an advantage, suddenly would begin to create working alliances, there is another development.

What if the mantle of world leadership is as we watch slipping toward Asia?
Japan Steel Works Ltd., a maker of atomic reactor parts for Areva SA and Toshiba Corp., more than doubled its forecast for China’s nuclear plant construction because of stimulus spending and environmental pressures.
The country may build about 22 reactors in the five years ending 2010 and 132 units thereafter, compared with a company estimate last year for a total 60 reactors, President Ikuo Sato said in an interview. Japan Steel Works has the only plant that makes the central part of a large-size nuclear reactor’s containment vessel in a single piece, reducing radiation risk.
China, the world’s largest energy consumer after the U.S., is increasing spending on atomic energy as part of a 4 trillion yuan ($586 billion) economic stimulus and as it curbs greenhouse gas emissions. Japan Steel Works is counting on the rising reactor demand as the global recession curbs sales to customers such as carmakers and electronics companies. [More]

China is already the most dynamic economy, growing with only slightly diminished vigor. They now are the world's largest car market, and dominate sales of everything from cement to fertilizer.  They have the largest army, they are on the verge of being the largest exporter, and will soon likely pass the US as the largest manufacturer.

Anyone who walks the aisles of a U.S. retailer might think China already is the world's largest manufacturer. But, in fact, the U.S. retains that distinction by a wide margin. In 2007, the latest year for which data are available, the U.S. accounted for 20% of global manufacturing; China was 12%.

The gap, though, is closing rapidly. According to IHS/Global Insight, an economic-forecasting firm in Lexington, Mass., China will produce more in terms of real value-added by 2015. Using value-added as a measure avoids the problem of double-counting by tallying the value created at each step of an extended production process.

As recently as two years ago, Global Insight's estimate was that China would surpass the U.S. as the world's top manufacturer by 2020. Last year, it pulled the date forward to 2016 or 2017.

"The recent deep recession in U.S. manufacturing does mean that China's catch-up is occurring a few years earlier than would have been the case if there had been no recession," says Nariman Behravesh, the group's chief economist.

U.S. manufacturing is shrinking, shedding jobs and, in the wake of this deep recession, producing and exporting far fewer goods, while China's factories keep expanding. If manufacturers on both sides of the Pacific were thriving, there would be little reason to butt heads. But given the massive trade gap between the two nations and uncertainty in the U.S. over when and to what degree manufacturing will recover, China's ascent has become a point of growing friction. [More]

I no longer discount as sharply the possibility of China becoming a world power as large as the US in my lifetime.  I have always subscribed to the view that people are power, not a burden.

While the rise of China does not require the demise of the US, at some point in the future we may ask, when did we decide to relinquish world leadership or at least hold the burden to be too great?  Perhaps we will say it was the point when we told China to go first on emissions controls.  And there is some evidence that Chinese leadership may be moving more vigorously than ours to wrestle with such long term issues, such as renewable energy.

Moral leadership is part of the pattern, I think, of global competition.  When the US is no longer the place to look for the right answer, we lose some of the prestige which makes our foreign policy more effective and enables commerce to flow more freely.

We need to spend less time shouting we are Number One and more time proving it by our actions.


Ol James said...

...then throw the tariff on Chinese Tires on the fire, what could be next??
China is set to be the largest importer/exporter in existence. I don't think you have long to wait Mr. John.

Anonymous said...

john,, soon (er) than we can even imagine we will be the next Britain of the world