Review: Chinamerica: Why the Future of America is China

Interesting assessment of the divergence in industrial and economic development between the US and China in the last 10-15 years.

Name:  Chinamerica: Why the Future of America is China

Author:                Handel Jones

ISBN 978-0-07-174242-9

In many respects this book seemed to me to describe the natural follow on from much of what Tom Friedman had pointed out in his excellent work, The World is Flat.  China’s wealth is growing – and with it, its influence and power.  America’s preeminent position on the world stage is under threat, slipping and, in some fields, gone.

We are familiar with the themes: hard work and ambition, flexible labour force, growing population, currency manipulation, lack of respect of intellectual property rights, powerful, central control, controls over imports, growing foreign currency and gold reserves.  Jones provides interesting commentaries on developments in specific industries: automobile, electronics (including contract manufacturing), steel and software.  He also deals with the assimilation of Hong Kong and forecasts a future assimilation of Taiwan – driven by economic imperatives on both sides.

With respect to the US Jones has a number of concerns, including: non competitiveness, lack of commitment to research, disproportionate influence of the agriculture lobby, slipping educational standards.  Most importantly he sees a lack of strategic (medium and long term) planning in the context of competing with China (and other countries).

Living in Ireland I was particularly struck my Handel’s analysis of the educational backgrounds of top leaders in China (pp142-145).  The group is dominated by people with engineering and science backgrounds.  Perhaps this explains the target of 1,000,000 engineering graduates per annum by 2015.  In Ireland we seem to specialise in having governments dominated by teachers, lawyers and accountants.

The automobile industry is an excellent example of contract between US and China.  The US industry has recently been bailed out.  It is crippled by high costs – including the health benefit costs associated with retired workers.  China is currently ahead of its plan to build 15,000,000 cars and trucks per annum by 2015.

China is not without its challenges – in terms of mass poverty, underdeveloped rural society, rising expectations of its people, creating work for its people, competition from other countries, requirement to improve quality of its products.

Jones has not given up the ghost on America.  But he sees a need for change – and outlines this in his 8 point ‘restructuring plan’ – to include:

  • 5 and 10 year planning
  • National metrics
  • Financial support for building corporations to compete
  • Cuts in social spending
  • Financial incentives to increase exports
  • Tax subsidies to build new industries
  • Efficient manufacturing within US

In conclusion Chinamerica provides a useful comparison between industrial and economic growth in America and China over the last 10-15 years.  Jones provides useful insights into the reasons for the divergence and proposes a number of actions required to be taken in order for America to compete on a level playing field.  Will be very interesting to watch how this plays out in the next 5 -10 years.

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Author: Barry OGorman

Barry O'Gorman is an independent business and IT consultant, based in Dublin, Ireland.

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