Western Overconfidence

The overly generous attitudes of many Western nations to China indicates just how overconfident their elites have become. China is just as much a threat to the vulnerable West as it is an opportunity. In particular, Westerners should not underestimate the intelligence of the Chinese or overestimate their own capabilities.

Since 1945 the West has steadily been losing ground to East Asia in hi-tech manufacturing and design. According to the field of psychometrics, East Asians have higher 'performance IQs' than Caucasian Europeans and this seems to correlate with the decline of Western manufacturing. The Japanese and Koreans build more cost effective and reliable motor vehicles than Europeans and Americans and seem to be able to adapt much better to complex just in time management practices.

Although the West has some brilliant designers many of their designs are too complex for Western workforces to mass-produce. A couple of recent examples: the delays with the new Aerobus Jets because of their unnecessarily complex electronics and the recent recall of 110, 000 Jepp SUVs due to faulty heated seats. If the West came up with simpler designs, with fewer superfluous features, then Western workers might be able to build them to a higher standard. This approach is certainly working for Skoda (albeit on a relatively modest scale).

In competition with China many Western firms are hamstrung by environmental legislation such as the Kyoto protocol, which China as a ‘developing country’, is not pressured to comply with. However, China is rapidly becoming the world’s second biggest consumer- it is already the world’s largest consumer of concrete and steel for example. Only struggling countries, with limited resources, should get special exemption from agreements like Kyoto.

There is also very little pressure on China to float its currency, which is kept artificially low and gives it an unfair trade advantage over both developed and developing countries. The arguments put forward by US paleoconservatives like Patrick Buchanan, in favour of retaliatory tariffs, are also rarely given serious consideration in the US media. However, Buchanan makes a strong point - how can Western firms compete without protection when they can’t freely export to China?

Even in areas where the West is more competitive than China, Western governments still take a soft line in trade negotiations. China provides a potentially massive market for Western agricultural goods and New Zealand has already rushed into a free trade deal with China. The New Zealand media though, doesn’t say much about Chinese farmers receiving significant production subsidies, even though it is very critical of the E.C for protecting Europeans farmers.

The Western media industry is held up as a showpiece of the so called ‘knowledge economy’ yet its profits are undermined by rampant piracy in China. If Western countries expect to import large amounts of goods from China they are going to have to export large amounts of products to China. This simply isn’t possible though, if their primary exports can simply be substituted by illegal copies. The Western media industry is only a viable export option if the West has the power and the will to enforce fair trade in media products - unfortunately, at the moment, such willpower is clearly lacking.

The elites of the Western world are spending too much time salivating about making money out of China and not enough time worrying about the Chinese making easy money out of the West.