On Friday the New York Times ran a fear-mongering story on the prospect of a Chinese company acquiring Seagate Technology, a leading manufacturer of hard drives:
SAN FRANCISCO, Aug. 24 — A Chinese technology company has expressed interest in buying a maker of computer disk drives in the United States, raising concerns among American government officials about the risks to national security in transferring high technology to China.
The overture, which was disclosed by the chief executive of one of the two remaining drive makers in the United States, William D. Watkins of Seagate Technology, has resurrected the issues of economic competitiveness and national security raised three years ago when Lenovo, a Chinese computer maker, bought I.B.M.’s personal computer business.
The NYT is late to this party. Hard drives have been manufactured overseas for many years now and China is a leading supplier if not the primary supplier. Engineering has followed manufacturing, first to Taiwan and now, increasingly, to China (where a lot of Taiwanese companies do their manufacturing). Is it a surprise that management would follow engineering and manufacturing? What did you think the Chinese would do with all the dollars they’ve been accumulating?
My expanded thoughts on this story are here.
Yesterday the Newspaper of Record painted a horrifying picture of environmental degradation in China:
BEIJING, Aug. 25 — No country in history has emerged as a major industrial power without creating a legacy of environmental damage that can take decades and big dollops of public wealth to undo.
But just as the speed and scale of China’s rise as an economic power have no clear parallel in history, so its pollution problem has shattered all precedents. Environmental degradation is now so severe, with such stark domestic and international repercussions, that pollution poses not only a major long-term burden on the Chinese public but also an acute political challenge to the ruling Communist Party. And it is not clear that China can rein in its own economic juggernaut.
To the paper’s credit the article obliquely suggested that market forces be harnessed to gain control over the situation. Little was said about the political, social, and legal reform that would make that possible.
I’ve posted further thoughts on this story here.
China isn’t our friend, nor are they our enemies. China poses little military threat to the U. S. (Check out our relative military capabilities and relative levels of annual expenditures.) Their military is mostly land-locked. They don’t have much in the way of a blue water navy. Our military aircraft capability is several times theirs and we have a fleet of aircraft carriers without peer anywhere. Our nuclear capability is orders of magnitude greater than the Chinese.
China isn’t an economic threat, either, unless we’re planning on being the low-cost provider of labor. A far greater threat is the lag of U. S. companies in capital spending which has been remarkably low for an economic recovery. Have we forgotten that entrepeneurialism means taking risks?
IMO we need to make realistic and pragmatic assessments of China’s capabilities and problems some of which, like China’s air and water pollution, affect us all. They’ll need our help and encouragement in overcoming those problems to all of our benefits. Antagonizing and demonizing the Chinese doesn’t help.
