> > Haier, TCL and Lenovo are all small. And they're all new competitors
> > in mature industries with cutthroat margins.
>
> These are multibillion euro firms with globe-spanning operations. And
> tailgating the majors is precisely the pattern which worked so well for
> Japan, Taiwan, South Korea, Singapore, and Central Europe. Copy from the
> best, learn from the rest.
Are any of them on the global fortune 500? Their competitors are.
> > SMIC is primarily the
> > extension of Taiwanese capital into China, the CEO is American, and
> > where do they get their capital goods from? Godson is a couple
> > generations behind state-of-the-art, although impressive nonetheless.
>
> Two points: first, China's CPU tech *is* state of the art. What they lack
> are the manufacturing and fab skills. Second, Taiwanese capital is very
> much under the control of Taiwan's own extremely effective developmental
> state.
First, the 'developmental state' of Taiwan and China don't get along that well. The state in Taiwan is desperately trying to prevent high-tech investment in China, so I don't get your point. They levied a huge fine against the CEO of SMIC for investing in China.
Also, I don't see a lot of Chinese-designed CPUs in use even here in China. Actually, the fabs in China are not too far behind. Land and labor are so much cheaper, and there are no pesky environmentalists to complain about all the toxins that fabs belch out, so much of the fab expansion from Taiwan is now in China. But in terms of design I don't see it. State of the art? If Godson is the best, there's still a long way to go. I just came back from the computer store, actually. All AMD and Intel. Couldn't even find a VIA.
> > China has made great strides in lots of fields, but unfortunately the
> > rate of advance among the foreign firms they now have to compete with
> > has been quicker.
>
> This flies in the face of China's export earnings, which are colossal.
Not at all, since a large portion of China's exports are generated by foreign-owned firms.
> > Well, since China is predominantly rural, if you only look at the
> > cities, the best you can come up with is a half-truth.
>
> Eh? Rural growth in China has been impressive. Not as fast as the coast,
> but impressive nonetheless.
Rural growth in China has been dismal since the mid-90s. Both farm and industry. TVEs have been shedding workers for years. With stagnant farm prices, the only option for most families is to find work in the cities.
> > None of the other East
> > Asian developmental states had such a large 'hinterland' to deal with.
>
> Taiwan had a huge rural sector in the 1950s, so did South Korea. Most
> Japanese citizens didn't live in urban regions until 1965. All the
> developmental states had highly effective and quasi-socialistic land
> reform programs.
Taiwan a huge rural sector? Multiply the entire population of Taiwan by 3, and you still have less people that some of China's more populous *single* provinces. Size matters. The development in Zhejiang province is probably something akin to that of Taiwan, but China also has to deal with very rural and highly populated inland provinces as well. Taiwan never had this kind of problem.
Further, the government's ability to influence the countryside is dropping rapidly. It's where the most serious unrest is, and everyone expects it to continue. There was never anything like this in Taiwan, I don't know about SK. The state's intervention in rural Taiwan was organized and massive, and if you visit Taiwan today, you don't get a sense of stark disparities between the countryside and the city. If you travel between the country and the city in China you will be moving through two almost completely different worlds.
Also, China gave up an incredible amount to get into the WTO. All the concessions they had to make would have been unheard of to the other East Asian developmental states: financial sector liberalization, lifting of restrictions on foreign entry in just about every field, etc. The postal reform 'big-bang' of Japan is also happening in China right now, and China's having an easier time in privatizing its state-owned firms than Taiwan is. What they gave up are the levers of the developmental state, and bound themselves to play by WTO rules, which are not geared toward developmental state policies, to put it mildly.
Various aspects of 'socialism' that were established in China before the Reforms played a role akin to that of a 'developmental state' until the mid to late-90s, when it became in the interests of officials to drive the state sector into the ground. One of the key areas of the 'developmental state' in East Asia was its ability to discipline firms/capital. China does not have this ability any longer.
> > And I see no reason why the Chinese authorities
> > would want to do anything to rock the boat.
>
> I'm not arguing that they would.
> I'm pointing out that the US and China
> are surprisingly interdependent, and that the traditional theses of
> neocolonialism can't explain what's happening in the East Asian
> semi-periphery.
I guess I would agree that the 'traditional neocolonialism' (strawman) thesis explains little, but I think that the 'developmental state' thesis obscures just as much.
Cheers,
Jonathan