Opinion | Will China’s rise come at our demise?

Tom Watkins is a former Michigan Schools Superintendent and an advisor to the Michigan-China Innovation Center

I have just spent three weeks in China and, as always, it is an eye-opening global adventure. 

Since my first trip in 1989, the changes I have witnessed in China are both remarkable and universally acknowledged. From a backward nation to a nation that is now helping to define the future, the changes are like watching a black and white TV that suddenly switches to technicolor.

The Chinese are investing in education, infrastructure, and technology – fully embracing the future. They understand that knowledge, innovation, and creativity are the 21st century currency that will propel them forward as individuals, families and a nation, and are investing heavily in them.

I worry about our future. As a state and nation we are disinvesting in these very areas.  Furthermore, rather than embracing change, the future, and technology, far too many of us are running from it. Our strategy seems to be “blame China” as though this alone will solve what ails this great nation of ours. 

But China’s rise does not need to come at America’s demise.

 From Plastics to AI 

In the movie “The Graduate” starring Dustin Hoffman, a memorable line speaks to counseling the young graduate to a career in “plastics.” The 21st century equivalent may well be “Invest in AI” – artificial intelligence – as the Chinese are bent on doing in dominating the market.  

The individual, company, state and/or nation that owns AI will own the future.  

The Chinese are intent on being number one in this space. They have the capability to invest in new technologies but are also equally equipped with an appetite and ability to buy U.S. firms and our technology. Where is our oversight about the true cost to America’s future?

That old axiom, “knowledge is power,” was never truer than today, “where the world is about information, not about things,” according to Paul Rosenzweig, who worked at the Department of Homeland Security under President George W. Bush. Controlling information is about controlling our destiny.

“Made in China 2025” is a Chinese strategic plan. The Center for Strategic and International Studies describes it as an "initiative to comprehensively upgrade Chinese industry," directly inspired by the German Industry 4.0. The core of the plan is focused on developing leading-edge advanced technologies through investment in R&D from state and industry sources and the accumulation of intellectual property. The Council on Foreign Relations argues it is a "real existential threat to U.S. technological leadership".

China has telegraphed its fight strategy and it should surprise no one. They want to reclaim their position of the “Middle Kingdom” where the world revolves around them. China has shaken off the scares of the “century of humiliation” and are on a quest for fuqiang – “wealth and power.” 

China 2025 is China’s ambitious plan to become a technology powerhouse and control the future through technology. 

Where is America’s plan?

I have no qualms with China fighting to win. What concerns me is we are going into the ring with our fists dangling around our waist. We are getting our butts kicked and not doing enough to protect ourselves.  

We have little ability to control China. But we DO have 100 percent control in investing in research and development, education and infrastructure that will prepare us to be a dominant force, not swamped by the rising China tide.

It is politically expedient to blame China for our ills. It is also a long term losing strategy for preparing us for the future. We need leaders who focus on additions and multiplication for American citizens – NOT division and subtraction and blaming China for our ills.

At the end of World War II, the big question was “Who Lost China” referring, in U.S. political discourse, to the unexpected Communist Party takeover of mainland China from the American-backed Nationalists in 1949, and the subsequent "loss of China to Communism". 

The 21st century question may well be, “Who lost AI to China?”

China’s rise need not come at our demise, but we need a drastic turnaround in the investment in the American people.

Let’s start investing in things that make us strong: education, workforce retraining, research and development, infrastructure improvements.

We need leaders to call on Americans to be architects of our collective future – not the victims of it. 

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Tue, 06/26/2018 - 8:17am

Tom, the US already spends more on education and research than almost any nation out there. Why do you think there are so many Chinese students here? (And they're not majoring in gender studies or Poli Sci). The issue is the kind of education and research we're spending on and what we are getting for it. I think you could argue that we spend a lot on politically driven objectives and areas that give us little to no pay back . Instead we focus on making some people feel good and meet some notion of social justice but the amount of spending overall isn't in question.

Agnosticrat 2.0
Tue, 06/26/2018 - 9:03pm

Interesting that you focused on the amount of money we are spending on education. As many Chinese students as we have here I would wager there are far more in China itself.
Do you think there is a possibility that an American education may be easier to buy... for someone with means that is? Not to get too cheeky but I'll bet there are people you have seen that have a Harvard education that you believe may not have deserved the diploma on their wall.
Any chance that you may agree that just because you spend the most on something that doesn't make it the best?

David Richards
Tue, 06/26/2018 - 9:17am

Clearly we are living for today and acting like there is no tomorrow. We are increasing our deficit at a time of full employment and strong business profits. Our infrastructure is in bad shape across the country and getting worse, with no willingness to spend the resources needed to correct the decline. National Parks are not being maintained and protections for them are being lowered to accommodate extractive operations beneficial only over the short term. I don't know if Matt is correct or not about spending for education not being done effectively generally, but in the state of Michigan we are wasting money by cannabalizing what we spend on parallel school systems, charter and traditional, and the results show it.

Howard T. Spence
Tue, 06/26/2018 - 10:09am

Dr. Tom Watson is spot-on in his observations about the coming century bringing the greatrst challenge ever to long-standing American preeminence in business, technology, and even geopolitical leadership. Like Dr.Watson, I too just returned from a three-week visit to several major urban cities in China. While the technological and infrastructure advances in China over the past several decades are in and of themselves quite impressive, China clearly is focused on the future and returning to a preeminent position of Economic and technological leadership as well as geo-political leadership - not only in the asia-pacific rim area, but on the entire world stage.

While the present leadership of the United States is somewhat complacent and smug in its assessment of the status quo and working under the assumption that American preeminence will continue forever with American world dominance and Leadership, that smug attitude and belief may, in retrospect, be one of the causes that historians look back upon when documenting the next century as the century were the Great American Empire ended and indeed the Middle Kingdom of China reemerged not only in the East, but throughout the world.

While Americans chant about Making America Great Again and looking back to a time which in the minds of many "was a much better time," clearly the Chinese are looking forward with a certain degree of confidence that the future belongs to them. The Chinese obviously already are one of the two major economies in our world today. China presents itself with a major workforce, a clear vision of where the country should and must be going, and the economic oversight focus of a planned economy that is making choices daily about the future of that country. While China looks to the future, innovation, and the realization that it must provide for work and livelihood of all of its people into the future, the United States and many of its business interest look back with Nostalgia to a time when things were easier, when new ideas and new people flowed into the country to be additive to the "Great Melting Pot" and its derived innovation and assimilation, and the related technological advances and inventions that served us well in the past, but may not be nearly as helpful or effective as we move into the future. While China is investing heavily in its own human resources and people through Education and Training, the United States has actually disinvested or at least under-invested in many of its educational and vocational programs designed to enhance and keep American Manpower and human resources from becoming the necessary contributing parts to what our future could and should be.

Thanks to Dr. Watson for bringing into stark contrast the future strategic planning goals of these two countries in this article which is prescient and a clarion call for America to wake up, reset its priorities to invest in the future of our people, our cities and infrastructure and the technologies and ideas of the future in order to compete successfully with China, and indeed with other developing economies and societies in this world we share.

With America seemingly looking back, willing to look at the past through rose-colored glasses and a faulty recollection of the past, afraid of and rejecting science and technological advances, and busy destroying or at least undermining traditional or historical business relationships with allies and others, America may right today be losing the future and be perched to become a follower rather than a leader in development and support for the people in our country.

The history if our world is full of the carcasses of fallen great empires - both economic and political - that slowly died while looking back with attitudes of invincibility and memories of grandeur while barreling into the future without strategic plans for change, innovation, inclusion of the people's of their empires...

Agnosticrat 2.0
Tue, 06/26/2018 - 9:39pm

Oh my...
One almost forgets that China is an aggressive Communist nation that crushes dissent and that all of its business is state owned.
I do not believe a trade war is in any way a good idea but you will have a hard time convincing they are forward leaning.
The future?
Pish posh sir!

Tue, 06/26/2018 - 10:21am

People - Lets imagine our problem is an approaching of WWIII. America is poorly postured by our decision makers. We are truly disadvantaged by our current decision makers so much so that if we were in a war the President would and should sweep his current generals off the board and replace them with officers that truly analyse and forecast the nations immediate and future needs. These new officers then would put politics aside as the non-productive past methods they were and put in place those measures to counterattack our problems. New priorities would be set with progress benchmarks agreed upon and enforced. Funding would be allocated to help achieve success on this battlefield currently in a new swamp of business driven decision making without regard for the citizen troops requirements. Soon it would be realized that without the citizen troops being properly armed all would be lost as well as the war. People - America is truly in a war and to survive our leaders need to put politics and poor business decisions aside and pull together in a long term effort to win for our citizen troops and the future of America. Get out and vote out the worst and in the best for they will be necessary to fairly equip and educate the current and new troops.

Paul Jordan
Tue, 06/26/2018 - 5:45pm

The sad truth is that the United States' model for the future is Guatemala. Our educational system is in disarray, our infrastructure is fast approaching Third World quality, and it appears that yet another generation will be less prosperous than their parents (who were less prosperous than their own parents' generation). In the past decades China has been investing in Africa and South America in order to secure a stable source of raw materials while we have been busy disinvesting. The current regime's withdrawal from multinational agreements has clearly communicated our unreliability as a partner and, as a result, those allies upon whom we have depended for over 70 years are now forming their own European military alliance.
Face it--we have had our day of international preeminence.

Wed, 06/27/2018 - 9:35am

Our author is trying to save US education one platitude at a time.
I think that Donald Trump plans to defeat China by collapsing their economy, and not with military might.
The article "China's Next Ten Years" by Roy C. Smith of NYU's Stern School of Business in the summer 2018 Independent Review brings together the well documented economic and societal problems of China, which has similarities with the Japanese economy from thirty years ago.
Thirty years ago, Japan's borrowing was out of control, expanding factories and building at an insane pace. A single plot of land in Tokyo was worth more than the entire state of California. Their educational system was flawless, and their exports became ever more sophisticated. We in the West were stunned by Japanese successes and wanted to emulate them.
Then, in 1989, the Japanese economy imploded. Real estate prices went into the toilet, zombie corporations all owned each other, the Nikkei dropped from 40,000 to 7,000 and stayed there, and stubborn deflation marred a generation. Young people were not able to get jobs, to marry, or to have kids.
Today, China, the factory of the world, is financially leveraged to the hilt. There are banks and shadow banks, and no one seems to know how much has been borrowed or how many loans are in default. Regional potentates arrange for development with money that they don't have. Decisions on what is produced and ideals that are to be pursued (like the touted turn toward "high tech") are made by political bosses who get their clues from the doctrinaire NYT and Economist. The CCP is deeply worried about joblessness and the miserable prospects for the 300 million rural peasants and the other 300 million illegal immigrants to their major cities. These are already restive.
If things went south, these leaders would impose rigid and authoritarian solutions (like the Keynesian ones that Japan employed) which would hamper the market's self-correction of the financial unpleasantness.
Is Donald Trump greasing the skids to make the inevitable Chinese internal market collapse occur sooner than later? He may, probably consciously, be arranging the cash flow crisis, factory closures, and joblessness that will destroy the Chinese economy.
Let's assume that President Trump imposes an incremental 25% tariff on Chinese goods imported to the USA. Our retailers would buy cheaper goods, many produced by automation in the USA. Chinese factories would have to close, and workers would be laid off. Cash flow would dry up and mortgages go into default. Armies would have to be deployed to impose order on unemployed starving peasants and to tame the middle class bankrupted after the stock and housing markets have collapsed.
In the U.S., the cost of manufacture is about 10% of the retail price of goods. We would have to make stuff ourselves, and the protected producers could raise prices of manufactured goods by the 25% of the tariffs since that's the extent to which they will be protected from market forces, but the increases are only on the manufacturing costs and should raise the retail prices by a measly 2.5%. The impact in the USA should not be that severe. The increased costs would be cheaper than any shooting war in the Far East.
So Trump is waging war by simply changing rules at our borders; we decide what (if any) Chinese merchandise gets into our Walmarts. If we want to target our tariffs more closely, we can specify which factories will close in Shanghai, Chongqing, and Wuhan. The CCP will be kept busy just surviving, beating down its workers and peasants, and will have trouble finding the funds to pay for the Silk Road project and nine dash line, much less wage a shooting war outside its borders.
Given the unstable, overheated Chinese economy, a little nudge should be enough to start the downward spiral going. Poverty and chaos will follow from the loss of the U.S. cash flow. That is not a kind thing for Donald Trump to do.
But the Chinese will have no reason to reach for their nukes or missiles, and that will save all of us, the Chinese included, real problems.
Erwin Haas is running for Michigan's 26th Senate District.

John S.
Wed, 06/27/2018 - 9:07pm

I'd think that the U.S. would want to invest in education. infrastructure, advanced technologies, and R&D regardless of what China's up to. One of the U.S.'s advantages is its diversity. The U.S. can attract the brightest scientists from throughout the world by offering them a better and more rewarding professional and personal life. The U.S.'s future may depend on whether our immigrant scientists are brighter and more innovative than those who remain behind in their native countries.

Sun, 07/01/2018 - 11:48am

The sheer potential of China's consumer economy argues that, as they grow their middle class, they will begin to eclipse the economic power of the US. Demography wins. The apparent success of their drive to wed capitalism with a command and control economy opens the door to an economic third way, which further strengthens their position by providing business with certainty that messier democracies cannot.

Now, add to that a US government that is protectionist, abdicates its position as the leader of united, democratic, capitalist societies, and talks about, but does not fund, 21st century infrastructure and research. We are hastening the arrival of China's century, and our own eclipse.

John G
Sat, 07/07/2018 - 8:51pm


Mon, 07/23/2018 - 9:54am

China experienced democracy for only thirty years in the 20th century. Ironically the USA helped Japan after the second world war and Mao had to turn to the Soviets for help. Then the turnaround in US-Sino relationship in 1972 launched the comeback of China, and the rest is history. China has learned many lessons from the US and the presidents (Lincoln, Wilson, Eisenhower, Kennedy) and is now a global player in technology and economy. China 2025 is going to happen and it will be done by making deals with all nations, good or bad. Meanwhile, Trump will get us all a bad deal with friends and foes.

jack segal
Sun, 04/14/2019 - 5:49pm

We're looking forward to Tom Watkins presentation April 18 to IAF. He has such a deep understanding of China and the crucial role that education plays in meeting this challenge. Should be a fascinating event.