Wednesday, March 26, 2008

Is Brad DeLong right about China?

In one of the most curious defenses of free trade ever, DeLong argues that we should continue to trade freely with and embrace China so that their children will think fondly of us when they are our new overlords. Really! I am not making this up.

Some quotes:

if possible, the current superpower should embrace its possible successor. It should bind it as closely as possible with ties of blood, commerce, and culture--so that should the emerging superpower come to its full strength, it will to as great an extent possible share the world view of and regard itself as part of the same civilization as its predecessor: Romans to their Greeks.

There is a good chance that China is now on the same path to world preeminence that America walked 130 years ago. Come 2047 and again in 2071 and in the years after 2075, America is going to need China. There is nothing more dangerous for America's future national security, nothing more destructive to America's future prosperity, than for Chinese schoolchildren to be taught in 2047 and 2071 and in the years after 2075 that America tried to keep the Chinese as poor as possible for as long as possible.

I am just not so sure about this. First China is still a very poor country, and we recently found out it's even poorer than we thought. Second, though still very poor, China already has a very very serious pollution problem. Third, none of the east Asian miracle countries have caught up to the US (nor does it look like they will). Singapore and Hong Kong are indeed quite rich but they are cities, not countries. In per capita terms, Japan, South Korea, Taiwan, Thailand all grew rapidly relative to the US for a while but plateaued well short of US income levels. Fourth, China has serious governance problems. I do not foresee a totalitarian government reaching US-EU levels of wealth, and I do not foresee a change of government in China that would be anything close to smooth.

So, free trade with China? Sure, I'm for free trade with everybody. Trying to please our new overlords in advance? If they turn out to be so, I don't think what we do now will matter much, but I also wouldn't hold my breath waiting for the takeover.

1 comment:

Steven Taylor said...

There does seem to be an odd fascination amongst many who should know better that China is poised to become THE superpower. What confuses me about such arguments is that they ignore the developing world-level GDP per capita in China, amongst a host of other indicators.

It all remind me very much of the early 1990s when it was fashionable to say that soon Japan and Germany would emerge to be at least as powerful, if not more powerful, than the US in the Post Cold War period.

And I concur with you about free trade.