The Challenge of China

In late November the New York Times ran a 20-page special report in a Sunday edition titled “China Rules.” If you know anything about the state of publishing—especially newspapers—in this age of reading things on screens, you probably know that running 20 pages, of which only one was an ad, and a house ad at that, is no small undertaking.

In late November the New York Times ran a 20-page special report in a Sunday edition titled “China Rules.” If you know anything about the state of publishing—especially newspapers—in this age of reading things on screens, you probably know that running 20 pages, of which only one was an ad, and a house ad at that, is no small undertaking. But presumably the editors at the Times fully recognize the growing importance of China as regards not only the denizens of New York, but of the rest of the world, where China is becoming ever-more important.

In 2015 China announced a 10-year plan. It is called “Made in China 2025” and it is focused on promoting manufacturing in 10 areas:

1. New information technology

2. High-end numerically controlled machine tools and robots

3. Aerospace equipment

4. Ocean engineering equipment and high-end vessels

5. High-end rail transportation equipment

6. Energy-saving cars and new energy cars

7. Electrical equipment

8. Farming machines

9. New materials, such as polymers

10.Bio-medicine and high-end medical equipment

An intent is to reduce the country’s reliance on technologies from companies that are based in other parts of the world. While the sixth on the list is of particular interest to the readers of this magazine, arguably 1, 2, 7, and 9 should also be noted. (I must admit that seeing “High-end numerically controlled machine tools and robotics” gives me as much pause as “Energy-saving cars and new energy cars” because machine tools and robots are needed for the production of cars—energy-saving or otherwise—and it seems to me that far too little attention is paid in the U.S. to the means of production; I suspect that most people who temporarily reside in Washington don’t have the slightest idea of what a machine tool is.)

While I’m not going to pretend to understand the political machinations that are afoot between the U.S. government and the Chinese government, what is absolutely evident to me is that those of us in the U.S. are really going to have to up our abilities and capabilities in order to compete, administrations notwithstanding.

For example, in one of the stories in the Times report, written by Phillip P. Pan, there’s this: “mainland China now produces more graduates in science and engineering every year than the United States, Japan, South Korea and Taiwan combined.” One might make the argument that quality beats quantity when it comes to things like science and engineering graduates, but one might also make the argument that putting a mediocre grad in charge of an operation might be more beneficial than putting someone in that position who doesn’t have any college education. What’s more, according to the National Center of Education Statistics, “The number of students projected to attend American colleges and universities in fall 2018 is 19.9 million, which is higher than the enrollment of 15.3 million students in fall 2000, but lower than the enrollment peak of 21.0 million in fall 2010,” so things aren’t looking good in the near-term vis-à-vis the number of graduates from U.S. universities.

And there’s this from the Times story: “Because of new wealth, a traditional emphasis on education as a path to social mobility and the state’s hypercompetitive college entrance exam, most students also enroll in after-school tutoring programs—a market worth $125 billion, according to one study, or as much as half the government’s annual military budget.”

Science. Engineering. Education. Who is promoting any of those things in the U.S.?

At last month’s North American International Auto Show GAC Motor held a press conference, which was not its first time doing so. You may not have heard of it. GAC is Guangzhou Automobile. The company has achieved top ranking in the J.D. Power Asia Pacific’s China Initial Quality Study six years running. While it might be the case that the competition might not be as strong as it is in the U.S., here’s something that cannot be underestimated. In its news release announcing that sixth win, GAC pointed out that in order to improve its quality it “has partnered with 18 of the top auto suppliers in the world including Bosch, Denso, Continental, Aisin, and Magna.” All world-class suppliers. Clearly the people at GAC understand what the metrics are like in the rest of the world, so they’re working with the best to develop their vehicles. And there’s something else that is particularly telling about their commitment: the company has established in 2008. So to achieve the sixth consecutive J.D. Power Award at the end of 2018 is nothing to sniff at.

The point is simply this: while trade policies and currencies are important, so are science, engineering, education, machine tools, and other things that aren’t necessarily the stuff of headlines, but which are essential for any country that wants to be relevant in 2025 and beyond.