China Is Not Russia and This Is Not the Cold War

I came of age in the 20th century, a time when Russian Communism was a military and ideological threat to western interests. Some now want to compare the current U.S. – China disagreements with the Russian-American “Cold War” that lasted from the end of World War II to the fall of Soviet Union on December 26, 1991. I, and many of you, Americans and Russians, remember it well.

Although the Soviet Union and the United States engaged each other militarily and ideologically, they never engaged each other economically. The Soviet Union was not part of the global economy. As a result, the U.S. had no economic interests in Russia, and Russia had no commerical interests in the United States.

China, on the other hand, does not just compete with the U.S. economically, but it challenges the U.S. for world economic leadership. That is something the Soviet Union never did. Although the U.S. and Chinese economies compete, they are also powerfully intertwined.

Consider this quote from Investopedia:

China is the world’s largest emerging market economy, both in terms of population and total economic product. The country is arguably the world’s most important manufacturer and industrial producer, and those two sectors alone account for more than 40% of China’s gross domestic product or GDP. China is also the world’s largest exporter and the second-largest importer, and it contains the fastest-growing consumer market…China makes and sells more manufacturing goods than any other country on the planet.

Who consumes most of those Chinese goods, American citizens? The United States is the largest consumer market in the world. According to Global Trade Specialists Inc., The largest categories of U.S. imports from China in 2018 “…included electrical machinery ($152 billion), machinery ($117 billion), furniture ($35 billion), toys and outdoor equipment ($27 billion), and plastics and plastic parts ($19 billion).”

And if you think it’s easy to move manufacturing from China to another country think again.

Each nation has a unique business culture that demands a very long learning curve.

Each country has an infrastructure that may or may not have reliable port facilities, roads and electrical power.

Each nation has a different form of government, different bureaucratic rules, language, work ethic, sense of time, and timing.

When the world’s biggest consumer and the world’s biggest manufacturer compete, it’s in their mutual best interests to find a solution. And I think they will. Yes, both sides are going to argue, and threats will be made, but there is simply too much to lose by attempting to unravel mutual interests that have taken decades to weave.

2 thoughts

  1. I agree with Randy. the only country which can compete and may do it better is India. India has population of 1.38 billion. It is democratic country and everything is transparent. A government that is inclined to promote manufacturing and building infrastructure. It is an English speaking and it is told that by 2025 India will have the largest English speaking people and will create its own English dictionary. India manufactures world class Automobile cars, bikes, consumer electronics (Samsung, LG, Sony,Philips all have factories). Apple iphones will be manufactured by Foxconn soon. Coming specific to toys Hasbro, Mattel, Spinmaster have offices in India to look after their manufacturing and there are many other toy companies who are doing manufacturing in India. You name the toy and they can all be manufactured soon in India

  2. China has become very aggressive on the military front. They have taken away rights from Hong Kong Citizens that were supposed to stay in place until 2047. They have not been truthful (and that is being kind) when it comes to Covid 19. They have stolen patents and continue to do so. They have introduced questionable apps into the U.S. that is garnering data from people’s personal phones and computers. They are buying up precious metals and securing as many oil contracts that they policy can.

    While I believe you make very valid points in the differences between Russia and China; I do believe that the points above are more than just concerning and could lead to very different long term policies and relationships between the two countries.

    If a company can make a manufacturing move, they should at least weigh the above with what it would cost to move somewhere else, where perhaps the politics are a little bit different.

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