U.S. vs. China: Nurturing America's Homegrown Advantages | TIME Ideas

PETER PARKS / AFP / GETTY IMAGES

A person passes a photomontage of the Shanghai skyline in a subway station in Pudong, the financial district of Shanghai, on Feb. 3, 2012

Liu's latest book is The Gardens of Democracy: A New American Story of Citizenship, the Economy, and the Role of Government

Two years ago, China launched an ambitious campaign to lure expatriate Chinese-born scientists, engineers and entrepreneurs, particularly those in the U.S., to go home to China. This “talent development” initiative, reported the New York Times, promises free housing, tax breaks and signing bonuses of up to $158,000, and reinforces a narrative loop in the threatened American psyche: First they got our jobs, then our dollars and debt and now our talent.

But in his new book, China Airborne, James Fallows tells a story that’s more nuanced and, in some ways, actually harder to bear. A longtime correspondent for the Atlantic who’s lived in Beijing and Shanghai, Fallows chronicles China’s efforts to create a world-class commercial-aviation sector from scratch. Assembling iPhones by hand requires only abundant unskilled labor. Making passenger jets that stay aloft requires an economy of such sophistication and interlocking complexity that it can truly be called first world. And, indeed, China’s aviation boom — with catalysts ranging from well-connected tycoons to ambitious American advisers to provincial boosters — is a microcosm of China’s epic rise. Where that country’s core assets can be brought to bear — scale, mass, will, central planning — breathtaking progress ensues. China, for instance, is building 100 new airports today; the U.S., one or two. China has created a giant aeronautical complex in Xi’an for 250,000 engineers.

(MORE: Why China’s Rise Is Great for America)

Yet the Chinese have liabilities too. Those engineers have been trained more to follow routines than to adapt creatively to the unexpected. The state’s control of the Internet stifles innovation. The reluctance of the People’s Liberation Army to relax its grip on airspace deters aerospace entrepreneurs. The culture of self-dealing state capitalism makes foreign investment risky. The absence of transparent governance and public trust dampens citizen initiative.

These liabilities often go unnoticed by Americans because it’s harder to see the soft stuff (like culture) than the hard (like infrastructure). For the same reason, Americans are often blind to their own strengths. I write this from Seattle, which remains the aviation capital of the world — and likely will for the rest of our lives. Here America’s assets are hidden in plain sight: its research universities, its venture-capital ecosystems, its Boeings and Microsofts, its immigrants of all races and classes, its relatively open government, its web of voluntary associations.

(MORE: China’s Going to the Moon — and That’s Good for Everyone)

But then, in the other Washington and on Wall Street, America’s liabilities lie also in plain sight. The body politic is crippled by severe, asymmetrical party polarization. CEOs and shareholders are obsessed with quarterly results instead of long-term economic health. Bankers still believe that financial engineering is engineering and that making a casino killing is the same as creating social value.

It turns out that a much earlier work by Fallows may bear the more apt message for our times. Back in the late 1980s, when Japan was rising and predictions of American decline were rampant, he wrote that instead of wringing our hands and trying to be more like the Japanese, what we needed was to be — in the title of his book — More Like Us. We had to remember that America’s advantage, when activated, was its openness to talent from outside, its social mobility, its institutional support for equal opportunity, its amalgam of individual moxie and mutual responsibility, its tolerance for change and risk, its essential pragmatism.

We know how that story ended: America rebounded, and Japan, because of its own underappreciated weaknesses, fell into a “lost decade.” How today’s story will end is still in question. What’s certain is that Americans should be less alarmed by reports of China’s methods than by reports of America’s underfunded universities, its money-drenched ideological politics, its concentration of wealth and the meanness and myopia of its immigration policies. These things — not China’s 12th Five-Year Plan or $158,000 signing bonuses — are what threaten American prosperity.

(MORE: Will Events in China Have a Lasting Impact on Obama?)

It’s worth remembering too that the transformation China must now make to create an economy with topflight jobs is much more wrenching than the transformation America must make to keep such an economy. The difference is civic: a society’s talent is developed much more readily when institutions and incentives tip toward openness and freedom. And it’s much harder to create such institutions than to renew them.

As Fallows observes, leaders in China aren’t preoccupied with the U.S.; they are busy trying to hold their own centrifugal, contradictory society together. But they surely note even today the rich evidence of insistent American innovation: from SpaceX’s rocket launch to James Cameron’s deep-ocean dive to the Nobel laureates who still populate America’s research institutions and are exploring the frontiers of nanorobotics and brain science and the mysteries of the genome.

So let China take flight and let them do it their way. We can’t out-China China. But we can be more like us — and we’d better, in a hurry.

MORE: Murder, Lies, Abuse of Power and Other Crimes of the Chinese Century

Liu is the author of several books, including The Gardens of Democracy and The Accidental Asian. He was a speechwriter and policy adviser to President Clinton.

via ideas.time.com

This is a great piece on the under-appreciated differences between the US economy and our rising Chinese counterpart. Great stuff. Here is my favorite excerpt;

"...Americans are often blind to their own strengths. I write this from Seattle, which remains the aviation capital of the world — and likely will for the rest of our lives. Here America’s assets are hidden in plain sight: its research universities, its venture-capital ecosystems, its Boeings and Microsofts, its immigrants of all races and classes, its relatively open government, its web of voluntary associations."

U.S. vs. China: Nurturing America's Homegrown Advantages | TIME Ideas

PETER PARKS / AFP / GETTY IMAGES

A person passes a photomontage of the Shanghai skyline in a subway station in Pudong, the financial district of Shanghai, on Feb. 3, 2012

Liu's latest book is The Gardens of Democracy: A New American Story of Citizenship, the Economy, and the Role of Government

Two years ago, China launched an ambitious campaign to lure expatriate Chinese-born scientists, engineers and entrepreneurs, particularly those in the U.S., to go home to China. This “talent development” initiative, reported the New York Times, promises free housing, tax breaks and signing bonuses of up to $158,000, and reinforces a narrative loop in the threatened American psyche: First they got our jobs, then our dollars and debt and now our talent.

But in his new book, China Airborne, James Fallows tells a story that’s more nuanced and, in some ways, actually harder to bear. A longtime correspondent for the Atlantic who’s lived in Beijing and Shanghai, Fallows chronicles China’s efforts to create a world-class commercial-aviation sector from scratch. Assembling iPhones by hand requires only abundant unskilled labor. Making passenger jets that stay aloft requires an economy of such sophistication and interlocking complexity that it can truly be called first world. And, indeed, China’s aviation boom — with catalysts ranging from well-connected tycoons to ambitious American advisers to provincial boosters — is a microcosm of China’s epic rise. Where that country’s core assets can be brought to bear — scale, mass, will, central planning — breathtaking progress ensues. China, for instance, is building 100 new airports today; the U.S., one or two. China has created a giant aeronautical complex in Xi’an for 250,000 engineers.

(MORE: Why China’s Rise Is Great for America)

Yet the Chinese have liabilities too. Those engineers have been trained more to follow routines than to adapt creatively to the unexpected. The state’s control of the Internet stifles innovation. The reluctance of the People’s Liberation Army to relax its grip on airspace deters aerospace entrepreneurs. The culture of self-dealing state capitalism makes foreign investment risky. The absence of transparent governance and public trust dampens citizen initiative.

These liabilities often go unnoticed by Americans because it’s harder to see the soft stuff (like culture) than the hard (like infrastructure). For the same reason, Americans are often blind to their own strengths. I write this from Seattle, which remains the aviation capital of the world — and likely will for the rest of our lives. Here America’s assets are hidden in plain sight: its research universities, its venture-capital ecosystems, its Boeings and Microsofts, its immigrants of all races and classes, its relatively open government, its web of voluntary associations.

(MORE: China’s Going to the Moon — and That’s Good for Everyone)

But then, in the other Washington and on Wall Street, America’s liabilities lie also in plain sight. The body politic is crippled by severe, asymmetrical party polarization. CEOs and shareholders are obsessed with quarterly results instead of long-term economic health. Bankers still believe that financial engineering is engineering and that making a casino killing is the same as creating social value.

It turns out that a much earlier work by Fallows may bear the more apt message for our times. Back in the late 1980s, when Japan was rising and predictions of American decline were rampant, he wrote that instead of wringing our hands and trying to be more like the Japanese, what we needed was to be — in the title of his book — More Like Us. We had to remember that America’s advantage, when activated, was its openness to talent from outside, its social mobility, its institutional support for equal opportunity, its amalgam of individual moxie and mutual responsibility, its tolerance for change and risk, its essential pragmatism.

We know how that story ended: America rebounded, and Japan, because of its own underappreciated weaknesses, fell into a “lost decade.” How today’s story will end is still in question. What’s certain is that Americans should be less alarmed by reports of China’s methods than by reports of America’s underfunded universities, its money-drenched ideological politics, its concentration of wealth and the meanness and myopia of its immigration policies. These things — not China’s 12th Five-Year Plan or $158,000 signing bonuses — are what threaten American prosperity.

(MORE: Will Events in China Have a Lasting Impact on Obama?)

It’s worth remembering too that the transformation China must now make to create an economy with topflight jobs is much more wrenching than the transformation America must make to keep such an economy. The difference is civic: a society’s talent is developed much more readily when institutions and incentives tip toward openness and freedom. And it’s much harder to create such institutions than to renew them.

As Fallows observes, leaders in China aren’t preoccupied with the U.S.; they are busy trying to hold their own centrifugal, contradictory society together. But they surely note even today the rich evidence of insistent American innovation: from SpaceX’s rocket launch to James Cameron’s deep-ocean dive to the Nobel laureates who still populate America’s research institutions and are exploring the frontiers of nanorobotics and brain science and the mysteries of the genome.

So let China take flight and let them do it their way. We can’t out-China China. But we can be more like us — and we’d better, in a hurry.

MORE: Murder, Lies, Abuse of Power and Other Crimes of the Chinese Century

Liu is the author of several books, including The Gardens of Democracy and The Accidental Asian. He was a speechwriter and policy adviser to President Clinton.

via ideas.time.com

This is a great piece on the under-appreciated differences between the US economy and our rising Chinese counterpart. Great stuff. Here is my favorite excerpt;

"...Americans are often blind to their own strengths. I write this from Seattle, which remains the aviation capital of the world — and likely will for the rest of our lives. Here America’s assets are hidden in plain sight: its research universities, its venture-capital ecosystems, its Boeings and Microsofts, its immigrants of all races and classes, its relatively open government, its web of voluntary associations."

The sky's the limit | James Fallows new book on the Chinese aerospace ambitions

2012-06-01 07:56:19.0Kelly Chung DawsonThe sky's the limit1811066442People2@usa/enpproperty-->

Author explores potential of Chinese aviation

Beyond standard economic indicators of prosperity, certain industries can be seen as a microcosm of a country's maturity. James Fallows' new book, China Airborne, argues that Chinese aviation is such an industry, worthy of closer examination for what its successes and shortcomings reflect about China's technological and social progress.

"There are a number of industries that have significance beyond themselves," Fallows says.

"If a country succeeds in those industries, it indicates a larger range of accomplishment and networks of sophisticated production, and aerospace is one of these high-end industries.

"Countries that have successful aerospace industries are capable of building sophisticated operation systems, maintaining safety standards, and can pull off the integration of military, civilian and weather systems on an international level," he says.

James Fallows sees the aviation industry as a microcosm of China's maturity in his new book. Provided to China Daily

"It's a microcosm of the larger Chinese effort to become a higher-value modern economy, and it seemed to me to deserve attention as a test case for China's emergence."

China Airborne traces the history of the nation's commercial airline industry and its more recent attempts to compete as an aircraft manufacturer. Once rated among the most dangerous to fly, Chinese airlines now boast some of the lowest crash rates in the world. But Chinese airplane manufacturers lag behind international competitors in innovation and design - a telling sign, Fallows says.

"There are major catch-up efforts to build regional jets and larger jetliners, and the test is whether these Chinese factories will be able to take the next step up. It has not happened yet, but Boeing and Airbus are very attentive to what will happen in China over the next few years."

In 2011, the Chinese government unveiled its 12th Five-Year Plan (2011-2015), in which it pledged 1.5 trillion yuan ($237 billion, 189 billion euros) to develop the national aerospace industry in the form of new airports, navigation systems and planes. As of 2010, the country counted 2,600 commercial planes, about half as many as in the US, with a target of 4,500 by 2016.

Construction of 150 new airports is already under way in China, although Fallows seems to argue that growth can sometimes surpass actual need. Much of China's airspace is highly regulated and in some cases off-limits due to military reasons, severely curtailing the potential of the private small-aircraft industry.

But as Fallows notes, Boeing executives have declared China the sole source of hope "that the world aviation industry is beginning to recover".

China Airborne also outlines the history of Chinese involvement in aviation and aerospace. A Chinese engineer, Wong Tsu, played a significant role in the development of the US industry in the early 1900s, Fallows writes. Born in Beijing in 1893 and sent to England for naval cadet training, Wong eventually became a student at MIT, in the country's first aeronautical engineering program. In 1916 he joined Bill Boeing in Seattle as the Boeing Co's first chief engineer. In fact he designed the Model C plane, the first aircraft Boeing sold to the US military.

China had its first flight in 1909, only six years after the Wright brothers' fixed-wing gas-powered plane made history on a North Carolina beach. But the gap between Chinese and US technologies only widened over time.

For a period, China used only Soviet-made planes. When the then US President Richard Nixon flew to China in 1972 aboard the Boeing 707 that was Air Force One, the simple question of how he would disembark to the runway 20 feet below created a small crisis, Fallows writes. Soviet aircraft were built at a different height and the airport was unprepared for Nixon's visit. Ultimately, Chinese builders rushed production of a set of stairs built from published 707 specs and photographs of similar portable stairways.

During that trip, Premier Zhou Enlai approved the purchase of 10 Boeing 707s as a goodwill gesture, Fallows writes. "This purchase - like all major airline sales in the modern age - was as much a diplomatic gesture as a commercial transaction, constituting a big and noticeable US export to China."

Decades later, when President Hu Jintao visited the US in 2006, his very first stop was a Boeing factory outside Seattle. While touring the assembly line, he spoke to about 5,000 Boeing workers. "Boeing is a household name in my country," Hu said. "When Chinese people fly, it is mostly in a Boeing plane. I am happy to tell you that I came to the United States on a Boeing plane."

Fallows makes the important point that because their products enable travel between nations, airline companies and their executives are de facto diplomats in geopolitics.

"One of the reasons I wanted to tell the story of Boeing's role in China was that while living in China, I was really impressed at the thousands of less-publicized levels of interaction that occur between the two countries," Fallows says.

"For Boeing, they recognized that in many parts of the world, sales are not only commercial decisions but also political decisions. On the Chinese side, Boeing was viewed as a branch of the US government. And in Boeing's role as this quasi-governmental body, it was able to get involved in air-safety ventures and air-traffic issues. Much of the miracle of making Chinese airline travel so much safer has involved intense work between Boeing and the Chinese side."

The American company brought in Western experts to train Chinese airline officials and regulators, and worked to bring China's air industry up to international standards.

"Boeing had a direct stake in improving the safety record of Chinese airlines and felt it had a responsibility to do what it could," writes Fallows.

"If commercial airliners kept crashing - as five of them did within a four-month span in 1992, including an accident in southern China in which more than 140 people aboard a Boeing 737 died - neither Chinese nor foreign passengers would ride on them, and Boeing's prospects would be limited. Thus, making Chinese airlines safer became Boeing's job."

While China's contributions to airline manufacturing remain unremarkable, the government took a huge step in moving toward innovation in 2011 when the State-owned Aviation Industry Corporation of China bought US manufacturer Cirrus Industries, known for its state-of-the-art small-propeller airplanes, and Teledyne Industries' piston engine business, which equips small aircraft including Cirrus planes.

"That is a very significant sign of Chinese sophistication," Fallows says. "It's a sign of their potential. It is an interesting choice, and I expect more purchases like that. I think that the people on the Chinese investment side are sophisticated in their purchases - they know if they do too much, there would be an adverse reaction in the US. They are being cautious, but there will be more of this, knowing the kind of ambition that's present in the Chinese industry."

Fallows, who was a speechwriter for former US President Jimmy Carter before his longtime journalism career with the Atlantic, published the 2001 book Free Flight about the US airline industry. He called the experience of reporting and writing China Airborne inspiring.

"I had a lot of fun working on this book and going out to these remote areas, where people were cooking up new airports and had big dreams," he says. "It was very stimulating. If you are interested in life and things changing, China is a very interesting place. The air industry is a field that I have pre-existing interest in, so it was a rewarding way for me to learn more about China.

"I ended up thinking about how much more varied China is than most Americans know, and if you look closely at the particular case of an industry or region or technology, you can see reflections of the country on a larger scale. This is a field in which China is trying to rise to the top, and its success or difficulties in fulfilling that dream will broadly indicate the success or limit of its technological ambition in general. If these Chinese can succeed in aerospace, there's nothing they can't succeed in."

kdawson@chinadailyusa.com

(China Daily 06/01/2012 page21)

via usa.chinadaily.com.cn

Great review of James Fallows' new book, China Airborne, about the ambitious Chinese aviation industry. Fallows is one of my favorite China watchers and this book is officially on my summer reading list. What I want to know about the Chinese aviation industry is when will there be a Chinese competitor to Airbus and Boeing?