Competing models of governance


Our competition in the world is China. Moreover, competitively, we live in a world that is supercharged with sophisticated semiconductor silicon microchips, artificial intelligence, and precision guidance weapons systems. And all this high-tech competition is taking place in a world trying to fully comprehend its climate crisis.

First the basics.

The People’s Republic of China (PRC) is a communist country. Xi Jinping is Secretary General of China’s Communist Party, Chairman of the Central Military Commission, and President of the PRC. Despite the appearance of popular rule with a National People’s Congress, a State Council, and a judicial system with a Supreme Court, China is a one-party authoritarian state and Xi Jinping rules with totalitarian authority.

While I studied China in college, taught Chinese History at the secondary level for over 10 years and have travelled throughout China many times since 1977, I have also watched the nation vacillate economically and politically over the years from absolute state control to free market socialism. The Communist Party has ruled unequivocally since Mao Zedong took control of the country in 1949, but its absolutism has waxed and waned. As a political lifeform, democracy does not exist in the People’s Republic of China.

It is understood that the United States is very different, with a form of governance often described as democratic capitalism, or market capitalism. As citizens of this nation, we understand its character and characteristics. We vote to elect our leaders, and our constitutional democracy has three distinctly separate branches of government, each with a parcel of authority to balance the executive, legislative and judicial functions.

In this rapidly evolving, fast-paced, high-tech, climate-challenged twenty-first century, how will these competing models of governance perform, separately, competitively, and globally?

Of course I can only speculate, but the pieces of the puzzle are on the table and some of the picture is coming together. How it all fits together is yet to be determined.

China’s government is centrally directed, and can make tactical and strategic decisions much more quickly than America’s more deliberate democratic and capitalist system. Sometimes China’s political and economic agility wins and sometimes its ad hoc impulses get it wrong. In this fast-paced world, the U.S. has to figure out how to stay at the front of the arc of innovation and production.

Chris Miller, who teaches international history at the Fletcher School of Law and Diplomacy at Tufts University has authored a best-selling book called “Chip War: The Fight for the World’s Most Critical Technology.” From vacuum tubes, to transistors, to DRAM memory chips to semiconductors, the U.S. has architected, pioneered, and masterminded the highly sophisticated manufacturing techniques for these technologies, yet we have licensed out critical intellectual properties for production to third world countries with cheap labor and capital, while China and Russia have stolen much of the intellectual property through nefarious intelligence operations. Fairchild Semiconductors, Texas Instruments, Intel, Micron, and Bell Labs were Silicon Valley pioneers of these technologies. The rest of the world has ingested the spoils from these groundbreaking American minds and industries.

In the competition for economic influence and military advantage, semiconductor supremacy is key. Automobiles, washing machines, toasters, mobile phones, missiles and drones, everything runs on chips. Miller puts it this way.

“Until recently, the United States designed and built the fastest chips and maintained its lead as the number one superpower. Today, America’s edge is slipping. What’s more, China, which spends more money importing chips than importing oil, is pouring tens of billions of dollars into a plan to catch America’s lead.”

Both Russia and China have a problem in these regards. They are so unaccustomed to entrepreneurial innovation and so dependent upon intellectual theft that they are still behind in the technological development of super sophisticated microchips and the manufacturing processes. Additional downward pressure on their attempts at chip supremacy is Xi Jinping’s tilt away from market mechanisms and more towards state control of China’s means of production, which throws a wet blanket over entrepreneurial initiatives and capital investments.

From the standpoint of geopolitical power, the U.S. is learning its lessons from the recent global supply chain problems, the war in Ukraine, and the importance of “reshoring” not only the production of these critical technologies but the strategic importance of securing the raw materials like silicon, cobalt, arsenic and gallium.

Right now, the largest chip fabrication plant in the world is in Taiwan. Perhaps this is why President Biden let it slip that, despite our one-China policy, the U.S. would defend Taiwan if it were invaded by the PRC.

Chris Miller warns of the scale of this competition. “A facility to fabricate the most advanced logic chips costs twice as much as an aircraft carrier but will only be cutting edge for a couple of years.” The melding of the nation’s strategic security needs with the private sector’s implacable desire for profits will be a real test for this nation’s ability to maintain supremacy.

Renewable energy has made a major impact on keeping the electrical grid up during this summer’s heat waves. Silicon photovoltaic solar cells are a reprise of the semiconductor story. Invented in the U.S. in the 1950s, and according to one study reported in The Atlantic, as late as 1978 American firms commanded 95% of the global solar market. But then corporations sold off patents or leased the intellectual properties for foreign production and the genie was out of the bottle.

According to EnergySage, “China is now the largest producer of solar panels worldwide. Based on the latest data from the International Energy Agency, in 2021 China manufactured 75% of modules, 85% of cells, 97% of wafers, and 79% of polysilicon.”

This is no way to compete for economic and political supremacy when the global great power competition has become as epic as it has in the first two decades of the twenty-first century. Forget the culture wars America. This is big-league competition with the 4,000 year old Middle Kingdom, determined to be the superpower center of the world once again. Democratic capitalism will be challenged not to let this happen.

Bill Sims is a Hillsboro resident, retired president of the Denver Council on Foreign Relations, an author and runs a small farm in Berrysville with his wife. He is a former educator, executive and foundation president.

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