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November 02, 2005

Thomas Friedman: China’s Little Green Book.

Thomas Friedman likes to think he’s all up to date, in fact, even in advance of current thinking. You know, his self-image seems to revolve aroud the idea that he’s a seer, a prophet, able to guide us on the primrose path to a wonderful future.

Actually, today, he shows himself to be exactly 188 years behind the times.

You see Tom’s been to China and noticed that they’re beginning to design thngs, some pretty good things.

You think China is cleaning our clock now with cheap clothing? Wait a decade, when we'll have to import our green technology from Beijing, just as we have to import hybrid motors today from Japan.


Unfortunately Tom seems to be a little mixed up on the subject.

''So they will become technology exporters rather than importers,'' he said. And because of the unique needs of China and the fact that it will become the biggest market for any product, the Chinese will ''innovate at their affordability level.'' Once they come up with low-cost solutions that work inside China, they will take them global at China prices.

The mix up? Well, y’see, Tom seems to think this is a bad idea. Which is why he is that 188 years behind the intellectual curve. For a gentleman named David Ricardo published, in 1817, a book which shows that this trade thing, buying stuff from other people rather than making it ourselves, is actually what makes us all so stinking rich.

Which really makes it a little odd that Tom worries about people buying things and technology from China. Y’see, it’s the whole damn point of the enterprise Tom, it’s not a bug it’s a feature.

Tag


There’s more of the piece below the fold.

There are only about 60 gold-standard green buildings in the world -- that is, buildings certified by the U.S. Green Building Council as having been made with the materials and systems that best reduce waste, emissions and energy use. One of those buildings is in Beijing -- China's Ministry of Science and Technology, at 55 Yuyuantan Nanlu Street.

I toured it the other day with Robert Watson from the Natural Resources Defense Council, who advised China in designing the building. What struck me most was how much stuff in China's greenest building was labeled ''Made in China.''

Get used to it. In China, conservation is not a ''personal virtue,'' as Dick Cheney would say. Today it is a necessity. It was so polluted in Beijing the other day you could not make out buildings six blocks away. That's the bad news. Here's the good news: China's leaders and business community know it. They know that as China grows more prosperous, and more Chinese buy homes and cars, it must urgently adopt green technologies; otherwise, it will destroy its environment and its people. Green technology will decide whether China continues on its current growth path or chokes itself to death. So green innovation is starting to mushroom in China.

And what's the U.S. doing as green technology is emerging as the most important industry of the 21st century? Let's see: the Bush team is telling our manufacturers they don't have to improve auto mileage standards or appliance efficiency, is looking to ease regulations on oil refiners and is rejecting a gas tax that would help shift America to hybrid vehicles.

We should be doing just the opposite: creating more pressures and incentives so our companies will innovate and dominate the next great industry. You think China is cleaning our clock now with cheap clothing? Wait a decade, when we'll have to import our green technology from Beijing, just as we have to import hybrid motors today from Japan.

Green China will be much more challenging than Red China. Look around the nine-story Ministry of Science and Technology building. Yes, a lot of cool things here are from Europe, and some are from the U.S.

But what about the porous pavement bricks, made of fly ash, a byproduct of coal combustion that allows storm water to flow through and be reabsorbed into the Beijing aquifer? Made in China. The photovoltaic panels that provide 10 percent of the building's electricity from sunlight? Made in China. The solar hot water system? Made in China. The soil substitute in the building's roof garden that is 75 percent lighter than regular dirt and holds three to four times more water per cubic foot? Made in China. The concrete building blocks filled with insulating foam that keeps you warmer in the winter and cooler in the summer? Made in China, by a U.S.-owned company. The water-free urinals? Made for the China market by a U.S.-owned company.

Jack Perkowski, who runs Asimco Technologies, the huge China-based auto parts maker, told me where this is heading: ''As China moves from the second-largest market to the first in autos the industry here will have to come up with transport that is more affordable, fuel-efficient and environmentally sound.''

As green technologies get adopted here and gain scale -- Mr. Perkowski cited a Chinese auto company now rushing to develop a green diesel engine for passenger cars -- the Chinese will set the standards for the world.

''So they will become technology exporters rather than importers,'' he said. And because of the unique needs of China and the fact that it will become the biggest market for any product, the Chinese will ''innovate at their affordability level.'' Once they come up with low-cost solutions that work inside China, they will take them global at China prices.

The China Daily reported that China's 11th five-year plan, which starts soon, includes a program to sharply reduce China's energy usage per unit of G.D.P. by 2010. ''To hit the target, a huge business potential will be open to investors,'' Zhou Dadi, director of China's top energy research institute, told a forum held by the paper.

''China is growing three times as fast as we are,'' Mr. Watson said, ''[so] a lot of innovation is going to happen here, and once it is introduced [on the low-cost China platform] it is going to spread a lot faster. We are not the only source of innovation on the planet. The Japanese and Europeans are here in a big way, and they are giving their stuff away.

''We deserve to lose. We are clutching our past with these tremulous hands, and everyone else is vigorously grasping the future.''

Via The Peking Duck.

November 2, 2005 in Trade | Permalink

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» Daily linklets 3rd November from Simon World
Resolving Chinas border disputes in Central Asia. Politics and turf wars behind private investment in Chinas financial system and banks. Its the great Kimchi War of 2005. Reflections on the differences between HK and Chinese politics. P... [Read More]

Tracked on Nov 3, 2005 8:00:57 AM

» Daily linklets 3rd November from Simon World
Resolving Chinas border disputes in Central Asia. Politics and turf wars behind private investment in Chinas financial system and banks. Its the great Kimchi War of 2005. Reflections on the differences between HK and Chinese politics. P... [Read More]

Tracked on Nov 3, 2005 8:05:07 AM

Comments

Hmm China, gunpowder, invention of the compass, using books and paper before anyone else...

Pi (π) was calculated by 5th century mathematician Zu Chongzhi to the seventh digit. The decimal system was used in China as early as 14 Century BC. "Pascal's" Triangle was discovered by mathematician Liu Ju-Hsieh, long before Pascal was born.... (wikipedia)

Vaguely recollected facts... In something like the 19th Century, China produced half the world's output.

China has been in a blip of economic underperformance in most of the twentieth Century. Its just getting back on track again.

There might be some fall out from excessive demand in China pushing up prices of some goods (esp. luxury etc), but then there are the income effects of having cheaper goods to buy in some cases.

In most cases though we can only vaguely forecast what will happen without any certainty. Its a problem when all the doomsayers have their projections - they are subject to the same error margins as the rest of us.

Posted by: Angry_Economist | Nov 3, 2005 9:49:57 AM