Chinese tycoons, keen to fulfill President Xi Jinping’s ambition to turn China into a soccer superpower, have invested more than $2 billion in European football clubs since the start of last year, reports Ben Bland in the Financial Times. Among the European teams in which Chinese groups have acquired or invested: Italy’s AC Milan and Inter Milan, England’s Manchester City and Aston Villa, Spain’s Atletico Madrid and Espanol. Many of these investments may pay off. But the article stresses that there is a big difference between the “first division” acquirers such as Wang Jianlin’s Dalian Wanda Group or Fosun International, which have deep pockets and well-developed sports marketing and media strategies, and “second division” investors, for whom there are unlikely to be many synergies. It will be interesting to see if Xi and the Party can will China into global dominance in this sport, which received relatively little state support before Xi came to power. The mixed results achieved by China’s state-led sports machine at the Rio summer Olympic games suggest global victory in soccer could prove a tricky goal.
Here’s what else we’re reading this weekend….
China has abandoned the “charade” of peaceful rise. So says veteran China watcher Frank Ching in a tough column in last week’s South China Morning Post. To justify its expansive sovereignty claims in the South China Sea, says Ching, China has created an “imagined universe” where everything China does is right and any nation or person who disagrees with China’s actions is, by definition, wrong. Thus Chinese foreign minister Wang Yi can simply dismiss The Hague’s ruling in favor of the Philippines’ territorial claims in the South China Sea as a “farce.” Well, yes, but don’t all large countries do something similar, more or less? Doesn’t the US? Neo-realists from Kenneth Waltz, Hedley Bull and more recently John Mearsheimer would observe that that’s the whole point about the international order: it’s anarchic. There is no right or wrong, no moral order. And even if there were, in the absence of an all-powerful hegemon, there’s no central authority to enforce it. Ching doubts the US is willing to be that enforcing authority, at least not in the South China Sea. He thinks the US already has acceded to China’s control of the region.
China, through its artificial islands…can project its air and navel power throughout the area and check American bases in the Philippines. While other countries may still occupy a reef here or a rock there, China is in overall control.
Ching also doubts Japan, India, and South Korea can combine to create a counterweight to China. SCMP
Chinese commerce officials tell Reuters last week that China doesn’t have any trade problems with the U.S. and that the two countries in are frequent discussion about a bilateral trade pact. It’s nice that at least one of the partners is happy. But in trade with Americans, as in dancing with Argentines, the point is it takes two. The US trade deficit with China last year was $336 billion. Reuters
Carnegie Mellon professor Vivek Wadhwa rehearses some familiar reasons why “China can’t win with next generation manufacturing” in an opinion piece in the Washington Post. Here’s a snippet of his argument:
After all, American robots work as hard as Chinese robots. And they also don’t complain or join labor unions. They all consume the same electricity and do exactly what they are told. It doesn’t make economic sense for American industry to ship raw materials and electronics components across the globe to have Chinese robots assemble them into finished goods that are then shipped back. That manufacturing could be done locally for almost the same cost. And with shipping eliminated, what once took weeks could be done in days and we could reduce pollution at the same time.
I’ve argued in this space that, at least in manufacturing, China’s competitive advantage is likely to prove a lot more resilient than many US technology experts assume–partly because China has developed a unique manufacturing ecosystem and partly because it is the only major economy graduating engineers in sufficient number to oversee industrial robots at large scale. But Wadhwa, who has worked with research teams at Duke and Harvard to assess both the quantity and quality of China’s emerging workforce, argues that “even though China is graduating far more than 1 million engineers every year, the quality of their education is so poor that they are not employable.” His conclusion: “There is little doubt in my mind that over the next five to ten years manufacturing will return, en masse, to the United States.” Washington Post
I’m a few installments behind on the Sinica Podcast and so am just now catching up to this fascinating discussion between co-hosts Kaiser Kuo and Jeremy Goldkorn and guest host, New York University professor Clay Shirky, about the difficulties faced by Chinese tech companies trying to compete globally. Shirky, who’s written a marvelous book about upstart Chinese phone manufacturer Xiaomi, makes the case that it’s almost impossible for even the most innovative Chinese companies to compete at home and overseas at the same time. That’s because China market is almost a world unto itself. Problems that have to be solved to succeed in China–technical, cultural, economic and political–don’t translate into competitive advantages elsewhere, and often turn out to be hindrances.
As Shirky puts it, “optimizations for China are ‘pessimizations’ for every place else.” He argues that “it’s really hard to be really good at operating in the Chinese context and then have a product that is ready for export to global expectations and standards.”