There’s been a lot of big stuff happening in the news recently, most of it bad.
And it is all a big deal. However, one of the biggest stories of all, the one simmering away in the background, going woefully underreported, is the current fall of China.
Yes, China is falling apart. Politically, socially, economically, it’s all headed South. Their (perhaps empty) threats to invade Taiwan, though serious, are just a sideshow in comparison.
The shorthand version, according to Peter Zeihan, is that the world’s second largest economy, with a quarter of the world’s population, ran their country over the last three decades, the same way Enron ran theirs. And now the game is starting to fall apart, Bernie-Madhoff-style.
Of course, it’s old news that we in the Global North helped them out as much as we could, moving our capital and factories over there (like in the USA), or turning them into our biggest customer (like in Germany). That turned out to be short sighted.
So companies are scrambling to move their operations out of China, preferably back home.
The trouble is, this is WAY harder than it looks.
The water bottle manufacturer and entrepreneur, Mike Beckham, explained it very well on a Twitter (X) thread recently, showing a clip from Apple CEO, Tim Cook.
Cook said the reason they make Apple products in China is no longer because they’re cheaper (they ceased being so years ago) but because they have the massive high-end infrastructure and the talent to do so, whereas the USA simply no longer does.
Over the last few decades, while China created a world-class manufacturing capability, we created the Rust Belt. We bled our manufacturing capability dry.
We created a culture that incentivized our brightest young minds not to go into manufacturing et al, but to go work for tech startups, Wall Street, law firms, consultancy firms, ad agencies, activism, academia, etc. All the sexy stuff. All while stripping previously well-respected jobs of their meaning and purpose with every job offshored.
Yes, the shareholders loved it (while it lasted), but now what? If China goes down, the shortages that happened during COVID were just a taste. A SMALL Taste.
And we’re not even going to mention the really bad stuff, like tens of millions being lost to wars and famine (which is a distinct possibility, especially when you have a massive population under Communist rule).
The brighter news is that culture got us into it and culture can get us out of it. If we let it.
If we set aside the obvious needs like infrastructure, education, training, economic incentives, domestic and global partnerships, it will also take a very real shift in perceptions – to show that manufacturing can again be meaningful and rewarding. (When was it ever not?)
It won’t happen automatically but there is an opportunity for American companies, the government, and consumers to drive culture change to bring these jobs back to the United States.
That’s because fortunately for us, we’re a freedom-loving democracy with a massive economy, which allows us, unlike authoritarian regimes like the Chinese Communist Party, to change our minds, admit our mistakes, dust ourselves off and try again.