In This Issue
Week of 6/3/2019 Vol.
24 Issue 18
Disengagement: The Technical and Business Outcomes for an Isolated China
- Two Opening Thoughts on the Eve of Disengagement
- The Players
- The Role of Technology
- The US Without China
- China Without the US
- In the Long Term
- The Ending
Quotes of the Week
- Re: Fear of Amazin’
- The INVNT/IP Digest
- Who Is the Enemy? Two Countries in June
Two Opening Thoughts on the Eve of Disengagement
1. When I first began writing the SNS Global Report, its focus was on the convergence of computing and telecommunications technologies. Ten years later, with that no longer the primary driver of the energy in the technology sector, I moved on to writing about how technology drives the global economy. In both decades, the focus was on technology – how it drove either companies (their earnings, their competitive positions, and their strategies) or national economies.
2. All of this changed in around the year 2000 (we know in retrospect), when China adopted what we have named the “InfoMerc” national business model, in place of pure communism. By 2005 it was clear that: a) we had been on the right original theoretical path, leading to the SNS Economic Mantra: In the post–Information Age, technology drives every sector of the global economy, and intellectual property (IP) is its asset class; and b) China, after Deng, was transforming into a country bent upon using stolen IP to dominate global markets. After it illegally took over the South China Sea, we had to expand our estimate of its plans to include geographical and military dominance, in the longer term, as well.
The result was a new understanding of our charter: while we would continue to cover technology trends and their effects on the economy, the world had changed dramatically. There was no technology, company plan, or country economy that could be discussed without including the effects of China’s actions and plans. Virtually every prediction we’ve made with this in mind, involving all of our prior subject areas, has proven accurate, whether involving computers, chips, smartphones, or cars. Conversely, any analyst not including China’s effects will get it wrong – and there remain a preponderance of analysts who don’t have a clue about the real China.
On this score, we and our members have had the good fortune of being perhaps the first in the world to understand and share China’s real plans, through the research and activities of our INVNT/IP division. This isn’t a brag; the US DoJ has said the very same thing, and we know that it’s true because we’ve briefed the top leaders of all of the free world’s intelligence agencies on this knowledge, as well as political leaders. The obvious benefit to you, our members, is that you have been the first to see this new world in its proper context, and therefore have a much greater chance of making effective plans – for yourself, your company, and your country.
In today’s issue, we are addressing the possibility that there’s no way for “inventing nations” to engage with China without being harmed, or even dominated. Certainly, the Chinese InfoMerc model can be seen as having been designed as the perfect antipode to modern free-market democratic rule. While most people tend to think of countries vis-a-vis the latter’s politics (liberal democratic vs. purely capitalist, for example), we don’t; rather, we consider their national business models. In a sense, this means we don’t address their cultural or social programs; we just work with whether they will grow or suffer based on how they make money.
This may sound tough, but it’s a less judgmental, and therefore more accurate, lens. To that end, given the SNS Economic Mantra, things look very simple: there are Theft Nations and there are Inventing Nations. Class over.
So what will happen if China refuses to stop stealing others’ IP and dumping it back onto the global markets? Ultimately, we’ll either have to disengage or disappear. Today’s issue is based on the premise that all free people would prefer to disengage.
For those of us who are spending the effort to learn about China’s real plans, and who are not afraid to speak out about what we’ve learned, unfortunate comparisons to the 1930s are unavoidable. By this, I do not mean that China is like Germany, or that Xi Jinping is like Hitler, or that the Uighurs are like the Jews of that time. But the comparison works well when we use it as a mirror, perhaps as Spinoza intended, so that we might, by studying what happened then, avoid being condemned to repeat history.
What does it feel like when a global clash of nations is building and about to occur? How would we know if it were happening again before our eyes? What would our leaders say? What would China’s leaders say? What would our company executives do and say, about all of it? Who could we trust to get it right, to tell the truth, and to save us all from repeating the horror of global conflict? Don’t forget, no one who experienced WWI wanted to do it again – which itself became a kind of self-induced form of willful ignorance.
From these perspectives, disengagement not only doesn’t look so bad; it could easily become the preferred path, shared by those seeking not only survival, but also long-term profits and peace.
Let’s spend some time looking at the players, drivers, and outcomes from this strategy.