Three data points on technology, the U.S. and East Asia.
- Lenovo, the Chinese PC maker that bought IBM's personal computer division in 2005, announced plans to drop the "IBM" from its ThinkPad line of laptops two years earlier than originally planned.
- A government-funded research institute in Taiwan says the island nation's "capacity for semiconductor production" has dislodged the United States from the No. 2 rank in the world. Japan, with 24 percent, is still No. 1. But Taiwan now accounts for 18 percent, and the U.S. and South Korea are tied for third place, at 17 percent.
- Cisco's CEO, John Chambers, announced that the networking firm will spend $16 billion in China over the next five years, mostly on procurement.
Let's take all these factoids, which could easily be abused in the service of an Asia Rising! alarm, in the context of an article published on ABCNEWS.com this week, "America Beats China in Manufacturing: 'Made in the USA' Labels Are More Common Than 'Made in China.'"
There are at least two major flaws in the ABC story. The first is that there is zero empirical support in the article to justify the headline about the relative number of labels. Instead, we learn that the U.S. manufactures 21 percent of the world's manufactured goods, and China only 8 percent, as measured in terms of dollar value, not total quantity. On this scale: One Boeing jet equals umpteen million Crocs. Certainly, taking a larger share in terms of value is more economically significant, but still, one would like the headline to be factually correct.
The second problem is that the story is largely sourced on information provided from the Cato Institute's Center for Trade Policy, without even bothering to inform readers that the libertarian think tank has a very specific agenda when it comes to trade (i.e., pro-free trade), and so all its talking points should be carefully filtered.
But the stupidest part of the whole story is the framing in which one country "beats" another. This is a misguided stance often adopted by pro-trade China analysts who seem to think that by denigrating what China has achieved and boosting up the U.S., they can ameliorate protectionist tendencies. But it completely misses the point about what's really happening, which is that the U.S. and East Asia are advancing hand in hand; it is not a zero-sum game.
Taiwan's semiconductor production capacity may have overtaken the U.S.'s, but a significant proportion of those chips are still designed in the U.S. and manufactured to order for U.S. companies. Lenovo may be dropping the IBM brand, but those laptops still have Intel chips inside. Cisco might be spending a ton on Chinese procurement, but the resulting routers and switches plug into networks all over the world.
If you want to make the case for trade, the cross-national high technology production networks that link together the nations around the Pacific Rim are an example of how multiple economies benefit from cooperation and mutual entanglement. Recalibrating that into a zero-sum framework where one nation "beats" another plays into a stupid jingoism that obscures more than it clarifies.