By Mitchel Olszak
Back in the 1980s, Japan was expected to be the next great world power.
Its economy was expanding at a phenomenal rate, much faster than its creaky, aging counterpart in the United States. We were being advised of the benefits of learning to speak Japanese, because that country’s corporations would soon be in control.
But that day never arrived. Instead, the Japanese economy faltered. Its banking system was flawed and inefficient. Its workers weren’t the unstoppable dynamos of myth. No one talks about a world dominated by Japan today.
Instead, the next big thing is China. And with good reason. It’s a large country with plenty of natural resources (something Japan distinctly lacked). For years now, China’s economy has grown by leaps and bounds as an officially communist leadership has embraced all manner of capitalistic practices.
Consumerism in China has exploded, as improvements in material comforts spread from a favored few to the masses. Chinese cities are as modern and technologically advanced as any.
So there is now the expectation that China will one day eclipse the United States as the world’s greatest power, much in the way Japan was expected to do. Will this happen? Or will China’s economy eventually crash and burn from its own inadequacies?
In material terms, China seems to be better positioned than Japan. And there is no disputing the fact its success is real. The government there is determined to pursue growth and development and will do what it takes to achieve those goals.
An authoritarian regime has certain advantages in this regard. While there may be dissenting views, they can be ignored or dealt with far more easily than political foes in the United States. Mass murders of dissidents may be a thing of the past in China, but there’s no doubt about who’s in charge.
Such a centralized system can easily direct the focus of political and economic resources. But that’s useful only if the powers that be know what they are doing and how to deal with the innovation that’s always part of economic growth.
Which brings us to Google.
This American company began as a bare-bones Internet search engine and has expanded to become a dominant force in the Information Age. No matter the arena on the Web, Google is a player and it continues to grow.
This gives Google clout, which is one reason it is threatening to pull out of China. The company says it will no longer censor search results as ordered by the government. It also complains its users are being monitored by authorities and its sites are being hacked.
Here is a key test of China’s future. Economic growth increasingly depends upon knowledge and the free flow of ideas. Restrictions and roadblocks become impediments to making money.
So the question is, how will China deal with a world where control and restriction is anathema to growth?
The Chinese model may enjoy great success when it comes to industrialization and the sort of corporate espionage that produces growth from the stealing of ideas. But these methods will not put China on top of the economic ladder. At best, it always will be chasing others.
Companies such as Google come out of nowhere because nimbleness and drive are major contributors to future economic advancement. Corporations — as well as nations — fall by the wayside when they fail to adapt.
Whether China recognizes that fact will determine its chances for toppling America from its perch as the world’s top power.
