President Biden is right.
China is not our enemy, but it does represent “extreme competition.”
The difference between the two is simple. If they’re our enemy, then only one side can win. If we’re in competition, both sides can.
This is not a popular view. It’s popular to hate China. We hate China because of the Uigyurs. We hate it because of Hong Kong. We hate it because of the South China Sea, and the way it threatens Taiwan. Some say the country is accreting territory from neighbors like India and Mongolia.
But China’s autocratic ways can be used against it, assuming we maintain America and the West as reasonable, attractive alternatives. That means welcoming Chinese immigrants and their money. Tyranny also hurts creativity.
But there’s one area where China is smarter than we are. That involves its Cloud Emperors.
China managed to create and implement new antitrust rules on technology in just three months. The new rules stop exclusivity, which keeps merchants on Alibaba’s TMall from selling through JD.Com, or Pinduoduo. It prohibits price fixing and limits the use of data or algorithms in manipulating markets.
You’ll note that China’s Internet is far more focused on commerce and financial services than ours is. It’s also far more concentrated. The Cloud Emperors have captured both online and offline infrastructure, which America’s Cloud Czars have yet to do.
I know what cynics will say. China doesn’t want its Internet companies to become a power separate from the government. That’s why they went after Jack Ma. That’s why they went after Ant Financial. But Ant was making loans without taking on any of the risk. This was creating a “big shitpile” like the one that hit our mortgage market in the 2000s, where risk and origination were separated and there wasn’t enough capital to back loans when they went bad.
The rules aren’t perfect. They’re opaque. There’s a lot of room for interpretation, and abuse by government bureaucrats. To the extent it slows China’s Internet economy, this is also a good thing.
Meanwhile, any American efforts to rein in the Czars is stuck in political limbo because Republican supporters of reform just happened to support an insurrection and coup against the Congress. Oops.
Advantage, China.
