A parallel-universes dance?: random thoughts on US-China over the next decade (series?2/2)

This is the article I had long intended to write. My last (2018) post on US-China became quickly dated because of the trade war in 2019 and then the pandemic outbreak in 2020. The situation is changing so fast that the whole world is merely trying to catch up. There is never a good time to write on this topic, so here it is.

Black Swans

Just when we were grappling with the global economic impacts of the US-China trade war for the better part of 2019, no one had expected it was merely a rehearsal. We had not dared to predict that anything bigger would come.

Came it did. A once-in-a-century pandemic that has, tragically taken over 120,000 lives, impacted millions in losing their jobs, is truly a Black Swan occurrence that will leave its mark on future generations.

At a time like this, it’s important to be a student of history, so that we can get a better, if not a more holistic perspective on things. One may say that our past consists of Black Swan events. To list a few from recent to more distant ones within the last century -

2016: Trump election;

2008: financial crisis;

2001: World Trade Center attack;

1991: Collapse Of The Soviet Union;

1983: The invention of the internet;

1945: US atomic bomb drop — WW2 ended;

1941: Pearl Harbor attack;

1939: WW2 started;

1929: the Great Depression;

1918: Flu Pandemic;

1914: WW1 started.

Over the last 100 years, the world has experienced at least 11 unpredictable and significant events — averaging one every ten years. If we stretch the time horizon even further — way further — could the extinction of Dinosauria count as one giant Black Swan occurrence that gave humanity the rise? I might go one step further to state that the creation of earth and life itself is a beautifully measured low-possibility phenomenon that happened billions of years ago.

You might be able to see where I’m going with this.

Black Swan events are not always bad — they represent infrequent, unpredictable, major changes. Sometimes changes are for the better like the invention of the internet, but often are disruptive and can be detrimental to society as a whole. Yet we have shown the resilience of the human race, each and every time. And we have always learned and adopted something new from the experience.

The COVID19 pandemic is a once-in-a-century event. One might say it’s a combination of 1918 flu (disease) + great depression / financial crisis (employment loss) + worldwide (war-like) defense. It’s nothing we have ever seen.

So what does it mean for the world going forward?

New World Order: the great decoupling accelerated by the COVID19

Our generation has enjoyed the tailwind of globalization over the past few decades. And now the pendulum seems to swing the other way. As I’m writing this, countries, including the US, China, Japan, and major European countries, have all adopted strict policies of flight travels. Noticeably, as each nation is scrambling to handle its own coronavirus crisis, we have unfortunately seen little global collaboration. Instead, we have witnessed mistrust, misinformation, scapegoating, and interfering.

It’s disheartening for sure, but not surprising. Thanks to the tone set by the trade war, the US and China have started its painful decoupling procedure, followed by the world’s search for new leadership in the global stage. For someone like myself, a Chinese immigrant to the US, it feels like you are caught in the middle of divorcing parents. It has been messy, uncomfortable, and emotional.

China and the US have very different political and societal structures. I can empathize on both sides, as a person who has spent a roughly equal amount of life in both countries. Amidst Covid19, the US and China demonstrated to the world the pros and cons of their systems — China, with the big government, showed impressive strength in containing and stopping the virus by rallying the entire nation’s resources behind one task.

The US, with the democratic system and its current white house leadership, has shown the opposite — the lack of attention from the beginning and then the chaos during. However, the US system shines its advantages during the “peacetime” when it makes sure the decision power is not overly concentrated and (ideally) quality decisions come from thoughtful deliberations.

It might be easy to fall into the heated debate on which system is better. But this post is not about that. I expect that both systems, just like Yin and Yang, can and will co-exist equally in the long foreseeable future.

The keyword at question here is “equally.”

Future is past rolled into presence

According to the chart below (by Ray Dalio), over the past 1400 years, China had been the #1 for roughly 850 years in terms of global power (starting from 600 AD to 1250, then 1400 to 1600). And it’s no surprise to anyone who studies China’s history that China is coming up and “reclaiming” its global position. On the other hand, the US has been the world’s # 1 power for less than 100 years and is very anxious in retaining its global leadership. Since Trump’s election, the America-centric view has been boosted. The Covid19 development has only accelerated such trend and hardened the viewpoint of the populists. But it is a slippery slope. Closing the border may have short-term comfort, but the long-term damages are yet to come.

China knows it fully because it had suffered from it. To the western world, China appears to be this “mysterious dragon” that just woke up and ready to take over. However, few realized that China was going through a painful nineteenth and twentieth centuries when trading prospered the rest of the world. For much of the seventeenth and eighteenth centuries, China was steadily declining, being fully ignorant of the emergence of the Netherlands and UK empires.

Until the 19th century, China continued to see itself as the center of the world, with neighboring countries bowing to its Emperor. As time progressed, China became more closed up with uprising nationalism and smug complacency for centries, even as the western world was going through a major tech breakthrough, namely the Industrial Revolution in 1760. We all know what happened afterward. China was left behind for the following 200 years, was invaded many times, and has ever since attempted to catch up.

History seems to be repeating itself on its early pattern, only this time in the US, not in China. While the US is focusing on its political fights and its close-up “America First” policies, the rest of the world, certainly China, is beaming with 5G, Clean Tech, and AI automation. This early trend ought to worry everyone.

It is my hope that, with its democratic structure, the US will not follow the suit of old China. Hopefully, the 2020 election will help slow the swing of US nationalism and place the US in a non-hostile position with the world.

In any case, we are likely to see a world moving forward with two “parallel universes.”

1. On the political side, one is a “bottom-up” small government country with 0.3 billion population, and the other is a “top-down” big government nation with a population of 1.4 billion.
2. On the economy side, one’s GDP is $21 trillion, and the other is $14 trillion but steadily rising. It is projected that the gap would be significantly lessened by 2023 and completely closed in 2030. But I suspect it could come earlier due to the different handlings of the pandemic by the two countries.
3. On the innovation side, one has dominated fundamental tech research (semiconductor, internet, AI algorithm, etc.), and the other has been agile on the tech applications (manufacturing, mobile payment, and facial recognition, etc.).

We are certainly at a historic moment, and it would be fascinating to see how the “parallel universes” dance with each other (hopefully more peacefully) over the next decade.

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* The post was first published at https://www.amisfit.vc/blog/a-parallel-universes-dance-random-thoughts-on-us-china-over-the-next-decade-series-22

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以下由谷歌翻译器翻译： 

这是我长期以来打算写的文章。我在2018年写的关于中美的文章由于2019年的贸易战而迅速过时，然后2020年爆发了大流行。形势变化如此之快，以至于全世界都在努力追赶。我觉得从来没有一个好时机写这个话题，那么就现在来写吧。

黑天鹅

就在我们为应对2019年大部分时间的中美贸易战对全球经济的影响而努力时，没有人想到这仅仅是一场排练。我们不敢预测会有更大的事情发生。

然后更大的事情发生了。一个百年一遇的大流行悲惨地夺走了12万条生命，影响了数百万人的失业，这是一次重大的黑天鹅事件，它将在后代留下印记。

在这样的时候，重要的是要学习历史，这样我们才能对事物有更好甚至更全面的认识。可以说我们历史是由黑天鹅事件组成的。列举上个世纪中从最近到较远的几个：

• 2016年：特朗普大选;
• 2008年：金融危机；
• 2001年：世界贸易中心袭击；
• 1991年：苏联解体；
• 1983年：互联网发明；
• 1945年：美国原子弹投掷- 二战结束；
• 1941年：珍珠港袭击；
• 1939年：第二次世界大战开始；
• 1929年：大萧条；
• 1918年：流感大流行；
• 1914年：第一次世界大战开始。

在过去的100年中，全世界至少经历了11次不可预测的重大事件-平均每10年发生一次。如果我们进一步拉长时间范围，是否可以将恐龙的灭绝算作是使人类崛起的巨型黑天鹅事件之一？我也许会更进一步地指出，地球和生命的创造本身是一种发生在数十亿年前的精美的低可能性现象。

您也许可以看到我想要说明什么。

黑天鹅事件并不总是坏事-它们代表着罕见，不可预测的重大变化。有时，更改就像互联网的发明一样好，但往往更多的时间，这些改变是有破坏性的，可能对整个社会有害。然而，我们每次都展示了人类的韧性。我们一直从经验中学到并采用新的东西。

COVID19大流行是百年一遇的事件。也许有人会说这是1918年流感（疾病）+大萧条/金融危机（就业损失）+全球（类似战争）防御的结合。这是我们从未见过的。

那么，这对世界前进意味着什么呢？

新世界秩序：COVID19促进了巨大的脱钩进程

在过去的几十年中，我们这一代人享受了全球化的动力。现在，钟摆似乎正向相反方向摆动。在我撰写本文时，包括美国，中国，日本和主要欧洲国家在内的国家都已采取严格的飞行旅行政策。值得注意的是，由于每个国家都在努力应对自己的冠状病毒危机，因此不幸的是，我们几乎没有看到全球合作。相反，我们目睹了不信任，错误信息，替罪羊和干扰。

确实令人沮丧，但不足为奇。由于贸易战的基调，美国和中国开始了痛苦的脱钩程序，随后世界在全球舞台上寻找新的领导者。对于像我这样的一样的人来说，作为一个在中国出生的新美国移民，感觉就像您陷入了与父母离异的中间。这是一个凌乱，不舒服和情绪化的过程。

中美有着不同的政治和社会结构。作为一个在两国生活时间大致相等的人，我对两边都认为可以理解。在Covid19中，美国和中国向世界展示了其系统的利弊。-中国与大政府一起，通过将整个国家的资源集中在一项任务之后，在遏制和阻止该病毒方面表现出了令人印象深刻的力量。

具有民主制度和现任白宫领导权的美国已经表现出相反的情况-从一开始就缺乏关注，然后在此期间却引起混乱。但是，美国系统在“和平时期”确保其决策权不会过于集中并且（理想情况下）质量决策来自周密的审议，从而发挥了其优势。

我们可能容易陷入关于哪种系统更好的激烈辩论。但是这篇文章不是关于这个的。我认为这两种制度就像像阴和阳一样，这两个系统在可以预见的将来可以并且将平等共存。

这里的关键字是“平等”。

未来是现在的过去叠加式

根据下面的图表，在过去的1400年中，就全球力量而言（从公元600年到1250年，然后是1400年到1600年），中国一直是世界力量的第一。对于研究中国历史的任何人来说，中国正在崛起并“夺回”其全球地位也就不足为奇了。另一方面，在过去不到100年的时间里，美国是世界第一大国，并且非常渴望保留其全球领导地位。自特朗普当选以来，以美国为中心的观点得到了提振。 Covid19的发展只是加速了这种趋势，并强化了民粹主义者的观点。但这是一个湿滑的斜坡。关闭边界可能会带来短期的舒适感，但长期的损害尚未到来。

中国完全了解它，因为它遭受过其带来的痛苦。在西方世界，中国似乎是刚刚醒来并准备接手的“神秘巨龙”。然而，很少有人意识到，当贸易繁荣到世界其他地区时，中国正经历一个痛苦的十九世纪和二十世纪。在十七，十八世纪的大部分时间里，中国一直在不断下降，完全不了解荷兰和英国帝国的崛起。

直到19世纪，中国一直将自己视为世界中心，周边国家向其皇帝鞠躬。随着时间的流逝，即使西方世界正在经历一项重大的技术突破，即1760年的工业革命，中国也变得更加封闭起来，内部更是有民族主义和自满自大。在随后的200年中，中国被抛在后面，被多次入侵，从那时起就一直试图追赶。

历史似乎正在以其早期模式重演，仅这次是在美国，而不是在中国。尽管美国将重点放在政治斗争和特写的“美国优先”政策上，但世界其他国家（尤其中国）也正在着手5G，清洁能源和AI自动化。这种早期的趋势应该让每个人都担心。

我希望美国凭借其民主结构不会仿效旧中国的做法。希望2020年大选将有助于减缓美国民族主义的步伐，并使美国与世界保持不敌对的立场。

无论如何，我们很可能会看到一个带有两个“平行宇宙”的世界。

1. 在政治方面，一个是“自下而上”的小政府国家，人口为3亿，另一个是“自上而下”的大政府国家，人口为14亿。
2. 在经济方面，一个国家的GDP为21万亿美元，另一个为14万亿美元，但仍在稳定增长。预计到2023年，这一差距将大大缩小，并在2030年完全消除。但是，我怀疑由于两国对流感大流行的不同处理，这种差距可能会更早地出现。
3. 在创新方面，一个主导了基础技术研究（半导体，互联网，AI算法等），另一个则在技术应用（制造，移动支付和面部识别等）上保持敏捷。

我们无疑处于历史性时刻，在接下来的十年中看到“平行宇宙”如何彼此（希望更加和平地）共舞会非常有意思。