海角大神

Last night鈥�

We鈥檙e racing to the airport at Pudong. We don鈥檛 know why we are racing; there is plenty of time. But the driver seems to want to set a new land speed record for a taxicab.

He鈥檚 rocketing along at 100 mph. The cab weaves flawlessly through the traffic.

But what鈥檚 this? The cab driver has taken both hands off the wheel. He is putting in a CD. Moments later鈥�what da鈥�?

Country road, take me home, to the place, I belong鈥�
West Virginia, mountain mamma, take me home鈥�

This is no country road. It is about the most modern highway we have ever been on. Flyways鈥�flyovers鈥�bridges鈥�elevated highways鈥�we have just gone over the river on a bridge that looks like it was built yesterday. Now, we are cruising along through the smog in 8 lanes of traffic.

Over on the left, a ghost city is barely visible through the gray haze. It must have dozens鈥�no hundreds鈥�of office and apartment towers. There is a huge parking lot on the left鈥�and then, in the distance鈥�another city. We see only the shapes. But it is a city as big as Bethesda鈥�no, as big as Baltimore鈥�.

We continue our Taxicab 500鈥�passing cars on the left鈥�then on the right鈥�and then, right through the middle鈥� slipping through a narrow space with cars and trucks on both sides.

Again on the left is another of these spectral cities鈥� Is it Cleveland? Is it San Diego? In size, it could be either. We left downtown Shanghai a half an hour ago. But we are still passing through towns鈥�industrial parks鈥�and building projects. There must be a dozen cities the size of Baltimore between the center of Shanghai and the airport.

The airport, of course, is new鈥�like everything else鈥�and colossal. It is Dulles in style. But bigger, many times bigger.

Can there be any doubt that China is destined to become the world鈥檚 economic superpower? It has the size鈥�the energy鈥�the know-how. And it has the money.

One of our Dear Readers in Shanghai enlightened us:

鈥淚 came here 20 years ago. Then, we foreigners had so much more power and money鈥�and technology. We could call the shots.

鈥淥ur company still does about half its manufacturing in the US. The local companies here in China can beat us on price every time. And the contracts are huge, so we can make a lot of money here鈥�even with low-cost, relatively low-margin products. But the top quality stuff still comes from the US. The Chinese have not quite caught up 鈥� partly because the market here doesn鈥檛 want too much quality.

鈥淭here鈥檚 such a fast turnover. People don鈥檛 want to pay for products that will last too long. Things are changing too fast.

鈥淪o for now, the quality here on many items still isn鈥檛 up to US standards. It鈥檚 just a matter of time, though. I鈥檓 going to retire in 5 years. I figure that鈥檚 about as long as we鈥檙e going to be able to do these deals. After that, it鈥檚 all over. They won鈥檛 need us. They have the money. They have the skills and technology. We won鈥檛 have anything to offer.鈥�

Generally, the more you do something the better you get at it. The Chinese are making more cars鈥�more highways鈥�more trains鈥�more office buildings and more of everything than anyone else. It is no wonder that they are doing these things well 鈥� maybe better than anyone else too.

A new train service between Shanghai and Beijing begins next month. Trains will travel between the two cities at up to 300 kilometers per hour. Already, a high-speed maglev train takes you from the airport to the city so fast that you arrive before you find a seat.

But so what? You鈥檙e probably wondering. So are we. So what if the Chinese take the lead in wealth and innovation?

You remember those 5 big trends we mentioned in yesterday鈥檚 ? You don鈥檛? Well, we鈥檒l repeat them:

1) 鈥� in many of the advanced economies, but centered in America鈥�

2) The continued rise of the developing economies鈥�not just in Asia, but in Latin America and Africa, too.

3) The increasing scarcity of cheap energy, land, water and raw materials.

4) The decline (suicide might better describe it) of the American Empire.

5) The approaching end of the dollar-based world financial system.

The interesting, and frustrating, thing about these trends is that they all intersect in various ways at various times鈥�setting up collisions that are as unpredictable as they are hazardous.

You鈥檒l notice, too, that the China story runs right through the middle of them, like a tanker truck through a pizza parlor. It is the central story to the rise of Asia and the developing economies. It is a large part of the reason low-priced commodities and natural resources are disappearing. The Chinese currency is almost sure to rise as the dollar-based world financial system comes apart. And China is also the likely successor to the US Empire.

We have neglected this theme for years 鈥� ever since we published (with ) our opus on the subject, . But the killing of Osama bin Laden reawakened our interest.

One of the few things we don鈥檛 wonder about is why the feds killed Mr. bin Laden. It would have been far too messy and uncomfortable for them to put him on trial. After all, before he was America鈥檚 greatest enemy, he was one of her greatest friends.

Yes, dear reader. Mr. bin Laden rendered much service to the US Empire, specifically to the US defense establishment. First, he set up Al Qaeda, with CIA help, to harass the flank of America鈥檚 most powerful enemy 鈥� the Soviet Union. Then, when the Soviet Union fell, the defense industry was despondent. There was no longer any need to invest such a huge part of America鈥檚 treasure on 鈥榙efense鈥� when there was nothing to defend against.

With no plausible threat, the defense budget would have been easy prey for the budget hawks. But then, in their hour of need, like the Argentine generals coming to the aid of Maggie Thatcher鈥檚 approval ratings, Osama bin Laden came to the rescue. At least, so it appears. We would have been very curious to find out more about his role in the 9/11 attack; unfortunately, the trial of Osama bin Laden was cut short by two bullets fired at close range.

Not that we鈥檙e criticizing. If we were in a position of power, we probably would have wanted him to disappear too. The last thing anyone in the CIA would want to see would be Osama shooting his mouth off in front of the whole world.

According to The Atlantic magazine, bin Laden triggered $3 trillion of spending by the US. How much of that ended up in the pockets of defense contractors? One percent? Five percent? We have no idea, but even 1% would be a $30 billion windfall, probably about equal to the annual profits of all the world鈥檚 automobile companies combined.

But now what? Osama is in Davy Jones鈥� locker. And the US is headed to bankruptcy. Will the Pentagon and its suppliers go gently into that good night 鈥� of budget cuts and shrinking profits? Or will they rage鈥�and find a replacement for Mr. bin Laden? China, perhaps?

Stay tuned.

--------------------------

海角大神 has assembled a diverse group of the best economy-related bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers' own, as is responsibility for the content of their blogs. To contact us about a blogger, click here. To add or view a comment on a guest blog, please go to the blogger's own site by clicking on the link above.