China: the competitor on our heels

Spengler writes,

Household income in China has grown by 16 times – that’s 1,600% — since 1987, the greatest advance of living standards in history. It has turned a peasant population into urbanites with vastly superior education, health, and expectations.

China is moving 600 million people from the countryside to cities in the space of 25 years, the largest migration in history.

Spengler lists these highlights of China's development:

China’s shore-to-ship missiles can sink a U.S. aircraft carrier 200 miles or more from its shores (its missiles reach space and go straight down, and our countermeasures aren’t designed for that sort of threat)

China will have the most industrial robots of any country by 2014.

Tianhe-2 is the world’s fastest supercomputer.

Beijing Genomics Institute has the world’s largest DNA sequencing capacity.

China had 505 million Internet users in 2011 and expects E-commerce to double between 2012 and 2015.

“Starting from almost no live surveillance capability 10 years ago, today the PLA has likely equaled the US’s ability to observe targets from space for some real-time operations.” (World Security Institute)

In computation, missile technology, satellites and Internet technology, China has reached world class.

China will leapfrog the Wal-Mart and Bank of America model of brick-and-mortar growth and go straight to the Amazon model.

China now plans to build high-speed rail through Southeast Asia, and eventually all the way to Istanbul — along with broadband Internet and pipelines. It’s the biggest infrastructure buildout in world history and it will transform the Asian economy. Southeast Asian countries already are making plans to turn their peasants into high-value-added farmers sending fresh goods by 200-mile-an-hour train to the Chinese market.

This is history’s great exemplar of creative destruction. China will destroy the smokestack economy that Deng built just as Deng destroyed the peasant-centered system that Mao built. It is creating a new tech-driven economy.

What should America do about it? Acting tough doesn’t help. We have to be tough. There’s only one thing that matters, and that is doing what we used to do best: innovate. The economic environment — budgetary, fiscal and regulatory — is more hostile to innovation than at any time since World War II. We need more defense spending, not less, but spending geared to the scientific cutting edge — the kind of focus that gave us the moon shot and the victory over Russia in the Cold War.