Whatever you thought about China, the reality is scarier. My new book (You Will Be Assimilated: China’s Plan to Sino-Form the World) looks at China from inside the belly of the dragon, where I spent four years as a partner in a Chinese-owned Hong Kong investment bank. The past two hundred years of Western dominance, in China’s thinking, briefly interrupted China’s position as the world’s richest and most powerful country. China missed the first Industrial Revolution, and spent a “century of humiliation” knocked about by the Western powers and Japan. But it plans to lead the Fourth Industrial Revolution–where factory robots and energy sensors and self-driving vehicles communicate via high-speed mobile broadband, and run autonomously with Artificial Intelligence. Huawei’s dominance in 5G broad isn’t important for what it does, but for what it enables others to do.
Victor Davis Hanson wrote about You WIll be Assimilated, “David Goldman was an early voice in the wilderness, cautioning that it was one thing to deride Chinese ambition and capabilities, but quite another to thwart them. In his latest analysis, he offers a realist alarm that confronting China is as necessary as it will be taxing, given how long an unprepared and naïve America has underestimated Chinese talent, strategic thinking, and persistence. A realistic wake-up call from an American patriot, polymath scholar, and international financial analyst who knows China all too well.”
As I write in the Introduction (“Everything You’ve Heard About China is Wrong, Or Not Right Enough”):
Psychiatrist Elisabeth Kübler-Ross described five stages of grief: denial, anger, bargaining, depression, and acceptance. Over the past decade America has been in denial about China’s emergence as a global power. We couldn’t believe a country that for generations was a byword for poverty could compete with us. With Donald Trump’s election in 2016 we’ve transitioned to anger. As matters stand, we’ll be bargaining before long.
For thousands of years China’s internal weaknesses—natural disaster, famine, plague, civil unrest, and foreign invasion—kept its attention inward. We are now at the greatest turning point in Chinese history since its unification in the 3rd century B.C. China is turning outward—but doesn’t want to rule you. Like the Borg in Star Trek, it wants to assimilate you.
President Trump is right to insist that America’s status quo with China can’t continue. He campaigned against their systemic theft of U.S. intellectual property and the migration of our manufacturing to China. He reversed 20 years of benign neglect toward China’s challenge to our strategic dominance and took vigorous steps to check China’s expansion. But he hasn’t succeeded. Thus far he has addressed symptoms rather than causes. Our trade war with China settled into an uneasy truce by the end of 2019, with modest damage to both economies but no clear winner.
The past year was a watershed. As matters stand the United States will be overtaken by China in the next several years. China is developing its own intellectual property in key areas. Some of it is better than ours—in artificial intelligence, telecommunications, cryptography, and electronic warfare. In other key fields like quantum computing—possibly the holy grail of 21st-century technology—it’s hard to tell who’s winning, but China is outspending us by a huge margin.
China’s first great multinational company, Huawei, is rolling out fifth generation (5G) mobile broadband across the whole of Eurasia, from Vladivostok, Russia to Bristol, England, despite a full-court press by the Trump Administration to stop it. In January 2020 Great Britain—America’s closest ally—brushed off Trump’s personal intervention and allowed Huawei to build part of Britain’s 5G network. The European Community announced it would take no measures to exclude the Chinese giant. Washington tried to strangle Huawei by slapping export controls on U.S. components for 5G equipment and smartphones, only to see Huawei continue expanding using Asian components while achieving self-sufficiency in chip production.
Former House Speaker Newt Gingrich deplored this as “the greatest strategic disaster in U.S. history.” At stake are not only the sinews of the new industrial age, but scores of spinoff applications that will transform manufacturing, mining, health care, finance, transportation, and retailing—virtually the entirety of economic life—in what China calls the Fourth Industrial Revolution.
America’s status as a superpower is on the line, and our children’s and grandchildren’s future. It’s the biggest and toughest challenge we have faced as a nation.
America’s commitment to high-tech manufacturing collapsed with the tech bubble of 2000, never to recover. By no coincidence, the income of US households barely grew during the next twenty years. If China surpasses the United States, we will fade into second-rate status, much like Britain did during the 20th century. We will be poorer, weaker, and less secure.
China’s challenge is formidable. We are competing with 1.4 billion intelligent and industrious people. Chinese schoolchildren turn up at 7:30 a.m. and leave at 5:00 p.m. Ten million Chinese teenagers take
the college entrance exams each year and prep twelve hours a day for two years to gain acceptance at a good university. The Asian work ethic explains why 28 percent of students at America’s Ivy League colleagues are Asians, although Asians comprise just 5.6 percent of the US population. The difference is that America has eighteen million Asians, and China has 1.4 billion….
Can America remain the world’s most powerful, productive, and inventive country? I wrote this book to answer that question with a resounding yes. It won’t be easy. China is the first challenger we have faced whose economy is as big as ours. Surpassing China will take all of our resources, inventiveness, and national spirit. We can do it. But we have been losing time, and time is getting short.
K.T. McFarland, former deputy national security advisor to President Trump, writes: “David Goldman’s book is an urgent wake-up call for America. He details China’s comprehensive plan to replace us as the world’s most powerful country and dominate global technology, security, communications, and trade within the next few years. There is still time for America to regain the initiative, but only if we act wisely and quickly. If you read just one book about how China plans to make the 21st century theirs and what we can do about it, read You Will Be Assimilated.”
It’s available as an Amazon exclusive here.