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posted on 26 October 2016

Top 10 American Misconceptions about China (Version 3)

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Hello from China!

Misconception 1: China is a communist country

China is no longer a communist country per se! China was a communist country from 1949 to 1976. China embraced capitalism after Mao died in 1976. Today, China is more capitalistic than America in many ways. For more, read: "Communist China", Really?

China has a one-party political system. The ruling party is called the CPC (Communist Party of China). This unfortunate name has given the American political-media complex a good excuse to keep referring to China as "communist China" to impugn the country and arouse distrust in America. However, it's not true and it's done only to mislead Americans.

Misconception 2: China is a threat to America

China is not an enemy to America. Economically, China is a competitor to America. The use of the word "threat" is distraction and clearly un-American!

Militarily, China has never been a threat to America! For example, in 2015, China's 2015 military spending was $145 billion vs. America's $600 billion. China did increase its military spending in 2015 by 10%, which was characterized by America's mainstream media as a "ballooning" military budget. Where else on earth could this kind of talk have been possible other than in America? Thanks to "brainwashing" (Brainwashing in Communism and in Democracy)!

In 2015, America spent more on her military than the next 10 top spenders combined! Worse yet, America is the only country that has been spending like that for decades! Why so much? Because the MIC (Military Industrial Complex) has powerful lobbyists in Washington and has convinced our politicians (with enormous gifts) that the rest of the world is just waiting to subjugate us! Due to our perpetual military interventions, America has been, since the Cold War ended in 1991, a major source of instability around the world, especially in the Mideast.

Misconception 3: China steals America's jobs

Since humanity is one, capitalism is global by definition, from the resources (e.g. oil) to the markets. So compete or get out of the way! Two facts:

  1. Over the past two decades, America lost more jobs to automation than to outsourcing.
  2. The primary reason behind America's outsourcing is that America's cost structure has become too high. The jobs that America "lost to China" would have gone to other places, such as the other BRICS countries, had China not developed over the past three decades!

Misconception 4: China steals America's IP (Intellectual Property)

Many countries have succeeded by copying first and then using their success for innovation. This applies to America 200 years ago, as well as to China today!

No doubt, the law must be obeyed. Having said that, I would like to seek an "understanding" (not to defend IP theft) as follows: China invented, among many things, papermaking and gunpowder. What if the Chinese, 2,000 years ago, had set up a patent system that required that, for the next 5,000 years, each and every foreigner pays the Chinese 1% of the price for each and every piece of paper we use and each and every bullet we produce?

Another perspective: Japan "copied" a lot from China for thousands of years, from the language to the culture. I knew that before moving to Japan in 1982. However, it was not until I started writing my first academic paper in English that I realized the depth of the "copy culture" in Japan: as I was struggling with English (and Japanese), my Japanese professor advised me to "借文", which literally means "to copy text in the name of borrowing". "借文" are two Chinese characters in Japanese, but they are not Chinese!

Bottom line: Copying is a means by human civilization to advance rapidly! People look up to successful people and their leaders by "copying" them. Mimicking is the most sincere form of flattery!

Misconception 5: China is a currency manipulator

Every country has the right to defend its own currency for its best interests! America has printed $4 trillion in cash and added $10 trillion in debt in just eight years under President Obama - Talk about currency manipulation?

Now, will further appreciation of China's RMB reduce America's trade deficit with China? Not in any meaningful way! Below are two sets of hard data, showing that "America's manipulation" of the exchange rate has worked with neither Japan nor China.

U.S. trading partner








U.S. trade deficit





Exchange rate ($1 =)

250 Yen

100 Yen

8.3 RMB

6.5 RMB

Bottom line: The only way to increase global competitiveness is through innovation (e.g. Apple) and hard work (e.g. lowering the cost structure), not the repeated use of steroids (i.e. stimulus packages like QE1 and QE2). Oh, by the way, QE1 and QE2 are also known as "printing money", which is the worst form of currency manipulation, by any definition, especially when the currency is a major world's reserve currency like the U.S. Dollar - We have been printing trillions of Dollars, mostly at the expense of our creditors (e.g. China and Japan)!

Misconception 6: China trades unfairly with America

Free trade is fair trade! A willing buyer exchanging with a willing seller is, by definition, "fair trade."

Today, America has trade deficits with some 90 countries. Are we going to argue with each and every one of them about "fairness"? Or, simply face the truth: our cost structure is simply out-of-control!

Misconception 7: China is not free

China is much freer today than yesterday! So China is moving in the right direction. Remember: China was communist from 1949 to 1976. So China has made giant strides away from its communist past, and likely to continue to improve. With more prosperity comes more freedom, and vice versa!

On the other hand, Americans have been losing more of their freedoms, as its economy falters. For more, read: New Slavery in America: Pay without Work!

Bottom line: Prosperity is directly linked to freedom, and vice versa. Freedom (free will) is The Mainspring of Human Progress. The key is to strike a balance between the two, country by country and people by people. There is not one size that fits all!

Despite what is said above, China must improve on free speech, now!

Misconception 8: China has problems with human rights

The West is not entitled to unilaterally impose their standards on the East and vice versa!

Bottom line: Given America's eroding status, we Americans no longer have any right to lecture the Chinese on their perceived shortcomings! Culturally, China has a far more extensive history than ours. Economically, we are in debt to China, almost $2 trillion!

Misconception 9: China has issues with Taiwan and Tibet

Neither Taiwan nor Tibet is as big an issue today (i.e. China is prosperous) as they were 35 years ago (i.e. China was dirt poor). They will become non-issues within 20 years (i.e. China will be more prosperous). Meanwhile, no American intervention, no problem! For more, read: Understanding China, Truly!

Misconception 10: The Chinese can't play basketball

Yao Ming was real, and Jeremy Lin is real! Although Jeremy was born in America and his parents came to America from Taiwan, I am sure he enjoys his enormous popularity in China, whose market is 1,000 times bigger than Taiwan's!

Bottom line: Jeremy has several mega endorsement deals from China! Making money and being rich may no longer be fashionable in America, but they are still highly coveted in China! Perhaps America should sue China for copying our previous, successful capitalism, even though we seem to be done with it.

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