The China Factor

Chapter 4The West No Longer Rules

If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.

—Sun Tzu, The Art of War

Melding of Positions

Although the West has dominated economically for the past several decades, the competitiveness of the West, and of the United States in particular, is threatened with the rise of China. And the two economies—East and West—are stretching and growing in new ways. The global economic playing field has changed and will continue to transform, shifting and challenging the advantageous position that the West has enjoyed thus far.

In true competitive fashion, each player—the U.S. and China—is evolving and acquiring the advantages and strengths of the other. For example, the United States is trying to bring some manufacturing (and jobs) back home and China is driving toward becoming more innovative.

China Today

China has done a fine job of climbing the economic ladder and is looking to sharpen its expertise in areas where it has traditionally been weaker and they continue to acquire know-how.

They will not settle for simply being the gurus of manufacturing that they are right now. In fact, their neighbors (for example, Bangladesh and Vietnam) are taking over much of this area. The Chinese want to become innovators and are learning from the ...