Two thousand years ago, there were two great empires in the world. In China, Qin Shi Huang Di created a gigantic empire in 221 BC, which was succeeded by the Han Empire fifteen years later. In the West, the Roman Republic conquered much of the Mediterranean world, and in 27 BC Augustus Caesar became the first emperor of Rome. Augustus favored free markets and free trade, and except for modest customs duties of about 5 percent, the Roman Empire became a vast free trade area.
Trade between the two regions was carried out by the countless caravans that traveled the silkroad. Rome’s population reached 1 million around 250 AD. During the Tang dynasty, Chang An’s population was about 1 million with 100,000 foreigners. Their significant numbers in China’s capital city indicate it was a popular destination for foreign traders.
In his fascinating book, The Geniuses of China Robert Temple (1986) noted that China excelled in the field of engineering. There are many examples.
(1) Temple cited China’s development of iron and steel, for which the modern world is forever indebted to China. In the fourth century BC, the Chinese developed the blast furnace to extract cast iron from iron ore, 1200 years earlier than it appeared in Europe. In Mesopotamia where the earliest civilization was developed, the Sumerians built zigurat out of clay, but the Chinese used the same clay to build blast furnaces.
The common belief in the West is that Henry Bessemer developed the process of refining iron into steel, but the Chinese in the second century BC developed the “hundred refinings method” by injecting oxygen into the blast furnace.
(2) The Yellow Emperor invented the compass and his wife, Lei Su, the silk, paving the way for world trade between the Orient and the Occident. Using the silkroad, untold caravans carried goods back and forth between China and the West.
(3) The chain pump was invented in the first century AD to pump water from lower to higher altitudes. This increased agricultural productivity, which was an important reason to help support a larger population than other regions. In contrast, Roman water pumps were used in Roman baths for the wealthy.
(4) Paper was invented in China in the second century BC, and used for clothing. But the use of writing paper was begun a hundred years later by Cai Lun. Aristocrats in the Roman Empire used vellum (sheepskin) or imported papyrus from Egypt. The art of papyrus production was invented 4000 BC, but its production ended once paper was introduced to Europe.
(5) Row farming and the use of seed drill. In the famous parable of the sower,
Jesus in the early first century AD said (King James Version),
Behold, a sower went forth to sow; And when he sowed, some seeds fell
by the way side, and the fowls came and devoured them up: Some fell upon stony
places, where they had not much earth: and forthwith they sprung up, because
they had no deepness of earth: And when the sun was up, they were scorched;
and because they had no root, they withered away. And some fell among thorns;
and the thorns sprung up, and choked them: But other fell into good ground,
and brought forth fruit, some an hundredfold, some sixtyfold, some thirtyfold.
As shown in this parable, in Europe and the rest of the world, farmers practiced scatter seed farming, and did not plant seeds into the ground. In the sixth century BC the Chinese practiced row cultivation and used the seed drill, thereby minimizing seed loss. This method was not adopted in Europe until the 16th century AD.
(6) The suspension bridge techniques invented by the Chinese in the first century AD are still used today to build modern bridges (such as Tsing Ma bridge in Lantau Island) that span great distances.
(7) Without the invention of gunpowder, Europe’s colonization of America and other continents would not have been possible.
2. Vision of China as the largest world economy
It would be presumptuous for me to talk about China's vision. Rather, with this address I am asking what vision China has. While China was the birthplace of many fundamental inventions that improved the quality of life until the sixteenth century, Asia and the rest of the world benefited enormously from American inventions during the last century. Most of the modern inventions came from Americans — television, light bulbs, airplanes, telephones, movies, computers, the Internet, and mass production of automobiles just to name a few.
However, China has made great strides to catch up with the West during the past few decades. Newsweek (May 9, 2005, p. 32) reports that “In 25 years China has moved 300 million people out of poverty and quadrupled the average person’s income.” China’s per capita income has been growing by 6 percent per year, doubling almost every 12 years. In 2005 China’s per capita income was estimated to be about $5,000, about one-eighth of America’s per capita income. If the current growth rate is sustained, in 50 years the wage rates of China, Europe and America would be equalized, and China will become a formidable economic superpower. It is now time for China’s intellectuals to contemplate what China needs.
China already has turned into an industrial giant. According to a Duke University (2005) study, the United States graduated about 137,000 engineers in 2004, whereas China’s total was about 640,000. Thus, both countries have similar engineer-population ratios. There is one engineer per 2000 Chinese. In the United States, there is an engineer for every 2,175 Americans. Roughly speaking, Chinese are 10 percent more likely to be engineers than Americans.
Innovation comes primarily from manufacturing, rather than from service sectors. China is still racing to catch up with Japan in technology. In not so distant future, say in fifty years, China is likely to become a technology superpower simply because it has an abundant supply of well educated engineers. Once again, the engineers in the rest of the world may flock to China to learn and acquire new Chinese technologies.
3. Religion, Ethics and Efficiency of the East and the West
Efficiency of an economy depends primarily on the trustworthiness of its members. True, in any society, there are a small number of people who break laws and take advantage of the system. However, in the West the majority of people observe the rules, which are prescribed by the ethics in their religion. As the number of rule breakers increases, society will be forced to devote more resources to maintain law and order, thereby reducing the supplies of labor and capital inputs available to produce consumer goods that will enhance the welfare of its citizens.
Any religion that promotes violence and terrorism is counterproductive in that it teaches its disciples to disrupt the lives and output of others. Terrorism destroys and reduces world output. Despite the theological differences among world faiths, most religions admonish their adherents to be ethical and respect the property rights of others.
The moral code of Christianity is “love your neighbor as yourself.” Accordingly, the main emphasis in the Western society is “fairness.” As a result, democracy that was developed in Greece in the fifth century BC has flourished in the West. The western people follow rules and treat others fairly. Western laws require fair play in businesses and sports. Monarchies were overthrown and equal opportunities are given to all law-abiding citizens. Western businesses treat their consumers as king. They gladly accept returns when consumers are not satisfied with their products. They also voluntarily eliminated slavery, treat workers fairly and do not force them to work more than 40 hours a week. Such ethics are conducive to the development of the middle class in modern society. The majority of the Western people respect property rights and work honestly. Chinese movies exported to America receive the same protection as domestic movies in the United States.
Confucius taught loyalty to kings and filial piety to parents. The main emphasis in the Asian society has been “loyalty,” mainly to rulers and parents. In Asian countries, fairness is not emphasized as much as in the West. If a boy steals food to feed himself, he is punished in both Asian and Western societies. However, if a boy steals food to feed a dying parent, it is considered a commendable act. The usual punishment would be suspended, because it touches the heart of all Asian parents. Such teachings are conducive to stable families and a harmonious society, which may explain why Asians survived in larger numbers than Europeans. Dynasties occasionally were replaced by others, but once they were established, the populace respected the rulers and lived harmoniously.
In a society, religions prescribe ethical rules, which determine how consumers and workers behave in the economy. The economy must provide room for income inequality which stimulates otherwise lazy workers to strive to improve their quality of life. Equal opportunities are given to all, and each worker or entrepreneur reaps the harvest of his own effort. Without property rights, individuals have little incentive to work diligently as the total output will be shared equally among all. If intellectual property rights are not respected, there is little incentive to innovate and develop new products.
Due to biological differences, there is no one race that is superior to all others in all aspects of life. In other words, no race has absolute advantages over another in every area of human effort. Similarly, it is futile to prove scientifically or analytically that one religion is superior to another. Some differences exist in theological concepts and religious practices among competing religions. Since human beings have a short life span, each person has something to learn from another. Likewise, each religion has something to learn from another.
Theological differences may be viewed as product differentiation which favors local religions that are more suited to the people in one region than another. Even though all world religions teach their followers to become good people, religious practices can have very different effects on the economy.
Moslems gather once a week at a Friday mosque and listen to the sermons of an Imam. On the Sabbath, Jews worship together at a synagogue. Christians worship on Sunday and renew their faith. While typical workers and consumers may commit sins, once a week they hear moral teachings, which serve as a constant reminder to treat others fairly in their economic activities. As a result, the West promoted a rule-governed society. True, there are criminals who break the law in any society, but the majority of the people in the Western society observe the rules and the cost of containing crimes is minimal.
If exported products indicate revealed comparative advantage, for centuries China had a comparative advantage in technology and science, but not in religion. True, there are home-grown religions in China. From time immemorial the Chinese believed in Shang Ti, a heavenly emperor. A similar concept exists in Shinto in Japan, but kami is a god who favors the Japanese, just as the Jews were a people chosen by Yahweh, and sends a divine wind to destroy the Mongol fleet. These were nationalistic gods.
Lao Zi was the first teacher of Taoism in the sixth century BC. Also, Confucius was a contemporary of Lao Zi and taught much of the political wisdom to his students. Buddhism was imported from India in the first century AD, and reexported to Korea and Japan. Taoism, Buddhism, and the Confucian teachings make up the moral fiber of the Chinese society.
Today there are no regular teachings, courses or sermons given to the average workers in China. Buddhist monks chose to isolate themselves, retire in the mountains, and fail to reach the rank and file of Chinese society. Friday mosques are scattered in the Moslem world accommodating believers once a week. Christian churches dot the streets of any European and American cities. Buddhists and Confucians do not have weekly public gatherings where they could offer moral teachings to Chinese workers. There are no communal gathering places for the Chinese to receive moral teachings regularly. Imported Christian churches have not received a hearty welcome from the government. Without constant reminders, the glorious heritage of China may be forgotten and the lofty teachings of Chinese philosophers can easily become hazy in the life of Chinese people who are busy exporting their products to the West.
4. Whither China?
During war and emergencies, people switch gears to their survival mode. In the survival mode, anything is justified for survival and the moral code is suspended. Similarly, a developing country that emerges from the ravages of war may feel justified to produce, consume, or export any product to the high-income countries of Europe and America.
China is becoming into an industrial giant. Today China’s industries are based on cheap labor. According to Newsweek (2005), 80 percent of Wal-mart’s suppliers are in China. Thus, Wal-mart is a Chinese firm, in all but name, hiring Chinese workers to sell Chinese products in America. During the past few decades, China has been busy catching up with western technologies, not paying much attention to intellectual property rights of the Western countries. Such a policy may not only result in losses in Chinese economy but also makes it difficult for China to reach its true potential — to realize its vision to become a first-rate world economy. More importantly, it does not befit the dignity of the Asian people. China had a brilliant cultural heritage, and China’s technology, in many respects, was superior to that of the Roman Empire and its successors in Europe for many centuries.
China soon may become a center of technology, developing new processes, technologies, and patents. It would be in China’s best interest to respect the intellectual property rights of other countries now, so it can ask the rest of Asia and the West to respect those of China in the near future. The genius of China should be devoted to developing new technologies and inventions that will benefit all of mankind.
References
Duke University, Framing the Engineering Outsourcing Debate: Placing the United States and a Level Playing Field with China and India, 2005.
King James Version, Matthew 13:1-9. Also, The Urantia Book, p. 1688.
Newsweek, “Does the Future Belong to China?,” May 9, 2005, 26 - 47.
Temple, Robert. The Genius of China: 3000 years of Science, discovery, and
invention, Simon and Schuster, 1986, Prion, UK, 1986.
<Kwan Choi's keynote speech at the International Conference of Trade and Industrial Economics, Tamkang University, March 24, 2006>.