When Economics Become Espionage

I just came across this story in /. on a new Chinese policy demanding that corporations importing electronics into China provide the government with all source code for their products. The story, of which I've heard nothing in our country, has become a point of contention in Japan--where companies such as Sony are worried that the Chinese government will pass sensitive information on to Chinese corporations (which, um, are owned and operated by the Chinese government).

In his recent book Source Code China: The New Global Hub of IT Technology, Cyrill Eltschinger argues that today's companies are missing out on China as a potential resource (and cites a number of companies who are shifting their outsourcing from India to China). He gives a number of reasons for considering China, most of which would make someone interested in global human rights cringe. What he doesn't comment on (at least on the website), is the dubious position the Chinese government holds regarding Western intellectual property laws. (I admit that I am relying on the website--I have not read the book. I use it as an example).

I am no expert on global relations. But to this outsider, it seems that China is practicing global economics as the USA and USSR practiced espionage during the Cold War. I might be paranoid. I might be disillusioned. But if I were Bill Gates, I wouldn't be pushing Windows into China under these conditions.

The American economy is fragile--as we are now all aware. The decimation of the American dollar isn't primarily tied to our inflated real estate market (the current crisis). The underlying problem is our massive trade deficit. Or so tells my stock broker every week as he laments our demise and warns of worse times. For those who don't dabble in the market, let me assure you that its worse than you think. Here's how to tell, the price of gold. Gold is an international standard, to see that gold prices have tripled means that, on a fundamental international level, our dollar is worth a third of what it once was. It doesn't help (as some might assume), that other countries are experiencing a similar state. It means that a bigger market correction lies on the horizon, a global correction. It means things could get much, much worse.

In an era when our exports are tied almost exclusively to digital/intellectual products, we must protect this property as if it were our land.

Sometimes, in the middle of the day, I think of this shit and it makes me want to scream. I can't wait for that next wave of meaningless presidential ads.

On a side note, the /. forum discussion is quite interesting and some of the best public dialogue I've seen in awhile. Sigh.


Casey said...

I almost agree with you -- the problem isn't our (current) inflated real estate market -- but it also isn't the massive trade deficit. The problem is very simply that since we exited the gold standard in 1913 and handed over control of interest rates to a (REGULATED!) federal banking system, money has been an artificially inflated commodity.

BUT -- don't underestimate the power of "artificial" values. On a long-shot, you might be right: maybe we should all be buying gold because (eventually) an international collapse is immanent. But I don't think we're there yet. People are just stupid enough to believe that with this $700,000,000,000 (I like to type the zeros out) bailout package the problems of the world are fixed. And their belief (however foolish) might be just what we need to carry us for another generation, further and further away from the only universal standard of economic value (Gold).

Gold is like Jesus. He'll return some day, but we know not when...


Insignificant Wrangler said...

Not only type out the zeros, but pronounce it w/ a doctor evil intonation: seven-hundred BILLion dollars.

Gold prices tend to rise when everything else is falling. When people get comfy again, you'll start to see gold fall.