We have been comparing the market driven economy and the centralized economy in class. History has proven that the market driven economy outlast the centralized economy due to the weeding out process of the weak while the strong remains. In addition, according to Romer's interview, it is difficult for countries like China to surpass the super-power nation like the US since there are no institutions to produce new innovations. However, according to the article "Steelworkers Blast China on Subsidies" by Elizabeth Williamson and Ian Talley has made it clear that the US is being constantly threatened by China for various reasons. In fact, due to the Chinese subsidies in its clean-energy sector, Ron Kirk, the US Trade Representative, has seen that the Chinese green-technology manufacturing sector would allow China to dominate this sector in the international arena. With the yuan remaining low, the US will face extreme difficulties to go head to head with China, especially with the state that it is in.
As a result, I think that although it might be hard for a country like China to surpass the US at this point. Its ability to compete through copying ideas is astounding especially with the government's help. If there is nothing left to copy, the government's allocation of subsidies might be different. It may possibly shift more toward intellectual institutions for innovations.
1 comment:
This article and your synopsis introduce an interesting concept that we have hinted at in class: the impact that government institutions have on aiding or hindering innovation. You mention that Chinese institutions are not as effective in stimulating innovation as America's. I would argue that this is true. But, I think it's worth considering the current predicament that the US is facing in regards to the US patent, in which it sometimes take two years to process patents while Chinese inventors can get them within the year. This example points to a structural disadvantage that the US has, albeit very specific, that the article does a nice job of contextualizing.
Post a Comment