2010-12-31

Why we all need to learn Chinese

I had to write a short essay about an emerging issue in US-China relations and what I think should be done about it. I figured I'd post it here too. Short story: we all need to learn Chinese.

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The next 10 years will see the beginning of the end of the US' "free lunch".  As the standard of living continues to improve in China and as economic reform and access to information continues to spur growth, wages and prices will rise, which will cause an increase in the cost of goods manufactured in China, and much of this cost increase will be passed on to the American consumer. The increase in the cost of consumer goods may make continuing to import goods from China unsustainable for some industries. Unfortunately the US has already lost (or never developed) the ability to manufacture certain goods and materials in quantity, and has long relied on cheap manufacturing in Chinese factories. Chinese economic growth is therefore likely to cause tensions between China and the US.

Meanwhile China has started investing heavily in outsourcing cheap manufacturing to Africa and other developing regions, so it is likely that China will emerge as the next super-consumer country, and with an emerging middle-class and much greater purchasing power than the US (and maintaining trillions of dollars of US debt), the rise of China will likely drag the US into economic doldrums.

The traditional business and economic approaches to address this problem will all of course be pursued (investing in emerging Chinese markets, exporting Western brands to China and/or developing multinational business conglomerates).  However I think to truly stay relevant, the US needs to focus on teaching Chinese language and culture to every school student the way that every Chinese school student is taught English language and culture, and the US government needs to focus on setting up an extensive network of student exchange programs with China and other Chinese-speaking countries.  By exposing school children to Chinese language and culture, the next generation of business leaders, political leaders, scientists and engineers will be enabled to work alongside Chinese counterparts rather than simply competing against them while the economics of scale turn in China's favor.