Which Internet Startup is China?

A few months back I was talking with an aquaintance in the telecom industry. I mentioned an article I had just read about leading Chinese telecom companies choosing 3G standards that weren’t compatible with international norms. Her response was basically that when you have the kind of domestic market that China has, international norms will eventually come to you.

Fast forward a few months and a couple economic meltdowns later and we find, via an excellent NY Times piece, that when the U.S. (and the world) sneezes, China might not catch cold, but it does reach for its handkerchief. Among other things, the article points out that China needs to maintain an 8 percent growth rate just to keep job creation in line with demand. Despite all the potential of the Chinese domestic market, the reality is that China has not yet demonstrated that it has a motor capable of driving its own economy, let alone the global economy.

I’ve talked a lot about some of the deferred maintenance China has accumulated compared to the States and Europe regarding multiculturalism and some territorial sovereignty issues. When your economy is ripping along at 10 and 11 percent growth rates, those sorts of things are easy to ignore. Less so when belts start to tighten.

It will be interesting to see just what of the multipolar world survives this global economic downturn, which just might turn out to be the geopolitical equivalent of the bursting of the internet bubble. I’ve been as guilty as anyone of predicting an era of diminishing American influence. But it could be a case of a rising tide lifting all boats. Poor leadership certainly exagerrated the ways in which America’s boat rose significantly less than others. But if nothing else, the American economy, and American power, has proven itself to be resilient. Which means it might sink less than others when the tide falls.

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