Another Capitalism vs Communism lesson

It was revealed this week, that the Chinese intelligence service, sometime during the Obama administration, designed and built a tiny chip, no bigger than a grain of rice, to be fitted onto Supermicro motherboards (a former Chinese company) which were destined for servers sold to American corporate giants Apple and Amazon, presumably these chips were hidden gateways for the Chinese to use in data gathering schemes.

Of course, China is a communist country politically and when the Chinese government orders companies to do things like this, they either comply or get shot. BUT stuff like this is bad for business. A lot of manufacturers are rethinking the idea of having China in their global supply chains and shit exactly like this — is a big reason why.

The Chinese also steal Intellectual Property (IP) and/or force companies doing business in China to outright hand it over, and this, along with Xi’s suppression of his own people, will be the Chinese government’s downfall, not a U.S. challenge on the high seas, over the Chinese plan to steal the entire South China Sea by the environmentally disastrous process of crushing up the submerged coral reefs surrounding these former atolls and turning them into islands.

Communism is a failed political and economic system and China seemed to understand that in recent decades.

It was the Chinese government (not under Xi) that embraced capitalism and brought more people out of poverty than any government ever has, anywhere in world history.

Now, under “lifetime” leader Xi (he’s a dictator) that promising change in direction is under attack. The Chinese leaders believe they can use force to intimidate their own population into remaining communist — while exploiting capitalism to feed their huge and heavily populated country, but of course, this is impossible.

Direct foreign investment in China will now begin to wither. Even Chinese investment in China will wither. Companies are willing to experiment and build factories anywhere if they think there are labor cost and/or regulation advantages, BUT, if they know their supply chain is vulnerable, to political whim and/or corporate spying, they will vote with their wallet and build those same factories elsewhere.

Lets’ just hope these corporate leaders are smart enough this time — not to choose another communist country as a destination.

 

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About karlspain

20 year Newspaperman. Lifelong Inventor. Wrote 2 books so far, working on more. The Revelation, 1st book, about your brain & the universe, and math. Hooked together! God I trust, America I love, 2nd book, is the biography of Aris Mardirossian, a great man. Also owned a software company, an IT integration company, a gas station and a fuzzy logic software title along the way.
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