What do the United States and China have most in common these days? An increasingly pressing need to grow our respective economies faster. How? By one of the few practical means available: unleashing the information technology and telecommunications sector.
China faces a dilemma. Double-digit growth in China over the last 20 years has spawned tens of millions of entrepreneurs. Chinese government leaders understand that it is easier to maintain "control" over all of this through autocratic and at times repressive political processes, when general living standards and personal household wealth are rising quickly. However, rising oil prices pose a need to keep real growth in China high enough to pay for the escalating cost of importing ever-larger volumes of oil without sacrificing improvements in living standards.
America faces similar economic challenges. The rising price of oil is doing to many oil-producing countries what opium did to China 100 years ago. Windfall revenue from oil exports is creating the illusion among far too many increasingly corrupt autocracies in oil-producing states, like Iran, that they do not need to modernize or abide by globally accepted commercial and political norms to survive. Instead, those newfound riches are too often squandered on weapons, terrorists or whatever else it takes to keep bankrupt regimes in power.
Predictably, it falls to America to do what is needed to keep global oil supplies flowing and the global economy growing. Dealing with fanatic regimes in Iran, North Korea, Syria and elsewhere is one thing with the U.S. economy humming along at full employment. An economic slowdown could undermine the public's willingness to foot the bill for being the world's guardian of democracy and freedom.
All of which brings us to the growing strategic importance of America's information technology sector. Research recently conducted by noted Harvard economist Dale Jorgenson concluded that since 1995, the four information technology producing industries - computers, semiconductors, software and communications - have accounted for one-third of real economic growth in the United States, even though these industries combined account for less than 3 percent of gross domestic product.
China understands this equation as well as the United States and is targeting its own information technology sector for preferential treatment and rapid growth. It is also investing considerably more in its domestic communications networks than the United States and has been since 2003.
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