by Dana Blankenhorn
Volume X, No. XXVI

This Week's Clue: China Plays its Hand

Home | Dana's Bio | Clued-In Archive | Newsletter '06 Archive | | Subscribe!
This Week's Clue: China Plays its Hand
SSP (Shameless Self Promotion)
Best of the Week
ZDNet Open Source
Clued-in, Clueless

Dana Recommends The Blankenhorn Effect offers a powerful, positive message for our time. Once you understand how Moore's Law impacts every part of your life, how powerful it is, and how irresistible a force it truly is, you will have the power to predict the future and know how to change it. Buy it today, and make 2006 a better year for yourself, your business, and your family.


For the Week of June 26, 2006


This is China's card.

Stability made China an economic power during the 1990s. Stability is the "gift" China now seeks to give the world.

At a time when the U.S. is contributing mightily to global instability, other nations have been grabbing Chinese stability as a lifeline. Most Americans have not noticed because stability is quiet. It doesn't make headlines. And, we thought, it didn't impact us.

In The Chinese Century I posited an unstable way in which Chinese stability might be imposed on us. I saw things happening in an American way, dramatically, with big sudden events arising from simple misunderstandings.

In fact it's happening far more subtly, in a Chinese way. Recently, for instance, U.S. markets tanked. So did European markets. So did commodity prices. Analysts on CNBC were saying things like "nothing is working."

Well, something was working. The Chinese Central Bank was working.

What was happening was a subtle shift of Chinese investment out of the dollar,. Slower purchases of U.S. assets mean both lower values and higher interest rates. The message we weren't getting from our media, was that we had lost control of our economy. But the markets heard loud and clear.

This was followed in China by an attempt to cut lending and slow the Chinese economy. It is being called a "subtle shift" of economic policy, an attempt to create a "soft landing" by a pilot, Zhou Xiaochuan, who has never flown the economic plane before.

They have a cold, we catch the flu. China wants to cool off its growth, we slide into recession. The policies which control our economy are being made in Beijing, not in Washington. That's how other economies have had to deal with America's changes for decades. That's what we have to get accustomed to now.

China is quietly taking control of the world's resources, especially in Africa. Its message of stability is vital there. Authoritarian governments across Africa are embracing their new Chinese masters. China is also paying more attention to Latin America than we are. Chinese economic ties to Brazil are especially close.

There are ways in which the U.S. can meet this threat, but the first step is acknowledging where that threat lies. It does not lie with China's military. It lies with our economy.

The way forward for us is clear. We need a freer Internet, with wider lanes, to spur innovation. We need to take advantage of our creativity and make change happen faster.

A small example of how we can win is Open Source Storage. This is a Sunnyvale company that has built a facility to customize Linux-stack servers and can deliver to U.S. customers faster than foreign providers. It's the quick turnaround and customization that's the secret, despite the common assumption that "open source" benefits foreign competitors.

This is why the idea of Open Source politics is so vital. Open source politics drives open source economics. The things we need to do in order to compete and win against China are precisely the things this government is refusing to do. The practical philosophies of the Internet make these values intelligible to the majority of Americans, because most people in this country have used the Internet.

There's irony in the fact that I'm saying sharing is the key to defeating what we have long thought of as Communist China. But their economy is entirely built on an industrial, proprietary model. We have to grasp the future in order to win.

And here's the bonus. By competing economically, by using open source and the Internet, by forcing economic and technology change, there are no losers. The pressure of our growth will force China to open up its society. Without that pressure, as we've seen the last few years, there is no such pressure. The only way to free China is to beat China, so that China will be forced to free itself.

There don't have to be any losers here. That's the message we need to take forward.


Shameless Self-Promotion

I have made a big decision. I have moved my main blog, formerly called Mooreslore, to under the name Dana Blankenhorn. (Hey, that's MY name.) The blog is written in Typepad and is also available at

I'm continuing to produce a special blog on Open Sourcefor ZDNet. I am pleased to say it has grown into a real money-maker. I work as a freelance writer in Atlanta, and am on the development team for Voic.Us, which aims to become a political "super-site" and offer mobile marketing services. Please visit that blog as well.

You are encouraged to forward this newsletter widely. And if you have trouble subscribing let me know. Remember: it's journalism that keeps the Clues coming...


Best of the Week

Bill Gates Grows Up

You don't put $50 billion to work readily or easily

The 1966 Game: Who's Romney Now?

James Webb

The Right Open Source Argument

The winning arguments are economic arguments.

The Time Flies Game

It's the game where you get to see just how long it's been, and what that means in terms of other eras.

Cut Yourself Off for Money

If I didn't let search engine spiders find me, could I make money from it?

The Politics of E-Mail

They can spam you, but you have to fill out math problems to e-mail them. They want to protect themselves from "Astroturf," sponsored by corporations, unions, issue groups or the organized blogocracy, while at the same time they seem to think that political spam is going to influence how you vote.

Power First, Ideas Second

It would be nice if the Netroots embraced the Open Source idea before their candidates began winning power. But it is not necessary.

GBuy Built for Defense

Assuming Google gets to look at enough transaction data to identify "GBuy Trusted Merchants," it will be seeing enough data to identify scammers as well.

Who Can Save the Internet?

Vint Cerf can.

World (Cup) Turned Upside Down

0-3. Never mind.

It Should Be Closer

Despite the fact that we're now 38 years from Nixon's election, there is still life in the old Thesis yet. The reason? Modern medicine.

Hate Speech Shows Weakness

Political rhetoric is like a drug. A sure sign of excess, then, is when rhetoric becomes crack.



Big Hat, No Cattle

New Game: Stop Taylor

Cox Starts to Smell Like a Loser

Reddy Tries to Wrap it Up

The Crowd to Replace Steen

Does Bill Campbell Matter?

McKinney the Model

Democratic Wedges

Update: Shadows Get Pushback

Back to the Shadows Again

Blog Jiu Jitsu

A Bitch Too Far?

One Party State?

ZDNet Open Source

Great Man Series: The Most Hated Man in Cyberspace

When is Stupid Not So Stupid?

Open Source Creates U.S. Manufacturing Jobs

Microsoft Objects

Open Source Searching it All

Solving the Computing Problem in Education

Microsoft Abandons Open Source Discussion


Clued-in, Clueless

Clued-in is Bill Gates. If he can grow up, maybe us other 51 year olds can, too.

Clueless is Rupert Murdoch. He's getting hosed by the Internet again, but no one dares mention it. Except me.

A-Clue.Com is a free email publication, registered with the U.S. Copyright Office as number TXu 888-819. We're on the Web at

Home | Dana's Bio | Clued-In Archive | Newsletter '02 Archive | | Subscribe!