China is huge, not rich

Some people say we need one billion Americans

If you compare Mexico to Iceland on almost any basic counting metric, you’d probably conclude that the aggregate achievements of Mexico are dramatically more impressive.

Mexico thrashes Iceland in agricultural output and industrial production, and all those economic statistics add up to a much larger gross domestic product. Mexico has a larger and more potent military establishment. And not only is the Mexico City Metro much more advanced and impressive than any of Reykjavik’s infrastructure, so is the Monterrey Metro. Keflavik Airport serves only about a quarter of the passengers who fly through Benito Juarez International. Beyond that, the airports in Cancun, Guadalajara, Monterrey, Tijuana, and Los Cabos all serve more passengers than Iceland’s largest.

So why is Iceland such a poor and backwards society compared to Mexico?

It is, of course, not. Mexico has better weather and is a much larger country, but by any standard, it’s dramatically poorer than Iceland, and this is pretty obvious if you visit the countries.

This is such an exaggerated example that I doubt anyone will dispute it. I’ve never seen a take comparing Mexico and Iceland in aggregate counting statistics, concluding that Mexico is far ahead, and wondering why Iceland has become so inept and dysfunctional. But I still think it’s important to keep in mind, because the aggregate statistics really just reflect the fact that Iceland is very small.

And I find that similar errors are made all the time with regard to China.

China has gone from poor to middle income and, in the course of doing so, has achieved some genuinely impressive feats. China sent a probe to the dark side of the moon and back. Their electric car industry has benefited from generous government subsidies, but appears to have used those subsidies to make real technical breakthroughs that now allow them to produce world-leading cheap battery technology. China has a mind-blowing high-speed rail network and a very impressive set of brand new airports. China is workshop to the world with the largest manufacturing output of any country — somewhere between double and triple that of the US.

China’s achievements are truly impressive, but given the ideological commitments of the Chinese government, they’re also kind of scary. I think many Americans are a little too complacent about China, sort of stuck in a perpetual mental 2004 where the United States is clearly hegemonic. But I also think efforts to shock America out of its complacency — like Niall Ferguson’s recent Free Press article proclaiming the United States to be the new Soviet Union — often misstate in the other direction. The United States is not sclerotic, backwards, and poor, or on the brink of being overwhelmed by Chinese dynamism and ingenuity. We’re just smaller!

Numbers matter

Take another look at that manufacturing chart above.