Featured Post

An American Coup D'etat?

This has gotten completely out of control. I never thought I would see our country's politics reduced to the degrading levels of a Banan...

Monday, May 13, 2019

Braking China

Sorry for the long break from blogging. Lots of activity at the Diplohouses, but much too boring to relate . . . so I won't.

China is back in the news, again, so let's discuss that.

Many years ago--April 2, 2012, to be exact--I wrote a little piece in this humble blog titled "China's Century?" If you have time, I would ask that you go back and read it; it's not too long or cutesy. In fact, I think a lot of it still holds up. The main contention of that long-ago post was to dispute those who see the 21st as "China's century." I argued that it could become China's only if we gave it away. That seems an accurate assessment. Probably the single biggest miss, however, in the article was that "experts" wowed by the "inexorable" rise of China seemed to ignore,
the overseas political side of it. China's trading partners, the US and Europe most notably, are reaching the end of their patience with China's currency manipulations. A trade war is not inconceivable; China would have the most to lose.
I thought, for sure, that the West's patience with China's political and economic shenanigans would prove much shorter than it has, and that we would have seen a trade war or the inklings of one well before 2019. The West seemed content to allow whole swathes of our economies to be either devastated or just uprooted and transplanted to China: manufacturing was deemed largely dead in the West; our political and economic leadership seemed absolutely fine with that, and with China's active intellectual property theft and aggressive intel operations. Anybody else wonder, for example, why new Chinese weapon systems seem to look so much like those of the United States?

The West, furthermore, went along with the absurd Paris Climate Deal that would have destroyed, for example, the coal industries in the US and Australia, and benefited those in China and India. In other words, our leaders didn't really believe the nonsense about global climate change, they just wanted the "dirty" industries moved somewhere else. Not in My Backyard.

Well, things appear changing. Another one of the consequences of the 2016 election is that we have a President not afraid to take on the Chinese. He correctly determined that our national security and prosperity were imperiled by our dhimmi-like attitude towards Beijing. Tariffs are always a blunt instrument and they can have negative consequences; they should never be the first line of defense when dealing with unfair trade practises. They, however, are more than justified in the current situation. Nobody wants a "trade war," and such an event or the threat of one can and will have economic consequences--I see them in my stock portfolio. That, however, is more a result of our having allowed our economy and our deficit spending to be in hock to Beijing. We have allowed corporations to make absurd intellectual property deals with the Chinese in "exchange" for the Chinese "allowing" us to set up factories in China, with Chinese partners, and export the product back to our own countries. That is a prescription for economic suicide.

I would have no problem with making the new higher tariffs on Chinese goods permanent. Western corporations and their budding Chinese overlords must learn that trade is supposed to be a two-way affair; trade doesn't mean, or shouldn't mean, we give away our factories, jobs, and technological crown jewels in exchange for cheap consumer goods, the financing of our debt, and a growing military threat in areas of concern to us.  

I hope President Trump hangs tough on this. Put the brakes on China.

17 comments:

  1. Apple must now be having second and third thoughts about putting most of its eggs in a China basket.

    ReplyDelete
    Replies
    1. They were warned by Trump long ago. Funny thing on the way to the bank... it turns out the party of the rich is really the democrats who control FB, Twitter, MS (and MSNBC), Apple, etc. When one considers the Deep State it is DNC as well.

      A complete overhaul of our Security Clearance system, whether for govt or civ, needs to be enacted. Since the Clinton's we have been leaking, or rather drowning in this regard.

      Delete
  2. I have always assumed that the intent of 'engagement' with China was to make China dependent upon the US and force it to grow a 'confidence scam government' where by the commies grow their books and report such great numbers for such a very long time, that when the US cuts the spigot, China continues to pretend there's still money flowing. I assumed that was the goal because then eventually people in China will figure out that the spigot really is turned off and revolt.
    But apparently everybody forgot what the spigot was for. It was supposed to be a 'long term regime stick'.

    - reader #1482

    ReplyDelete
  3. https://www.youtube.com/watch?v=KUu_ztoOgkI
    WAR Footing, a plan and a prayer for American survival!

    "... making the new higher tariffs on Chinese goods permanent. Western corporations and their budding Chinese overlords must learn ... trade doesn't mean, ...we give away our factories, jobs, and technological crown jewels in exchange for cheap consumer goods, the financing of our debt, and a >--->growing military threat in areas of concern to us. I hope President Trump hangs tough... WLA

    Me too Boss! Btw, wrote for about an hour, then google decided to delete my post, when I failed to select anon, Oh well I probably would have had a squad of G-Men with Bull horns knockin down my door!

    On Watch~~~
    "Let's Roll"
    https://www.youtube.com/watch?v=KUu_ztoOgkI

    ReplyDelete
  4. The trade and budget deficits could not continue forever for the simple reason that the current account would not continue to balance it - eventually other nations would tire of financing us and begin to worry about being repaid in dollars whose value had been reduced by inflation.

    Stein's Law: "If something cannot go on forever, it will stop."

    People who "blame" Trump for the trade situation are simply showing their ignorance (his "style" is a fair argument, but not really significant).

    An excellent analysis of the situation can be found in the work of Michael Pettis, professor of finance and economics at Peking University, specifically "The Great Rebalancing".

    Things will get worse, but we have the better hand in this game of poker.

    ReplyDelete
    Replies
    1. not to worry, if the dems win potus in 2020, they'll fold as fast as they can

      - reader #1482

      Delete
    2. ...if the dems win...in 2020, they'll fold...fast"...!

      Especially when they're awarded the DOLLAR GENERAL franchise in their 'Special re-Districts' by the venerable Biteme/Bernie coopted co-Leaders forever of the NEW Improved 'People's Republic of Nort America' --
      You May Relect on the Socialist Gifts that are now yours Dear Workers and Peasants~~~
      OW~Sow~~~
      Let US Hum HO HUM...

      Delete
  5. It doesn't help in dealing with the Chinese and the North Koreans that our media constantly runs stories of President Trump nearing impeachment, or defeated by the Democrats. This emboldens them, to avoid making a deal.

    ReplyDelete
  6. Heard an analyst on CNBC this morning say that he was starting to wonder whether Xi wanted a deal or not. Apparently, a deal might require less governmental control of the Chinese economy and people, thus threatening the leadership.

    That does not sound far fetched to me.

    Not considered, though, is whether Trump thinks that tariffs are a bad idea. I'm not leaning one way or the other on that at the moment, though Trump's tweets certainly could be read so as to imply that Trump believes that a tariff is on China, instead of on the US Consumer.

    I'm close to believing that Trump intends to make a higher tariff across the board a standard (and not just with China). By the end of June, I'll decide which, and start to realign my investments accordingly.

    For the country as a whole, this is a bad idea, but then, DC is where bad ideas go to live forever.

    Green Bear

    ReplyDelete
  7. Chicoms and US economists will be SHOCKED at how fast manufacturing can move out of China to non tarrifed countries. The pain inflicted on the US economy will be cursory and a prelude to huge trade increases with countries that have fair trading regimes in place. The damage to the Chinese economy will be long term.

    ReplyDelete
  8. As a translator, I have profited from Chinese trade. However, I have always wondered why China was given such good treatment by the USA. It is, after all, the last, best hope for 20th century totalitarianism.

    While serving as vice consul in AmConsul Guangzhou, I noted that while we dutifully reported on things like child labor, corvee, and prison labor, the Boy Clinton admin still pushed for permanent MFN status for China. And you could all but see the dollar signs in the eyes of bizman Jim Sasser when Clinton appointed him ambassador to the PRC (the man was also completely ignorant of the serious human rights abuses going on in the PRC in those days when the suppression of the demonstrations was still a fresh memory).

    I also fault the elder Bush for having had a horrible case of what we call "clientitis".

    ReplyDelete
  9. You're not the only diplomatic veteran who supports Trump's approach to trade with China. The outgoing French ambassador to the USA agrees with you.

    "Let’s look at the dogma of the previous period. For instance, free trade. It’s over. Trump is doing it in his own way. Brutal, a bit primitive, but in a sense he’s right. What he’s doing with China should have been done, maybe in a different way, but should have been done before. Trump has felt Americans’ fatigue, but [Barack] Obama also did. The role of the United States as a policeman of the world, it’s over. Obama started, Trump really pursued it. You saw it in Ukraine. You are seeing it every day in Syria. People here faint when you discuss NATO, but when he said, “Why should we defend Montenegro?,” it’s a genuine question. I know that people at Brookings or the Atlantic Council will faint again, but really yes, why, why should you?"

    The French Ambassador Is Retiring Today. Here’s What He Really Thinks About Washington.

    ReplyDelete
  10. I had my first trip to China recently -- the supposedly less-developed western part. I just scratched the surface in a few weeks, but most of that time was spent with Chinese people rather than foreigners. It did not look as bad as it apparently did in 2012. Excellent infrastructure; not a lot of obvious poverty; nothing like the US/European visible underclass; minimal (mostly unarmed) police presence.

    The good and the bad in the China situation start here in the US. The bad is that too many politicians and businessmen have taken the Chinese silver -- selling out their own country for short-term benefits. The good is that we ought to be able to do something about those US miscreants, if we can get our act together.

    ReplyDelete
  11. You want to watch the Youtube videos of committee for present danger China. Particularly the question answer session I highly recommend. Pay particular attention to Bannon and Calabasas speeches

    ReplyDelete
  12. Whoops Kyle Bass. https://www.youtube.com/watch?time_continue=1472&v=IZP7FIu_O2I

    The whole conference is long but worth watching.

    ReplyDelete
  13. https://presentdangerchina.org/
    Committee on the Present Danger: China

    Well worth Watching/Listening, as were many of these Speakers and Questioners!

    WAR: "Informational-Economic-Guns Up"
    WE ARE AT WAR. Bannon at his Best, IMho.

    https://www.youtube.com/watch?v=IZP7FIu_O2I
    OW~~~
    "Let's Roll"

    ReplyDelete