China

[TGHusker]

^^^  It is amazing that prior to WW 2, America did produce approx 96% of what it consumed.  We couldn't fight another WW2 again since now we are so dependent on imports.   The strength of globalization is that we are all tied together like a woven cloth - war would destroy the whole cloth. The weakness of globalization is that we are all tied together like a woven cloth - national self determination becomes somewhat limited.

Here is an excellent, scholarly article on the challenge we face wt Chinese economic competition.  It is an issue of societal differences - not just in governance but also in culture.  Long term vision vs short term.   I encourage you to read the full article as it gives historical perspective and also touches on the geo-political game plan of China.   I've copied sections of it below.

https://imprimis.hillsdale.edu/how-to-meet-the-strategic-challenge-posed-by-china/

First Paragraphs:

China poses a formidable strategic challenge to America, but we should keep in mind that it is in large part motivated by insecurity and fear. America has inherent strengths that China does not. And the greatest danger to America is not a lack of strength, but complacency.

China is a phenomenon unlike anything in economic history. The average Chinese consumes 17 times more today than in 1987. This is like the difference between driving a car and riding a bicycle or between indoor plumbing and an outhouse. In an incredibly short period of time, this formerly backward country has lifted itself into the very first rank of world economies.

Over the same period, China has moved approximately 600 million people from the countryside to the cities—the equivalent of moving the entire population of Europe from the Ural Mountains to the Atlantic Ocean. To accommodate those people, it built the equivalent of a new London, plus a new Berlin, Rome, Glasgow, Helsinki, Naples, and Lyons. And of course, moving people whose ancestors spent millennia in the monotony of traditional village life and bringing them into the industrial world led to an explosion of productivity.

Where does America stand in respect to China? By a measure economists call purchasing power parity, you can buy a lot more with $100 in China than you can in the United States. Adjusted for that measure, the Chinese economy is already bigger than ours. In terms of dollars, our economy is still bigger. But the Chinese are gaining on us, and in the next eight to ten years their economy—unlike the economies of our previous competitors—will catch up.

China, on the other hand, is an empire based on the coercion of unwilling people. Whereas the United States became a great nation populated by people who chose to be part of it, China conquered peoples of different ethnicities and with different languages and has kept them together by force. Whereas our principle is E Pluribus Unum, the Chinese reality is E Pluribus Pluribus with a dictator at the top.

2 issues:

The single most troublesome deficiency we have in the United States is not the industrial base, which is relatively easy to deal with. It is the lack of scientific and engineering education. Six or seven percent of U.S. college students major in engineering. In China that number is 30-40 percent. That’s our biggest problem. Second to that is the fact, already mentioned, that there is a massive distortion of the global economic system caused by Chinese industrial policy.

The Chinese play very dirty. One of the issues raised in the Trump administration’s recent National Security Strategy is forced technology transfer. That is, if Intel wants to get access to the Chinese market—the biggest chip market in the world—China requires Intel to divulge everything it knows. From the standpoint of Intel stock price over the next five to ten years, that’s a pretty good deal. But it is bad from the standpoint of America’s national interest. If the U.S. government prohibits the transfer of technology to China, the Intels and the Texas Instruments of the world will scream, because it will hurt their stock prices. I’m a free trader, but national security sometimes supersedes the free market. This would be such a case.

final paragraphs

In 1983, I wrote a memo for the National Security Council arguing that the Strategic Defense Initiative would pay for itself—that the impact of the new technologies we were researching, once they were commercialized, would generate more tax revenue than we’d spent on R&D. When you do R&D, you don’t know the outcome. Manufacturing using CMOS chip technology came about because the Pentagon thought it would be great for fighter pilots to have a weather forecasting module in the cockpit. The semiconductor laser came about because the Pentagon wanted to light up the battlefield during nighttime warfare. These technologies produced unforeseen consequences that rippled in unimaginable ways through our economy.

We have failed to continue this innovation in recent decades. Starting with the Clinton administration, we came to believe we were so powerful that we didn’t have to invest in national defense and new technologies. Investment went into the Internet bubble of the 1990s, as if downloading movies was going to be the economy of the future.

I’m a free marketer. But the one thing markets cannot do is divorce themselves from culture. It is when we have a national security requirement, forcing us to the frontier of physics to develop weapons that are better than those of our rivals, that we get the best kind of innovation. So the government has a role—a critical role—in meeting the Chinese challenge.

If the Chinese are spending tens of billions of dollars to build chip fabrication plants and we come up with a better way of doing it, suddenly they’ll have a hundred billion dollars’ worth of worthless chip manufacturing plants on their hands. But you can’t predict the outcome in advance. You have to make the commitment and take a leap of faith in American ingenuity and science. We can meet the strategic challenge of China, but we have to meet it as Americans in the American way.

 

[TGHusker]

So we have this little trade war going with China.  Trump is out of his league here.   He showed all of his cards at one time and China is responding in kind.

I think a trade summit would have been a better approach.  If he is such a great negotiator, he should have sat down wt China and worked this out as equals.

So, he disrupts several industries including farming by taking his approach.  At this article notes, China is no longer the kid brother that can be pushed around.

The bold below, could really cause great damage to our economic model if we were to allow it to happen or push China to make it happen. 

https://www.bloomberg.com/news/articles/2018-04-05/china-s-state-media-warns-of-pain-for-trump-in-trade-battle

The paper said that Sino-U.S. ties were no longer that of David and Goliath, but of two equally matched giants, and that President Donald Trump’s incitement of a trade war was out of step with global sentiment. The daily’s correspondents based in the U.S. filed an article about how businesses and consumers in the U.S. opposed Trump’s tariffs.

The Global Times said China had many more weapons in its arsenal to deploy against the U.S. in the event of a trade war. It could devalue its currency, or promote the yuan as an alternative to the dollar in the global financial system.

And then we also have this financial nuclear card that they 'literally' hold -   they hold $1.7T of our sovereign debt. 

https://www.reuters.com/article/us-usa-trade-china-treasuries/china-holding-treasuries-keeps-nuclear-option-in-u-s-trade-war-idUSKCN1HB34M

It took China just 11 hours to retaliate against the United States for proposing tariffs on some 1,300 Chinese products, but Chinese officials are holding back on taking aim at their largest American import: government debt.

In a tit-for-tat response to the Trump administration’s plan for 25 percent duties on $50 billion of Chinese imports, China hit back with its own list of similar duties on key American imports including soybeans, planes, cars, beef and chemicals. But officials signaled no interest for now in bringing their vast holdings of U.S. Treasuries to the fight.

China held around $1.17 trillion of Treasuries as of the end of January, making it the largest of America's foreign creditors and the No. 2 overall owner of U.S. government bonds after the Federal Reserve. Any move by China to chop its Treasury portfolio could inflict significant harm on U.S. finances and global investors, driving bond yields higher and making it more costly to finance the federal government.

 

[TGHusker]

More on the leverage China has on us.

http://theweek.com/articles/765276/how-china-win-trade-war-1-move

Compared to the scale of the U.S. economy, the numbers are still relatively trivial and mostly theoretical. But if things do spiral into all-out trade war, it's worth noting China has a nuclear option.

I'm referring to rare earth metals.

These are elements like dysprosium, neodymium, gadolinium, and ytterbium. They aren't actually rare, but they do play crucial roles in everything from smart phones to electric car motors, hard drives, wind turbines, military radar, smart bombs, laser guidance, and more. They're also quite difficult to mine and process.

It turns out the United States is almost entirely dependent on foreign suppliers for rare earth metals. More importantly, it's almost entirely dependent on China specifically for rare earth metals that have been processed into a final and usable form.

 

[TGHusker]

Trump is an idiot and China knows it and they know he is arrogant and will make foolish decisions because of it.

If the U.S. goes through with an additional $100 billion in tariffs, China will not hesitate to fight back and is already prepared to, a Ministry of Commerce representative said.

"We will immediately fight back with a major response," the representative said during a Chinese-language briefing with reporters Friday in Beijing. "We have no other choice."

"We feel America is very arrogant. They have taken a wrong action. The result is that they will hurt themselves. If they release the list of $100 billion tariffs, China is prepared. And will not hesitate," he added.

https://www.cnbc.com/2018/04/06/china-will-not-hesitate-with-major-response-to-new-tariffs-ministry-of-commerce.html

 

[deedsker]

https://www.washingtonpost.com/business/economy/trump-weighs-rejoining-trans-pacific-partnership/2018/04/12/37d59500-3e71-11e8-8d53-eba0ed2371cc_story.html?utm_term=.1a7c1a8cc2d3

President Trump ordered top administration officials Thursday to look at rejoining the Trans-Pacific Partnership, a major shift on the sprawling multination trade pact he rejected just days after taking office.

Rejoining the pact would come as Trump escalates a trade conflict with China. The Pacific Rim trade deal was intended to counter China’s influence, but Trump criticized the pact as a candidate and pulled the United States out of it in one of his earliest moves as president.

 

[commando]

https://www.washingtonpost.com/business/economy/trump-weighs-rejoining-trans-pacific-partnership/2018/04/12/37d59500-3e71-11e8-8d53-eba0ed2371cc_story.html?utm_term=.1a7c1a8cc2d3

maybe he is realizing he gave china all the cards when he dropped us out of the agreement.  or is this some 6th dimensional chess he thinks  he is playing?

 

[deedsker]

maybe he is realizing he gave china all the cards when he dropped us out of the agreement.  or is this some 6th dimensional chess he thinks  he is playing?

I am guessing that he thought he was the best negotiator and now he realizes he is the best deal maker.

Don't mind 7 years of Obama's work to make it happen, he was the one who made the worst deal ever! MAGA!

 

[RedDenver]

F*%K!

That was just about the only silver lining I had for Trump.

 

[jsneb83]

Well add another "accomplishment" to this administration

 

[Mierin]

I remember reading that the TPP would've been really good for Nebraska. And likely for lots of other red states. It's just that people don't know that much about trade deals (myself included). The thing is, I doubt Trump understands better than I do.

 

[RedDenver]

Good article breaking down why trade deficits and surpluses and BOTH necessary for there to even be trade at all:

https://www.philosophyofmoney.net/dont-like-trade-deficits-tax-rich/

 

[TGHusker]

China is falling back into Maoist territory in it's repression of its people and religions. 

https://apnews.com/a2e4a0436fba4146a156daef77885945/For-God-or-party?-China's-Christians-face-test-of-faith

Under President Xi Jinping, China’s most powerful leader since Mao Zedong, believers are seeing their freedoms shrink dramatically even as the country undergoes a religious revival. Experts and activists say that as he consolidates his power, Xi is waging the most severe systematic suppression of Christianity in the country since religious freedom was written into the Chinese constitution in 1982.

The crackdown on Christianity is part of a broader push by Xi to “Sinicize” all the nation’s religions by infusing them with “Chinese characteristics” such as loyalty to the Communist Party. Islamic crescents and domes have been stripped from mosques, and a campaign launched to “re-educate” tens of thousands of Uighur Muslims. Tibetan children have been moved from Buddhist temples to schools and banned from religious activities during their summer holidays, state-run media report.

This spring, a five-year plan to “Sinicize” Christianity in particular was introduced, along with new rules on religious affairs. Over the last several months, local governments across the country have shut down hundreds of private Christian “house churches.” A statement last week from 47 in Beijing alone said they had faced “unprecedented” harassment since February.

Authorities have also seized Bibles, while major e-commerce retailers JD.com and Taobao pulled them off their sites. Children and party members are banned from churches in some areas, and at least one township has encouraged Christians to replace posters of Jesus with portraits of Xi. Some Christians have resorted to holding services in secret.

“Xi is a closet Maoist — he is very anxious about thought control,” said Willy Lam, a Chinese politics expert at the Chinese University of Hong Kong. “He definitely does not want people to be faithful members of the church, because then people would profess their allegiance to the church rather than to the party, or more exactly, to Xi himself.”

Various state and local officials declined repeated requests to comment. But in 2016, Xi explicitly warned against the perceived foreign threats tied to faith, telling a religion conference: “We must resolutely guard against overseas infiltrations via religious means.” And in April, the religious affairs department published an article saying that churches must endorse the party’s leadership as part of “Sinicization.”

“Only Sinicized churches can obtain God’s love,” the article stated.

The government is even cracking down on Christians more aggressively through legal means. In March, a prominent Chinese house church leader with US permanent residency was sentenced to seven years in prison after he built Christian schools in Myanmar. And half a dozen Christians were sentenced last month to up to 13 years in jail for involvement in a “cult,” according to U.S.-based Christian non-profit ChinaAid.

The pressure has pushed several dozen pastors and their families to flee to the United States in recent years, ChinaAid says. The wife of one pastor under house arrest left for Midland, Texas about a year ago, after authorities warned that their children might have trouble getting an education in China. She said members of their church in China were barred from being baptized, and even a simple Christmas service was interrupted.

 

[Mierin]

Xi had Christopher Robin banned in China because people were saying he looked like Winnie the Pooh. That is exactly the kind of thing Trump would do if the law was behind him.

 

[Danny Bateman]

Xi had Christopher Robin banned in China because people were saying he looked like Winnie the Pooh. That is exactly the kind of thing Trump would do if the law was behind him.

Have you seen the pictures? They're pure gold. I have no idea if they were pre-existing or drawn specifically to imitate Xi (I think one with Shinzo Abe probably was), but they're good for some laughs nonetheless. 

 

[Mierin]

Anyone been following the story of the Chinese star that "disappeared" ?

Fan has not been seen since June, a month after Cui Yongyuan, a former presenter for state-broadcaster CCTV, accused her of large-scale tax evasion. Fan's disappearance from public view sparked widespread speculation she had been detained by the authorities. Xinhua said she had been under investigation by tax authorities in Jiangsu province, near Shanghai but didn't provide any details on her current whereabouts.

They are charging her for tax evasion and say that she owes the government $130 million. But according to the internet, her net worth is $100 million. I think they are just forcing her to give them all of her money and making an example out of her to show they can.

https://www.cnn.com/2018/10/02/entertainment/china-fan-bingbing-tax-intl/index.html

I have a Chinese friend and I'm afraid to even text her right now because she's over there getting her visa renewed and she told me she's worried they'll stop her from coming back here.