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.