Chinese stocks enter bear market as trade war heats up

WTO considers China a "developing" country, thus relieving it from many obligations other developed countries have to fulfill. Simply accepting what WTO says is clearly not a sound strategy for the future.

https://www.cnbc.com/2018/04/25/what-trump-gets-right-about-...

And US per capita CO2 emission is 2 times that of China

You’re right that everyone suffers. The question in a “war” is who can handle the most losses/suffering before routing. The evidence seems to suggest that the Chinese market is already tanking, with the US barely having taken a first few shots. I see minimal impact, if any, on US markets (there are of course localized pockets of suffering, but we’re talking about the whole picture).

So this is more about taking a long term view. When the status quo (pre-Trump-tariffs) continues, the US continues to rack up a deficit, loses a lot of manufacturing expertise, develops a significant dependency on China, while China continues to innovate and raise its standard of living. Of course the US remains engaged in more higher level work, but rampant IP theft renders a large part of it moot, when it can simply be stolen. So a few decades from now, the US is only slightly above its current position while China has advanced considerably. Even better, with China’s large population, and emphasis on STEM, they are better positioned for the next many decades, compared to the US. Now combine that with China’s (or any large power’s) willingness to throw its weight around, and within a century it is not too hard to visualize the US as a secondary power to China.

China (or anyone else for that matter) will continue to steal IP as long as they can get away with it. It’d be stupid not to. The point of this is to really force them to come to the table and come to terms that are amenable to the US. It is trivial to issue a “statement” condemning IP theft, but entirely another matter to take actual steps to prevent it. The ultimate goal of US (or any country’s) foreign policy is to maintain long term geopolitical advantage. Continuation of the status quo did not seem like the most realistic path to doing that, so they’re fighting it.

From a trade perspective, a rising deficit means the US pays for Chinese goods, while barely getting paid for its products. The US would really like to sell more than it buys. This cannot happen when the Chinese have tariffs on just about everything, in addition to making it nigh impossible for foreign firms to operate on their soil. This state of affairs works strongly to their advantage, so they have no reason to do it differently. The US hopes that these (and future) tariffs will convince the Chinese to be more open to US products and companies in mainland China.

I don't think it's about trade but the wholesale theft of IP, R&D, etc.

According to Marc Goodman, in his book "Future Crimes" he details how China is responsible for the largest transfer of wealth in Human History all through theft of I&P.

I know my companies own experience led to the closing of a factory after it was discovered that the Chinese Military had infiltrated the Factory floor and was actively trying to harvest IP and Financial Information.

I just finished speaking to someone who is in the plastic injection molding industry and they are carefully managing the technology they send to China and don't allow dies to be manufactured there because of the extent of IP Theft.

This is about survival and trade will be used to fight the war.

Well it is in that the trade deficit lowers the value of our currency. The problem is that China has been manipulating the currency value to be lower than it actually is. Which means they can sell a product for less than American companies with the same costs.

Half the world would like to line up for a word with America after the last 20 years.

BHO would never have done it. The USA makes too much money on trade with China given the way the deficit is calculated.

For example, an iPhone made in China is only assembled there. All the IP is American, an American company realizes almost all the profit. This trade war is going to cripple us because we make so much money on even the deficit, even with the IP theft.

BHO wasn’t stupid, DJT sees an opportunity in simplistic messaging that gets his based riled up. What is weird is that we are at the peak of an economic cycle, it’s not like unemployment numbers could go any lower, and the jobs he is after with this trade war are all low value.

Not only are your tone and diction off-key, but your framing of this as a two-party domestic issue belies your myopic view of the world. My experience is that Americans grossly overestimate their advantage versus Asia, and are generally blind to the cues that several of the top economies in the world are laying the groundwork to free themselves from America’s increasingly confusing and belligerent influence. When the opportunity presents itself, the myopic West will have to admit that they missed clear signals like Japan’s decision to pursue TPP without the USA, and the warming of Sino-Japanese relations, including overtures by China to flip TPP to an “Asia First” bloc, and China’s inevitable domination of innovation and so-called intellectual property (a fundamentally flawed premise) in the coming decades. Not to mention the roles of Russia, India, Indonesia, Vietnam, etc. in the New New World Order. China is openly talking about colonizing Africa and Eastern Europe. It’s all there in the news, if you choose to pay attention. The world is lining up for America’s Julius Ceasar moment.

The US manages the value of its currency indirectly but the market sets the price. China controls its currency value by fiat (well, beyond a small currency market in HK), but must still do the same indirect management to avoid carry trade issues.

What makes the RMB inappropriate for international trade is that it isn’t fully convertible like the US dollar is.