Handling of U.S. trade dispute causes rift in Chinese leadership: sources
reuters.com
reuters.com
The us has done a terrible job helping workers find new employment when their old factory or similar manufacturing jobs were lost to another country. It's hard to see how we'll ever do a good job on that because half the country has an ideological resistance to helping each other (social security, medical insurance, a job, those are all things we should make on our own). I can't see that these tariffs can ever bring back many factory jobs to the us. We need a strategy to find new jobs and industries. The current plan is just not going to accomplish much of anything.
But, and it's a big but, lets not forget that trade between countries has a good chance of reducing the potential of wars between them. I really believe that extensive international trade between the us and china will have a good tampering effect on potential war between the two countries. Chinese building of military bases in the south china sea against the wishes of your neighbors and and asserting your power won't help anyone to trust china, but when there was extensive and growing trade between the two powerful countries war should be less likely.
It was not a requirement for many many years already, and before that on case by case basis.
The list of industries in which it is still a requirement is well known.
On Qualcomm and NXP, that's kinda bizarre - nor Qualcomm, nor NXP is a listed company in China, nevertheless, China orders a block on merger of their units in USA.
But were they not be compliant, they could've fared worse: remember Sigmatel, they tried to bully a Chinese competitor with patent trolling, but instead got shipments of their chips tracelessly vanishing at Chinese customs. That was a death sentence for them as a company: it doesn't matter that they were selling chips to foreign companies for as the final product was assembled in China
Was this ever true? The old saying, "If goods don't cross borders, then troops soon will."
Europe was very commercially integrated before WW1.
I think nukes are what will prevent a war.
Of course are fringe nutters in the world and unfortunately some of them even get elected, but the vast majority of Americans, Republicans and Democrats, are just ordinary people who care about their kids and their neighbors, want to see everyone prosper, and even agree about a lot more than they disagree about.
He's not just a fringe figure that managed to get elected but has no real power.
I don't think that he's against helping people. Rather, he thinks that those programs have long term externalities which outweigh their benefits. We're talking about actual people here, not villains from a 60's cartoon.
I met some people in Alaska who were trying to approximate this.
a ten is a very modest utopia where everyone can perpetually live like a student
I guess some people historically would see it as a utopia. One's perspective changes with age and life experience. Some would find it depressing.
Most people in the world, if not the US, spend at least five days a week working to have even far less then that. I would put a true utopia, with e.g. the good parts from unlimited free energy, at a hundred or more on that imaginary scale.
Sure. I'll have that instead of the 8-ish student life.
> I agree that the vast majority of Americans want those things
I had to double check that this was the same username. You seem to have disagreements with yourself. Which comment is the accurate one in your eyes? Either way, lumping half the country into one harmful ideal, then not apologizing or explicitly admitting you were initially wrong to do this or actually believing it, is not ok.
It's a claim that half the country holds inconsistent beliefs - wanting things for themselves which entail people helping each other, but being ideologically opposed to the mechanism.
You may disagree, or consider it exaggeration, but it doesn't seem to be incoherent as a claim.
He is extremely clear in his language about Social Security.
"As Speaker of the House, one of my top priorities is to preserve the Social Security safety net and make sure the program remains solvent for future generations."
The way I see it they can either cut entitlements and piss off their retired voters or they can make the young pay more and piss off their working base.
> The us has done a terrible job helping workers find new employment when their old factory or similar manufacturing jobs were lost to another country. I can't see that these tariffs can ever bring back many factory jobs to the us. We need a strategy to find new jobs and industries. The current plan is just not going to accomplish much of anything.
....and similar opinions identify a problem, but this manner of thinking where people say we'll "just" find new jobs (it worked out in the past few hundred years, therefore it is guaranteed to continue working indefinitely) is irresponsible, as is pointing out the simplistic isolated fact that "it's more efficient" to offshore jobs. Thoughtful, responsible leadership listens to all opinions, and considers all consequences, before rushing headfirst into incredibly transformative change in an extremely (on a relative basis) short period of time.
Indeed, many things are getting so much better for millions of people around the world. But if one takes a calm, unbiased look under the covers, some potentially very serious cracks are starting to appear economically and socially. I'm not a huge student of history, but I know enough that sometimes seemingly good and stable systems can destabilize very quickly.
There are a great many Republican voters who support social safety nets and yet continue voting for the party that is ideologically opposed to them. Continuing to pretend this doesn't happen, as you propose, cannot fix the problem.
(Note: My comment is in response to your comment about the parties. I cannot and will not defend GP's comment as applying to "half the country," as I think this is overbroad.)
The article could be interpreted thus: Extensive international trade between the us and china will have a good tampering effect on trade war between the two countries.
Chinese building of military bases in the south china sea against the wishes of your neighbors and and asserting your power won't help anyone to trust china
The long term plan of US strategic planners is to keep China bottled up behind their coastal waters with the help of Taiwan, Korea, Japan, and other allies and neutral parties who want to avoid Chinese hegemony. As a distant hegemon, the US is much preferred. On the other hand, China wants to realize the Greater Asian Co-Prosperity Sphere envisioned by pre-WWII imperial Japan, but with China as the head and local hegemon.
That's obviously not a great situation. Yet we, as in American companies, vastly incentivize such systems by shipping trillions of dollars worth of production to China. So we pride ourselves on more humane standards, yet send trillions of dollars to the lowest common denominator on labor that's a hair's breadth above slavery? This never made any sense to me.
I think free trade is a great idea when nations are comparably developed with comparable values. But when you have asymmetric value systems, you just end up greatly rewarding the lowest common denominator while hurting the nations that place a greater value on labor rights.
Anyhow, glad to see the effect of these tariffs is almost certainly going to end up favoring American interests, and perhaps even the Chinese people as well if I can be allowed a bit of optimism.
That's because American capitalists _don't_ value human and workers rights. And to a large degree, the American labor movement doesn't either - as long as it can escape the oppression of the American capitalists at home and have cheap consumer goods as a result of the export of capital to poorer countries.
The only ways to alleviate this within the capitalist system is to either decrease the mobility of capital, or increase the mobility of labor (i.e. immigration). Unfortunately, neither of these are in the immediate interests of the American working class.
I used to believe this until I read up on how prisoners in the US basically work like indentured servants for pennies.
There's a few news articles and occasional "anger" at the situation, but I read about it 15+ years ago and nothing has changed.
It's not like the average Chinese person is against human and worker rights. If you talk to them, of course they will say they value it.
It's just those in power don't care. And those that do care, don't have the power to change anything.
However having an an alternative option is almost always better than not having that option. This problem may be best solved by actually making it easier for companies to participate in prisoner work-release programs, thereby increasing competition and driving up prisoner wages.
First regarding wages. I think Foxconn is around $2.50/hr. The suicide rate is actually lower than the national average I think, they are just the size of a small city so it's likely to happen (from mental illness). The nets seem to be them fighting bad publicity in a tone-deaf way that also generates bad publicity (and hopefully saves some people too).
Of course, Foxconn is famous and gets more scrutiny. I'm sure other factories in China are worse. But, these people are probably not quitting their high-paying jobs to work in a factory. If they lose these jobs, they will probably not be better off! As the economy has been developing, wages have been going up in China, and more factory jobs have been moving to Bangladesh, Vietnam etc. But this has been due to economic development in China, not a trade war.
I've only been talking about if it hurts the Chinese factory worker so far. But let's look at America.
The Chinese factory worker is not literally being payed in dollars that are leaving the country. He is payed in RMB. When a dollar 'leaves' the US, someone is trading it for RMB. Now someone else owns the RMB and someone else owns the dollar. But the dollar generally stays in the US.
So why do we have a deficit with China? It depends on what happens to that dollar that stays in the US. If they (overall) spend it on goods and we spend it on goods, it would be in balance. If they spend it on accumulating a big US bond balance and we spend it on goods, that is the trade deficit.
Now, this is similar to how banks work. When you put your money in the bank, it doesn't disappear, it is spent again by someone borrowing it. And when you buy a bond, the company or government can invest that money how it likes.
The important thing is that China does not necessarily 'win' by doing this. US bonds pay very little, China might lose money overall. And for a while now their government has been doing the opposite (selling US dollars in order to keep the currency up).
On a side note, most of the 'China' deficit is actually from other countries in Asia and just passing through China. For example, for an iPhone, the screen and CPU are much more valuable than assembling it, and those pieces are coming from Korea, Japan etc. It ships from China but most of it is not "made in china". And of course, most of the money goes to an American company.
Hopefully I've at least managed to convince you that it's complicated.
The good news is it doesn't seem to be a 'race to the bottom', at least for countries with separate currencies. In theory, if China allows strip mining and has an advantage there, that will make their currency more expensive and give their engineers a disadvantage.
Edit:
To be clear, I'd like to see human rights improve in China (and many other places). I'm just not sure trade is what is stopping that, it seems like if Foxconn shuts down the employees will just take lower-paying jobs under worse conditions and they'll open a factory in Vietnam or automate it.
One last note about jobs in the US: I don't think economists view there being a fixed number of jobs - if there is more unemployment, the government can (via fiscal or monetary policy) step on the gas more without generating inflation. Of course, there is the problem that the jobs that are created may not be in the same location or need the same skills (and the US shares a currency, so there aren't the same self-balancing factors). Then that ties in to housing policy in the cities where jobs are being created, education etc. But these are things we can improve (although we probably won't).
It is "a not a secret secret" that a lot of party higher ups covertly own big parts of Chinese industry, including export oriented ones.
The squabble is about them being caught in the crossfire. Their message: "make peace with USA for as long as we make money." Now the talk is over them being thrown under the train. Naturally, they are frustrated by that.
I want to remember that Xi Jingping himself came to power on the promise of "making party membership great again" and rode the wave of anger of minor and midtier party bureaucrats over them being sidelined during Jiang and Hu's eras. But now, he himself is busy throwing its own "powerbase" under the train.
The US and others had looked the other way on China’s mercantilist actions in the past on a strategic gamble that China would slowly evolve into a more democratic state, with open markets, freedoms and rule of the law. This strategy had worked out well with South Korea and Taiwan as they made their transitions from poor dictatorships to wealthy democracies (and peaceful US allies).
During the reign of Xi’s predecessors this did seem to be a possibility but Xi’s policies and perhaps most importantly his ascension to President for Life ended any illusion that China would make this sort of evolution.
The Made in China 2025 program for example explicitly codifies what many had long assumed - that China is directly targeting the most advanced foreign industries with a state backed industrial policy.
With China moving away from even playing lip service to liberalization and now directly threatening US/European interests with Made in China 2025 and other initiatives, there is no longer any reason for the US to play nice with China.
Frankly if China had simply continued quietly moving forward as they had under Hu and made perhaps some nominal reforms or concessions they probably could’ve continued their plans unabated.
If I'm not mistaken, both these countries became wealthy during the dictatorship period. It was only after the stability and wealth that they become democracies.
Taiwan's first democratic vote was in 1996 and South Korea's first public election was in 1987.
One important difference is that both Taiwan and South Korea have been continuously dependent on US military protection from WWII until now.
It may look like that to us now, but these things have a way of unraveling themselves faster than we expect. Xi is 65 and it's unlikely he'll try to hold on to power for more than the next 15 years. China's GDP/capita is currently right around where SK and Taiwan's were when they switched to democracy. And SK, Taiwan, and Japan all have tried, in many ways succeeding, to have their own advanced industries - it didn't spell the end of the world when they did so.
Dictatorships often crumble suddenly, and China is still on the approach of the trajectory that SK and Taiwan followed. For that reason I think it would be silly to write off China just yet.
The similarity in outlook with Western business interests in that respect is striking, and much obscured by the lack of Chinese democracy and the resulting difficulty in news-gathering.
> Xi is apparently painted by US officials as an elitist ‘who believes that the offspring of Maoist revolutionaries are the rightful rulers of China.’
> On the question of human rights, the cables apparently have little to say on Xi’s views, but they do note that his father was critical of the crackdown on the Tiananmen Square protesters and also that the Dalai Lama apparently had ‘great affection’ for Xi’s father.
> There’s also mention of Xi’s now notorious (and not very diplomatic) outburst during his trip to Mexico a couple of years ago, when he complained to some overseas Chinese that: ‘There are some well-fed foreigners with nothing to do, who point to China and make unnecessary accusations.’
https://www.scmp.com/week-asia/opinion/article/2142568/us-ch...
> A prominent and influential academic whose views have found favor in some party quarters has also come under attack for his strident views on Chinese power.
> Wang, who was the architect of the “China Dream”, Xi’s vision for China to become a strong and prosperous nation, has been taken to task by the Chinese leader for crafting an excessively nationalistic image for the country, which has only provoked the United States, the sources said.
> “He’s in trouble for mishandling the propaganda and hyping up China too much,” said one of the sources, who has ties to China’s leadership and propaganda system.
Wang Huning is a noted neo-authoritarian ideologue and a member of China's most powerful leadership body, the Politburo Standing Committee. Understanding his views gives a lot of insight into the Chinese government's current outlook:
http://www.judeblanchette.com/blog/2017/10/20/wang-hunings-n...
https://www.nytimes.com/2017/11/13/world/asia/china-xi-jinpi...
He got great luck that his scholarly postulates happened to align with prevailing winds during Jiang's era. From then and on, he was just an obscure speechwriter and unofficial chief of propaganda, with some "strategy advisor" cred.
[1] really it would make more sense to write Chinese names in English in a way that reflects that they are three separate characters, e.g. Wang Hu Ning, but for whatever reason that isn't done.
http://chinaheritage.net/journal/imminent-fears-immediate-ho...
That really should worry people more than it seems to.
Most of the time, when unsustainable economies collapse, they get replaced by something else. Collapse a few times and eventually you get something sustainable, if only through survivorship bias.
"But China’s continental economy of 1.4 billion people could achieve almost all possible economies of scale while still maintaining intense internal competition; in principle, India could, too. The United States, with 300-plus million people, would suffer only slightly if it exported and imported little beyond its borders, and the same is true for the European Union’s single market of 520 million.
Beyond some point, the potential benefits of wider trade between equally rich countries inevitably decline. If there was less trade among the continental-scale economies of China, the US, and Europe in 2050 than there is today, the direct impact on living standards would be small." [1]
In addition, China's AI research is already the 2nd most advanced in the world [2]. They are trading heavily with the west in order to grow faster, but they would still be growing without trading.
[1] https://www.project-syndicate.org/commentary/protectionism-c...
[2] http://csrankings.org/#/fromyear/2015/toyear/2017/index?ai&v...
Their system is almost the exact opposite of capitalistic in fact. It's a mercantalist, hyper-nationalist, hyper-protectionist, quasi-fascist economic system, with de facto state control of all businesses, lives and property.
You can't have the state controlling and owning all your major industries, and claim that it's primarily capitalist.
Fascism typically presents a fake veneer of private property and Communism doesn't bother with the veneer. China is ok with pretending you own a business or a condo, until or unless they decide your ownership is no longer in their strategic interest or you upset the wrong powerful member of the party. Thus their economic system is more like a traditional fascist one, as opposed to a communist approach that doesn't pretend you have a right to property at all.
They have few property rights protections and the ones they supposedly have, are not real (which gets demonstrated constantly). It's almost entirely illegal to own farm land, and farming is entirely state controlled. The banking system is almost entirely owned by the state, the rest is aggressively controlled by it. Your property can be taken from you at any time by the central government, for any reason it decides to invent; you will not get it back, and you will not win in court. You have no freedom of speech / press / expression, which is a critical requirement for a market economy; without those things, you cannot properly argue in the realm of ideas, which is needed to maximize all forms of research, innovation, trade and economic action (without it, you're handicapping your potential dramatically, which is going to inherently restrict China's ability to innovate). The economy is overflowing with operate-by-bribe requirements, you can't do anything economically in China without bribing people (at the beginning, during, and or throughout); that's a top to bottom, systemtic failure of property rights and judicial + political integrity. You can't pretend you have a capitalist system when your competitors can trivially destroy you by using the state (and no, pointing out that this happens occasionally in market systems in the West, is not a proper rebuttal; it's the difference between a system that operates routinely that way, versus one where that's considered a crime or scandal).
Xi's crackdowns the last few years perfectly illuminate that no rights in China are solid. They can be removed at any time and for any reason. There can be no functioning market economic system in that type of atmosphere. You can't be at all confident that your property rights will exist tomorrow or 20 years from now, which means you can't really make confident long-term business plans, you can only shrug and keep going regardless, hoping some powerful person doesn't randomly destroy you. This is why Chinese capital is so desperate to flee the nation (so desperate that China had to almost entirely lock it down, so you can't get your wealth out of China any longer; that's a hostage situation, not a capitalist system).
What China has is economic activity on a tight leash. They gave a lot more slack to the leash thanks to Deng, and Xi has pulled in the leash a lot.
This seems like an odd thing to say.
China produces about 1/3 of the amount of oil Saudi Arabia does. So it's not the top oil producer in the world, but it is a major one.
And Intel's Fab 68, which produces 3DXPoint, is in China. Then again, I'm not sure how state-of-the-art electronics can be considered a "resource".
Are they done fully reverse engineering it yet, and have they in the process learned everything they know to build the next generation?
Not that they necessarily need to though, as the parent above observes, many large economies could largely cease international trade and after a period of adjustment, get along just fine on a historical standard of living basis. Of course, this would come with its own new problems, but if everyone started accepting reality maybe societies could start having some more productive evidence-based discussions on how to best get along on planet earth.
In any case, less dependence on oil import is a major reason they push EVs and renewable energy very hard.
Trump seems to like the pomp of a 'win'... real or imagined.
I think it will come down to how quickly things escalate and if Trump runs or wins in 2020. It's possible the Chinese will hold out until then and adjust accordingly... I think the stakes are high on both sides. Thus far China has had virtually no economic push back to the transfer of jobs and wealth from the US. If the Chinese can break through, I doubt anything will stop China's accent. Likewise, if Trump doesn't persist it's possible he'll lose his voter base and it's unlikely that any other administration will have the stomach to take on China.
I think it's possible that if a few other things go Trump's way (North Korean, Iran, the wall) he'll have enough voter support for a second term. I don't see a blue wave forming if that happens, nor do I see a large pool of credible Democratic Party presidential candidates emerging no matter how uncouth Trump's rhetoric. A perfect example is Ocasio-Cortez and her socialist policies who I don't see appealing to a large enough voter base.
Where it will become the far-left vs the far-right. And honestly, the US "far-left" isn't really that extreme compared to some European parties.
1. https://medium.com/incerto/the-most-intolerant-wins-the-dict...
They can't prevent it altogether. I don't speak Chinese, but my understanding it that it's a punner's paradise, and online political discussion in China occurs using a dense and ever-changing system of slang and puns.
https://en.wikipedia.org/wiki/Homophonic_puns_in_Mandarin_Ch...:
> Xiǎo Píngzi - Students participating in the pro-democracy movement in Beijing's Tiananmen Square in 1989 smashed little bottles as a means of protesting Deng Xiaoping's handling of the movement. Deng's given name, Xiaoping (小平) sounds a lot like "Little Bottle" (小瓶子, xiǎo píngzi),
https://chinadigitaltimes.net/space/Grass-mud_horse
If you'd review https://news.ycombinator.com/newsguidelines.html and follow the rules when posting here, we'd appreciate it.
Trump’s trade war is enough I think to set an economic reckoning in motion. However, it also gives the leadership a nice scapegoat if they know they can’t avoid it. That might not be good enough, however.