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Comment by pjc50 | Hacker News Reader

This is the thing that economists have been pointing out for decades: at the country scale, allowing free trade provides productivity benefits to both sides, and restricting it affects both sides. You can't have a trade war without domestic casualties.

What's crazier is that the strategy of economically integrating China with the world was a Rebublican economic-liberal one to start with. The plan was to make the rest of the world look like America and be trading partners, providing markets for American companies. Someone forgot the last bit.

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Well sure American and other companies have tried to gain market share in China, but China has effectively stifled a lot of foreign competitors from entering. So it's not very symmetric free trade with China, therefore giving some justification for this silly trade war.

It's understandable though from China's perspective, that they aren't willing to give up important strategic sectors like social media or internet search to some US corporation. Especially so with their intention of being a rivaling global superpower to US one day. But it seems the economical aspect of increasing the revenues of Chinese companies has been as important or even more, which makes this practise more or less just cheating. Not that others are playing always fair, but China seems to be doing it considerably more than the others.

Just as an anecdote, AWS offers its Chinese region as a separately owned Chinese company, completely separate from other AWS regions. To me it speaks volumes how restrictive and hostile the Chinese market is to foreign companies, can you imagine having to do the same for each country? It would be a nightmare for global economy. https://techcrunch.com/2017/11/13/aws-exits-china/

> To me it speaks volumes how restrictive and hostile the Chinese market is to foreign companies, can you imagine having to do the same for each country?

China is the most populated country on earth and an emerging superpower. They have every right to consider themselves exceptional, just the way the US considers itself exceptional.

To posit another angle: most international nations are smaller markets than the US (individually) so it doesn't make sense to customize things for every nation, which would be a goddamn nightmare. But this is a country of over 1.3 Billion people. China would need to be an exception anyway, and AWS having a subsidiary in China doesn't illustrate the unfairness of China's practices as much as the reality of how important that market really is.

> international nations

What's an international nation?

You are just rationalizing China’s purposeful one way trade barriers.

Explain to me how billions of dollars in subsidies for agriculture are not one way trade barriers.

If all China was doing was investing in it's own industries and sponsoring them, it would be very different from it's current policy of actually locking out competitors who dont have a local presence and such. There is a steep difference between positive economic assistance and negative legal barriers.

Without a local presence, how can the business be hold responsible if there's misdeed? US senators may even want to deny Huawei compensation for patent infringement in the US.

It definitely is. But the magnitude is much different. China makes it very hard to do business in a wide spectrum of industries. That's their right. But it's not free trade in any sense.

> China is the most populated country on earth and an emerging superpower. They have every right to consider themselves exceptional, just the way the US considers itself exceptional.

Being highly populated and powerful is not really an exception in history. The USA got (? gets) its sense of exceptionalism from their innovative form of government/constitution that provided more freedoms than any government in history. The roots are based in a sense morality.

And the right way to out pressure on China would be to get a bunch of countries to update WTO and GATT to include these kinds of services. Instead Trump went it alone after alienating everyone else. How is that supposed to work?

The US would never allow Chinese companies to operate similar services in the US to any scale for national security reasons. So it is better to keep these issues as talking points than actually resolving them.

> Well sure American and other companies have tried to gain market share in China, but China has effectively stifled a lot of foreign competitors from entering.

"National Interest" is the key phrase, and the US has similar protective barriers in key industries. Food security is one such area that the US protects, and to that end, it provides a lot of agricultural subsidies preventing a lot of foreign farmers from entering the American market. The pearl-clutching when China does the same in their national interest is lacking in self-awareness.

The US agricultural subsidies have interesting first- and second-order effects (cheap corn syrup, obesity and corporate farm consolidation) - but I digress.

As always, context matters. The shear scope and scale of China's protectionism, coupled with their flagrant disregard of international norms and aggressive, state sponsored campaign of industrial espionage is simply breathtaking. China has been waging a trade war for 20 years, it's time for everyone else to respond.

There are stacks of US companies that have made a significant entry into China:

  * Coke
  * Starbucks (the largest one in the world is currently in Shanghai)
  * KFC
  * McDonalds
  * Pizza Hut
  * Domino's Pizza
  * US movies regularly make as much money in China as they do in the US.
  * General Motors sells more cars in China than in the US.

Have they put in place limits that they are legally allowed to put in place based in WTO rules? Yes.

Part of the reason that AWS has two separate companies is because China, the US & the EU have laws like the CLOUD Act, GDPR and CDPR. It is easier to keep all companies seperate or at least siloed which is what most large companies do.

A wise man once said that all of the business contracts in the world don’t matter if the two sides don’t trust each other. So just claiming to stay within the rules & limits is not enough. Good faith goes a long way.

American companies have done REALLY well for themselves both post-war and in the globalization age. The cheer amount of capital and military elbow grease assured their dominance no matter what.

Perhaps most America's problems are more internal than external and when the game is rigged in favor of one country we don't see them complaining. Maybe everyone is the same.

Just look like America is not enough. In China, the government logic is "Hey, our labor is cheap and market is big, so it's fair to give us your secrets and accept our management", which is not exactly what Americans was planing for, even on the surface it may look very similar at start.

It's just like two people marry together for different intentions, just too hard to yield something good out of it to begin with.

i think from china's perspective "providing markets for American companies" is a form of colonialism which they try to mitigate by forcing IP transfer

Colonialism tends to imply a shift of influence. A government bending to the will of foreign companies to keep their power. This is more foreign companies bending to the will of the Chinese government so they can keep their profits.

It's not like China respects IP anyways.

Labor markets for American companies. Then subcontractor markets for American companies.

There was not free trade before though. We allowed China access to our markets, they didnt return the gesture. So econmists are wrong. You can have a perfectly unfree market and still posper, all you have to do is to convince other other nations to ignore the obvious mafia like behavior.

This is both a democrats and republican making. Trump is right about this war even if it will cost some, in the long run we are better of.

"We allowed China access to our markets, they didnt return the gesture."

I would argue that China opened access more than the US did. During the Mao era, it was basically impossible for US goods to enter the Chinese market. The converse was not true: Chinese goods could enter the US market. So during liberalization the Chinese opened up more than the US did simply because they had so much further to go.

While true, that is incredibly irrelevant to any current evaluation of fairness. It seems to reward an unreasonable start state for no reason.

If person A is 3 steps away from a goal and person B is 6 steps away and they want to negotiate to get to the goal together, the fair negotiation is that person A takes one step for every 2 steps person B takes. If person A says "I'll walk as fast as you once you catch up to me", person B has no assurance person A is arguing in good faith or ever has any intention of actually taking those steps.

Not sure what you mean.

The situation defacto is that china and the chinese has free access to our markets while we don't have free access to theirs.

The situation is that defacto china is benefitting from their developing nation status outcompeting western companies just on shipping prices.

Very few US products enter the chinese market plus those who do are forced to give over their IP.

American companies have access to the Chinese market. If you go to any major Chinese city, that will be obvious to you pretty quickly. American brands are everywhere.

US companies do very well for themselves in the Chinese market. The reason for the trade imbalance is not Chinese protectionism, but rather structural issues in the United States and the Dollar's role as global reserve currency.

> American brands are everywhere.

Some American brands are everywhere....

Obviously some have been heavily restricted, most prominently internet media companies.

A lot of American brands are in China. The restrictions are about censorship of information, so they affect Google, Facebook and newspapers. You can still buy Starbucks, Levi jeans, iPhones, Ford automobiles and KFC buckets.

I.e the big companies yes those who also have much of their production done in China. Thats not the same as China being open to western companies like the west is to china. And again no IP protection with countless cases of ip theft and forced technology transfer by the mafia run chinese goverment. To claim that the structural problems are US is absurd.

> To claim that the structural problems are US is absurd.

The US has a trade deficit with almost all of its trading partners. That is a structural issue.

> no IP protection

That's a crude caricature. There is IP protection in China. If that weren't the case, American microchip designers would not be making such large licensing fees in China. As far as I understand it, as a non-expert, IP protection in China is actually fairly good for a developing country.

> Thats not the same as China being open to western companies like the west is to china.

Western brands have much greater penetration in the Chinese market than vice versa. Moreover, much of the American trade deficit with China is actually made up of Western companies doing production in China.

>The US has a trade deficit with almost all of its trading partners. That is a structural issue.

But has nothing to do with what we are talking about here.

It's not a crude caricature. IP protection in china is non existing which anyone who even done a little business in china knows very well. It's litterally one of the biggest criticisms so I am not sure where you are getting your information from, none the less it's incorrect.

Chinese don't need their brands to western markets they just need to produce for our markets. The difference is that the west doesn't hinder chinese companies to compete on our markets, china does hinder us competing on theirs.

> IP protection in china is non existing which anyone who even done a little business in china knows very well.

Rather than going back and forth with "Yes it is," "No it isn't," I'll provide some hard facts here.

China has been ramping up IP enforcement over the past five years or so. In 2014, China began establishing specialized IP courts in major cities, and over time, more and more have been created. These courts have been hearing a rapidly expanding number of cases. The number of IP disputes heard in Chinese courts has increased by 30-40% every year for the past few years. Last year, Chinese courts heard nearly 300,000 IP disputes. 10% of patent cases in China are brought by foreign companies, and they win 70% of cases.

There have been problems with the Chinese court system when it comes to IP. The penalties for IP infringement have historically been low, but they have been increasing. Evidence discovery has been difficult, but new procedures have been introduced to enable it. Foreign companies have felt that local companies are favored, but the central government has been pushing for stronger enforcement of foreign companies' rights, and the statistics show that foreign companies are now as successful as Chinese companies in their cases.

In light of all this, I think it's fair to say that the picture you're painting is crude. China is actually becoming one of the most active venues for IP litigation in the world, going just by the sheer volume of cases they handle now.

1. https://www.limegreenipnews.com/2018/09/china-ip-litigation-...

2. https://thediplomat.com/2018/01/chinas-progress-on-intellect...

3. https://www.ipwatchdog.com/2018/05/07/rapid-changes-chinese-...

4. https://www.scmp.com/news/china/politics/article/3001407/jum...

Those are not hard facts.

Progress isn't the same as a satisfactory situation. Anyone who has tried working in China knows exactly what the problem is.

If not for Trump we wouldn't even be having this discussion and China would now have more or less complete domination on large parts of western infrastructure.

I have no idea what make you think that you are making any kind of argument here. It's a known fact even by the EU that china is not giving us access to their markets and har not actually securing IP and are in fact forcing it onto chinese hands.

That's not something I am just making up it's at the heart of the conflict.

> Those are not hard facts.

What isn't a fact? Everything I wrote about the development of Chinese IP enforcement is detailed in the sources I listed at the end.

> It's a known fact even by the EU that china is not giving us access to their markets

That's not a known fact. American and European businesses not only have access to the Chinese market, but also have very significant presence there. China is the biggest market for Boeing and Airbus. It's the biggest market for General Motors and Volkswagen (and VW is the largest car brand in China), and the second largest market for Ford. I could go on and on like this. China is obviously still strongly export-dependent, but its consumer economy is growing quickly and foreign companies have a huge presence in that sector.

> and har not actually securing IP and are in fact forcing it onto chinese hands.

In my last comment, I cited to you the figures on the rapid growth in the number of IP disputes heard by Chinese courts. I told you about how specialized IP courts have been set up in major Chinese cities over the past five years, about how penalties for IP violations have been significantly increased, about how evidence discovery has been made easier, and about how effective foreign companies are in winning patent disputes in China (a 70% win rate). Those are facts.

I find that people outside China often have an image of the country that lags 10-20 years behind reality. The image you're painting would have been more accurate in 2009. In 2019, it's woefully out of date.

That you take something from an extremely poor place and make it better is not the same has having lifted it to anything close to a satsifactory level.

China has no excuse for not enforcing IP rights and no excuse for their forced technology transfer. There is no defacto improvement in China thats the reality you apparently refuse to understand.

You keep missing the point of this discussion and thus the point of the conflict with China.

China Mobile would also point out how heavily restricted Chinese telco brands are in the USA.

Sorry but this is simply wrong. Europe is well aware of this problem too and there is support for Trumps war with china far into the EU.

China doesn't protect IP exactly because of the way they operate. Why do you think they don't want to enforce IP rights in China?

What, precisely, is wrong? It is simply a fact that American brands are omnipresent in China. It's a very striking thing if you go to any big Chinese city - how many Western restaurants, hotels, clothing brands, automobile brands and technology brands are everywhere.

The idea that China doesn't protect IP is a cliché one hears in the West, but it's not accurate. Developing countries generally have much weaker IP enforcement than developed countries. But as far as developing countries go, my understanding is that China actually has pretty strong IP enforcement now. There have been massive changes to the Chinese legal and regulatory system as part of its entry into the WTO, but a country that had a GDP/capita of just hundreds of dollars a generation ago is not going to become Western Europe overnight.

You are missing the point here. Big brands are part of the problem here, they are the ones who got acces to chinese markets by offering jobs. We are talking about normal companies not just big brands that get things produced in china. I would urge you to study the subject a little more, you will be surprised how much of what you think is simply wrong.

Be concrete about what you're claiming. You've granted that big American brands have access to the Chinese market (and I'd add that their sales there are very significant and have been increasing rapidly as Chinese consumer spending has grown). Now you're claiming that somehow, "normal" American companies are being blocked from the Chinese market. What are these "normal" American companies? How, precisely, is China blocking them from doing business?

20 years ago that would have been absolutely 100% true. The damage may already have been done, however. The IP has already been given away, so China doesn't much need us, but so has the manufacturing, so we need them. I hope that's not the case, but... we'll see.

I do remember how economists were lining up to shout their party line, that protectionism doesn't work and China was only hurting themselves. For some reason I don't hear so much of that these days, now that China's investments into local companies have started paying off.

But new IP is being created. Just because the other presidents didn't act in time, doesn't mean we should continue letting China dominate by basically operating as a mafia organization while still being defined as a developing nation.

That's absolutely absurd.

China can make new IP too. Our big advantage was our head start and we blew it. I'd love to be wrong.

As for letting China continue to reap the benefits of being defined as a developing nation, yes, that's absurd, and also needed to stop 10-20 years ago.

Our big advantage is our free and open markets. It's not a question about whether we blew it the question is what are we going to do about it.

Letting China win this with their mafia-like government, where there is no rule of law only rule of the party, is simply not an option.

Right now the biggest challenge is the western politicians who hate Trump so much they don't care if they help the Chinese. Anything to get him down.

But yeah I agree that it's definitely late in the game. We can still win this though.

> Right now the biggest challenge is the western politicians who hate Trump so much they don't care if they help the Chinese. Anything to get him down.

Absolutely wrong. What do you think the TPP was meant to do?

The only thing Trump does is short term bluster and outbursts with no long term plan at all. Tariffs are short term plays. Long term strategic thinking requires creation of alliances and allies.

The fundamental difference always seems to be if you can persuade the world that your ideas and system is good, or you demand it by force. The latter is not a very effective long term strategy.

It wasn't meant to do anything but solidify chinas continued domination over western markets through our reliance on their cheap labor.

Politics isn't debate club. It doesn't work that way especially not when you are dealing with a mafia organization like Chinas ruling party.

There are still almost 50,000,000 people in China that live on less than $2 a day. The GDP per capita is roughly 3x less than the US.

20 years ago there was close to 700,000,000 people living on less than $2 a day and there was no underground subway in all of China. Do you really think this was developed?

A few cities (Beijing, Shanghai, Guangzhou & Shenzhen) are developed (~6% of the country) while the rest is still not very developed but improving.

Should it still be developing? Probably but not for much longer. How much is up for debate. Some say now. I expect it will happen sometime in the next 10 years.

Trade and competition happens with the developed parts. Our policy should reflect that.

> We allowed China access to our markets, they didnt return the gesture.

How is that so? The US people brought all those products in exchange of what exactly?

Paying Oracle to use their database software makes Oracle stronger. Paying China to use their manufacturing makes China stronger. That's the meta-game.

China strongly discouraged their citizens and companies from buying US products and making the US stronger, but the US encouraged their citizens to buy from China, making China stronger.

This worked out well for China.

Only in the last 10+ years have large quantities of Chinese people started to earn enough to be able to buy US products.

In the past, virtually none of them had enough money to buy products made in the high end (The US generally makes high quality but expensive products)

Commerce is a two way game. Paying China to use their manufacturing makes the US stronger too.

Tell that to the 4 million factory workers who lost their middle-class jobs.

That's not true. Both China and the US had WTO commitments. What is true is China had cheaper labor then the US and succeeded in attracting manufacturing.

Don’t forget the Republican and Democratic parties kinda did a flip. I’m not sure if Nixon’s 1960s Republican party was the same as it is today. It was certainly starting to head the way it is today in the 1960s.

The Republican and Democratic parties did a flip around the turn of the 20th century.

What's happened since the 1960s is more that the Republican party has been charging madly off into the far right (and, in some cases, simply into looney-land), while the Democratic party has shuffled nervously rightward after them.

You'll note that it's far from true now to say that the Republicans are doing much of anything that the Democrats would have done in the 1960s (aside from things that were prevalent across the board at that time, like racism and sexism).

I think an argument could be made that Republicans, or at least conservatives, have now become the defenders of free speech while "the left" seems not just comfortable with but intent on increasing censorship, at least certain kinds.

I will note that this isn't a complete slam dunk of an argument, I would say the left in the 60's was motivated more by the general principle of free speech, whereas I would say the right today is more motivated by self-benefit. And also I suppose it doesn't go without saying: the first amendment and the general principles of free speech / censorship are similar but distinct ideas.

Most here at HN think of the left as wanting more censorship in order to avoid hurtful speech, but that's not generally how the left thinks of it. On the left, the view is that the practice of maximizing freedom of speech by tolerating extreme speech, has the effect of reducing the freedom of expression of the non-extreme, non-powerful constituencies.

In other words, protecting freedom of expression by politely tolerating hate speech has the effect of making the targets of hate speech less free to express themselves in practice. Like a heckler's veto, the presence of hate speech dissuades minorities and the less powerful from engaging at all. It's not freedom from being offended that the left wants, it's a less corrosive public sphere that doesn't demand that the weak struggle through a painful headwind in order to be heard at all.

Having a extremism-based standard for measuring freedom of expression creates a requirement that participants tolerate the material harm of extremist expression. The left wants to shift the standard of measurement to tolerating more speakers of different kinds, rather than more subjects of varying extremism. The left still believes in maximizing freedom of expression, they just recognize that there are different metrics that may apply.

This is exactly correct, but unfortunately, because your first sentence is true, you're getting significantly downvoted.

It is an example of the paradox of tolerance: If a group believes in tolerance, absolutely, to the point that they tolerate intolerance, then over time, those who are intolerant will tend to gain power within the group and the tolerance will be eroded (except, of course, the tolerance of those intolerant beliefs that usurp them).

Absolutism of any kind is generally going to lead to problems in our imperfect, non-absolute world. Free speech maximalism is just one example of that. If we put people and their genuine needs before abstract principles, that will tend to be a better guide for how to make a society that serves everyone—and, indeed, allows the greatest freedom for the greatest number.

The argument I made was originally formulated by Andrea Dworkin, testifying to Congress about pornography, and formulating it that way--what metric are you measuring freedom by--has done a lot to expand my thinking.

Another is the saying "tolerance isn't a virtue, it's a peace treaty", which I think really cuts through the apparent dilemma you highlight.

If people put there own needs first you end up with a selfish group that doesn't serve society only themselves. People believing in an abstract idea can rally society around important causes.

More accurately, I believe it's fair to say your description is a steelmanned version of "the left's" argument. I happen to be in very high agreement with what you've said.

Some issues I see with this perspective:

- a very small percentage of people, regardless of where they fall on the political spectrum, think about these matters in anything approaching the level of complexity displayed in your comment. This thread is absolutely full of people who seem to have lost the ability to distinguish between reality itself and an extremely lazy interpretation of reality. I can appreciate the frustration that's brought them to this point, but the ability for a small percentage of people like you to skillfully articulate a steel-manned version (that may not actually be technically accurate let's not forget) of the beliefs of an emotional mob doesn't give me a lot of comfort

- not all powerful actors are behaving in a completely honest or as well thought out manner, or may believe that censorship "overreach" is strategically justifiable, from an "ends justify the means". And this may very well be a reasonable and even correct belief, at this snapshot in time, and under these particular circumstances - but what about the future? What if we get another Trump-style leader in the future exploits well-intended limits of free speech toward an undesirable end?

- by not extending any effort towards understanding the real and extremely psychologically complex motivations that are actually behind the emotional lashing out of people (that we all know very well happens with humans, that can be observed throughout history, and on this very forum), often along "racist" lines, those who propose to curtail free speech may be acting in an overly enthusiastic manner (not to mention, if people can't be bothered to even consider calming down and making a serious effort to understand what is actually going on, why should I trust they have the mental capacity to make wise decisions on something as important as free speech?)

The world is incomprehensibly complex, and getting worse at a rapid pace. I think extreme caution is warranted on any matters related to something so fundamentally important as free speech. If some of these ideas are really so bad, why can good ideas not win out in the marketplace? I have this constant feeling that there is a lack of serious effort, and that there are often not-easily-seen reasons why such an effort cannot be made (Thomas Frank, Jonathan Haidt, and Mark Blyth would be a few people worth listening to if one was interested in starting to get some depth in this perspective).

They believe in maximizing group speech in the largest diverse group as possible.

This is what happens with religion. Everyone is welcome and encouraged to believe these truths and questioning them will get you kicked out or ex-communicated or at best ignored and re-educated.

>So, sometime between the 1860s and 1936, the (Democratic) party of small government became the party of big government, and the (Republican) party of big government became rhetorically committed to curbing federal power. How did this switch happen?

>Eric Rauchway, professor of American history at the University of California, Davis, pins the transition to the turn of the 20th century, when a highly influential Democrat named William Jennings Bryan blurred party lines by emphasizing the government's role in ensuring social justice through expansions of federal power — traditionally, a Republican stance.

The article[1] goes on the state both parties started changing stances to try and win the new Western states.

[1]https://www.livescience.com/34241-democratic-republican-part...

Republicans have always been economic liberals even during Lincoln. Northern Democrats developed a heavy base of labor activists (unions), so started tending a bit left. Southern Democrats simply existed as “anything but Republicans” (the party of a much hated Lincoln), so catered to southern white supremicists.

Johnson’s push of civil rights in the 60s simply destroyed the southern democrat wing of the party, who were welcomed into the Republican Party via Nixon’s southern strategy, and the pro-union Northern Democrats became the sole power source of the remaining Democrats.

Now with Trump and his rust belt base, Republicans are losing a bit of their economic liberalism (being more against free trade).

I hear this referenced constantly but without source.

Trying to find sources on my own has turned up nothing conclusive, nor clear enough to say that a "flip" occurred in any short period.

Does anyone have decent sources for this?

> What's crazier is that the strategy of economically integrating China with the world was a Rebublican economic-liberal one to start with.

Why is that crazy? Economic-liberals in the US have mostly been Republicans historically.

I think OP meant, that it's ironic.

Yeah, but it's not ironic. Parties are fluid organizations, not internally coherent philosophies. And even if they were, people are allowed to rethink their ideas.

I know what you are trying to say, but IMO that's practically the definition of irony.

> Economic-liberals in the US have mostly been Republicans historically.

> <...> people are allowed to rethink their ideas.

Of course people can change their minds and opinions. But that's what is ironic and funny - to completely change your long time historical behaviour.

Ah I see what OP meant now. But isn't Trump's stated goal with the trade war to obtain more free trade ultimately? My understanding is that he believes a trade war with China might force its hand into adopting more liberal trading policies. If that's correct, I wouldn't say the objective has changed so much but the approach definitely has (and it's indeed not a very popular approach among economic liberals).

Trying to figure out what "Trump" wants is an exercise in futility.

The Trump administration's stated goals are to obtain concessions for some American industries. Precisely the ones that funded his rise (Coal, Steel, Agribusinesses etc.) or where most of his ardent loyalists are employed.

It makes sense. Free trades hurts the poorest/uneducated/minorities who use to support Democrates because they wanted trade barriers.

As Democrates have become more global and open to free trade they lost the poor/uneducated.

The poor/rural/uneducated are not represented in hollywood. So people forget they exist. Everyone seems to run a magazine / is a doctor/lawyer/firefighter. It creates this fake viewpoint that these other people don't exist in the numbers they do.

What's crazy is that it's not anymore, was the implication.

What is free trade though? If you think about it, it’s a form of resource and labor transfer. From poor countries to wealthy ones without reverting to colonialism.

This is a simplistic statement, but it's an important question as to who benefits from the trade and whether it's really symmetrical. A lot of 90s and 00s anti-globalisation activists discussed this.

(The canonical example of exploitative "free" trade is the banana republics, sponsored by the US for the United Fruit Company)

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