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Comment by underseacables | Hacker News Reader

You make an excellent point: What WOULD happen if we stopped buying oil from Saudi Arabia, and slapped an 80% tariff on all Chinese made goods? Would these regimes change their ways, or begin a major pivot away from America? I’ve always been fascinated by the friendship between China and the Middle East. No pesky human rights to worry about, just the flow of oil and money is opposite directions.

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> Would these regimes change their ways, or begin a major pivot away from America?

Pivot to whom? China needs a large population of consumers. Besides the US they have their choice of countries full of young poor people, countries full of thrifty old people, and countries with consumers that are too small. They could drop the US if they’re willing to have a massive financial contraction. The US holds the ultimate trump card too, we need them less and less, and we can remove all shipping security guarantees for Chinese goods and watch their international trade collapse. It’s hard to fund influence campaigns when your economic house of cards crumbles around you.

The China envisioned in Made in China 2025 already has access to a large population of consumers: the Chinese population.

And the whole point of the Belt and Road initiative and their aircraft carrier program is to remove dependence on the US backed shipping security apparatus.

> The China envisioned in Made in China 2025 already has access to a large population of consumers: the Chinese population.

Not for long. The Chinese population is aging incredibly rapidly. Younger Chinese who could contribute to a stable consumer base will instead be crushed attempting to support the accelerating number in older generations retiring.

Older Chinese are still consumers, they'll bog down younger Chinese no more than US consumers will. It's not like US consumers are providing anything other than capital and a market as it stands. And a transition to higher end products and associated manufacturing means less low end workers (and less workers overall) needed to make that happen.

> Older Chinese are still consumers, they'll bog down younger Chinese no more than US consumers will.

On average people consume less and save more as they age. After retirement saving dries up and consumption takes a dive. After people turn 80 their activity falls off a cliff and they hardly spend anything. Their major costs are healthcare related but that’s a financial burden not a consumption boost for most societies including China.

I'm not sure that the idea that their population is aging follows the data. Their population age bubbles are younger than the US's. Their two bubbles are what are our older gen x and middle of the road millennials.

https://www.statista.com/statistics/1101677/population-distr...

Additionally, they have a different retirement system that doesn't dry up for individuals the same way. If it's important for China that older citizens continue being consumers, they'll make that happen.

Also, they have a large rural population that is unused and not very productive. Using that population can more than make up for aging workers.

Wouldn't companies like Boeing lose out from Chinese market if US does that? Many US companies don't want to lose out the Chinese market, also US also exports stuff like agriculture produce to China.

There are countless ways for those countries to retaliate: war, terrorism, cyber attacks, disinformation campaigns, corporate or political espionage, releasing state secrets, stoking geopolitical tensions, creating anti-US coalitions, etc.

Not saying that punitive actions can’t be effective, but the US is still vulnerable to some forms of retaliation, especially if get initial action is as sudden and dramatic as the ones you describe.

> war, terrorism, cyber attacks, disinformation campaigns, corporate or political espionage, releasing state secrets, stoking geopolitical tensions, creating anti-US coalitions, etc.

You just listed every thing what The New Axis has done in the previous decade.

Are you implying that US worries about human rights when Saudi Arabia is the ally?

Saudi oil: nothing would happen. It’s a commodity. They’d sell their oil at market price minus epsilon. Regime would be fine.

China tariff: they’d devalue the yuan. They already have capital controls that keep money from leaving the country. Regime would be fine.

At the end of the day, might as well trade with them for our own benefit.

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