It is not yet clear what havoc President-Elect Trump will or will not wreak on the US economy, society, and foreign relations.
Liberal internationalist self-esteem apparently remains intact despite the awkwardness of having to explain to authoritarian nationalist regimes that they lectured on their moral, political, and economic shortcomings for decades why the United States itself elected an authoritarian nationalist.
The narrative that Trump, who garnered about 2 million fewer votes than his Democratic rival Hillary Clinton, won thanks only to the quirks of the Electoral College and the idiocy of 57 million deluded voters, has quickly taken hold and will console and encourage liberal internationalists until the next election.
One thing, however, that has taken a quick and immediate hit is the idea that the United States was the reliable linchpin of the liberal internationalist order, one that not only practiced and promoted the norms of globalization but also defined, promulgated, and enforced them.
Now, the American Atlas has stumbled, alarming the world with the spectacle of its inattention and apparent incapacity. Xi Jinping has offered to carry at least the economic share of the burden. Is China ready?
With Trump’s announcement of US withdrawal from the TPP as part of his 100-days agenda—one of the few campaign promises he can easily honor—the United States has abdicated its position as leader of an Asian-Pacific trade bloc that would exclude the PRC and position the United States and Japan as a preferred focus of regional investment and trade.
The lofty ambitions of the TPP—and its hopes of bucking a regional trend towardeconomic integration with the PRC—seemed unsustainable to me. Even as the TPP chugged along, Asian nations conducted discussions on the PRC-sponsored RCEP (Regional Comprehensive Economic Partnership) as well as the TPP, to keep a foot in both camps.
Perhaps a welter of bilateral agreements, or a “TPP-lite” of like-minded Asian nations led by Japan, will garner the tangible economic gains the TPP promised to secure. But economics aside, the United States is paying a hefty geopolitical price as Asia stands revealed as a sideshow in Trump’s America.
The PRC is gleefully capitalizing on US retrenchment to present itself not only as the lodestone of Asian economic integration—a pretty plausible claim—but also as champion and guardian of the global free-trade order against protectionism—a considerably harder sell given the PRC restrictions on capital flows and investment, its obsession with cultivating and protecting national champions, and its selective and imperfect legal system.
The PRC’s claim to embody the ideals of globalization are about as dubious as the now-fading US claims to occupy a leading position in the Asian economic order. It is not unreasonable to assume that some Chinese misstep will allow the PRC’s interlocutors to push back against Chinese overreach—and perhaps permit US liberal internationalists to exact a measure of revenge.
Unexpected shocks tend to shake loose interesting responses, one of which was an interview that economist Paul Krugman, a vociferous pro-Clinton partisan and champion of liberal internationalism, gave to Voice of America. His bitterness at the US electoral outcome and the repudiation of his agenda for Asia were reflected in some dark China-related thoughts.
Per VOA:
A number of analysts have argued, and human rights and democracy advocates hope, that an economic downturn in China could bring about social and political change that constitutes regime change — even if that regime change is engineered by the current government or members of the current government. Krugman said he thought many outcomes were possible, including the Beijing government turning again to violent means to crack down on protest and dissent.
The core assessment here seems to be Shambaughism 2.0. David Shambaugh, an analyst of contemporary China who is very influential in the Beltway and US medialand, had originally opined that economic development in the PRC would result in a more liberal, US-friendly government in Beijing—the so-called “responsible stakeholder.” When this expectation was disappointed, he concluded that the PRC regime, due its illiberal and authoritarian character, was doomed to collapse. Indeed, the collapse—the “crack-up” in Shambaugh’s words—was imminent.
I suspect that Shambaugh’s analysis became the foundation of US China policy in the age of the pivot, and informed a posture, both for US national policy and its dealings with Asian allies, that China was going to fall on its behind and go boom. Therefore, the key mission was to quarantine the PRC, economically and militarily, to the greatest extent feasible, and set up parallel trade, financial, and security structures that would contain the damage from a PRC collapse and provide place for a chastened and submissive China to rehabilitate itself as a newly compliant member of the “liberal international order.”
The fact that “human rights and democracy advocates,” many of whom have close and sympathetic ties to the United States (and for that matter, VOA) had integrated the “PRC collapse” scenario into their strategies is perhaps another indication of the influence of this theory in US China policy.
Now, rather ironically, it’s the US Asian order, rather than the PRC, that has fallen on its behind and gone boom.
Or as Woeser, a Tibetan rights activist, put it: “Trump symbolizes the collapse of civilization.”
In recent months Krugman has been bullish on a China collapse with the happy optimism that the consequences of the CCP’s economic misdeeds would be borne primarily by China and not the world economy.
In Krugman’s view today, apparently, the PRC’s still going to blow a la Shambaugh, but under Trump America’s not going to be there to pick up the pieces i.e. coordinate a global response to mitigate the impact of a sag in Chinese demand, per his interview with VOA:
Krugman says it is not China’s economic growth and dominance in the world economy that worries him. Rather, it is the likelihood of a coming economic downturn in China, and its enormous impact on the global economy, that concerns him.
…
The biggest problem, he said, is what China will do in the event of an economic collapse, and what problems that would pose for the rest of the world.
Asked whether the international community would come to China’s rescue in a manner similar to the bank bailout program the U.S. government launched following the financial crisis of 2007-2008, Krugman shook his head: “No, even with the best will in the world, China is just too big — not too big to fail, but too big to save.”
He quickly added: “Who’s going to do this? The Trump administration in America? The European Union, which is busy tearing itself apart? No, it’s not going to be a global rescue.”
Everything would have worked perfectly, if not for those darned nationalists, in other words.
It might be worth pointing out that PRC’s massive state-mandated stimulus program, and not the US government throwing mountains of cash at overjoyed bankers, is what probably kept the world out of recession in 2008.
But in Krugmanland, I get the feeling a China/world economic crisis, though bad for, you know, China and the world, might have the salutary collateral result of awakening the masses to the error of their ways and help put the liberal internationalists back in the saddle.
It should be stipulated that the PRC today is in a pretty unhappy place economically with exploding corporate debt and money supply, and declining returns on investment as the PRC tries to keep the wheels on until the global economy rebounds and domestic reforms to local governance and administration of state-owned enterprises somehow take hold. If U.S. interest rates rise, flight capital will presumably start trotting toward the door, leaving the CCP with the unpleasant options of either digging into its forex war chest to defend the RMB, or letting it float and undercutting the PRC’s claim to possess a strong, stable currency ready for international prime time.
Xi Jinping can only hope that Paul Krugman is as wrong about China as he was about the US election—i.e. spectacularly—and the PRC can draw on reserves of political, institutional, and economic resilience as invisible to the liberal internationalists as Trump’s electoral strength inside the US.
I am not sure american media land is correct,they used to be pally pally with dictators of many countries to promote american interest…under trump presidency they don’t want to look like hypocrites saying this dictator is better than the other dictator.Who is the biggest purchaser of american weapons …..it will be american friendly dictator who got the support from CNN,VOA,USA Today,BBC,NY times,Guardian & Washington post…who is the biggest purchaser of weapons of China or Russia it will be democratic countries….so at some point of time this crooked system had to collopse & the american people voted for that change.
While RCEP & all will be useful for china…however people have to benefit from chinese innovation in rest of asia….so if they launch a project to moon then new industries will take shape like electronics,tooling,communication,machining,material science,medical science,energy science like solar batteries,internet science etc etc.So chinese & russians should focus on commercial application along with weapon sciences so this cold war with america they can crush the neo con world.
Hilary Clinton’s "mandate" is entirely from California. California alone voted 3.7M+ times more for Clinton than Trump. The election was of 5% of the United States by area vs. the rest, or put another way: large urban cities plus heavily government dependent areas vs. everyone else.
Lastly, the 2M+ margin – given the present results are showing a tad over 1M – seems like the same sort of fiction which led to mass MSM, pundit, Hollywood and pollster fails.
The CCP will handle the Chinese economy just fine without Krugman´s advice. Krugman was right on one issue and that was the housing crisis in the USA that led to the financial meltdown in 2008. I read his columns religiously from 2000 right until the crash. I even have his book of columns covering that period. Since then he has not been right on a single thing. One major thing he was wrong about was his absolute certainty that Hillary Clinton would win the election. Another thing he is dead wrong about is that he does not understand that China does not have a dysfunctioning government like the US has. The Chinese government works in unity for the betterment of China. The US government is dedicated to the enrichment of a few families, the 1/10 th of 1%, nothing more. The only thing the government of the USA can agree on is that the wealth of the nation should reside in the offshore bank accounts, safe from the taxman, of that select few families and oligarchs. Oh and throwing shiploads of money into the MIC in the hopes of retaining world military domination.
If Krugman wants to fix an economy why not look closer to home and work on the American economy. The American economy has been a basket case since the early ninteen nineties. First Dr. Krugman , in other words heal thyself before looking so far afield, and predicting the collapse of the Chinese economy which is going gangbusters as compared to the extremely feeble American economy. One small note. The Chinese system of government and the state run economy has raise some 500 millions of Chinese out of poverty and into the middle class. Compare that to the USA Turbo Capitalist economy that has killed the middle class and forced a couple of hundred million people into poverty. ( The main reason for Trumps election to the Presidency) I have heard predictions of the Chinese economic collapse for the last twenty years. Instead of that we see a dynamic country, building infrastructure that the USA can´t even dream of. A country who´s military is gaining on that of the USA at a gallop. A country whos citizens are better off now than at any time in their history. Compare that to the USA which is stumbling around like a bird with a broken wing.
I am not so pessimistic about America and the West in general. Economists hop, P. Krugman included, from one mistake to another and hope that this time they will be right. So called liberals made so many mistakes not only regarding D. Trump election, but also about Brexit and many other elections in Europe and elsewhere. Their mistake show how far from reality they mast be. They live in some cuckoo and lalala land spiced with Prozac or other mass-control psychobabble garbage. Trumps come as the result of idiotic left and neoliberal/neocon psychobabble, but people learn, sometimes longer or shorter and remember. The D. Trump high will probably last shorter than through 2017 and those who voted for him will see that they were taken for sackers. We will see about that in 2020 primaries and election. People learn by making mistakes and this is the only way to learn: if you don’t make mistakes you will never learn. So, for those hyper active prophesizing the demise of the US and the West I would say: sit tight and breath through your nose and stay calm because you cold be unpleasantly surprised.
I would also like to add that Ayn Rand must be biting her overgrown nailes in her grave that the Atlas not only stumbled but is on collision course with reality.
AT is now a joke,