Way beyond the first midnight shot in what could possibly turn into a vicious trade war, the US-China tariff tussle must be seen in the context of the game-changing geopolitical and economic Big Picture.
The blame game, as well as all sorts of speculative scenarios on how the tariff tussle may evolve, are peripheral issues. The ultimate target of what started today is not allegedly dysfunctional “free trade”; the target is Made in China 2025, or China configured as a high-tech powerhouse on a par, or even surpassing, the US and the EU.
It’s always crucial to stress that it was Germany that actually supplied the blueprint for Made in China 2025 via its Industry 4.0 strategy.
Made in China 2025 targets 10 techno-strategic fields: information technology, including 5G networks and cybersecurity; robotics; aerospace; ocean engineering; high-speed railways; new-energy vehicles; power equipment; agricultural machinery; new materials; and biomedicine.
For Made in China 2025 to bear fruit, Beijing has already invested in five national manufacturing innovation centers and 48 provincial centers, aiming at 40 national centers by 2025. And by 2030, via a parallel strategy, China should also be established as a leader in artificial intelligence (AI).
President Xi Jinping’s Chinese Dream mantra, also billed as “the great rejuvenation of the Chinese nation”, is strictly linked not only to Made in China 2025, internally, but also, externally, to the Belt and Road Initiative (BRI), the organizing concept of Chinese foreign policy for the foreseeable future. And both Made in China 2025 and BRI are absolutely non-negotiable.
In sharp contrast, there’s no evidence a Made in USA 2025 is in the cards. The White House would rather frame the whole process as a battle against China’s “economic aggression”. The National Security Strategy frames China as the top challenger to US power. The Pentagon’s National Defense Strategy sees China as “a strategic competitor using predatory economics”.
So how did we get here?
Innovate or perish
A quick background is in order.
David Harvey, in The New Imperialism, borrows from P. Gowan’s The Global Gamble: Washington’s Bid for Global Dominance, to stress how they both see “the radical restructuring of international capitalism after 1973 as a series of gambles on the part of the United States to try to maintain it’s hegemonic position in world economic affairs against Europe, Japan and later East and Southeast Asia”.
Before the end of the millennium, Harvey was already emphasizing how Wall Street and the US Treasury was deployed as “a formidable instrument of economic statecraft to drive forward both the globalization process and the associated neoliberal domestic transformations.”
China for its part masterfully played this capitalist reorientation game – investing no holds barred in what can be described as “neoliberalism with Chinese characteristics”, and profiting to the hilt from US economic power projection via open markets and WTO membership.
Now China, at breakneck speed, is finally ready to invest in its own economic power projection. As Harvey had already noted over a decade ago, the next step for East Asia capitalism would be “away from dependency on the US market” towards “cultivation of an internal market.”
Harvey described the massive Chinese modernization program as “an internal version of a spatiotemporal fix that is equivalent to what the USA did internally in the 1950s and 1960s through suburbanization and the development of the so-called Sun Belt”. Sequentially, China would be “gradually siphoning off the surplus capital of Japan, Taiwan and South Korea and thereby diminishing the flows into the United States”. That’s already happening.
President Trump is not exactly a strategic geopolitician. The reason for these tariffs may be to force the supply chains of US corporations to become less dependent on China. But the way the global economy has been set up does not support the undoing of these supply chains – with production de-delocalized back to the US, as Trump would have it. Location, location, location also rules turbo-capitalist logic; corporations will always privilege cheaper labor and production costs, wherever they are.
Now compare it with China investing in high-tech delocalization integrated with US centers of excellence. When it comes to the top of the line innovation battle between China and the US, the strategy of the Zhongguancun Development Group (ZDG) is a fascinating case.
ZDG has established a series of innovation centers abroad. The key ZGC Innovation Center happens to be in Santa Clara, California, quite close to Stanford and the Google and Apple campuses. Then there’s a new center in Boston a stone’s throw from both Harvard and MIT.
These centers offer the complete package – from state of the art labs to, crucially, capital, via an investment fund. The matrix comes from Beijing’s government, via the city’s techno-district. And it goes without saying that ZDG fully aligns with BRI in its emphasis on expansion to “learn overseas experience of [an] innovation ecosystem”.
That, in a microcosm, is what Made in China 2025 is all about.
Half a century of trade war?
So what happens next?
Amid a tsunami of hysteria, sober analysis provided by Li Xiao, the dean of Jilin University’s school of economics, is more than welcome.
Li goes for the jugular, stressing how “China’s rise is essentially a status rise within the dollar system.” From Beijing’s point of view, change is imperative, but it will be gradual. “The goal of the yuan’s internationalization is not to replace the dollar. The dollar system is irreplaceable in the short term. Our goal for the yuan is to reduce the risk and cost under such a system.”
Li, realistically, also admits, “the conflict between two major powers could go on for at least 50 years or even longer. Everything happening today is just a curtain raiser of history.”
Implicit in the curtain raiser is that the Chinese leadership seem to interpret this first midnight salvo as the revving up of what’s described in the US National Security Strategy. The conclusion, for Beijing, is inescapable; the US is now threatening the Chinese dream.
As the Chinese dream, the “rejuvenation of the Chinese nation”, Made in China 2025, BRI, multipolarity, and China as a driver of Eurasia integration are all non-negotiables, no wonder the stage is set for major, inevitable turbulence.
China’s strategy provides more opportunities to the World while the US only wants to dominate the World at all costs…
Now even the blinds see clearly who is the evil force.
THE US. IS A HOUSE OF CARDS. WELLFARE; FOODSTAMPS; SEC 8 HOUSING[[FREE HOUSING]] MEDICAID OBAMA CARE FREE IPHONES TO WELLFARE RECIPIENTS ETC. ALL THIS IS KEEPNG THE ECONOMY GOING BUT ITS FOLDING FAST SO THIS ARTICLES TIME FRAME IS WAY OFF BASE. IF THE CHINA DEFIES THE US. IN ANY SIGNIFICANT WAY THE DANCE IS OVER IN THE U.S. DEBT BOTH GOVERNMENT AND PERSONAL IS SO HUGE ANY ONE PART OF IT COULD BRING DOWN THE HOUSE. THE STUDENT LOAN FIASCO IS SO HUGE THAT ALONE COULD DO IT!!
How did Tojo, Hitler, Stalin, and Mao do?
Different strokes for different folks. Their elites may not be a greedy and vicious like those in the West. They rather integrate other nations into their system in a coaxing manner rather than use guns and nukes.
Mike Johnson
Not as bad as Trump, I guess. At least, they got more support from their nationals.
Maybe it’s time your elite got rid of Winnie Xi Pooh and the CCP, as well as the social credit system abd the PLA,
Meesta Cross Yes like the social credit system….
Tell that to your neighbors who hate and fear you more than the US
Stalin ? Why not Mao, Hitler, Pol pot or any other mass murderer.
The trade war will end up with the U$ being devalued as USA tries desperately to regain lost markets.
By imposing tariffs on products imported from China, USA is not reducing its overall trade deficit because it will import the same products from other countries instead of from China. And since the prices of the products that it will import from other countries will be higher than from China, the trade deficit of USA will be higher, and US consumer will buy the products at higher prices. In other words, at the end of the day, USA will have a higher trade deficit and American consumers will buy the same products at higher prices.
So then all your masters’ holdings in USD (Including Winnie Xi Pooh’s childrens estates in the US) are worth less ?
Better to give money to other countries than the CCP
Funny you mention it Stan…. just been in Italy, overheard at a cafe 3 asian girls talking about their parents paying for nose jobs, eye jobs and their lucky friend marrying an Irish boy.
What hope do you have when they dont want to look like you or marry you.
CCP cant change genetics……
The uni-polar world that USA achieved after the collapse of the Soviet Union was unstable. The Chinese economy, by virtue of its very size and mass, was bound to, and has, attracted a set of geo-political associates that are closer to it than to the US dominated world economy. USA attempted to establish dominance over the OPEC countries and succeeded to an extent with the collapse of Sov. Union, but,USA unleashed a demon that is far worse – Islamic militarism. The resultant tensions that centred on USA more than other national economies made USA dependent on the rest of the world for a lot of commodities. China stepped in. and the forces of Dialectical Materialism exert their inevitable resultants.
Ivor Large, US nuked and napalmed millions of japanese in the last world war, did the same to south east Asian in the 70s.
America has a war economy whereas the business of China is business. It is also patently obvious to anyone who examines lables that " made in China "is the symbol of retail trade in America . Without chinese goods half the stores would go out of business. Unless America reindustrializes it will lose even a fictious trade war that will ultimately hurt its own multinational businesses.
Though China believes Five Principles of Peaceful Coexistence, all nations large and small should be treated as equal and with respect, but it welcomes challenges from anybody particular the stronger nations like the USA, because Chinese believes sharper sword (Chinese national strength) needs hard sanding stone (the challenges from the US) to shape and grind. Chinese trust the American will perform their duties Competently.
As history has shown, the American never back off confrontation sensibly and willingly, all the wars the American involved lasted for years if not decades. All the previous wars the USA fought do not involve their own survivality but not this time. This war was engineered by the White supremacist in the USA and it is the final solution for them to stamp out all the challenges undermining their White supremacy, hence for the survival of their species they will fight this war with no barrel hold, tough, nasty and dirty. This war will not end in fifty years but at the end of the USA destruction and capitulation.
Ivor Large, there is a big nation with 14 billion strong, it people hate their dark skin, their marriage recruitment advertisement specified "dark skin needs not apply." It is surprised you have only pick up 3 of them talking about their nose jobs, and not their skin whitening jobs.
There were 3 Aussie white women in Starbucks talking about the tricks to avoid low IQ ex convict males polluting their worms back home that will degrade their quality of life with low quality offspring, those women know even god cannot change the genetics of ex convicts.
Have a look at by Jeremy Rifkin. https://www.youtube.com/watch?v=QX3M8Ka9vUA
good
American is the dark force of the world, they are cult fanatics and they will use their blinding cult fanaticsim to destroy everything rather than to let the human beings survive and prosper. "If I cannot have it then nobody can have it" is the American cult religion, their culture and their gene.
generally….we battled communism by promoting capitalism…suspecting that we could dominate ….well…. China appears to have learned well and here we are…. billions of people with a flare for education and innovation and hunger to better their lives….so much for exceptionalism
With its huge foreign reserves in dollar, China can just pay off the tech company. Cash is more concrete and smells better than the mythical ideology.
The US can’t win this fight with an uneducted population, no matter how many very stable geniuses they have.
Low Shen-Cheang Sure they should have let the Japs take all of China, after all Mao ran away (didnt your Grannie in Nanking tell you ?)
The CCP can no longer use mass waves of soldiers, single child families.
Yes, some whites, including Trump, still believe in White Supremacy or the Existence of Pure White race.