President Trump has invited China’s President Xi to stick around after the G20 Summit in Buenos Aires so that Trump can host a dinner party – “maybe hamburgers, maybe more; it’ll be just great, great,” he might have said.
Xi has tentatively accepted and the world can assume that the two leaders will engage in substantial conversation about the trade war, tension in the South China Seas and other subjects of deep concern to both countries.
While the Dow Jones seems to flutter up and down depending whether the pre-summit preparatory talks by officials are perceived to be going well or not, most observers following Trump closely are not expecting much to come out of the coming summit.
A major reason for low expectation is Trump’s notorious negotiating style. He says one thing and means another. He always reserves the right to abruptly change his position at any time.
This approach might have proven effective in his real estate dealings, keeping his competitor off balance, but is not any good for building trust and confidence with foreign countries.
He has also made a list of harsh demands and expects China to come to Washington, hat in hand, with a list of concessions in exchange for the privilege to sit down and negotiate. Trump seems to think the Chinese would accept his upside down process, namely for China to concede first, and then negotiate.
Trump objects to Made in China 2025
Probably the most surprising among all this is Trump’s indignation that he finds China’s Made in China 2025 “insulting” and demands China retracts the national plan.
Made in China 2025 is meant to be an aspirational document to encourage the Chinese people to aim high based on excellence in STEM and by the dint of their own efforts.
It’s puzzling as to why MiC 2025 is any of Trump’s business and that he should find it offensive.
Nothing in the document says anything about commandeering US technology or about pushing American heads under water in order to advance China.
Instead, it’s China that should feel offended that Trump finds China’s aspirations insulting. Instead of spelling out his own set of national aspirations to compete with China, Trump is trying to push the Chinese underwater as a way for the US to stay on top.
Thus we are left to speculate as to the possible outcome of the dinner discussion in Argentina. Will it presage the beginning of a cold war between China and the US? Or will it make some advances in the trade war negotiation?
The hostile tone of speeches given by Vice-President Pence as a stand-in for Trump suggests that the US is heading toward confrontation. He accuses China of militarizing the South China Sea. Yet it’s the American Navy that regularly patrols the water in the name of exercising Freedom of Navigation.
Apparently sending your warships thousands of mile away from your home base to sail around China’s territorial waters is friendly but for China to develop military bases on its offshore islands is unfriendly.
Hijacking intellectual property
Pence and the rest of Trump’s China team accuse China of forcing the transfer of intellectual property in order for US companies to do business in China.
It’s true in the early days when China joined the WTO, China as a developing country with backward technology was allowed to protect certain key industries. Protection included the requirement that the foreign company must form a joint venture with a Chinese company. In the process, foreign know-how was shared with the local entity.
There is no denying that the strategy was helpful for China to catch up. Now as the second largest economy with its mounting collection of native-grown intellectual property, China should no longer need to insist on forming JVs to access foreign technology.
Removing this stipulation as a condition for doing business in China would take away a sensitive bone of contention.
However, as usual, the Americans have blown the matter out of proportion and acted as if a denied access to IP from the US would cause China to dry up and wither on the vine.
An indication of Trump’s irrational arrogance is his policy to restrict visas for students from China. His rationale is that the students are there to steal national secrets and receive valuable training to bring back to China.
He is apparently ignorant of what elite American universities already know – that Chinese students make contributions far exceeding their numbers. Furthermore, most choose to remain and work in the US.
Trump’s new policy actually encourages the best and brightest to go back to China. His track record suggests that he likes to sock himself in the eye and then declare himself a winner.
Trump: trade surplus is evil
Trump’s original trade dispute with China rests on the simplistic idea that anyone enjoying a trade surplus with the US is “insulting” and must be stealing from the US.
In his ideal world, each trading partner would sell to the US no more than what they can buy from the US, a ludicrous and impractical proposition that makes no sense economically.
In one of the early discussions, the US side demanded that China buy more from America to reduce the trade surplus by US$100 billion. Upon looking around, the US negotiating team to their chagrin discovered that China may be ready to buy, but the US doesn’t have enough products to sell.
In Trump’s view, China’s top-down allocation of resources in favor of state-owned enterprises give the SOEs unfair advantage in competing with American companies without such a subsidy.
Actually, a recent report by the Rhodium Group for the Asia Society revealed that SOEs make up only 5% of all the companies in China, but account for 28% of the industrial assets and generate only 18% of the total profits. Their return on assets is a woeful 2.9% vs 9.9% for private enterprises. At a minimum, Trump’s fear of China’s SOEs has been misplaced.
As president, Trump has materially changed the bilateral conversation with China. As Hank Paulson pointed out in his speech in Singapore, Trump is leading the US on a divergent path away from China.
Rather than seeking to work together based on common interests, the US is putting down China as best as it could. For example, the White House is clearly intimidated by China’s Belt and Road Initiative.
Pence: Beware BRI projects
Pence, in particular, has been going around warning third world countries of China’s predatory financing associated with the BRI projects.
It’s true that the BRI projects in Sri Lanka did not work out. But Sri Lanka was an exception. Most third world countries continue to want to be part of China’s BRI. However, the negative publicity should prompt China to calculate the financial viability of every new project with more care.
On the other hand, projects financed by the Asian Infrastructure Investment Bank have followed the discipline of World Bank financing. AIIB founded by China has a multinational staff and practice of transparency.
To date, India has been the largest beneficiary of BRI projects funded by the AIIB, and there have been no complaints about predatory terms.
In his speech, Paulson notes that there are no winners in a trade war and suggests that Trump is dropping an iron curtain between China and the US, and forcing other countries to choose sides.
China offers collaboration and assistance on infrastructure projects along with free and open trade. The US is known to focus on “America first,” and does not have a priority to help others. If forced, which side do you think these countries would choose?
Navarro takes on Paulson
In response, Peter Navarro proclaimed that the US was winning the trade war with China and President Trump does not need shuttle diplomacy. Clearly, in reference to Paulson, Navarro said: “Wall Street, get out of those negotiations.”
Before Paulson became the US Secretary of Treasurer under the George W Bush administration, he was chairman of Goldman Sachs. He worked closely with China’s leadership during the financial crisis of 2008 to prevent the total collapse of the US banking system and the global economy. His credentials are well established.
Navarro’s credentials? He was five times loser for political office and in one post-election pout, he said: “I don’t have any concerns at all about making stuff up about my opponent that isn’t exactly true.” Sound familiar?
For Trump’s 2016 campaign, Navarro co-authored with Wilbur Ross an economic roadmap on dealing with China. A public letter signed by 370 economists including 19 Nobel laureates called the plan an unmitigated disaster. So true, now the disaster is nigh.
Aside from keeping Trump’s boots in spit shine condition, Navarro has apparently been Trump’s main China whisperer as well as running around unilaterally declaring that the US is winning the trade war.
Other than finding demonizing China a lucrative profession, he does not have much else of a track record. Supposedly, to bring manufacturing back to America, Navarro has been tasked to import and recreate the many supply chains and put them back in the US. Want to bet if he can do it?
California winemakers, Iowa soybean farmers and Maine lobster fishermen are among many businesses wondering when and how winning this war is going to give them the business they used to enjoy with China.
George Koo pointed out the problem with President Trump is "irrational arrogance". I would add "ignorance" not only from Trump, but also his economic advisor Navarro. Trade war is hurting American business more than Chinese business. American companies and consumers are paying for the higher tariff. China can buy oil, soy beans, lobsters,etc. elsewhere without higher prices. American business is losing on both ends.
George Koo pointed out the problem with President Trump is "irrational arrogance". I would add "ignorance" not only from Trump, but also his economic advisor Navarro. Trade war is hurting American business more than Chinese business. American companies and consumers are paying for the higher tariff. China can buy oil, soy beans, lobsters,etc. elsewhere without higher prices. American business is losing on both ends.
Hamburger, or dogburger
Hamburger, or dogburger
Give up your independence, surrender to the CCP.
Without Taiwan all of China’s trade routes pass through choke points.
Give up your independence, surrender to the CCP.
Without Taiwan all of China’s trade routes pass through choke points.
China funnelled around $160 million into Tonga to help rebuild the capital’s CBD after riots in 2008. Tonga is now struggling to pay back the loans that amount to almost a third of the country’s gross domestic product.
Vanuatu was loaned $120 million to build what is thought to be the longest wharf in the region that can handle cruise and container ships — and potentially war ships.
In April, the Vanuatu government said rumours China wanted to use its new wharf as a permanent military base were “speculative”.
Some have accused China of engaging in so-called “debt-trap diplomacy”. Essentially, loaning nations huge amounts of money which they then find difficult to repay which in turn gives Beijing a say over a country’s affairs.
China funnelled around $160 million into Tonga to help rebuild the capital’s CBD after riots in 2008. Tonga is now struggling to pay back the loans that amount to almost a third of the country’s gross domestic product.
Vanuatu was loaned $120 million to build what is thought to be the longest wharf in the region that can handle cruise and container ships — and potentially war ships.
In April, the Vanuatu government said rumours China wanted to use its new wharf as a permanent military base were “speculative”.
Some have accused China of engaging in so-called “debt-trap diplomacy”. Essentially, loaning nations huge amounts of money which they then find difficult to repay which in turn gives Beijing a say over a country’s affairs.
While it is "common knowledge" that there is no winner in "trade wars", Trump’s trade war on China while hurting somewhat in the short-run, actually helps China in several ways. Firstly, "China" is quickening the pace of diversifying her exports worldwide. Secondly, increasingly her factories are moving final product assembly to countries not subject to US tariff, thus benefitting the indigenous economies such as those in SE Asian & "Belt-Road". Thirdly and most interestingly in response to the "trade war", China is providing more resources & relaxing some restrictions to the tightly regulated private sector & DFI, most notably the 2025 tech initiative. In contrast to the US, there is zil "redeeming value" as a result of the politically-motivated trade war & others acts against the rise of China.
While it is "common knowledge" that there is no winner in "trade wars", Trump’s trade war on China while hurting somewhat in the short-run, actually helps China in several ways. Firstly, "China" is quickening the pace of diversifying her exports worldwide. Secondly, increasingly her factories are moving final product assembly to countries not subject to US tariff, thus benefitting the indigenous economies such as those in SE Asian & "Belt-Road". Thirdly and most interestingly in response to the "trade war", China is providing more resources & relaxing some restrictions to the tightly regulated private sector & DFI, most notably the 2025 tech initiative. In contrast to the US, there is zil "redeeming value" as a result of the politically-motivated trade war & others acts against the rise of China.
Sun’s warring strategy: "protocol first, then soldiers" + "dagger hidden behind smiles", the opposite of all-bluffingTrumpism.
Sun’s warring strategy: "protocol first, then soldiers" + "dagger hidden behind smiles", the opposite of all-bluffingTrumpism.
THe problem with Trump, Pence is that there is no substance to anything they do; it is all posturing for Fox News. Pence seems to be going out of his way to be offensive and undiplomatic in PNG; the Chinese have long memories.
THe problem with Trump, Pence is that there is no substance to anything they do; it is all posturing for Fox News. Pence seems to be going out of his way to be offensive and undiplomatic in PNG; the Chinese have long memories.
Paulson created the US-China Strategic & Economic Dialogues, which led to Chinese leaders letting the RMB appreciate. Paulson’s engagement-based approach could also yield favorable trade outcomes, had the Trump admin not abandoned these best practices.
Paulson created the US-China Strategic & Economic Dialogues, which led to Chinese leaders letting the RMB appreciate. Paulson’s engagement-based approach could also yield favorable trade outcomes, had the Trump admin not abandoned these best practices.
Made in China is a rational strategy that should be emulated by the U.S.instead of being feared. After the lauching of the Sputnik in 1957, which by the way, changed my life forever as I immediately switched to majoring in physics, was a wake up call. President Kenendy wisely called for landing a man, an American, on te moon and gave huge resource to NASA. We indeed succeeded. Tha kind of thoughtful thinking is what is needed. But we need leadership in this country which is sadlt lacking
Made in China is a rational strategy that should be emulated by the U.S.instead of being feared. After the lauching of the Sputnik in 1957, which by the way, changed my life forever as I immediately switched to majoring in physics, was a wake up call. President Kenendy wisely called for landing a man, an American, on te moon and gave huge resource to NASA. We indeed succeeded. Tha kind of thoughtful thinking is what is needed. But we need leadership in this country which is sadlt lacking
George, your recent op-ed in the Asia Times is a spirited document, well-crafted for its audience. You cite many of the root causes of the discord between these superpowers. Your thesis seems to be supported by the disarray at the APEC Summit. It will be remarkable, should the relationship improve, during a Hamburger Détente, at the G20.
As I am somewhat of a stranger to the study of geopolitics, I took a moment to skim through a seemingly well-balanced report issued by the Center for Strategic and International Studies. (CSIS/Hillman/Jan 2018/”China’s Belt and Road Initiative: Five Years Later”) Concerns, there, focus on how the collaborative concept of BRI is being enacted and operationalized. The discussion seems well-reasoned – an equal counterpoint to your interesting view. Your guidance would be appreciated!
Characterization of the negotiators as buffoons is a popular one. Often, it seems Keystone Cops. Peel back the layers and one is apt to find that the mythology and rhetoric hides retrenchment from a posture of democratic global policeman and a juggling act in defence of the petro-dollar.
Still, the entertainer may be a wily fox.
I’m reminded of what I see, sometimes, at the supermarket checkout. The candy is merchandised down low, near the kids. All the parental logic and the best intentions in the world can fall prey to the screaming and stamping of feet.
George, your recent op-ed in the Asia Times is a spirited document, well-crafted for its audience. You cite many of the root causes of the discord between these superpowers. Your thesis seems to be supported by the disarray at the APEC Summit. It will be remarkable, should the relationship improve, during a Hamburger Détente, at the G20.
As I am somewhat of a stranger to the study of geopolitics, I took a moment to skim through a seemingly well-balanced report issued by the Center for Strategic and International Studies. (CSIS/Hillman/Jan 2018/”China’s Belt and Road Initiative: Five Years Later”) Concerns, there, focus on how the collaborative concept of BRI is being enacted and operationalized. The discussion seems well-reasoned – an equal counterpoint to your interesting view. Your guidance would be appreciated!
Characterization of the negotiators as buffoons is a popular one. Often, it seems Keystone Cops. Peel back the layers and one is apt to find that the mythology and rhetoric hides retrenchment from a posture of democratic global policeman and a juggling act in defence of the petro-dollar.
Still, the entertainer may be a wily fox.
I’m reminded of what I see, sometimes, at the supermarket checkout. The candy is merchandised down low, near the kids. All the parental logic and the best intentions in the world can fall prey to the screaming and stamping of feet.
Maybe Winnie Xi Pooh just wants his pot of honey
Maybe Winnie Xi Pooh just wants his pot of honey
good read
good read
WHY CHINA WILL LOSE BIG IN THIS TRADE WAR ?
US is the world biggest consumer market for China and other Asian exporters. Without these US market many factories in China will close down and millions will be jobless.
Which country can replace US market ? Who cares if Wall Street who depend on China slave wages for profit in the past, start to lose money ?
Many people predict US dollar will collapse next year.
What will replace USD ? Yuan can ? Are you freaking crazy to believe Yuan can replace US dollar as global reserve currency ?
Can China provide 100 million poor hungry and angry Chinese with jobs if dollar collapse ?
If US dollar collapse, where will China CPC elite hide their billions of corruption wealth without being caught ?
Can China be the biggest consumer market in the world without Yuan being the global reserve currency ? Not even possible. How can China defend Yuan as the global reserve currency ?
If US dollar collapse, American empire will disintegrate, there will be civil war in US for many years, what currency will replace US dollar as global reserve currency, in order to ensure an orderly global trading system.
China have no choice but to support US dollar and therefore American dollar hegemony empire.
China need USD350 billion trade surplus with US yearly to support China trillion yuan investment in mega infrastructure projects such as high speed train and nuclear power plants.
China is printing USD3 trillion Yuan a year to pay for all the mega infrastructure projects ongoing and planned for the next 10 years.
Can China print 3 trillion yuan a year without the estimated USD350 billion yearly trade surplus ?
Yuan may be able to function as limited global reserve currency if China fully back Putin Russia and help Venezuela, Qatar to be strong economically and independent of US domination.
If American empire collapse by 2025, China will not be safe because millions of jobless workers will also start to call for regime change in China 🙂
Therefore a US dollar collapse will cause both US and China into severe stress and lead to civil wars on both sides.
The current great trade imbalance is caused by the stupidity of Superjews Kissinger and his globalist elite patrons.
It started when China use ultra cheap yuan policy in 1994 (1 USD = 8.8 yuan) to undermine millions of American factory jobs security and destroy South East Asia exporting economy in the 1997/98 Asia financial crisis.
China accumulate huge trade surplus with the US, in the process of using unfair trade practices with the US and the rest of the world hiding behind fancifool label as a developing nation.
Elite Jews and Anglo American elite may be smooth talker and look and act very smart and intelligent. But these psychopath and sociopaths gangster are prone to doing stupid things due to their greed for more power and wealth.
These bunch of evil globalist gangster used China to suck in the global wealth from US and the rest of the world, to create a new world order where they can dominate the world forever and turn the rest into their permanent slaves.
They planned for China as the New World Order prototype. But their plan not working anymore due to expose by Julian Assange and Edward Snowden.
Will China CPC elite want to join these evil greedy jews and anglo american globalsit elite ? Answer is BIG NO. China leaders will never want to share their wealth with anybody other than those in their gang.
If China still did not kowtow to US demands in the current trade war with US, Americans white christians warmongers will not give up their fight easily and will never want to kowtow to their new masters the China CPC elite.
Expect false flag nuclear incident in south china sea happen on china man made unsinkable air craft carrier island by 2030.
China leaders are stupid in their drunken pursuit of becoming rich in the shortest time using trade surplus with US, they forgotten those riches they get are some from US Federal Reserve money printing ponzi scam, which is not sustainable.
China leaders have very low CQ (cultural quotient) and this will ultimately lead to nuclear Armaggedon.
WHY CHINA WILL LOSE BIG IN THIS TRADE WAR ?
US is the world biggest consumer market for China and other Asian exporters. Without these US market many factories in China will close down and millions will be jobless.
Which country can replace US market ? Who cares if Wall Street who depend on China slave wages for profit in the past, start to lose money ?
Many people predict US dollar will collapse next year.
What will replace USD ? Yuan can ? Are you freaking crazy to believe Yuan can replace US dollar as global reserve currency ?
Can China provide 100 million poor hungry and angry Chinese with jobs if dollar collapse ?
If US dollar collapse, where will China CPC elite hide their billions of corruption wealth without being caught ?
Can China be the biggest consumer market in the world without Yuan being the global reserve currency ? Not even possible. How can China defend Yuan as the global reserve currency ?
If US dollar collapse, American empire will disintegrate, there will be civil war in US for many years, what currency will replace US dollar as global reserve currency, in order to ensure an orderly global trading system.
China have no choice but to support US dollar and therefore American dollar hegemony empire.
China need USD350 billion trade surplus with US yearly to support China trillion yuan investment in mega infrastructure projects such as high speed train and nuclear power plants.
China is printing USD3 trillion Yuan a year to pay for all the mega infrastructure projects ongoing and planned for the next 10 years.
Can China print 3 trillion yuan a year without the estimated USD350 billion yearly trade surplus ?
Yuan may be able to function as limited global reserve currency if China fully back Putin Russia and help Venezuela, Qatar to be strong economically and independent of US domination.
If American empire collapse by 2025, China will not be safe because millions of jobless workers will also start to call for regime change in China 🙂
Therefore a US dollar collapse will cause both US and China into severe stress and lead to civil wars on both sides.
The current great trade imbalance is caused by the stupidity of Superjews Kissinger and his globalist elite patrons.
It started when China use ultra cheap yuan policy in 1994 (1 USD = 8.8 yuan) to undermine millions of American factory jobs security and destroy South East Asia exporting economy in the 1997/98 Asia financial crisis.
China accumulate huge trade surplus with the US, in the process of using unfair trade practices with the US and the rest of the world hiding behind fancifool label as a developing nation.
Elite Jews and Anglo American elite may be smooth talker and look and act very smart and intelligent. But these psychopath and sociopaths gangster are prone to doing stupid things due to their greed for more power and wealth.
These bunch of evil globalist gangster used China to suck in the global wealth from US and the rest of the world, to create a new world order where they can dominate the world forever and turn the rest into their permanent slaves.
They planned for China as the New World Order prototype. But their plan not working anymore due to expose by Julian Assange and Edward Snowden.
Will China CPC elite want to join these evil greedy jews and anglo american globalsit elite ? Answer is BIG NO. China leaders will never want to share their wealth with anybody other than those in their gang.
If China still did not kowtow to US demands in the current trade war with US, Americans white christians warmongers will not give up their fight easily and will never want to kowtow to their new masters the China CPC elite.
Expect false flag nuclear incident in south china sea happen on china man made unsinkable air craft carrier island by 2030.
China leaders are stupid in their drunken pursuit of becoming rich in the shortest time using trade surplus with US, they forgotten those riches they get are some from US Federal Reserve money printing ponzi scam, which is not sustainable.
China leaders have very low CQ (cultural quotient) and this will ultimately lead to nuclear Armaggedon.