The China/United States battles on trade and technology are the major issue facing the world right now and the implications of the outcome of this struggle are too momentous to ignore.

Concentration of production in one area of one (or a few) countries has been deliberate policy. It goes back many decades to a greater or lesser extent but the impetus for the globalist current heyday dates only from the early 90’s.

Remember at all times, those actions which the Clinton administration did to change international trade completely, were supported and enabled later by all succeeding US administrations – up to and until Trump.

Under Clinton two of the major changes were the creation of a trading regime controlled not by “careful and conscious engineering of competition to enable peaceful and productive commerce among peoples” as it had been post WWII, but  it now, in effect, “outsourced management of trade to private trading firms and banks” (Lynn in Cornered p207-8). In addition to that they added the final piece of the jigsaw which created the economic world we have today: the World Trade Organisation (WTO). Bill Clinton brought China into it, supposedly to use their integration into it as a way to have a “liberalising effect” on China. Yes, they said that and maybe they actually meant it. In any case, China as a potential large (and useful-on-cost) player had to be part of the new system.

That the disrupted world trade and economic systems are so much in the news today and that a major change (unseen since the early 1990’s) is well underway coincides with the Trump presidency and is led by it. It is a change which is relatively revolutionary in that far from being a Luddite-like reactionary move against inevitable “progress”, it is a move back to an historical, nation state trading system, a change from a flawed system, the elements of which were set out by Clinton man Robert Reich in his book The Work of Nations – in effect “Clintonomics” (1991, p1)(2)

…there will be no national products  or technologies, no national corporations, no national industries. There will no longer be national economies, at least as we have come to understand that concept.  All that will remain rooted within national borders are the people who comprise a nation. Each nation’s primary assets will be its citizen’s skills and insights. Each nation’s primary political task will be to cope with the centrifugal forces of the global economy which tear at the ties binding citizens together – bestowing even greater wealth on the most skilled and insightful, while consigning the less skilled to a declining standard of living.”

The changes led by the present US administration are a major effort to change a global system, and a chance to alter the seemingly unbroken movement by China to establish dominance over many facets of world trade. In effect to block the unintended consequences of that naïve Clinton move to admit China as a “partner”.

Space is too short here to fully expand on the gradual descent into the global control of trade and the globalisation of world economics from its early ideology expounded by Robert Reich but we all should be well aware of its status at the time Trump started challenging it. That Donald Trump had seen China as the major threat for many years is well-known and he also campaigned on it, but what we see in the world is enough evidence of the need, without Trump even being considered.

We know the recent history of China from the early 90’s and its membership of the WTO. Far from integrating into the “world system” as envisaged by the globalists, China has always retained its nation state status (as has Germany, for one, no matter how much it claims to be “Europe” – the evidence protecting industry and economic activity within the borders shows that clearly enough).

China did (& does still) use and abuse its “developing nation” exemptions from WTO rules, even as it joined in with currency manipulation, committed industrial espionage on a large scale, dedicated state subsidisation of industry – and exports, forced technology transfer etc -all well before Trump appeared as president of the USA.

China, did more, however, and moreover announced its plans publicly. Some missed seeing the danger

One Belt One Road and China 2025 Strategy

Announced in 2015, China’s  Made in China 2025 plan to be not merely competitive, but dominant and it is not merely in those areas listed, but “Made in China 2025 also targets traditional infrastructure sectors like shipping, rail transport and energy—as well as agricultural machinery”. In same article it is not just “catching up”; acute observers have seen that Made in China 2025 is a real danger in a trade war and it notes that the Trump administration is targeting the 2025 strategy as it relates to hostile intent as well as hostile actions. When you add the ongoing industrial espionage, currency manipulation, forced technology transfer and heavily subsidised industry (and exports), there is little wonder why the US and other countries see this as an alarming “initiative” as has been made clear.

“Made in China 2025 is a blueprint for transforming the country from a labor-intensive economy that makes toys and clothes into one that engineers advanced products like robots and electric cars. The Trump administration views it as an attempt to steal U.S. technology and control cutting-edge industries.”

Another major initiative of China, the One Belt One Road, is starting to look like a failure, a failure brought on by China and its actions in the South China sea, the Pacific and elsewhere after a once-keen coming on board by many countries who fell for its slogans. The now-typical Chinese bribe of billions has brought many nations within its sphere, including many Pacific nations, such as Papua-New Guinea, Fiji, Vanuatu and Tonga. Of course it has got to the stage where many nations dangle out the prospect of China money to force nations in the area (such as Australia) to jump in and subsidise it themselves. For many who have succumbed to the China money, however, an inability to repay loans has resulted in asset transfer, often ports and major national infrastructure. Reduction to vassal status, China military bases on their soil cannot be far away, going by Chinese aggression in the South China Sea.

America is said to be wary that this is all in line with a China intent to use it to help undermine the established international systems . China acting in its own interests and using its state power monopoly to do is isn’t unheard of. Quite the opposite and as shown in other posts it is known for it.

Even critics of the reaction to this China initiative such as Foreign Policy accept that China under Xi do intend to dominate “as the world’s most prestigious power”. It is hard to merely note this without making the obvious logical connection that this state role in the development of “political civilisation” logically will have the state power dictatorship of a communist regime driving it and all of its actions.

The key USA and China struggle

That the “wrongs” of China have been at the forefront for the Trump administration is a truism. After the campaigning on it, every action since the election of a Trump administration has been to question or challenge the China domination as they see it.

From the Davos meeting of January 2018, when Commerce Secretary Wilbur Ross and Treasury Secretary Mnuchin attended, the China-as-live-target was in evidence. In a talk with other high-level economists, Ross laid out very many complaints and proposals which have not only never been sidelined they have been reinforced. 

Particular attention should be paid to the following highlights:-

41.00              Massive China overproduction of steel & aluminium only possible in a country like China and warps a supposed free trading system.

50.00             Conventional, WTO actions against transgressors on dumping are a failure with country shopping, and trans-shipping (product through other countries) rife.

Now the US/China trade clash is at a vital stage. China has played most of the usual tricks that have succeeded with all previous challengers other than Trump. It is hard to deny that without a Trump around, the results would be the same as all the other attempts to change China. Lots of talk, “reduce your sanctions, then we’ll talk”, promises but with nothing being done in practice and the increasing domination rolling on. Then another “crisis” explodes into the open, more talks, and the inexorable move further in China’s favour.

Australia is a very good example for Americans to watch and to judge what it would be like if past US policy was continued and it allowed China to actually get dominant. The way China just happens to fail to honour Australian coal contracts, seemingly on a whim, sudden “rules” on imports, internal tariffs etc, sudden ‘faults’ being found at ports of entry. The Chinese policy stances have been likened to the meek China Panda interchanged on cue with a super-aggressive Chinese Dragon and both have  been seen in American and Australian difficulties.

But it is with the USA (& Trump in particular)  that China faces what is its greatest threat in decades. Continued, the US squeeze has hurt the Chinese economy and will continue to do so. All the good (peaceful) options are those of the USA right now, but convincing other nations, especially those of the export-dominant countries such as Germany will be hard.

Note: In a late  development, Yaroslav Trofimov wrote in the Wall Street Journal a worrying article where the backlash to the Chinese initiatives has brought out some serious Chinese counter proposals – even if shelved or dismissed – where serious confrontation has been proposed.    

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