This is extremely ironic after decades of pushing the international financial institutions like the WTO and the IMF to "open other countries for investment".
It's interesting that the US has advocated free trade whilst also being one of the biggest advocates of sanctions for countries with administrations that are not so sympathetic to its plans for them.
Perhaps what the USA wants is not really free trade but "free trade": new markets to sell labour-derived goods and services to and resource suppliers with very low wages, low standards of services and low food prices in order to maintain its (slipping) financially dominant position in the world.
Viewed from this angle the move makes sense and remains consistent with long-term policy goals. The stance of the current presidential administration is merely convenient. Whether it works in the long term remains to be seen.
I'm a long-term critic of the US administration's trade and foreign policy and do not gladly suffer any who are unquestioningly sympathetic with it. So I have a hard time admitting this, but the consequences of the US' global trade empire falling are unimaginable to me: I see more ways it could end up in a significantly worse global situation than a marginally better one.
> Perhaps what the USA wants is not really free trade but "free trade": new markets to sell labour-derived goods and services to and resource suppliers with very low wages, low standards of services and low food prices in order to maintain its (slipping) financially dominant position in the world.
This is a commonly touted criticism for the US by foreigners. I grew up basically my entire life hearing this argument. (I'm argentinian).
But I think it fails to grasp the political and economical reality. If the US restricts importations, it harms itself as well as it harms the would-be exporter. The idea that the US gains economic advantage by telling other countries to be open and remaining closed is just false.
Its like a business man telling other business men that paying good wages is the way to retain employees and then he pays below market: he harms himself with the hypocrisy.
Secondly, I am convinced that the natural state of human beings is to be mercantilist and protectionist, which means open trade is always a political uphill battle. The restrictions the US has on imports has been criticized by its liberal economists. But politicians are not elected to make good policy, they are elected to make popular policy.
"...The idea that the US gains economic advantage by telling other countries to be open and remaining closed is just false...."
Well, we do gain economic advantage when nations remain open, because the US is only open in theory. That said, this "only open in theory" thing affects us, the citizens of the US, just as much as it affects other nations.
For instance, in THEORY if we in the US don't like the fact that Facebook and Twitter have the power to shape what we see and hear, we're free to form startups that offer competing social networks. As a pragmatic matter though, we really aren't. Such startups are almost guaranteed to fail in the US.
On an international scale we can see this same effect in action by comparing the vibrancy of the Chinese internet startup market, against that of other, more open, nations. The vast majority of users in nations with more open markets use Facebook, Twitter, and other mostly US properties. Don't misunderstand me, the citizens of those nations can attempt to form internet startups if they wish, but the reality is that in the face of the giant, well funded, US competitors also operating in their nations, I, personally, wouldn't be sanguine about their prospects. The Chinese cleverly avoided that fate by effectively closing their market.
The chinese people are much poorer for not having as much foreign companies inside. They pay extra taxes for the subsidies and quality of service by having less options.
Yes, its a huge loss for FAANG that they cant compete in china, but its also a loss for chinese people. It's just not a loss for chinese politicians, that can tout that thanks to them they created massive companies.
You can run indefinitely on a bad platform while it gives your reasonable returns. We'll see what happens when china gets its own big capitalist crisis.
> But I think it fails to grasp the political and economical reality. If the US restricts importations, it harms itself as well as it harms the would-be exporter.
It's quite ironic that this is the US we're talking about and that the US gained so much from protectionism. Abraham Lincoln remarked, “Give us a protective tariff and we will have the greatest nation on earth.” The US was born, after its independence, in protectionism. Through protectionism, the US was able to establish a very impressive manufacturing base in almost every sector of the economy.
The US can drop all tariffs on imports to zero if it wants. Have you considered why it doesn't? If free imports really benefited the US in the way you're claiming they do, why would the US so aggressively seek trade deals with other nations?
The only reason to engage in trade deals is to be able to gain regulatory influence of other countries and set mutual tariffs. It is in the US interest to make these tariffs lower for things they are net exporters of and higher for things they are net importers of (because if you're manufacturing, the raw materials generally cost less than the cost of the imported raw materials and so a larger tariff on a smaller value is better than a larger tariff on the larger value)
Huge multilateral trade deals, the kind the US has been pushing, rely on the fact that they are the biggest single party and that the other signatories have a diversity of exports and imports. This is what makes Trump's bilateral approach slightly amusing: a bilateral trade deal with America First stamped on it seems like it would be a harder sell than the multilateral trade deal negotiated by the US as the largest single entity.
It makes it easier to sell to the people in those countries that their politicians have signed away their power to choose a government that has the power to introduce nice things like an efficient (i.e. socialized) healthcare system . Because the trade agreement will explicitly forbid this in order to open up the healthcare market to all the signatories.
> The idea that the US gains economic advantage by telling other countries to be open and remaining closed is just false. Its like a business man telling other business men that paying good wages is the way to retain employees and then he pays below market: he harms himself with the hypocrisy.
That's a poor analogy and as hard as I try I really can't see the mapping. In this analogy the businessmen are countries. The workers are what, the citizens? The factories? That makes no sense. Each party wants their factories to make money, of course. Are the wages taxes? Because the state taxes people. Reflecting the analogy back, is the US saying "cut taxes, cut the services for workers" whilst hypocritically turning into a social democracy?
But I like the businessmen analogy. We can say that one represents an entirely fictional Fortune 100 company (I'm sure none would behave this way) and another a tiny little manufacturer that is on the brink of going under. The Fortune 100 company uses its leverage to suggest it will give the smaller manufacturer a huge order subject to it giving it a free sample run or such of a bespoke part. The smaller manufacturer would never entertain such terms for any other customer in ordinary circumstances, but this contract would save it. So it bites, takes a hit and gets accelerated under. Then the Fortune 100 company buys it at a knock-down price when it's no longer a going concern.
The US wants imports, but not of things that directly compete with US manufacturing. Things have gone a little wrong, because self-interest has led to the moving of production to the plundered world and has led to the perception amongst some people that the main thing the US has been exporting is jobs.
> It's quite ironic that this is the US we're talking about and that the US gained so much from protectionism. Abraham Lincoln remarked, “Give us a protective tariff and we will have the greatest nation on earth.” The US was born, after its independence, in protectionism. Through protectionism, the US was able to establish a very impressive manufacturing base in almost every area.
I contest this idea that protectionism is what spurred growth in america in the 1800's. At the time, federal spending was like 5% of gdp. It was a time of low regulations and lots of business freedom within the borders.
Also take not that America was severely and artificially constrained as a colony, unable to legally build manufactures. After those restrictions were gone, the capital invested into machinery and production was going to shoot up immediately, regardless of tariffs. Also take into account the immigration the us had. The US kind of doubled its population every 20 years during the 1800's.
It grew in spite of the tariffs, not because of them.
> The US can drop all tariffs on imports to zero if it wants. Have you considered why it doesn't? If free imports really benefited the US in the way you're claiming they do, why would the US so aggressively seek trade deals with other nations?
Of course I considered it, and already mentioned it: political support. Why does the US subsidize corn? Or restrict the importation of agricultural products, or limits immigration? Votes and private interests, and generally because the public has believed the lies those private interests push, like immigrants taking away jobs. Something that is repeated even in this platform when the H1B topic comes up.
The only economical purpose of a trade deal is to improve free trade, by abridging the rules of both countries to merge the markets. There are then political reasons to do it, which relates to diplomacy or geopolitics, things that I cant speak much about.
> The only reason to engage in trade deals is to be able to gain regulatory influence of other countries and set mutual tariffs. It is in the US interest to make these tariffs lower for things they are net exporters of and higher for things they are net importers of (because if you're manufacturing, the raw materials generally cost less than the cost of the imported raw materials and so a larger tariff on a smaller value is better than a larger tariff on the larger value)
Trade deals with the purpose of protectionism, which definitely exist, show terrible results. You can see the Mercosur of south america, where Argentina and Brazil have deals that you can only import cars from one another. Result: cars cost twice as much as in the US with the labor force making less than what they make in the us. Disaster.
It would be in the interest of any country, at any point, to completely liberalize is import/exports, even if the other countries don't. If the US decided not to import argentinian lemons, argentina retaliating by not allowing the import of internet services can only be reasonable as a retaliatory measure with the intent of receding the other restriction. But without that goal, if that cannot be achieved, then there is no point in restricting the import. Let argentina eat its own lemons while watching netflix, and let americans think they won a battle while they eat worse or more expensive lemons.
But this is the part where people flare up their nationalism and lack of understanding of economics, and clamor for vengeance, or to teach a lesson. And thus,a politican gains votes by putting tariffs.
> That's a poor analogy and as hard as I try I really can't see the mapping. In this analogy the businessmen are countries. The workers are what, the citizens? The factories? That makes no sense. Each party wants their factories to make money, of course. Are the wages taxes? Because the state taxes people. Reflecting the analogy back, is the US saying "cut taxes, cut the services for workers" whils...
United States has largely been responsible for building the current world order post-WW2, based on democracy,and global trade. It's not easy being at the top.
In addition, it's also ironic how when the Chinese government intervenes you see the American media decry exactly the type of behavior that the administration now wants to embrace.
It has never been about ideologies (free market), it's always been about what's beneficial for the US government. Not just in trade, but in everything. And anyone who knows anything about the past 40 years should be able to see it clearly. Instead, so many people are happy to parrot whatever the latest talking point on the media is.
"...Instead, so many people are happy to parrot whatever the latest talking point on the media is..."
In fairness, propaganda is supposed to have that effect. There are people and organizations in China, and in the US, who spend DECADES studying human psychology, human behavior, etc etc etc, just to be able to properly direct human thinking at scale.
> after decades of pushing the international financial institutions like the WTO and the IMF
The Washington Consensus promoted free trade and liberal democracy. In just the last few weeks, it has become apparent China is devolving into a garden-variety dictatorship. Trading short-term economic growth to defray a long-term threat to the global system is entirely consistent with the UN/IMF/WB/WTO missions and past activity.
The Chinese are transferring western tech through acquisitions so what would you expect other than a door shut in their face? Also, the Chinese NPC just made Xi chariman for life, China is guity of countless human right violations agains Uyghurs and Tibetans, their leadership has failed to act against North Korea, they have created tensions in the South China Sea and the list could go on and on.
I really dont like the Trump administration for various reasons, but one thing they have done right is showing firm hand against China. Especially when it comes to the artificial islands in South China sea and also the attempts to buy western technology by buying companies and institutions in US.
I hope more countries wake up to what China is trying to do. Artificial island, Rohingya-cleansing, Sri Lanka airport etc. Its just the beginning, we need to be prepared.
China is not Myanmar... Is there a Rohingya conspiracy I'm not aware of?
Artificial islands in the south China sea... Is that not just a really crappy-low-tech version of an aircraft carrier?
When you say we need to be prepared. For what? Do you think China will attack? Or it will just pursue economic growth like every other country? In exactly the way we always wanted them to... Remember in the past China was closed... We (the West) opened that can of worms... Now we decide we don't like worms...
1. China with its vote in UN security counsuel was a major suppord for Burmese government to do what what they did without fear of being punished. Google "China Rohingya" theres plenty of articles.
2. Are you literally justifying building island in other countrys sovereign territory? There is absolutely no excuse for this. How would Beijing like it if France or US moved their aircraft carrier 1 km outside of Shanghai?
3. China may not be capable of attakcing through convential war, but they are doing more nastyness without it. Supporting the Sri lankan governments assault on the tamils literally killing 60 000 people in the last weeks of the war in 2009. Imprisoning nobel pieze price winner till his death? Punishing Norway economically for awarding nobel peize price? Suppressing the muslim population in their country (Uyighur?)
Stealing technologies and preventing any outside countries from enforcing IP-theft lawsuits.
My proposal is the initial proposal the western countries had for China. Let them into WTO and give the all the opportunities western countries have. And China certainly made good use of it. But the proposal also expected China to adapt to democracy and values like free trade. But instead they have become corrupt with power and gone the wrong direction, even electing a "dictator". Now its time to take away the giveaways:
- If China is going to practically make life hard for western companies to operate in China, then same will happen to Chinese companies. Huawei is already experiencing this.
- If you are going to steal intelectual property and mass-produce items then this will have implication on trade.
- WTO sanctions needs to be implemented until China starts to respect the rules that every other country follows.
>WTO sanctions needs to be implemented until China starts to respect the rules that every other country follows
Devil's advocate: those rules exist to protect the interests of Western countries, not China, and China is a nascent superpower with nuclear weapons, so why should China respect them?
Those rules can be applied to other countries as well as China. It's not just to protect Western countries - it's just those Western countries are being the most impacted.
Also China doesn't want civil unrest.. if we imposed harsh sanctions I can guarantee itll crollapse their economy, then their country. We just need to "tap the breaks" so to speak.
China as a superpower will cease to exist if its economy crashes. Its economy is very dependent on EU and US. So yes, they will have to respect the rules.
I live in the Philippines and it seems like most products are Chinese made. Is China getting more benefit out of the US/China relationship than the US?
You overestimated the extent that the Chinese economy is dependent on the US and EU. Exports in total, including to other nations, are less than 20% of their GDP. The US and EU combined account for less than 40% of their exports (ie. <10% of GDP).
They can manufacture almost anything they need. Oil is a major exception. They are addressing vulnerability to oil imports with big pushes for electric cars and nuclear energy, as well as alliances with major oil exporting nations.
They also have channels to import other raw materials, particularly from Africa with which they have strong economic ties and can in return provide the African nations with manufactured goods and expertise for infrastructure building.
On the other hand, a sudden, near complete sanction on Chinese imports would result in widespread shortage of many manufactured goods in the US and EU. Both sides will survive but it is unclear who would get hurt more.
What about the Panchen Lama? IMO that's a good summary of China.
> It has been claimed that Gedhun had been taken into protective custody from those that would spirit him into exile and is now "in captivity against the wishes of the Tibetan people", whereas the Chinese government states that he is living a "normal private life".Tibetans and human rights groups continue to campaign for his release.
The panel found that China’s claims of historic rights within the nine-dash line, which Beijing uses to demarcate its claims in the South China Sea, were without legal foundation. The panel also concluded that Beijing’s activities within the Philippines’ two-hundred-nautical-mile exclusive economic zone (EEZ), such as illegal fishing and environmentally ruinous artificial island construction, infringed on Manila’s sovereign rights.
I meant Myanmar actually. But you are right Uighur is another black mark on chinese politics.
Btw the chinese government is a support to burmese actions towards the Rohingya population, thats what I meant with my initial post. I am not going to repeat everything but there are plently of articles.
That's because there isn't anything that a US administration can do to slow the build up there. It's the same reason the Obama Administration didn't do anything of consequence to stop China when they began building the artificial islands.
It would require war, a near-war, or very large scale sanctions. A group of dozens of major economies would have to impose trade consequences. And even that might not deter China, given how badly they appear to want to annex that territory.
> there isn't anything that a US administration can do to slow the build up there
What bollocks. Freedom of navigation operations are a light-touch manoeuvre that still pisses off Beijing [1]. Economically embracing China’s neighbours (as TPP tried to do) and bolstering the militaries of Taiwan, the Philippines and other threatened democracies is another reasonable step.
I don’t really see what china thinks it is accomplishing there. The logistics are just too long to keep those islands supplied and functioning if any hostilities break out. They aren’t exactly unsinkable aircraft carriers either.
Those fortifications are a mixed bag in my opinion. On one hand, they help create area denial for the South China Sea. On the other hand, they are vulnerable and difficult to defend. Probably also a lower stakes target. If the Chinese shot at a foreign plane or ship, I think it would be tempting to attack one of these outposts. Easier and less inflammatory than attacking a mainland air base or port.
>> "I hope more countries wake up to what China is trying to do. Artificial island, Rohingya-cleansing, Sri Lanka airport etc. Its just the beginning, we need to be prepared."
Would you please be concise and more elaborative about what you mean?
I hope you can forgive me but I feel its very demanding to write this over and over again. I think I have written about the Sri lankan airport thing before in detail. The reason I leave the keywords in my post is so people can do a google search and find the necessary information.
The effect, at least for me, is a wild goose chase trying to determine how the context of your post fits things like "Rohingya-cleansing". I can kinda see what you're saying based on some of the articles that come up but if you think this is helpful I'd have to disagree.
The most recent is docking of Aircraft carrier in Vietnam for the first time since the cold war.
There is also a closer relationship with Taiwan and new bills being made to apporve sale of weapons.
The american ships and aircrafts have also ignored the territory of the artificial islands sending signal to all the commerical boats that the water is for everybody to use.
Selling arms to Taiwan isn't new. There's the Taiwan Relations Act Affirmation and Naval Vessel Transfer Act of 2014 and an arms deal signed under Obama in 2015 for $1.83 billion (1).
Sailing within the 12 nautical miles of the man-made Chinese islands also happened under Obama (2).
The artificial islands are in response to the US holding the first island chain [1]. Without a foothold in the South China Sea, China's military and economic access to the outside world is at the mercy of the US. This is the same reason you see so much Chinese interest in Burma — unbridled Indian Ocean ports [2].
That doesn't sound right. IIRC, the US and the rest of the world view the South China sea as international waters, while China makes that claim that it's its sovereign territory (against all international custom).
> the US holding the first island chain
Come on, the US doesn't hold Japan. They're allies.
> Without a foothold in the South China Sea
China already has a foothold in the South China Sea: it's coast, Hainan, etc.
Japan is in America’s sphere of influence, as is Taiwan. In case of a war, china’s only access to the open ocean is to the south, and that is assuming the Philippines and Indonesia are at least neutral.
Yes, definitely. It might be a different situation if Japan also had military bases inside our country, or if they had any choice in the matter. Do you think Japan, Germany, or South Korea have any choice whether our military can occupy their countries? Are you aware how many countries around the world are currently occupied by us? It’s threat of violence, plainly and simply. I’d love to hear your perspective if it contrasts mine!
I think Japan, Germany and South Korea prefers to "lease" US military as they're doing now rather than having their own military as the sole defence for the country. Germany in particular has shown signs of enjoyment in such an arrangement, leaving them to focus on other issues like building their economy and commanding EU. There is a reason why Trump is demanding more commitment from other NATO countries. An analogy to computer game would be, US is defending the NATO countries (+japan og SK) while the others are focusing on 'booming'.
If one day germany, japan or south korea were to decide to have referendum to remove US troops and get majority vote, I am sure US would remove their troops. So in short: no, US is not holding a gun to them because the other countries are certainly enjoying US nuclear and military umbrella protecting their territory.
> Do you think Japan, Germany, or South Korea have any choice whether our military can occupy their countries?
Yes, they 100% have a choice. Why do you think otherwise? They're US allies and they benefit from the situation.
Another poster pointed out that they benefit from this arrangement by not having to spend so much on their domestic militaries to protect themselves.
Another point: in the case of South Korea and Germany, the US military helps protect those countries from the real threats of invasion. South Korea is still technically at war. For 50 years US soldiers eyed Soviet soldiers across the inner German border, and closely worked with West Germany and NATO to be prepare if those soldiers ever crossed over.
You have a very odd, binary perspective on international relations that seems to preclude win-win military cooperation.
“After the collapse of the Soviet Union, the West welcomed the next big communist country into the global economic order. Western leaders believed that giving China a stake in institutions such as the World Trade Organisation (WTO) would bind it into the rules-based system set up after the second world war (see Briefing). They hoped that economic integration would encourage China to evolve into a market economy and that, as they grew wealthier, its people would come to yearn for democratic freedoms, rights and the rule of law.
It was a worthy vision, which this newspaper shared, and better than shutting China out. China has grown rich beyond anybody’s imagining. Under the leadership of Hu Jintao, you could still picture the bet paying off. When Mr Xi took power five years ago China was rife with speculation that he would move towards constitutional rule. Today the illusion has been shattered. In reality, Mr Xi has steered politics and economics towards repression, state control and confrontation.
So China isn't playing with wto rules? I thought that would get punished promptly before this day, considering its decades since China joined wto?
On the other hand, if we look at the staggering systematic corruption in western nations, and suffering of the lowest rank citizens, I see no reason Chinese people, who are mostly poor, would want to move to a western system.
> I thought that would get punished promptly before this day
International laws are closer to guidelines than the laws of a nation-state. Enforcement is fuzzy. When China lost its UNCLOS case to the Philippines, for example, the former simply ignored the tribunal's ruling [1].
The point of The Economist article [2] is that the WTO et al were unusually lenient with China. The hope was this leniency would result in a market economy that would, in turn, produce strong institutions and lay the path towards liberal democracy. That was the bet. That didn't happen. Hence the withdrawal of leniency.
> The hope was this leniency would result in a market economy that would, in turn, produce strong institutions and lay the path towards liberal democracy.
This logic completely baffled me. I think the democracy of western nations steadily declines after the peak of 70-80s? While the economy keeps growing.
The argument that market economies beget democracy was popularly espoused in Francis Fukuyama's The End of History [1]. The Soviet Union collapsed following glasnost [2], itself a response to the West's economic outperformance. The USSR's constituents were replaced by things that looked like fledgling democracies (e.g. Poland [3], Ukraine, the Baltics, East Germany, et cetera).
The West's thesis was wrong. Market economies do not cause democracy. But that was far from obvious in the 1990s. If this baffles you, I suggest reading up on the historical, economic and political context.
> I think the democracy of western nations steadily declines after the peak of 70-80s?
This view is not supported by the data [4]. The democratic retreat is a recent trend: "2017 was the 12th consecutive year of decline in global freedom" [5].
To be fair, I doubt he was baffled by people believing the thesis, or about the origins of the thesis, but by the thesis itself. Of course grand parent may have believed it in the 80's and 90's. Many did.
This is sensible. China has played the West, by using the unmaterialized promise of access to its markets to motivate technology transfer to it for its own strategic advantage. It's never going to let a Western company provide the technology to power its critical systems, so there's no reason the US should allow a Chinese one to do the same.
In many respects China has had a hands off approach by the world. They have high tariffs and other laws that prevent Western products and services competing in China. I'm no fan of trade wars, or a fan of Trump, but raising the tariffs on China for steel imports is nothing China isn't already doing.
I for one think it would be a good thing for the US if Xi Jinping becomes a dictator. Dictatorships have been proven to be unstable and don't make great decisions. If inaugurated in a period of growth, they tend to stagnate after the original dictator dies. See USSR after Stalin and then Khruschev, Robert Mugabe in Zimbabwe, The Pachas of Turkey, etc... Not to mention other dictators that were only brought down by war, but lord forbid that happens.
So basically, the destruction of what little democratic-esque institution there was in China will inevitably result in a decline and/or downfall of the current political agenda of China, which can only be a good thing for the world in the long term.
The world does not need more validation of dictatorships. It needs to see dictatorships fail, and - even more so - it needs to see democracies succeed.
> The world does not need more validation of dictatorships. It needs to see dictatorships fail
Venezuela is a dictatorship failing. China's population is 50 times larger than Venezuela's. Its military capabilities and global economic integration are commensurately greater. When Xi falls, the best we can hope for is a few months of chaos contained to Beijing.
If the world withdraws free trade with China, or realisticly, limits it by imposing tariffs on Chinese products, then the easy growth they've experienced would be gone. If we limit somehow limit their corporate espionage also...I'd expect the extreme suppression of their citizen's liberty and privacy will limit their innovation and growth.
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[ 3.3 ms ] story [ 114 ms ] threadPerhaps what the USA wants is not really free trade but "free trade": new markets to sell labour-derived goods and services to and resource suppliers with very low wages, low standards of services and low food prices in order to maintain its (slipping) financially dominant position in the world.
Viewed from this angle the move makes sense and remains consistent with long-term policy goals. The stance of the current presidential administration is merely convenient. Whether it works in the long term remains to be seen.
I'm a long-term critic of the US administration's trade and foreign policy and do not gladly suffer any who are unquestioningly sympathetic with it. So I have a hard time admitting this, but the consequences of the US' global trade empire falling are unimaginable to me: I see more ways it could end up in a significantly worse global situation than a marginally better one.
This is a commonly touted criticism for the US by foreigners. I grew up basically my entire life hearing this argument. (I'm argentinian).
But I think it fails to grasp the political and economical reality. If the US restricts importations, it harms itself as well as it harms the would-be exporter. The idea that the US gains economic advantage by telling other countries to be open and remaining closed is just false.
Its like a business man telling other business men that paying good wages is the way to retain employees and then he pays below market: he harms himself with the hypocrisy.
Secondly, I am convinced that the natural state of human beings is to be mercantilist and protectionist, which means open trade is always a political uphill battle. The restrictions the US has on imports has been criticized by its liberal economists. But politicians are not elected to make good policy, they are elected to make popular policy.
Well, we do gain economic advantage when nations remain open, because the US is only open in theory. That said, this "only open in theory" thing affects us, the citizens of the US, just as much as it affects other nations.
For instance, in THEORY if we in the US don't like the fact that Facebook and Twitter have the power to shape what we see and hear, we're free to form startups that offer competing social networks. As a pragmatic matter though, we really aren't. Such startups are almost guaranteed to fail in the US.
On an international scale we can see this same effect in action by comparing the vibrancy of the Chinese internet startup market, against that of other, more open, nations. The vast majority of users in nations with more open markets use Facebook, Twitter, and other mostly US properties. Don't misunderstand me, the citizens of those nations can attempt to form internet startups if they wish, but the reality is that in the face of the giant, well funded, US competitors also operating in their nations, I, personally, wouldn't be sanguine about their prospects. The Chinese cleverly avoided that fate by effectively closing their market.
Yes, its a huge loss for FAANG that they cant compete in china, but its also a loss for chinese people. It's just not a loss for chinese politicians, that can tout that thanks to them they created massive companies.
You can run indefinitely on a bad platform while it gives your reasonable returns. We'll see what happens when china gets its own big capitalist crisis.
It's quite ironic that this is the US we're talking about and that the US gained so much from protectionism. Abraham Lincoln remarked, “Give us a protective tariff and we will have the greatest nation on earth.” The US was born, after its independence, in protectionism. Through protectionism, the US was able to establish a very impressive manufacturing base in almost every sector of the economy.
The US can drop all tariffs on imports to zero if it wants. Have you considered why it doesn't? If free imports really benefited the US in the way you're claiming they do, why would the US so aggressively seek trade deals with other nations?
The only reason to engage in trade deals is to be able to gain regulatory influence of other countries and set mutual tariffs. It is in the US interest to make these tariffs lower for things they are net exporters of and higher for things they are net importers of (because if you're manufacturing, the raw materials generally cost less than the cost of the imported raw materials and so a larger tariff on a smaller value is better than a larger tariff on the larger value)
Huge multilateral trade deals, the kind the US has been pushing, rely on the fact that they are the biggest single party and that the other signatories have a diversity of exports and imports. This is what makes Trump's bilateral approach slightly amusing: a bilateral trade deal with America First stamped on it seems like it would be a harder sell than the multilateral trade deal negotiated by the US as the largest single entity.
It makes it easier to sell to the people in those countries that their politicians have signed away their power to choose a government that has the power to introduce nice things like an efficient (i.e. socialized) healthcare system . Because the trade agreement will explicitly forbid this in order to open up the healthcare market to all the signatories.
> The idea that the US gains economic advantage by telling other countries to be open and remaining closed is just false. Its like a business man telling other business men that paying good wages is the way to retain employees and then he pays below market: he harms himself with the hypocrisy.
That's a poor analogy and as hard as I try I really can't see the mapping. In this analogy the businessmen are countries. The workers are what, the citizens? The factories? That makes no sense. Each party wants their factories to make money, of course. Are the wages taxes? Because the state taxes people. Reflecting the analogy back, is the US saying "cut taxes, cut the services for workers" whilst hypocritically turning into a social democracy?
But I like the businessmen analogy. We can say that one represents an entirely fictional Fortune 100 company (I'm sure none would behave this way) and another a tiny little manufacturer that is on the brink of going under. The Fortune 100 company uses its leverage to suggest it will give the smaller manufacturer a huge order subject to it giving it a free sample run or such of a bespoke part. The smaller manufacturer would never entertain such terms for any other customer in ordinary circumstances, but this contract would save it. So it bites, takes a hit and gets accelerated under. Then the Fortune 100 company buys it at a knock-down price when it's no longer a going concern.
The US wants imports, but not of things that directly compete with US manufacturing. Things have gone a little wrong, because self-interest has led to the moving of production to the plundered world and has led to the perception amongst some people that the main thing the US has been exporting is jobs.
I contest this idea that protectionism is what spurred growth in america in the 1800's. At the time, federal spending was like 5% of gdp. It was a time of low regulations and lots of business freedom within the borders. Also take not that America was severely and artificially constrained as a colony, unable to legally build manufactures. After those restrictions were gone, the capital invested into machinery and production was going to shoot up immediately, regardless of tariffs. Also take into account the immigration the us had. The US kind of doubled its population every 20 years during the 1800's.
It grew in spite of the tariffs, not because of them.
> The US can drop all tariffs on imports to zero if it wants. Have you considered why it doesn't? If free imports really benefited the US in the way you're claiming they do, why would the US so aggressively seek trade deals with other nations?
Of course I considered it, and already mentioned it: political support. Why does the US subsidize corn? Or restrict the importation of agricultural products, or limits immigration? Votes and private interests, and generally because the public has believed the lies those private interests push, like immigrants taking away jobs. Something that is repeated even in this platform when the H1B topic comes up.
The only economical purpose of a trade deal is to improve free trade, by abridging the rules of both countries to merge the markets. There are then political reasons to do it, which relates to diplomacy or geopolitics, things that I cant speak much about.
> The only reason to engage in trade deals is to be able to gain regulatory influence of other countries and set mutual tariffs. It is in the US interest to make these tariffs lower for things they are net exporters of and higher for things they are net importers of (because if you're manufacturing, the raw materials generally cost less than the cost of the imported raw materials and so a larger tariff on a smaller value is better than a larger tariff on the larger value)
Trade deals with the purpose of protectionism, which definitely exist, show terrible results. You can see the Mercosur of south america, where Argentina and Brazil have deals that you can only import cars from one another. Result: cars cost twice as much as in the US with the labor force making less than what they make in the us. Disaster.
It would be in the interest of any country, at any point, to completely liberalize is import/exports, even if the other countries don't. If the US decided not to import argentinian lemons, argentina retaliating by not allowing the import of internet services can only be reasonable as a retaliatory measure with the intent of receding the other restriction. But without that goal, if that cannot be achieved, then there is no point in restricting the import. Let argentina eat its own lemons while watching netflix, and let americans think they won a battle while they eat worse or more expensive lemons.
But this is the part where people flare up their nationalism and lack of understanding of economics, and clamor for vengeance, or to teach a lesson. And thus,a politican gains votes by putting tariffs.
> That's a poor analogy and as hard as I try I really can't see the mapping. In this analogy the businessmen are countries. The workers are what, the citizens? The factories? That makes no sense. Each party wants their factories to make money, of course. Are the wages taxes? Because the state taxes people. Reflecting the analogy back, is the US saying "cut taxes, cut the services for workers" whils...
Xi's China at best a competitor, at worst an enemy, it is getting clearer and clearer day after day.
In addition, it's also ironic how when the Chinese government intervenes you see the American media decry exactly the type of behavior that the administration now wants to embrace.
It has never been about ideologies (free market), it's always been about what's beneficial for the US government. Not just in trade, but in everything. And anyone who knows anything about the past 40 years should be able to see it clearly. Instead, so many people are happy to parrot whatever the latest talking point on the media is.
In fairness, propaganda is supposed to have that effect. There are people and organizations in China, and in the US, who spend DECADES studying human psychology, human behavior, etc etc etc, just to be able to properly direct human thinking at scale.
The Washington Consensus promoted free trade and liberal democracy. In just the last few weeks, it has become apparent China is devolving into a garden-variety dictatorship. Trading short-term economic growth to defray a long-term threat to the global system is entirely consistent with the UN/IMF/WB/WTO missions and past activity.
I hope more countries wake up to what China is trying to do. Artificial island, Rohingya-cleansing, Sri Lanka airport etc. Its just the beginning, we need to be prepared.
Artificial islands in the south China sea... Is that not just a really crappy-low-tech version of an aircraft carrier?
When you say we need to be prepared. For what? Do you think China will attack? Or it will just pursue economic growth like every other country? In exactly the way we always wanted them to... Remember in the past China was closed... We (the West) opened that can of worms... Now we decide we don't like worms...
2. Are you literally justifying building island in other countrys sovereign territory? There is absolutely no excuse for this. How would Beijing like it if France or US moved their aircraft carrier 1 km outside of Shanghai?
3. China may not be capable of attakcing through convential war, but they are doing more nastyness without it. Supporting the Sri lankan governments assault on the tamils literally killing 60 000 people in the last weeks of the war in 2009. Imprisoning nobel pieze price winner till his death? Punishing Norway economically for awarding nobel peize price? Suppressing the muslim population in their country (Uyighur?) Stealing technologies and preventing any outside countries from enforcing IP-theft lawsuits.
The list is too long to mention.
- If China is going to practically make life hard for western companies to operate in China, then same will happen to Chinese companies. Huawei is already experiencing this.
- If you are going to steal intelectual property and mass-produce items then this will have implication on trade.
- WTO sanctions needs to be implemented until China starts to respect the rules that every other country follows.
Devil's advocate: those rules exist to protect the interests of Western countries, not China, and China is a nascent superpower with nuclear weapons, so why should China respect them?
Also China doesn't want civil unrest.. if we imposed harsh sanctions I can guarantee itll crollapse their economy, then their country. We just need to "tap the breaks" so to speak.
They can manufacture almost anything they need. Oil is a major exception. They are addressing vulnerability to oil imports with big pushes for electric cars and nuclear energy, as well as alliances with major oil exporting nations.
They also have channels to import other raw materials, particularly from Africa with which they have strong economic ties and can in return provide the African nations with manufactured goods and expertise for infrastructure building.
On the other hand, a sudden, near complete sanction on Chinese imports would result in widespread shortage of many manufactured goods in the US and EU. Both sides will survive but it is unclear who would get hurt more.
https://atlas.media.mit.edu/en/profile/country/chn/#Destinat...
https://atlas.media.mit.edu/en/profile/country/chn/
> It has been claimed that Gedhun had been taken into protective custody from those that would spirit him into exile and is now "in captivity against the wishes of the Tibetan people", whereas the Chinese government states that he is living a "normal private life".Tibetans and human rights groups continue to campaign for his release.
https://en.m.wikipedia.org/wiki/Panchen_Lama
https://www.cfr.org/councilofcouncils/global_memos/p38227
That means you’re a shill / sock puppet / DQ
Btw the chinese government is a support to burmese actions towards the Rohingya population, thats what I meant with my initial post. I am not going to repeat everything but there are plently of articles.
I'm Australian, so I follow the South China Sea closely.
The US seems to have completely abandoned doing anything in the South China Sea.
I mean - Trump talks a lot about China, but has done nothing to slow the Chinese build up there.
Here's a recent article about how the Chinese have finished their fortifications on one of their artificial islands (which are pretty impressive!): http://www.news.com.au/technology/innovation/photos-reveal-c...
It would require war, a near-war, or very large scale sanctions. A group of dozens of major economies would have to impose trade consequences. And even that might not deter China, given how badly they appear to want to annex that territory.
What bollocks. Freedom of navigation operations are a light-touch manoeuvre that still pisses off Beijing [1]. Economically embracing China’s neighbours (as TPP tried to do) and bolstering the militaries of Taiwan, the Philippines and other threatened democracies is another reasonable step.
[1] https://thediplomat.com/2017/08/south-china-sea-us-navy-cond...
Would you please be concise and more elaborative about what you mean?
In case you're not aware, China isn't even in the top 10 exporters of steel into the USA[0], so please don't say steel tariffs.
[0] https://www.trade.gov/steel/countries/pdfs/imports-us.pdf
There is also a closer relationship with Taiwan and new bills being made to apporve sale of weapons.
The american ships and aircrafts have also ignored the territory of the artificial islands sending signal to all the commerical boats that the water is for everybody to use.
Selling arms to Taiwan isn't new. There's the Taiwan Relations Act Affirmation and Naval Vessel Transfer Act of 2014 and an arms deal signed under Obama in 2015 for $1.83 billion (1).
Sailing within the 12 nautical miles of the man-made Chinese islands also happened under Obama (2).
(1) https://www.reuters.com/article/us-usa-taiwan-arms/obama-adm...
(2) https://www.washingtonpost.com/world/us-warship-sails-within...
https://www.wsj.com/article_email/chinese-billionaire-linked...
> https://www.wsj.com/article_email/chinese-billionaire-linked...
What about aluminum? What is your question, and how is your link related to it?
1. https://en.wikipedia.org/wiki/First_island_chain
2. https://en.wikipedia.org/wiki/String_of_Pearls_(Indian_Ocean...
> the US holding the first island chain
Come on, the US doesn't hold Japan. They're allies.
> Without a foothold in the South China Sea
China already has a foothold in the South China Sea: it's coast, Hainan, etc.
If one day germany, japan or south korea were to decide to have referendum to remove US troops and get majority vote, I am sure US would remove their troops. So in short: no, US is not holding a gun to them because the other countries are certainly enjoying US nuclear and military umbrella protecting their territory.
Yes, they 100% have a choice. Why do you think otherwise? They're US allies and they benefit from the situation.
Another poster pointed out that they benefit from this arrangement by not having to spend so much on their domestic militaries to protect themselves.
Another point: in the case of South Korea and Germany, the US military helps protect those countries from the real threats of invasion. South Korea is still technically at war. For 50 years US soldiers eyed Soviet soldiers across the inner German border, and closely worked with West Germany and NATO to be prepare if those soldiers ever crossed over.
You have a very odd, binary perspective on international relations that seems to preclude win-win military cooperation.
It was a worthy vision, which this newspaper shared, and better than shutting China out. China has grown rich beyond anybody’s imagining. Under the leadership of Hu Jintao, you could still picture the bet paying off. When Mr Xi took power five years ago China was rife with speculation that he would move towards constitutional rule. Today the illusion has been shattered. In reality, Mr Xi has steered politics and economics towards repression, state control and confrontation.
...
The West lost its bet.”
https://www.economist.com/news/leaders/21737517-it-bet-china...
On the other hand, if we look at the staggering systematic corruption in western nations, and suffering of the lowest rank citizens, I see no reason Chinese people, who are mostly poor, would want to move to a western system.
International laws are closer to guidelines than the laws of a nation-state. Enforcement is fuzzy. When China lost its UNCLOS case to the Philippines, for example, the former simply ignored the tribunal's ruling [1].
The point of The Economist article [2] is that the WTO et al were unusually lenient with China. The hope was this leniency would result in a market economy that would, in turn, produce strong institutions and lay the path towards liberal democracy. That was the bet. That didn't happen. Hence the withdrawal of leniency.
[1] https://en.wikipedia.org/wiki/Philippines_v._China
[2] https://www.economist.com/news/leaders/21737517-it-bet-china...
This logic completely baffled me. I think the democracy of western nations steadily declines after the peak of 70-80s? While the economy keeps growing.
The argument that market economies beget democracy was popularly espoused in Francis Fukuyama's The End of History [1]. The Soviet Union collapsed following glasnost [2], itself a response to the West's economic outperformance. The USSR's constituents were replaced by things that looked like fledgling democracies (e.g. Poland [3], Ukraine, the Baltics, East Germany, et cetera).
The West's thesis was wrong. Market economies do not cause democracy. But that was far from obvious in the 1990s. If this baffles you, I suggest reading up on the historical, economic and political context.
> I think the democracy of western nations steadily declines after the peak of 70-80s?
This view is not supported by the data [4]. The democratic retreat is a recent trend: "2017 was the 12th consecutive year of decline in global freedom" [5].
[1] https://en.wikipedia.org/wiki/The_End_of_History_and_the_Las...
[2] https://en.wikipedia.org/wiki/Glasnost
[3] https://books.google.com/books?hl=en&lr=&id=RCitZyd7QlUC&oi=...
[4] https://en.wikipedia.org/wiki/Polity_data_series
[5] https://freedomhouse.org/article/democracy-crisis-freedom-ho...
(The headline would not be out of place describing Washington state, which sees a large amount of Chinese real estate investment.)
So basically, the destruction of what little democratic-esque institution there was in China will inevitably result in a decline and/or downfall of the current political agenda of China, which can only be a good thing for the world in the long term.
The world does not need more validation of dictatorships. It needs to see dictatorships fail, and - even more so - it needs to see democracies succeed.
Venezuela is a dictatorship failing. China's population is 50 times larger than Venezuela's. Its military capabilities and global economic integration are commensurately greater. When Xi falls, the best we can hope for is a few months of chaos contained to Beijing.