Can somebody explain to me how China is screwing us?
- Thread starter RGLD
- Start date
This is an oversimplification, but we basically buy way more from them than they buy from us, and Trump doesn't like it. He thinks this will force Americans to buy American-made, which would lead to higher domestic production and jobs.
The headline is 'jobs' of course: you shouldn't be making things cheaper for us to buy, by using your cheap labor versus our more-expensive labor. We demand the unreality of $10 shoes AND a $20/hr domestic labor rate to make 'em. (And LOTS of $20/hr domestic workers, too!)
But the real deal (as you might surmise) is the intellectual property theft (in the $B, annually), one-way technological transfers ($B annually), AND THEN THE LACK of reciprocity re our ability to participate in the Chinese market. (Remember: they are hitting their LOWS of GDP *GROWTH* 6%+ annually!! over the last few years -- that is a Holy Shit!! economy, nearly 100% closed to foreign providers or foreign ownership. [What *has* opened up has been dribs and drabs, and nearly wholly without legal recourse should 'the rules' change at all. "Whattttttt???"])
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With IP yes, but by trading deficit, no. Trump simply doesn't understand economics.
In spite of tariffs last year the trade deficit increased:
"The U.S. trade deficit in goods (i.e. products) with China in 2018 rose to $419.2 billion, up from from the previous record of $375.5 billion in 2017, according to a Commerce Department report."
https://www.politifact.com/wisconsi...ent-trumps-china-trade-deficit-claim-doesnt-/
An explanation of why this deficit is so big:
https://www.marketwatch.com/story/h...thats-causing-a-huge-trade-deficit-2018-03-23
In spite of tariffs last year the trade deficit increased:
"The U.S. trade deficit in goods (i.e. products) with China in 2018 rose to $419.2 billion, up from from the previous record of $375.5 billion in 2017, according to a Commerce Department report."
https://www.politifact.com/wisconsi...ent-trumps-china-trade-deficit-claim-doesnt-/
An explanation of why this deficit is so big:
https://www.marketwatch.com/story/h...thats-causing-a-huge-trade-deficit-2018-03-23
It's about many things, the commies in that country play extremely dirty but everyone kept quiet cause they were importing Inflation and exporting Deflation ( Almost all of China operates at a loss )... Now China is very broke, short US Dollars and the end is here, so West started attacking practices suddenly. They dug a debt hole so big they can't climb out of, they have been trying to stop recession since beginning 2018 and they can't. Slowly turning into a depression, while they are printing 15-20 Trillion RMB a quarter pace ( Shadow included )
It seems more about causing extreme financial hardship to China that the commies get ousted, or at least Winnie... 25 % tariffs means any Importer who doesn't buy from China will be hugely ahead of the guys who Import from China, price terms, even with China already operating at steep loss. They do not float currency, and if they did, prices on imports would double overnight, and maybe triple causing severe Inflation. They use US Dollars to buy in International Markets, but they are out of them, and with 25 % tariffs means much less US Dollars coming their way, at a time where they are running deficit US account... It's over on the fact they will Default heavily on US Issued debt regardless of 25 % or not, and that they will be so short US Dollars they won't be able to buy anything, forced to float RMB... Float RMB insta collapse of Consumption GDP, which is already in the toilet, due to sky high consumer debt, high majority off the books shadow lending so won't appear on paper but it's there.
Last Friday they started robbing the citizens of US Dollars, you can't withdraw US from your bank in China anymore, unless you are connected... Hong Kong is collapsing too, PBOC robbed their Foreign Reserves as well
It's not (just) about trade deficits.
In the U.S., trade policy has for years been set by free-market, laissez-faire ideologues. To China, trade and trade policy is just another arena of competition, a space to angle for edge and gain a long-term, ideally permanent advantage over other nations. The Western legalistic obsession with "norms," rules, and fair play is a quaint weakness which can be exploited, and they have done so ruthlessly.
The basic playbook for the past twenty years has been:
1) Parrot back Western talking points about free markets, open access, mutual benefit, WTO rules, etc. to keep the US/EU placated. Any disputes which arise are gummed up in the WTO bureaucracy for years; by the time the plaintiff gets a ruling, things have moved on.
2) Boost exports using currency manipulation and systematic dumping to undercut competitors, while taking advantage of Western open access and fair-play legal norms.
3) On the other side, require JVs and technology transfer for all significant Western investments in China.
4) Actively and systematically favor Chinese firms in millions of small ways: contracting, licensing, regulatory moves, product standards, legal/court decisions, customs/tax inspections, etc. Turn a blind eye to theft of Western IP (everything from designs to software/film piracy), in some cases carrying out such theft using military hacking units.
Ultimately, in dealing with China, you can't just sign them up to some generic rule book and trust Chinese courts and officials to apply it fairly, as dispassionate arbiters presiding over a vigorous free market. The way it's looking, we need to have agreements along the lines of "X tons of soybeans for Y pairs of shoes, and we'll promise JP Morgan's joint venture will realize profits of Z billion next year". Then you need to monitor for non-compliance or gaming like a hawk, and ruthlessly turn the screws the instant you see any funny business.
In the U.S., trade policy has for years been set by free-market, laissez-faire ideologues. To China, trade and trade policy is just another arena of competition, a space to angle for edge and gain a long-term, ideally permanent advantage over other nations. The Western legalistic obsession with "norms," rules, and fair play is a quaint weakness which can be exploited, and they have done so ruthlessly.
The basic playbook for the past twenty years has been:
1) Parrot back Western talking points about free markets, open access, mutual benefit, WTO rules, etc. to keep the US/EU placated. Any disputes which arise are gummed up in the WTO bureaucracy for years; by the time the plaintiff gets a ruling, things have moved on.
2) Boost exports using currency manipulation and systematic dumping to undercut competitors, while taking advantage of Western open access and fair-play legal norms.
3) On the other side, require JVs and technology transfer for all significant Western investments in China.
4) Actively and systematically favor Chinese firms in millions of small ways: contracting, licensing, regulatory moves, product standards, legal/court decisions, customs/tax inspections, etc. Turn a blind eye to theft of Western IP (everything from designs to software/film piracy), in some cases carrying out such theft using military hacking units.
Ultimately, in dealing with China, you can't just sign them up to some generic rule book and trust Chinese courts and officials to apply it fairly, as dispassionate arbiters presiding over a vigorous free market. The way it's looking, we need to have agreements along the lines of "X tons of soybeans for Y pairs of shoes, and we'll promise JP Morgan's joint venture will realize profits of Z billion next year". Then you need to monitor for non-compliance or gaming like a hawk, and ruthlessly turn the screws the instant you see any funny business.
Perfectly written! Basically the only way forward with China is the commies out the way, and by reducing US Dollars going China's way, at a moment they are severely broke, is the right play if you wanna oust them... Winnie has made a lot of enemies in China, a lot of people died cause of him and his crew, slowly but surely China will realize in order to go forward is through Democracy and Free Markets... Democracy isn't always perfect like you see with Trump as an example, but it beats communist tools over reaching and destroying financial sector. Jinping is financially retarded, he managed to ruin China economically, when 10 years ago they were seen as the next US if they played there cards right...
Now its super charged pollution, corruption, control and extreme debt/brokeness... Also managed to alienate majority of Planet, they see fair trade as weakness... Haha, geniuses you got there, they make Trump look OK, and that's fucking hard to do. 25 % + of GDP is derived from random buildings in but fuck nowhere not lived in and completely useless, 50 % + of GDP is through Investment, over HALF of GDP is directly tied to mostly irrelevant debt. It's weird when you tell people they are headed in Argentina direction of misery and Inflation, they look at you like your crazy... It will get very ugly when they try to oust the commies, some will die but it's sacrifice they will have to make to enjoy freedom and happiness
Can you confirm that China the once "fastest growing economy" in the world is now no longer? China was growing at 7% at one point but now I hear that it's all financed with debt. Now they aren't growing fast but their debt keeps rising.
If they have been doing this for a while - how much of that 7% growth was at our expense you think?