8 ms·

Ma seems to be saying to the United States: Continue running trade deficits with China, subsidizing China's ill-conceived domestic social and economic policies,

• api 10y ago
  I've felt for a while that more happened behind the scenes in this election than we know, and that part of what occurred is a collapse in the de-facto unwritten alliance between the USA and China that has existed for some time now. Clinton was working to preserve that alliance, and failed. That's dangerous. I do agree that the USA has subsidized China too much to its own detriment, but the alternative could be significantly worse for both countries. A collapse of trade would crash both economies, and given the fragility of the Chinese economy a crash there could be a humanitarian and political disaster. It could also lead to the ascent of crazy hard liners. Honestly I don't see either -- continuing to subsidize China or collapsing trade -- to be a good outcome. It seems we've painted ourselves into a corner.
  • deleted 10y ago
    [deleted]
• mrb 10y ago
  Ma seems... And that's where it stops. Ma made a general observation and that's it. Historically countries who trade less tend to be hostile toward each others, while countries who trade in bigger volumes are friendly. Also Ma isn't saying or implying "keep the trade deficit". He says "keep trading. period" (a surplus or a deficit, doesn't matter in the context of his argument.) By the way it's weird that people seem to think it's China's problem that the US have a trade deficit with them. The deficit can be solved by the US selling products and services to China. It's the US' problem to find what to sell. And only the US can solve it.
  • jdmichal 10y ago
    Can a US-based business sell products and services to a Chinese one? At least, can they do it directly and not through some Chinese subsidiary?
    • RobertoG 10y ago
      Are not American corporations getting a god deal here? Because it seems to me that they are profiting from the difference in wages. Maybe a case of eat your cake and have it?
  • gph 10y ago
    > It's the US' problem to find what to sell. And only the US can solve it. Well there's the problem of China not respecting copyright or any type of intellectual property. And that's not just a problem for the Facebooks of the world, they are stealing our agricultural and industrial knowledge as well. And while it's not officially sanctioned by the CCP, it's unofficially encouraged.
    • RobertoG 10y ago
      That's the standard book for developing an economy. The USA did that to Europe, specially to England.
      • gph 10y ago
• allemagne 10y ago
  I'd much rather lose a petty economic rivalry to China than win a war against them.
  • rrggrr 10y ago
    This is the likely outcome.
• maxerickson 10y ago
  Exchanging promises (debt/trade deficit) for real goods is hardly a subsidy.
• dontyouremember 10y ago
  I'm not an economist, but from what I've read, running a trade deficit isn't necessarily a bad thing. The US ran trade deficits through the 80's and 90's while the economy was booming. And there is never a good time for war between two nuclear powers.
• kristianc 10y ago
  He's not making a threat of any kind, he's making an empirical observation that countries that trade with each other tend to go to war less.
  • coldtea 10y ago
    >He's not making a threat of any kind, he's making an empirical observation that countries that trade with each other tend to go to war less. That's more wishful thinking though. Many touted the same thing in early 20th century: that the increased trade between European powers, economic interdependence, etc. will mean the end of war. Then WWI and WWII came along. Trade is itself a kind of soft war (for resources, for markets, etc) and can easily be extended to full war when those are not ample enough.
    • kristianc 10y ago
      Yet there is evidence that larger trade agreements that bind economies together and create some sort of codependence have a function in reducing the likelihood of going to war. Ma is maybe guilty of conflating individual agreements between nation states and these kind of larger partnerships like Nafta, EU, Euratom etc (or not being sufficiently nuanced for effect). Of course, these large supranational agreements (rather than trading agreements per se) seem to be what Trump is opposing.
      • coldtea 10y ago
        Seems like we've somehow forgotten that before Trump came to power to denounce those agreements, every leftie and liberal, that is, all non corporatists, were also against NAFTA, TPPA, etc (and rightly so).
        • kristianc 10y ago
          In the US, maybe. The Eu enjoys broad support on the 'metropolitan' centre-left across Europe - only being opposed really by the extreme left and the centre to far right. Also, maybe the US should be careful what it wishes for. The UN, for instance, was set up post WWII to project US / Wilsonian values around the world. While trade deals / supranational agreements are inconvenient sometimes, the US may end up missing them when they're gone and the US has to deal with a truly multipolar world again.
• coldtea 10y ago
  >Ma seems to be saying to the United States: Continue running trade deficits with China, subsidizing China's ill-conceived domestic social and economic policies, or war Subsidizing? The US (and others) spends X in China, and Chinese workers and factories sweat their ass off and give back products that the US companies then sell for 2X to 100X. That's the exact opposite of subsidizing. It's the US that can't produce anymore, or can't produce cheaply enough and with enough tolerances, that found a solution to its issues. And if you count for the trade deficit, it's China that holds US debt and thus "subsidies" the US.
  • rrggrr 10y ago
    No. This is NOT how it works. China exports its domestic demand to the US, the US absorbs Chinese overcapacity. This initially began as China importing inefficient US industrial production in the 70s-90s, in exchange for US expectation of access to an enormous Chinese market. That trade never really occurred as the short terms incentives weren't present, resulting in Chinese inefficiencies and massive imbalances for both sides. Read this: http://carnegieendowment.org/chinafinancialmarkets/66485 http://carnegieendowment.org/chinafinancialmarkets/66485
    • coldtea 10y ago
      >the US absorbs Chinese overcapacity How charitable of them. Well, whatever makes one sleep at night with their national superiority intact. As a third party that's neither Chinese nor American, that's what I see.
      • rrggrr 10y ago
        This is exactly the policy the US seeks to now reverse (absorbing over-capacity) and which planned reversal China meets with threats of war. It wasn't charity as you well understand. The US exported its inefficient industries initially for the unfulfilled expectation of access to much greater markets for its efficient industries.
• jcfrei 10y ago
  How is the US subsidizing China's policies? US consumers buy lots of Chinese products because they offer cheap prices. Is a trading deficit really that hard to understand?
  • rrggrr 10y ago
    Read this: http://www.businessinsider.com/michael-pettis-spain-surplus-germany-deficit-2011-7 http://www.businessinsider.com/michael-pettis-spain-surplus-... Then tell me if you still think you understand how trade works.
    • snrplfth 10y ago
      Trade deficits aren't subsidies. All it means is that there's a greater volume of home-currency-denominated investment in the "deficit" country than there are home-currency-denominated exports. So, in the case of the US, there's a net positive capital inflow - dollar-denominated investment. Dollar payments balance, as they must: https://3.bp.blogspot.com/-ahpWrFO8WFM/TZkyZmhwGLI/AAAAAAAAPKE/Tm_wnRXSOvs/s1600/bp.jpg https://3.bp.blogspot.com/-ahpWrFO8WFM/TZkyZmhwGLI/AAAAAAAAP... Trade deficits are a meaningless thing to worry about. They're not actual deficits of any kind, and they don't even accurately measure trade, since they generally don't include services or the chains of value-adding.
      • rrggrr 10y ago
        > Trade deficits are a meaningless thing to worry about. Manifestly wrong. Large trade deficits are unsustainable for three reasons. They cause private and public debt bubbles in the defect nation. They cause unemployment and underemployment in the defect nation. And, they can cause systemic inefficiencies in the surplus nations that lead to economic and social problems at home, and deflation abroad.
        • snrplfth 10y ago
          Private and public debt bubbles? There's no actual debt or deficit being incurred - it's just using money to pay for goods. We might as well worry that we have a trade deficit with the corner store, or our employer might worry that they have a trade deficit with us. "Trade deficits" are orthogonal to actual debt. And they don't cause unemployment, they just change the composition of employment. Now, if a country resolutely insists on hampering its own economy with cartels and bizarre regulation, then yes, "trade deficits" can reveal some of those weaknesses more prominently, but they were already there. Trade deficits are just a mercantilist phantom, conjured up by counting physical goods crossing a border, carefully not counting services and capital investment, and then claiming that wealth is being "drained". It's like measuring evaporation from a lake (exports), ignoring any and all precipitation (payment for exports), and then claiming that the lake is running dry, without actually measuring the water level (per capita income). "Trade deficits" pretty much always comes down to "foreigners sell us things at a low price, therefore we need to fight them/restrict investment in our economy/make things more expensive for our own consumers". It's never been an actual problem.
• jaredklewis 10y ago
  Your usage of the word subsidize is strange. I might as easily say that I subsidize my local grocery store. Except that a much more natural way to say the same thing is that I buy food there. We have a trade deficit with China because they make so many affordable products that Americans want to buy. Of course much of that wealth ends up in the hands of the Chinese government, just as the US taxes corporations here. I would probably describe our government's use of most of those funds as "ill-conceived." We certainly wage more wars than China. Why so belligerent?
  • rrggrr 10y ago
    You're not in the grocery business. Your grocery store doesn't manipulate its prices giving it an unfair advantage against your store. Spirited disagreement != belligerence.
  • Mithorium 10y ago
    Now that you bring it up I realize that I am also running a massive trade deficit with my local grocery store. This does not seem fair, I should impose a 30% tariff on all food imported from the grocery, that will show them for subsidizing their supply chain and manipulating the prices of food
    • snrplfth 10y ago
      In fact, I think the grocery store has been manipulating their prices down, giving them an unfair advantage. Obviously you should insist that they stop selling such cheap food. Man, we'll be rich in no time if we keep this up.
• magicfractal 10y ago
  Do you think that the next generations, surviving in a post-apocalyptic irradiated world, will care about the reasons that took us to war? Is there anything that is worth the death of hundreds of millions of people? Because that's what you're advocating by saying we should go to war, throwing this word lightly like if there would be a future after war between major powers in the nuclear age.
  • gspetr 10y ago
    Post-apocalyptic irradiated countries, maybe. World? Not completely. I am skeptical of China's capability of successfully nuking US, aside from perhaps the west coast.
• appleflaxen 10y ago
  You are missing a step. How does "Keep trading" mean that war is inevitable? It almost certainly means that devaluation of the dollar is inevitable (the ultimate fate of any currency that runs an account deficit for long enough), but to say "war is inevitable, therefore declare war today" is ridiculous.
  • rrggrr 10y ago
    This chart (1/2 through article): https://www.ft.com/content/acd3f2fc-084a-11e6-876d-b823056b209b https://www.ft.com/content/acd3f2fc-084a-11e6-876d-b823056b2... suggests a disorderly adjustment for China if its economy is not rebalanced soon. With this adjustment will come much social unrest and with that always comes scapegoats and calls for war. So, its no the United States that concerns me.
• Balgair 10y ago
  >> then war with China is inevitable and better engaged in now, while the US still enjoys a qualitative advantage Are you saying that, or are you saying the Mr. Ma is saying that? Because if you are saying that then I'm pretty sure you haven't been following the news since August 6th ... of 1945. What the hell kind of war with China do you think is going to happen, one fought with bubble-gum? War with China means the doomsday clock goes to midnight and we all develop a nice healthy green glow.
  • rrggrr 10y ago
    If the British Empire is fated to pass from life into history, we must hope it will not be by the slow process of dispersion and decay, but in some supreme exertion for freedom, for right and for truth. Churchill
    • Balgair 10y ago
      Correct me if I am wrong, but I believe the use of that quote in this context is then advocating nuclear holocaust. If that is what you are trying to say, the next question is then: Are you insane?
      • rrggrr 10y ago
        You are wrong.
        • Balgair 10y ago
          Would you care to explain why?
          • rrggrr 10y ago
            http://johnhawks.net/weblog/reviews/behavior/game_theoretic/game_theory_intro_2007.html http://johnhawks.net/weblog/reviews/behavior/game_theoretic/... Playing chicken with an opponent who time after time demonstrates highly rational, self-dealing behavior is the opposite of insane.
• mindslight 10y ago
  This is an awfully US-centered way of interpreting the comment, which completely misses the real play. The comment was made while visiting Australia, and this article is in Australian media. Furthermore, China isn't looking to get into outright war with the US, for all the reasons listed in sibling comments. What Ma (/China) is really doing is capitalizing on the fear in US allies that the US will now hold back military support. This is a negotiation happening with Australia, to gain trade terms favorable to China. China is reminding Australia that they are within China's sphere of influence, and that it is Australia who must work to stay on good terms with China. For context, I'm a USian and think Trump is duplicitous and incompetent, but sympathize with why he was elected. The problem with the TPP was the same problem with our entire political landscape - it mostly consisted of prudent trade terms, but packaged with a bunch of corporate-pushed corruption. It's designed to be against our own interest to defect (game theoretically), but people are getting quite fed up with the scam.