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The Chinese cheat all the time. - high subsidiaries for their exports - blind eye on IP theft - forced technology transfer - closed market for many industri

The Chinese cheat all the time. - high subsidiaries for their exports - blind eye on IP theft - forced technology transfer - closed market for many industries and services - forced "joint ventures" for certain industries - legal system the favors Chinese companies - systematic attack on western industries Feel free to ask and I will give specific examples. Based on the kind of business relationship of the US and China, e.g. Apple products are produces in China and hence also go into the trade deficit, the trade deficit is heavily distorted. (China, Foxconn makes very little profit on assembling apple phones. Yet, Apples makes most profits offshore, e.g. via selling from China to HK and from HK to US). So a trade deficit is not surprising. Trump never said that he wants a zero trade balance, he told Xi to "lower it" and "equalize the playing field". This was a reasonable request. Xi just could have agreed to this but instead wants to play hard ball. In my opinion Xi can not win this game and the only rational strategy in a game that you can not win is not to play it. It makes me doubt the strategic abilities of Xi but we will see. "suggested on Sunday that China could deliberately disrupt American companies’ supply chains by halting the export of crucial components mostly made in China." Outstanding idea. I am sure Western companies will love this, invest more in China and don't move production to other countries. Before you downvote me, give an argument.

simonh 8y ago
I’m sure you are right that the Chinese cheat, but a fair and equitable free trade system must be based on rules and independent arbitration. Trump is doing everything he can to undermine and destroy every vestige of a rules based independently arbitrated global trade system. His policies are explicitly stated to be purely in US interests only, by him personally. That’s not the basis for a free trade system. Finger pointing at China doesn’t excuse any of this, even Trump’s policies against China, on the basis of free trade.
- jayalpha 8y ago
  I don't understand your argument. And if they Chinese tax US cars with 25% and the US taxes them with 2.5% (or was it 5%)? then it is reasonable to request equal tariffs.
  - simonh 8y ago
    Of course it is reasonable, so do that. Pursue them through the WTO or talk to your allies about reforming the WTO if it isn't working to your satisfaction, or scrap the WTO and build something better. If you believe in a global free trade system then build one. The US isn't doing any of that. I have little to no sympathy for China, but I do believe in equitable free trade based on consensus, a common rulebook and independent arbitration. It's served us very well and even with Chinese protectionism, which they have been gradually rolling back, the US and the rest of the world has profited from it. The economic issues in the West over the last 10 years were entirely home-grown and if anything trade with China has been a resilient economic buffer that's helped us cope with the financial crisis (if unintentionally). Blaming them for all our woes is just a distraction.
    - speedplane 8y ago
      Trump and many of his predecessors have gone through the WTO and have very little to show for it. It takes years for any decision and by the time you get the result it’s far too late (see solar panels). Why should any country submit itself to a proven broken system?
      - simonh 8y ago
        The WTO dispute resolution system has actually been pretty effective[1]. It typically takes about 1-2 years, but usually complainants will impose interim measures themselves anyway. This is just a smoke screen though. Suppose China does make a deal with the US and does agree various measures, what magical secret sauce does the US have to make sure they keep to them and don't violate agreements in the future? There will still need to be a dispute resolution system, a genuine open free trade system can't operate without one. The US policy right now is inimical to that - it's brazenly and explicitly stated to be partisan and based on economic strength rather than equitable free trade. Steel tariffs on close allies on 'national security' grounds? Really? [1] https://www.wto.org/english/res_e/publications_e/dispu_settlement_e.htm https://www.wto.org/english/res_e/publications_e/dispu_settl...
- sonnyblarney 8y ago
  " Trump is doing everything he can to undermine and destroy every vestige of a rules based independently arbitrated global trade system" I'm sorry but China is flagrantly violating so many of it's own agreements. The IP agreements of the WTO for one. There would be little fuss if China was sticking to it's own agreements.
  - jayalpha 8y ago
    "There would be little fuss if China was sticking to it's own agreements. " This alone would be very "un-chinese". A signed contract in China is always a contract in negotiation. Can change any time.
    - sonnyblarney 8y ago
      It doesn't matter what's on the paper. What matters is what they do. If they don't respect IP, we shouldn't respect theirs. If they respect ours, we respect theirs.
      - chii 8y ago
        And so an eye for an eye leaves the world blind.
        v_lisivka 8y ago
        So last one, with just one eye, will be the king.
  - simonh 8y ago
    You're out of date, a lot of that is in the past. They've still got a way to go, but they've been rapidly cleaning up their act, largely because so many Chinese companies are developing their own IP. They are doing what the US did. Rip of European IP until they had IP based industries of their own then get religious about it.
    - 8y ago
teknologist 8y ago
Another point is that companies manufacturing products in China can get tax deductions by hiring Chinese workers. Essentially rewarding companies for the exploitation of low paid workers and making the company more dependent on Chinese labour. It makes the threat of "do this for us or we'll shut down your China operations" that much more impactful.
- jayalpha 8y ago
  The thing is, I can buy many products cheaper in the US than in China. This tells you something. Due to this and fake products I buy clothes (YES, clothes!), shoes and electronic products only in the EU and the US. Edit: Don't get me wrong. I love China. But many people now see only the strength of China. They have a strong culture. But it comes with many weaknesses. They once fell behind western culture. They may fail again if they don't fix some things. The downside risks here a HUGE.
  - snaky 8y ago
    > I can buy many products cheaper in the US than in China Would you list some examples of that products, please?
    - dogma1138 8y ago
      All “foreign” products even those which are manufactured in China have a foreign goods tax of 25% some have additional taxes beyond that. China doesn’t want foreign companies selling cheap goods in China so essentially everything needs to be imported even if it’s manufactured down the street from you in China.
      - jayalpha 8y ago
        "China doesn’t want foreign companies selling cheap goods in China so essentially everything needs to be imported even if it’s manufactured down the street from you in China." It is possible to buy good products cheap. But there you need to be smart, smarter than I am, and have contacts. A sub contractor might sell excess product under the table for cheap if you know where to find it (I don't). chinalawblog.com had an article why you should always have your production samples shipped to you and never have any sample batch "destroyed" by your manufacturer. They may just sell it under the table. So you may be able to buy a REAL Gucci bag that was designed by Gucci bad was never available on the market with this kind of design. Really rare. :-)

simonh 8y ago

I’m sure you are right that the Chinese cheat, but a fair and equitable free trade system must be based on rules and independent arbitration. Trump is doing everything he can to undermine and destroy every vestige of a rules based independently arbitrated global trade system. His policies are explicitly stated to be purely in US interests only, by him personally. That’s not the basis for a free trade system. Finger pointing at China doesn’t excuse any of this, even Trump’s policies against China, on the basis of free trade.

jayalpha 8y ago
I don't understand your argument. And if they Chinese tax US cars with 25% and the US taxes them with 2.5% (or was it 5%)? then it is reasonable to request equal tariffs.
- simonh 8y ago
  Of course it is reasonable, so do that. Pursue them through the WTO or talk to your allies about reforming the WTO if it isn't working to your satisfaction, or scrap the WTO and build something better. If you believe in a global free trade system then build one. The US isn't doing any of that. I have little to no sympathy for China, but I do believe in equitable free trade based on consensus, a common rulebook and independent arbitration. It's served us very well and even with Chinese protectionism, which they have been gradually rolling back, the US and the rest of the world has profited from it. The economic issues in the West over the last 10 years were entirely home-grown and if anything trade with China has been a resilient economic buffer that's helped us cope with the financial crisis (if unintentionally). Blaming them for all our woes is just a distraction.
  - speedplane 8y ago
    Trump and many of his predecessors have gone through the WTO and have very little to show for it. It takes years for any decision and by the time you get the result it’s far too late (see solar panels). Why should any country submit itself to a proven broken system?
    - simonh 8y ago
      The WTO dispute resolution system has actually been pretty effective[1]. It typically takes about 1-2 years, but usually complainants will impose interim measures themselves anyway. This is just a smoke screen though. Suppose China does make a deal with the US and does agree various measures, what magical secret sauce does the US have to make sure they keep to them and don't violate agreements in the future? There will still need to be a dispute resolution system, a genuine open free trade system can't operate without one. The US policy right now is inimical to that - it's brazenly and explicitly stated to be partisan and based on economic strength rather than equitable free trade. Steel tariffs on close allies on 'national security' grounds? Really? [1] https://www.wto.org/english/res_e/publications_e/dispu_settlement_e.htm https://www.wto.org/english/res_e/publications_e/dispu_settl...
sonnyblarney 8y ago
" Trump is doing everything he can to undermine and destroy every vestige of a rules based independently arbitrated global trade system" I'm sorry but China is flagrantly violating so many of it's own agreements. The IP agreements of the WTO for one. There would be little fuss if China was sticking to it's own agreements.
- jayalpha 8y ago
  "There would be little fuss if China was sticking to it's own agreements. " This alone would be very "un-chinese". A signed contract in China is always a contract in negotiation. Can change any time.
  - sonnyblarney 8y ago
    It doesn't matter what's on the paper. What matters is what they do. If they don't respect IP, we shouldn't respect theirs. If they respect ours, we respect theirs.
    - chii 8y ago
      And so an eye for an eye leaves the world blind.
      - v_lisivka 8y ago
        So last one, with just one eye, will be the king.
- simonh 8y ago
  You're out of date, a lot of that is in the past. They've still got a way to go, but they've been rapidly cleaning up their act, largely because so many Chinese companies are developing their own IP. They are doing what the US did. Rip of European IP until they had IP based industries of their own then get religious about it.
  - 8y ago

teknologist 8y ago

Another point is that companies manufacturing products in China can get tax deductions by hiring Chinese workers. Essentially rewarding companies for the exploitation of low paid workers and making the company more dependent on Chinese labour. It makes the threat of "do this for us or we'll shut down your China operations" that much more impactful.

jayalpha 8y ago
The thing is, I can buy many products cheaper in the US than in China. This tells you something. Due to this and fake products I buy clothes (YES, clothes!), shoes and electronic products only in the EU and the US. Edit: Don't get me wrong. I love China. But many people now see only the strength of China. They have a strong culture. But it comes with many weaknesses. They once fell behind western culture. They may fail again if they don't fix some things. The downside risks here a HUGE.
- snaky 8y ago
  > I can buy many products cheaper in the US than in China Would you list some examples of that products, please?
  - dogma1138 8y ago
    All “foreign” products even those which are manufactured in China have a foreign goods tax of 25% some have additional taxes beyond that. China doesn’t want foreign companies selling cheap goods in China so essentially everything needs to be imported even if it’s manufactured down the street from you in China.
    - jayalpha 8y ago
      "China doesn’t want foreign companies selling cheap goods in China so essentially everything needs to be imported even if it’s manufactured down the street from you in China." It is possible to buy good products cheap. But there you need to be smart, smarter than I am, and have contacts. A sub contractor might sell excess product under the table for cheap if you know where to find it (I don't). chinalawblog.com had an article why you should always have your production samples shipped to you and never have any sample batch "destroyed" by your manufacturer. They may just sell it under the table. So you may be able to buy a REAL Gucci bag that was designed by Gucci bad was never available on the market with this kind of design. Really rare. :-)