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China, Leverage, and Values
- Leary 7y agoThe fundamental questions that America needs to answer are: What are the aspects of the current economic relationship with China that are beneficial to the US, and what are the aspects that are harmful. What policies should it adopt to manage its relationships with China while maintaining its values. Whether it should act unilaterally to achieve those objectives, or coordinate with its allies. What are the near-term and long-term consequences of Cooperating with China vs. Competing with China in a new cold war, considering China's power will likely rise in comparison with the US's.
- remarkEon 7y agoThe awkward elephant in the room here is that China appears to be much more able than the US, at least right now, to rapidly pivot and turn a near-term weakness into a strength. There's plenty of evidence of this (their rapid transition to nuclear, rapid deployment of high speed rail, how they've generally been able to modernize their economy on a short timeline). Your questions are good ones, but I don't think we're asking the most important one: is the age of "free market" capitalism coming to a close with the rise of China (broadly defined as the more free and democratic your country is the more rapid your growth will be), and is the real competition we're entering into a conflict between a "free" and "quasi-authoritarian" vision of capitalism?
- ineedasername 7y agoGood points, as long as you consider that ability to pivot is more a matter of political will than technical capability.
- remarkEon 7y agoRight, which is exactly what I'm getting at. In that sense, the Chinese model is much more able, in my humble opinion, to do a massive pivot. They may be starting far behind the US, but ours is a much larger and slower moving ship.
- Fjolsvith 7y agoAnd yet, in two years, we've decided to change the course of our ship with regards to China. China is rocking hard because of the wake we're leaving.
- Spooky23 7y agoThe US has been retreating from the free market for many years. 25% of GDP is healthcare, insurance and education. Key drivers of the economy, like housing, exist in their present form to due explicit and implicit subsidy. I think China is more like the US then we care to admit, except they think on a longer timescale.
- yborg 7y agoThis is a very good point. If you add in the GDP component of the financial and defense industries, you are looking at a massive overhead of markets managed by implicit or explicit government enforcement (or lack of it) for the benefit of a small elite. This is similar to China, but the Chinese have strategic vision for their economy; in the US it is managed by random allocation of lobbyist dollars.
- sonnyblarney 7y ago"If you add in the GDP component of the financial and defense industries, you are looking at a massive overhead of markets managed by implicit or explicit government enforcement (or lack of it) for the benefit of a small elite." This is not true. To construe 'finance' a just some arguably unnecessary or inefficient 'overhead' in the economy belies a basic lack understanding of what that industry actually does. It's often opaque to outsiders, but banking is a real value creating part of the economy, and it's also right at the foundation of it. Also, 'defence spending' is a normal part of every economy, and it has existential impact for all of us. Consider for a moment that US forces keep most international waterways open for everyone to use, even economic rivals, and even military rivals (!) so long as there's no war. The Suez Canal, Panama Canal, and other critical areas would instantly be under the control of nefarious regional forces if there were a power vacuum.
- roenxi 7y agoThe Big Thing that the banking system does is it lends people money and charges interest. The other services it provides are important but minor compared to that central goal. Now, the US has an overt policy of controlling what interest rate is charged. So the banking system is a free market in the sense that theoretically participants could choose to leave if they wanted to. However, there is also a very overt layer of government decision making and control. The government putting a finger on the scale in a very fundamental way. Exactly how that compares to China is difficult to judge - whatever it is, I argue it isn't very capitalistic. Capitalists are supposed to go broke when they lose money and given how low interest rates are they are more likely to refinance themselves with a new loan. The damage that has been doing to wealth creation since the GFC in around '08 is profound. It is hard to say how much worse China's approach is. It isn't as clear cut as China's Government vs 10,000s of Capitalists - in which case I'd favour capitalism by the numbers. The US government is hamstringing the ability of its own economy to organise around profitable ventures. Instead it is encouraging Ubers and Lyfts.
- internet_user 7y agoits much easier to catch up by stealing proven technology than invent your own. What is truly homegrown tech in China? Is there any?
- 0815test 7y agoPaper, gunpowder, the compass... the list goes on and on. You probably use Chinese-origin tech every single day, without even realizing it!
- internet_user 7y agoOh yes, the famous Four Great Inventions. Unfortunately those are very shaky claims. Just look at the first one: papyrus was in use for nearly 5000 (five thousand!) years in Ancient Egypt and all over the Mediterranean before paper was conveniently invented by Cai Lun. The term paper itself is actually derives from "papyrus". It's really not any different with the rest of those claims.
- jimclegg 7y agoSilkworm & tea can be included as major inventions that were stolen as well. I always find it funny/sad that Easterners in addition to suriving the crimes, have the extra task of educating the Western populations of the crimes committed in their names. I expect you've noticed that every single country that is a victim of modern Chinese espionage was directly involved in destroying the chinese economy during the 19th to early 20th century. US, UK, Japan, France, Germany, Russia (a few of the top offenders). These nations can't simply commit a bunch of crimes, get rich, change the rules, then expect to be protected from past actions.
- camelite 7y ago> These nations can't simply commit a bunch of crimes, get rich, change the rules, then expect to be protected from past actions. They do it all the time. When will the Chinese Communist Party pay for the famine which killed 2-6% of the population (lower bound is based on official government figures)? Probably never is when.
- ineedasername 7y agoI look at some of these questions from a game theory oint of view though, and China has shown itself something of a very regular 'defector'. In these recent moves the US has embraced more of a tit-for-tat strategy. And we're not the only players. Some other countries are to some degree going to follow suit with the US, making this a multiplayer game, in which tit-for-net has a larger upside for the cooperators than the sole defector. Of course this over simplifies things, but it's incorrect to say China's power will significantly rise relative to the US if the US and other countries begin treating with them as an "always defect" actor in this game.
- ajross 7y agoIf you want to throw geek jargon around, drop the "game theory" lens and start re-evaluating your "zero sum" assumptions. A world where we buy endless cheap junk from China and ship cash out of the country to pay for it is far richer one for everyone[1] than one in which we need to make all the junk at our labor rates. Why? Because all that cash is coming right back into the country as investments. It's like shopping at a store which decides the best use of their income is to lend it right back to you so you can buy more stuff. [1] Especially the chinese, of course, who have lifted their nation out of abject poverty in barely over half a century. But we win here too relative to the isolationist scenario.
- bsder 7y ago> A world where we buy endless cheap junk from China and ship cash out of the country to pay for it is far richer one for everyone[1] than one in which we need to make all the junk at our labor rates. Why? Because all that cash is coming right back into the country as investments. This does not automatically follow--and, in fact, I would argue against it. GE had to "insource" their hot water heater manufacturing to continue to wring out cost savings--and discovered that they had forgotten how to design and build hot water heaters. That is fairly strong evidence that keeping this stuff in China benefits China to the detriment of other countries. I am okay for paying a not insignificant amount extra on my goods to keep the knowledge of how to make them in the domestic area.
- _bxg1 7y agoA more interesting tactic would be to make economic sanctions dependent on values-based policies. Stop censoring certain kinds of speech, and we'll lower tariffs a bit. Stop persecuting Uighurs, and Huawei can have Android back. Strongarm the communist party into being less evil, instead of bluntly attacking China as a whole. I think most of China's people would pressure its government to agree to those kinds of deals. It's really just those at the top who are doing all the bad stuff. The rest are just excited about their newfound prosperity and want to hang on to it.
- selimthegrim 7y agoWhy didn’t this work with Carter?
- _bxg1 7y agoCarter?
- classicsnoot 7y agoYour use of the term "evil" says a lot about the warped Western perspective. Without diving too deeply into pedantry, it is the West that claims the cognitively dissonant idea that religiosity is subject to the State while also demanding the State act religiosly (just wars, responsibility to protect, etc.). For all the pseudo-commie bluster, China is a Han ethnostate. Lies that benefit the State are just. Brutality that protects the State is just. China has decided that a Muslim population in its borders requires brutality, and this rubs westerners wrong. China has decided that mass surveillance should be open and accepted, and this rubs westerners wrong. But the West is very comfortable with destabilizing Ghadaffi and instigating regional chaos, which was and continues to be incredibly brutal. The West appears to be quite comfortable with mass surveillance so long as nudes abound, food arrives at our doorsteps, and ideologies we collectively find icky are suppressed. Moralising is a habit of those who lack the strength and/or will to get what they desire through other means. The West dethroned its warriors and elevated its priests; China is dethroning its priests and raising up its warriors. Time will tell which class of leader shall overcome, but history is pretty clear about what kind of societies rise or fall.
- youeseh 7y agoIs there a resource where we can check the current state of tariffs between the US and China? Which tariffs are currently in effect? Which tariffs are on their way? Whats their status? etc.
- dba7dba 7y agoIMHO, tariffs is meaningless when it comes to trading with China. China govt should simply stop requiring foreign firms to partner up with local firms and/or placing arbitrary restrictions on imported products. Sure many nations do it, but China is an extreme case. Edit: I got downvoted but what part of my statement about China incorrect?
- internet_user 7y agoThat tariffs are meaningless. If they are so meaningless, maybe full-blown sanctions should be applied.
- throwwayhhgbnhd 7y agoYou can set up a Wholly Foreign Owned Enterprise in China so no local partners are needed. It’s what Tesla has done.
- nycdatasci 7y agoLaw firm websites like this are the most reliable source that I’ve found: https://www.strtrade.com/f-tariff-actions-resources.html https://www.strtrade.com/f-tariff-actions-resources.html
- Invictus0 7y agoI see China moving to appease the Americans in the short term and then working to secure their economic independence in the long term. The truth is that the Chinese know that they have overplayed their hand here; that Trump can raise tariffs all day long and it is foolish to race to the bottom with him. By making the requisite concessions in the trade war, which, as Ben noted, has historically been tilted to their favor, they will be able to steady their economy as they continue to build up their advanced technology infrastructure.
- SubiculumCode 7y agoIf the China tariffs last too long, it seems logical that supply chains will move outside of China. This might be ok for China, which is purportedly looking to pivot to a consumer based economy, but it might not be on their chosen timeline.
- frozenport 7y agoYou are absolutly correct. China has to make de jurre concessions, that are nothing more than agreeing to unenforceable vagaries. -> Protecting IP is only as real as the enforcement action. -> Competition can be suppressed by half safety regulations or stopping the items at port. -> Non-competitive taxes can be moved from central to confusing local laws. -> Internet fragmentation can be implemented as preferential traffic. All of these are already happening. It speaks to the Chinese government's resolve inspire nationalistic sentiment that they miked this situation for political leverage.
- mistermann 7y agoI have this constant feeling that life on Planet Earth circa year 2000 or so onwards is playing out kind of like a bizarre imitation of the old movie Lord of the Flies. To me, it feels like everyone is absolutely batshit insane. Everyone (well, mostly) is so sure of themselves, so sure of what is right and wrong. As if life is so simple. It seems to me that the rate of scientific progress has vastly outpaced that of the humanities (or, whatever is the appropriate "balancing" field to science) for so long that humans have become a danger to ourselves, for a very long time now, on several different fronts. We are simply not mature and responsible enough to be wielding this much power, yet here we are. And there's very little reason to feel very optimistic, that I see anyways. https://en.wikipedia.org/wiki/Lord_of_the_Flies https://en.wikipedia.org/wiki/Lord_of_the_Flies
- solveit 7y ago> or, whatever is the appropriate "balancing" field to science My opinion is that there is no such field, that there never has been such a field, and that we are therefore screwed.
- hurrdurr2 7y agoThis is my feeling as well. Good to know I'm not alone in this... however, it's still limited comfort since we're all probably screwed, as someone else had already pointed out.
- tasuki 7y ago> I have this constant feeling that life on Planet Earth circa year 2000 or so onwards is playing out kind of like a bizarre imitation of the old movie Lord of the Flies. To me, it feels like everyone is absolutely batshit insane. Everyone (well, mostly) is so sure of themselves, so sure of what is right and wrong. As if life is so simple. Apart from scientific progress, what has changed? Humans gonna human.
- stevens32 7y agoOur values are so far skewed towards progress that actually directing that progress to be beneficial to all is almost an afterthought (or, work that most people aren't really allowed to contribute to). People also aren't rewarded for what they _didn't_ do, and as long as nothing changes we'll continue to motivate people to build with more or less reckless abandon wrt social impact. Investigating correct usage of power isn't immediately profitable, and in a capitalist reward system it's hard to see how that work would get prioritized to the same level as simply increasing power. I'd never thought of this balancing of progress perspective, thanks for such a thought provoking comment!
- iliketosleep 7y agoThe author is correct in saying that China fired the first shots in the trade war with effectively shutting out major US companies with its protectionism, while China's expansion into the US went on unrestrained. If this process continued on unchecked, China would definitely replace the US as the world power. China is an authoritarian state, with core values that are at odds with the US. Therefore, the stakes could not be higher, and now could very well be the last time that the US has enough leverage over China to actually come out on top.
- avocado4 7y agoChina is going to have 450 million sick old people in 10 years. I don't think their domination was ever inevitable.
- dragonsh 7y agoDon't worry China won't be alone soon India will be in the same rank for authoritarian rule where everything will be monitored and dissent will be termed anti-national with secession laws applied and people jailed. This is the path India's current administration which might come back again, learned from China and using British methodology of divide and rule (dividing India along religious lines by letting people know where the cabinet is going for holy bath or pilgrimage).
- profalseidol 7y agoYeah, they should follow the steps of NSA.
- Fjolsvith 7y agoHowso?
- Fjolsvith 7y agoAnd hungry people, with the pork famine on the way. They're going to have to play ball if they want to be able to feed their people soon.
- 42yeah 7y agoIMHO why can't both take one step back? Forbidding technologies flow leads to different standards in different countries. China forbode Google, Twitter, etc from rooting in China years ago, so China developed a totally different ecosystem than the rest of the world (basically) to take their place: baidu as search engine, QQ as IM, weibo as social media. This made Chinese hard to take a peek to the outside world, while the outside world also has a hard time peeking in. And now US is doing pretty much the same. Just when Chinese companies are trying to develop overseas business, US bans them. And as people from US and China cannot communicate, hatred grows and lotsa Chinese are now volunteering to ban foreign products. This is truly meaningless.
- radicaldreamer 7y agoThe whole point of the West's policies is to increase competition at the low end of the labor market (manual, commodity, factory) while maintaining protectionism at the high end (intellectual property, media, culture, and technology), which is not coincidentally where elites are concentrated. The idea is to keep the price of labor as low as possible (to maximize profit for the owners of enterprises).
- mistermann 7y agoAre you sure that's the whole point? Undisputed superpower of the world isn't exactly a minor detail, I'm pretty sure China has that at least in the back of their minds.
- Fjolsvith 7y agoHow does the West's policies increase competition at the low end of the labor market? By your argument, the West is harming itself by cutting off access to cheap Chinese labor.
- AFascistWorld 7y agoYou mean like the past 2 decades?
- panarky 7y agoBlocked in China: Twitter, Google, YouTube, Github, The New York Times, Facebook, Instagram, Whatsapp, Bloomberg, Tumblr, Signal, Reddit, Netflix, Le Monde, Wikipedia, Reuters, Dropbox, Bing, Discord, etc., etc., etc. Who started this trade war after all?
- eo3x0 7y agoThis doesn’t include the fact that all foreign enterprises in China are actually 51% owned domestically. Tariffs, while severe, are no where close to this extreme protectionism. The US finally decided to bring a knife to a gun fight.
- throwwayhhgbnhd 7y agoThat’s not true. Tesla in China is a Wholly Foreign-Owned Enterprise.
- dis-sys 7y agowhat are Apple/Microsoft's domestic partners in China? note that, not talking about Apple's data center partner or Microsoft's cloud partner, just talking about Apple/Microsoft's core business (iphone, mbp, windows, office etc) here.
- deleted 7y ago[deleted]
- intellix 7y agoYeah I've noticed Github works quite well but Gitlab works but is heavily throttled at night time. It's frustrating cause all of the GFW projects are hosted at GH
- throwaway34241 7y agoDoes China gain an advantage, by not using / having access to the same services that the whole rest of the world uses? If they're gaining an advantage that's one thing. I don't want to just take that assumption for granted though. If China is actually harming themselves, I think it might not make sense for the US to copy them because "they did it first".
- yalogin 7y agoThis is the only Trump initiative I support. Hope he doesn’t do his usual bow down to the aristocrat routine and back down for whatever reason he sided with Putin, Saudis. This is a fight that the US must win. The only issue is Trump picked fights with the EU and they probably will use that as an excuse to not help out. The fight with China should have been done as a coalition to begin with.