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The 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,

by Leary 7y ago

The 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 ago
The 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 ago
  Good points, as long as you consider that ability to pivot is more a matter of political will than technical capability.
  - remarkEon 7y ago
    Right, 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 ago
      And 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 ago
  The 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 ago
    This 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 ago
        The 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 ago
  its 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 ago
    Paper, 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 ago
      Oh 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 ago
        Silkworm & 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 ago
I 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 ago
  If 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 ago
A 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 ago
  Why didn’t this work with Carter?
  - _bxg1 7y ago
    Carter?
- classicsnoot 7y ago
  Your 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.

by Leary 7y ago

remarkEon 7y ago

The 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 ago
Good points, as long as you consider that ability to pivot is more a matter of political will than technical capability.
- remarkEon 7y ago
  Right, 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 ago
    And 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 ago
The 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 ago
  This 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 ago
      The 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 ago
its 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 ago
  Paper, 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 ago
    Oh 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 ago
      Silkworm & 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 ago

I 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 ago
If 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 ago

A 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 ago
Why didn’t this work with Carter?
- _bxg1 7y ago
  Carter?
classicsnoot 7y ago
Your 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.