Generational Dynamics World View

[John J. Xenakis]

** 23-Sep-2019 World View: Trump's strategy with China

For months, I've heard so-called "experts" on television criticize
Donald Trump's use of trade sanctions with China.

It's now been generally agreed worldwide that a way must be found to
curtail China's hostile and illegal trade practices (cyber intrusion
into business networks, forced technology transfers in exchange for
market access, intellectual property theft). So those who want to
criticize Trump without criticizing the objectives have to criticize
the way Trump did it.

What I've been hearing for months was some variation of the following
strategy:

Quote: "It's necessary to curtail China's forced technology
transfer and intellectual property theft, but Trump is doing it
all wrong by imposing unilateral sanctions, isolating the United
States. What he should have done is formed a coalition with other
countries -- Canada, the European Union, Japan, South Korea, and
so forth -- and negotiate China's trade practices as a
group."

I've heard different versions of this for months, and it's a widely
accepted view among certain groups of analysts. The problem is that
the above strategy is so clearly disastrous that we can only assume
that any journalist, analyst or politician expressing this view is
truly ignorant, is truly an idiot, and probably can't find China on a
map.

The first and most obvious problem is that forming such a coalition is
impossible. Several European countries would balk, and at most one or
two countries would join the coalition before it fell apart
completely, making Trump look like a loser. Indeed the proposed
strategy would violate many concepts in "The Art of the Deal," and so
it's almost impossible that Trump would adopt it.

But let's suppose Trump DID adopt this policy anyway. This would be a
complete disaster. China's media would portray it as a revival of the
"century of humiliation" and the imposition of new "unfair treaties."
They would particularly point to the Versailles Betrayal, when all the
Western countries, including Japan, ganged up on China and forced them
to accept the terms of the Versailles Treaty after World War I. This
triggered extreme nationalism and the May Fourth movement, and led to
adoption of Soviet Communist "theory."

So it's absolutely certain that this strategy, which I've heard
"experts" propose repeatedly for the last few months, would fail
disastrously.

Instead, Trump followed a strategy apparently recommended by John
Bolton: He began by imposing tariffs that affected all of America's
allies, including the EU, Mexico and Canada, with a 25% tariff on
imports of steel and 10% on aluminum from these countries. After
that, he could pose unilateral tariffs on imports from China, without
being open to the accusation that everyone in the world was ganging up
on China. Ironically, the perception was (and is) that everyone in
the world is ganging up on Donald Trump, but that seems to be Trump's
strategy.

"https://www.bbc.com/news/world-us-canada-44426442"

Once again, this is what I mean. I see this every day -- different
"experts," usually young and pretty, who really know absolutely
nothing about anything, who believe that they know everything, who
believe that history always begins this morning, making really
incredibly stupid statements. If Trump had followed the pretty boy's
strategy, it would have been a disaster, but by following Bolton's
strategy, there are actual negotiations going on. (Although, as I
always point out, the world is headed for World War III with 100%
certainty, no matter what Trump does.)

Yesterday, National Interest online posted an article by Ali Wyne and
James Dobbins called "How Not to Confront China." The authors are
described thus: "Ali Wyne is a policy analyst and James Dobbins is a
senior fellow at the nonprofit, nonpartisan RAND Corporation."


https://nationalinterest.org/feature/how...hina-82356

Here are their pictures:

• Ali Wyne (top) and James Dobbins (bottom)

So Wyne is pretty enough, and Dobbins is definitely not, and is old
enough and from the venerable Rand Corporation, so he should know
better, but this shows that even old people in the Rand Corporation
have no clue what's going on in the world.

So let's take a look at some of the claims in the article.

Quote: "First, the administration is undercutting America’s
ability to form a coalition that can manage China’s resurgence. It
has expressed little interest in continuing negotiations on a
Transatlantic Trade and Investment Partnership with the European
Union (EU) and has abandoned the Trans-Pacific Partnership
(TPP). ... Even before it imposed its first tranche of tariffs on
China, in July 2018, the administration had penalized exports from
Canada, the EU, Japan, Mexico and South Korea."

I read this and I have to laugh at how naïve it is, for the reasons
already explained. By first penalizing exports from other countries,
Trump has avoided the accusation that the West was ganging up on
China, as in the "unfair treaties" and the Versailles Betrayal. If
Trump had gotten together with Canada, the EU, Japan, Mexico and South
Korea to demand that China change its trade practices, the result
would have been explosive. The real question is: Why don't these
so-called "experts" -- Ali Wyne and James Dobbins -- already know
that? It's bad enough not knowing what you're talking about, but you
have to be really stupid to not know that you don't know what you're
talking about.

Quote: "Second, while the present configuration of
technological entanglement between the United States and China
indeed presents significant security risks, the Trump
administration’s push to decouple the two countries’ economies and
derail companies such as Huawei and ZTE could redound to Beijing’s
benefit. China now feels compelled to accelerate its drive towards
indigenous innovation, find alternative suppliers of high-tech
inputs and reroute exports that were headed for the United
States."

This is just babble. At least they recognize that Huawei and ZTE
present security risks. But blocking them from taking control of much
of the global internet is not the same as "decoupling the two
countries' economies."

Quote: "Third, in withdrawing from the Joint Comprehensive
Plan of Action with Iran and making sanctions a central component
of its foreign policy, the Trump administration has incentivized
friends and competitors alike to probe more intensely for means of
circumventing the reach of the dollar, which is one of the
foundations of U.S. preeminence. The EU, China, and Russia are
partnering to develop special purpose vehicles, and a growing
number of individuals who shape monetary policy are calling to
reduce the dollar’s centrality. Even Bank of England Governor Mark
Carney proposing a digital reserve currency to “dampen the
domineering influence of the U.S. dollar on global
trade.”"

I've been hearing about these attempts to circumvent the dollar for
decades, and so far all attempts have failed. This is an empty threat
that has nothing to do with current round of sanctions. Furthermore,
most countries have quietly expressed agreement with Trump's sanctions
on China, since everyone agrees that China's illegal trade practices
have to be confronted. They may dislike Trump, but they know that
he's the only one who can do it.

Quote: "Fourth, while sharply criticizing core elements of
China’s geoeconomic agenda—often with good cause—the Trump
administration seems unable to offer a coherent one of its own,
thereby making its criticism seem less like an expression of
concern for its longstanding partners than a manifestation of
anxiety about its own competitiveness. That signaling reinforces
China’s twin narratives: that Beijing is confident and ascendant,
while Washington is nervous and declining."

More silly babble. Nobody believes the narrative that Beijing is
confident and ascendant, while Washington is nervous and declining.
Only a nevertrumper would say something so stupid.

Quote: "Fifth, and perhaps most fundamentally, while it has
undertaken a series of notionally competitive measures, the Trump
administration has not explained what it ultimately hopes to
accomplish. In seeming to countenance what Claremont McKenna’s
Minxin Pei calls “an open-ended conflict, with no measurable
indicators of progress,” there is an increasing risk that the
United States could focus more on a highly improbable quest to
contain China than on an eminently achievable effort to renew
itself."

This certainly is the "most fundamental" of Wyne's and Dobbins'
mistakes. Like most people in the media, they're totally baffled by
Trump's policies, and they blame it on Trump rather than their own
stupidity.

Trump's objective -- and it's been succeeding as far as I can tell --
is to disrupt critical places in China's economy in order to stop or
slow its headlong rush to launch a war with Japan, Taiwan and the
United States.

China was on a path where it could pour as much money as possible into
its war machine, supplemented by all the intellectual property and
technology that it could steal from the west, all the intelligence it
could steal through cyber attacks on the West's business and military
sites, and with complete control of a significant part of the global
internet through Huawei.

All of those Chinese plans are now in shambles, but of course they are
simply slowed down. China will start again on all those plans, until
finally some event triggers a new war. That's why I say that World
War III is coming with 100% certainty, no matter what Trump does.