People say you don’t like Chinese Trade Winds. No, I love them. But their leaders are much smarter than our leaders. It’s like taking the New England Patriots and Tom Brady and having them play your high school football team. That’s the difference between China’s leaders and our leaders. President Donald Trump.
Spengler’s prediction that America’s attack on Huawei would fail has been borne out quicker than anyone imagined. Today, Huawei owns the lion’s share of global telecoms revenue:
Two-thirds of the largest exporters in China are foreign-owned and thousands of US Corporations in China sell $600 billion annually into its domestic market–$100 billion more than China exports to the US–and generate net profits there of $50+ billion annually. Boeing sells more airplanes to China and Walmart produces more goods from China than any other company in the world. Of the factories operated by Apple’s top suppliers, 357 are in China and 63 are in America – so Apple is shifting Mac Pro manufacturing from the US to China. Since the trade war began, Tesla, Boeing, BMW of America, Exxon Mobil and Wal-Mart have announced new investments and factories in China – because Chinese Trade Winds sales grow six per cent annually.
American media silence about this is deafening. How many have mentioned that, while China is America’s biggest trading partner, America is only China’s #3?
The EU, its #1 partner, increased its China trade 11.2% this year and expects a further boost as the EU-China Bilateral Investment Agreement kicks in twelve months ahead of schedule. China’s 7% tariffs on EU products are another accelerant, as is the 17.2% rise in Belt and Road trade and the upcoming merger with. The Eurasian Economic Union. Meanwhile, hourly departures of Trans-Eurasian trains, fibre-optic cables and pipelines are rapidly uniting the continent.
The USA, China’s #3 partner, saw its China trade fall 9%, depressed by 21% tariffs.
Just how trade-dependent are the partners? Though trade accounts for 86% of Europe’s GDP, it’s only 37% of China’s and 26% of America’s. Imports account for 19% of China’s GDP and 15% of America’s but, while China’s global current-account surplus has fallen from 10% of GDP to 1.4%, America’s trade deficit has not budged. The US is less trade-dependent, but China is now the largest recipient of foreign direct investment, FDI, and its lead is growing.
After President Trump’s imposition of unilateral tariffs, China made its core conditions non-negotiable: lift all punitive, non-WTO tariffs, embargoes, and bans before the agreement is signed (and, presumably, return the captive Princess unharmed); apply all the agreement’s conditions equally to both parties; leave Xi’s 2018 offer unchanged; give China twenty years to implement the agreement’s terms.
Trump’s signature on such a deal would end two centuries of unequal treaties by granting. China peer status and humiliate America’s servile allies (like Australia and New Zealand) which both offended China and crippled their mobile telecoms programs. The deal will also accelerate the growth of China’s aggregate national wealth, further threatening America’s economic dominance.
While the annual 6.5% rise in Chinese per capita income will help slow. America’s job drain, it will raise China’s aggregate national wealth and global heft. A clear-cut Chinese victory would speed the move away from the US dollar. As a reserve and settlement currency and boost China’s sway in world affairs. What began as an easy-to-win trade negotiation could end in a geopolitical nightmare.
- 151 countries have filed WTO complaints against the US, 85 have filed against the EU, 43 have filed against China. ↑
- Belarus, Kazakhstan, Russia, Armenia, Kyrgyzstan.183 million people with $4 trillion GDP. ↑
- A trade agreement between Brunei, Cambodia, Indonesia, Laos, Malaysia. Myanmar, the Philippines, Singapore, Thailand, Vietnam, China, Japan, South Korea, India, Australia and New Zealand. ↑