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The US is gambling with the world economy, doubling its bet, raising the stakes, forcing the hand, and changing its own rules in order to corral other countries to come under its wings. |
But it should realize gambling with peoples' livelihood is gambling with peoples' lives which are non-negotiable. It may win one bet today but risk losing the game tomorrow because peoples are not going to stand idly by and just take its bullying heads-down.
And this is clear because Trump and his ilk have not asked themselves the simplest of questions: "if i can do it to others this year, will they continue to agree to comply next year, and the next, and the next?"
The US' own conclusion of what it is trying to do is thus equally simple: its trade tariff measures and economic sanctions are but the works of a global economic dictator bent on bending the will and aspirations of others to do business by the global free market's implicit willing buyer-willing seller principle.
If, say, next year China continues to run a large trade surplus over the US because the US citizens prefer to buy China goods, is the US going to exact punitive trade tariffs again on China? If for 2019, what about 2020, 2021 and so on as well?
Of all the countries in the world, China is the last country the US should be trying to impose trade imperialism. The fact the US is ignoring China's history is telling on the US' real intention to make sure China doesn't come up. This is counterproductive because knowing that, China consumers are not going to buy US goods even if all tariffs are removed by China on them.
So far, China has been totally responsible in its response which has been measured and proportionate. It doesn't want to fight a trade war. It doesn't believe in the thucydides trap. It is saying China must achieve the best its peoples can do just the US peoples have been achieving the best they have done.
But Trump and his sinophobes remain relentless. So what can China do next?
(1) Change the supply chains
Undertake the last-mile assemblies not in China but in other countries.
In fact, China is helping to build maritime ports in a number of other countries. Prevail on their governments to set up free trade manufacturing zones around those ports. Then whatever China makes by parts can be shipped to be assembled in those zones by those countries which will then export to the US. In the initial stages, China assembly experts can be posted to those places to help train the locals until they can do the assemblies confidently to sufficient quality standards.
In bluffing the world on trade figures, the US has slyly ignored that the present situation is China gets tabbed with the full price of the final product since it has traditionally been the last destination of assembly before the product is shipped out to the US even when its direct input is no more than ten percent of the product value. And that is why the US has been able to say China's trade surplus is too big.
So change the last destination of assembly to other countries. Doing so as suggested above will not only reduce straightway the US trade deficit figures with China but also help raise employment in other countries, bump up their trade figures, spread goodwill and soft diplomacy, and make those ports an instant commercial success.
Just be careful if this works, the US will next try to change the rules again to say the country of origin must be defined by the size of the content. By then, those countries affected should be up in arms against the US for changing its goalpost again.
(2) Privatize State-Owned Banks
The US has been harping that China provides state subsidies through its banking system to enterprises. So privatize the state-owned banks; then the US will have to withdraw its accusation.
If after that, China goods are still cheaper, then the conclusion is China factories have all along been more efficient so all those accusations are baseless.
(3) Intellectual Property Issues
There are 2-3 types: patents, copyright and trade secrets.
According to European sources and even US legal practitioners in China, the judiciary system in China is both efficient and comprehensive on patents and copyright; in fact foreign claimants get a much higher rate of success at China courts than in many other countries.
Trade secrets are however a moot issue. It is very hard to define one so that courts everywhere depend on documentation that will have to prove not just ownership but also entitlement and malappropriation.
What can perhaps be attempted next is to get the US to nominate Amcham in Shanghai to establish a cooperative working committee with China authorities to understudy how trade secrets can be defined and accepted as an operable legal structure in a joint-venture setting. Then the White House should not 开玩笑 anymore what it doesn't know anything about, and take out its ignorance on China.
This century, blaming the Chinese for everything and anything has to stop. Worldwide.