In 2006; China was very export dependent, exports were 36% of its gdp. In 2023, China has nearly halved that to 20% of gdp. I am not sure tariffs will be as painful to China as it would have been a decade ago. They might be able to weather them and grow fine.
Great analysis, and I would love to believe this is spot on. I think the current US policy would have made sense in 2010 maybe? China was still not really good at high-tech and high-value manufacturing. But now, it looks like locking the stable door after the horse has bolted.
China owns most the cards now; they have a network of supply chains around key strategic products of the future such as EV, solar panels, pharmaceuticals, smartphones, drones, ship building, and all at a scale no one can match today. They also have a huge market that they can present to the world when they decide to encourage more domestic consumption, but for now low domestic consumption allows them to keep their labor costs low, and therefore render US and Europe uncompetitive. Given Trump is alienating all allies, China also has the option of striking bilateral deals with key countries such as Japan, S. Korea and EU. They are already working with India, carefully for now, in building a closer relationship with many Chinese companies investing in factories to sell to Indian domestic market.
Ideally, Trump is able to get agreements with all allies in the 90 day period (and gets to tariff them at a flat 10%), and a higher (say 25%) tariff on China, and then work with allies to onshore or friend-shore most strategic industries. Over a 3 year period, he may be able to decouple from China at least in the most important industries.
But, given Trump's temperament, I just don't see this administration capable of a thought through strategy implemented over a 3-year period.
China is not going to get finished by this tariff war. People needs cheap product and they will protest for it by their votes. Western country power has decreased little bit. Other countries could not produce good quality product at this price range.
China is going to fight this war . Chinese people are going to be behind CCP this time. They know fall of china means fall of them. Chinese people in bulk could not move to western country because white people are racist towards them. So fall of Chinese economy will only moves Chinese people towards CCP. It's simple to think that Chinese support CCP just because of economic growth and economic crisis will turn them against CCP. This is going to be wrong here because according to them this crisis came due to USA who wants to throttle their growth.
USA is powerful because of white people and other intelligent people. As people of other countries are immigrating to USA , it will decrease USA power. White people despite their lots of fault they creates high trust society. In high trust society you can trade more trustfully to other people. This makes western country economically powerful. Whites people are also very good fighter , which makes USA militarily powerful. But same thing are hurting them in back now. High trust society trust in a wrong decision for a long times . They can get manipulated by other people very easily for their good or for their bad. Militarist society once they fight foreign war they turns their gun towards their own society. What makes western country powerful , also brings anarchy for them in a long times.
As population of white people is going to decrease , power of USA is also going to decrease. white people created a culture of trust in the society due to which intellectual property rights could be developed . As people income decreasing in USA they are not going to have a children. They are being substituted by foreign people who do not value the hard work of other people . Foreign people will cheat the system for their own benefits. Foreign people will not think for the betterment of the society , society which is going to be racist towards them. They will decrease the trust in the society in the long run. Western country power is going to decrease little bit in the future.
There is actually a wall which western country could not jump. If they creates a technology to fight with their opponents , their opponents will copy their technology or they will find ways around it with the passing of a times. If they use military power against their opponents , military will one days turns their gun towards their own society. What makes USA powerful , will also brings anarchy to them one day.
China is not going to become superpower. They lack both high iq creative people and high trust society. Without them you are not going to become a superpower. What china will do is copy from western source. In this process, they will be behind USA . AI could change technological gap between china and USA or not , i can't say about it as of now. If white people will not have children then Chinese power will increase more. There is never going to be vacuum. CCP is not going to allow western way of governance to China because they know what works in a western society is going to be anarchist in an eastern society. They will fight because they know once they accept western way of governance , their society will get destroyed. Chinese society is not high trust society. Low trust society can not copy way of life from a high trust society.
Chinese are going to use other country to sell their product in USA. In the mean while rising inflation is not going to help USA government. Bureaucracy is going to become powerful now because it's they who are going to take and distribute money. Bureaucracy was not good for colleges , how do they think increasing power of bureaucracy is going to help . How increase of bureaucracy is going to creates other problems is not being thought as of now.
Meanwhile Chinese is going to fight because they have seen what happen in the middle east and Afghanistan . It's karma. China have seen USA don't respect local custom and culture. USA will put pressure on them to adopt western form of governance which by the way only works in high trust and high iq society. Chinese middle class and upper middle class are not going to support democracy because in those system wealth is going to be distribute to the poor people also. USA will not understand this because they don't have lot's of dependent people .So china is not going to open it's country in anyway as this will bring anarchy in the society. I just see long continuous cold war between china and USA.
Fascinating ideas. But assuming Trump both is employing strategy and wants to counter China, how does alienating and harming allies fit into that picture?
Very interesting, some things to bear in mind until I have a better understanding.
I have no way to judge this complex analysis, nevertheless can Trump have anywhere near as sophisticated a view? How does applying tariffs (until this morning) to our long time allies fit in with this?
Spot on Zineb. Great analysis and serious synthesis.
Thank you, Professor! I truly appreciate you taking the time to read this.
Hi Zineb, you are one of my favorite commentators, and I learn so much from you.
However, I must point out a critique. China is not as export dependent as it once was.
https://data.worldbank.org/indicator/NE.EXP.GNFS.ZS?locations=CN
In 2006; China was very export dependent, exports were 36% of its gdp. In 2023, China has nearly halved that to 20% of gdp. I am not sure tariffs will be as painful to China as it would have been a decade ago. They might be able to weather them and grow fine.
Great analysis, and I would love to believe this is spot on. I think the current US policy would have made sense in 2010 maybe? China was still not really good at high-tech and high-value manufacturing. But now, it looks like locking the stable door after the horse has bolted.
China owns most the cards now; they have a network of supply chains around key strategic products of the future such as EV, solar panels, pharmaceuticals, smartphones, drones, ship building, and all at a scale no one can match today. They also have a huge market that they can present to the world when they decide to encourage more domestic consumption, but for now low domestic consumption allows them to keep their labor costs low, and therefore render US and Europe uncompetitive. Given Trump is alienating all allies, China also has the option of striking bilateral deals with key countries such as Japan, S. Korea and EU. They are already working with India, carefully for now, in building a closer relationship with many Chinese companies investing in factories to sell to Indian domestic market.
Ideally, Trump is able to get agreements with all allies in the 90 day period (and gets to tariff them at a flat 10%), and a higher (say 25%) tariff on China, and then work with allies to onshore or friend-shore most strategic industries. Over a 3 year period, he may be able to decouple from China at least in the most important industries.
But, given Trump's temperament, I just don't see this administration capable of a thought through strategy implemented over a 3-year period.
China is not going to get finished by this tariff war. People needs cheap product and they will protest for it by their votes. Western country power has decreased little bit. Other countries could not produce good quality product at this price range.
China is going to fight this war . Chinese people are going to be behind CCP this time. They know fall of china means fall of them. Chinese people in bulk could not move to western country because white people are racist towards them. So fall of Chinese economy will only moves Chinese people towards CCP. It's simple to think that Chinese support CCP just because of economic growth and economic crisis will turn them against CCP. This is going to be wrong here because according to them this crisis came due to USA who wants to throttle their growth.
USA is powerful because of white people and other intelligent people. As people of other countries are immigrating to USA , it will decrease USA power. White people despite their lots of fault they creates high trust society. In high trust society you can trade more trustfully to other people. This makes western country economically powerful. Whites people are also very good fighter , which makes USA militarily powerful. But same thing are hurting them in back now. High trust society trust in a wrong decision for a long times . They can get manipulated by other people very easily for their good or for their bad. Militarist society once they fight foreign war they turns their gun towards their own society. What makes western country powerful , also brings anarchy for them in a long times.
As population of white people is going to decrease , power of USA is also going to decrease. white people created a culture of trust in the society due to which intellectual property rights could be developed . As people income decreasing in USA they are not going to have a children. They are being substituted by foreign people who do not value the hard work of other people . Foreign people will cheat the system for their own benefits. Foreign people will not think for the betterment of the society , society which is going to be racist towards them. They will decrease the trust in the society in the long run. Western country power is going to decrease little bit in the future.
There is actually a wall which western country could not jump. If they creates a technology to fight with their opponents , their opponents will copy their technology or they will find ways around it with the passing of a times. If they use military power against their opponents , military will one days turns their gun towards their own society. What makes USA powerful , will also brings anarchy to them one day.
China is not going to become superpower. They lack both high iq creative people and high trust society. Without them you are not going to become a superpower. What china will do is copy from western source. In this process, they will be behind USA . AI could change technological gap between china and USA or not , i can't say about it as of now. If white people will not have children then Chinese power will increase more. There is never going to be vacuum. CCP is not going to allow western way of governance to China because they know what works in a western society is going to be anarchist in an eastern society. They will fight because they know once they accept western way of governance , their society will get destroyed. Chinese society is not high trust society. Low trust society can not copy way of life from a high trust society.
Chinese are going to use other country to sell their product in USA. In the mean while rising inflation is not going to help USA government. Bureaucracy is going to become powerful now because it's they who are going to take and distribute money. Bureaucracy was not good for colleges , how do they think increasing power of bureaucracy is going to help . How increase of bureaucracy is going to creates other problems is not being thought as of now.
Meanwhile Chinese is going to fight because they have seen what happen in the middle east and Afghanistan . It's karma. China have seen USA don't respect local custom and culture. USA will put pressure on them to adopt western form of governance which by the way only works in high trust and high iq society. Chinese middle class and upper middle class are not going to support democracy because in those system wealth is going to be distribute to the poor people also. USA will not understand this because they don't have lot's of dependent people .So china is not going to open it's country in anyway as this will bring anarchy in the society. I just see long continuous cold war between china and USA.
Fascinating ideas. But assuming Trump both is employing strategy and wants to counter China, how does alienating and harming allies fit into that picture?
https://phillipspobrien.substack.com/p/how-to-make-us-rivals-stronger-101
https://othermeans.io/p/the-american-delian-league
https://phillipspobrien.substack.com/p/sentiment-can-be-overrated-trust
Very interesting, some things to bear in mind until I have a better understanding.
I have no way to judge this complex analysis, nevertheless can Trump have anywhere near as sophisticated a view? How does applying tariffs (until this morning) to our long time allies fit in with this?