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I’m posting the article here rather than the politics forum because economics is not my strong suit and I’m curious if others agree with the author’s recommended approach.
Waiting is always a valid strategy in geopolitik. There are so few things that have to happen on any short timeline - there's always time to wait and use subtle pressure and negotiation. Consider that most changes resulting in panicky headines will not have any effect for a year and not come into full force for a decade.
Only idiots think "deals" have to be hammered out at a breakneck pace.
The United States is equally dependent on our 3% growth from debt (our boom time growth rates have been shrinking rapidly). So debt fueled growth isn't anything unique to China. There will always be challenges with any economy, however there is far more that can be done in China than here.
They have a massive under class that they can exploit and don't particularly care about. More and more of this under class is rapidly advancing into the middle class as well. So you end up with a unique situation. If prices go up and people die, **** 'em, expendable. 80% of their economy is rural or migrant workers. This is a massive pool for their middle class to grow from and growing it is.
Our situation is different. We have virtually 0 population growth. We have peaked and have a mature service based economy. Our middle class is being stretched, the top end is doing great but the bottom half is having a harder time moving up. Lower class has seen a lot of stagnation, real wages are likely lower over time. Regardless, the mobility in our economy at the fattest part is diminishing and this trend is likely to continue as more and more competition for outsourcing pushes more of the middle class out.
We also have a ton of economic issues that we haven't been able to address. Social Security is a big one. Same with excessive military spending. We have massive deficits yet are in supposedly a "good" economy. All of these things are going to require either massive spending cuts (bubble deflation) and/or tax increases. Regardless of how you do it, these items are going to be huge albatrosses over the next 20 years or so.
Outsourcing is only going to continue. The rest of the world is getting educated and competition is heating up for everything. Programmers, lawyers, engineers, accountants, realtors, etc. There is a ton of work that we have here which can be outsourced or done through machine learning / technology.
So what exactly are we waiting for?
China to open its markets? Why?
Let me put it this way. China holds all the cards. We had a chance to offset some of that with TPP but we foolishly pulled out of that. Our companies and every other company in the world wants to do business there and in Asia because that is where the growth is and will be.
China is playing the long game. We are playing the short, retarded game. What makes you think that China is going to suddenly give away all its leverage and let everyone into its markets? They won't. They don't have to and they won't unless they get what they want. 10 years, 50 years, 1000 years, they don't care. Simple numbers says they are going to dominate, just a matter of when.
The only thing they are waiting for and attempting to delay is the current administration in any way shape or form from raising tariffs again. Not because they are going to give in, they won't. They are stalling because every 90 days they "negotiate" and waste time that is time that tariffs aren't in place. They know as well as most people that the current administration is likely to face an uphill battle for reelection and in a relatively short period of time all of this will be over.
That is what they are waiting for.
The United States waiting? That is foolish. The only thing we are waiting on is a negative rate experiment when the next recession comes and at best maybe we crawl out of it with 1 or 2% growth for our boom cycle.
The article did not make it clear on waiting for what? I don't think Trump has a plan in current trade war to win, and China waits for nothing to execute its own plan that has been winning.
The article is mostly a political rant. It could've been written by a State Department employee.
"Economic development, it was also possible to hope, might nudge China toward political liberalization."
"If China were willing to open itself to the world and accept exposure to the irresistible forces of liberalism, then the United States and its allies should play along."
"On the contrary, it bolstered the legitimacy of an oppressive communist leadership."
"Meanwhile, it has become more assertive on the world stage, using a combination of hard and soft power to build an expanding sphere of influence."
"China remains an authoritarian, one-party state. The communist leadership is opaque and repressive. It has little interest in expanding political freedoms or defending human rights, and its overarching goal is self-preservation."
"The United States cannot force change in China and should be wary of policies that threaten to spark conflict or impoverish Chinese citizens. It should instead aim to limit malign elements of Chinese influence on the global economy while waiting patiently for the rot at the heart of the Chinese system to do its work. It should contain China, in other words, confident in the knowledge that its own economy, despite its many weaknesses, is more resilient."
When AI does take over those countries with massive populations will be in for an awakening. That is a lot of mouths to feed with a bunch of idle time on their hands.
The idea of the Western world "waiting out" the Eastern world is patently ridiculous to anyone who knows anything at all about their culture. The Chinese are a people who plan decades out. We can't even successfully plan to the day after the next election.
The United States is equally dependent on our 3% growth from debt (our boom time growth rates have been shrinking rapidly). So debt fueled growth isn't anything unique to China. There will always be challenges with any economy, however there is far more that can be done in China than here.
They have a massive under class that they can exploit and don't particularly care about. More and more of this under class is rapidly advancing into the middle class as well. So you end up with a unique situation. If prices go up and people die, **** 'em, expendable. 80% of their economy is rural or migrant workers. This is a massive pool for their middle class to grow from and growing it is.
Our situation is different. We have virtually 0 population growth. We have peaked and have a mature service based economy. Our middle class is being stretched, the top end is doing great but the bottom half is having a harder time moving up. Lower class has seen a lot of stagnation, real wages are likely lower over time. Regardless, the mobility in our economy at the fattest part is diminishing and this trend is likely to continue as more and more competition for outsourcing pushes more of the middle class out.
We also have a ton of economic issues that we haven't been able to address. Social Security is a big one. Same with excessive military spending. We have massive deficits yet are in supposedly a "good" economy. All of these things are going to require either massive spending cuts (bubble deflation) and/or tax increases. Regardless of how you do it, these items are going to be huge albatrosses over the next 20 years or so.
Outsourcing is only going to continue. The rest of the world is getting educated and competition is heating up for everything. Programmers, lawyers, engineers, accountants, realtors, etc. There is a ton of work that we have here which can be outsourced or done through machine learning / technology.
So what exactly are we waiting for?
China to open its markets? Why?
Let me put it this way. China holds all the cards. We had a chance to offset some of that with TPP but we foolishly pulled out of that. Our companies and every other company in the world wants to do business there and in Asia because that is where the growth is and will be.
China is playing the long game. We are playing the short, retarded game. What makes you think that China is going to suddenly give away all its leverage and let everyone into its markets? They won't. They don't have to and they won't unless they get what they want. 10 years, 50 years, 1000 years, they don't care. Simple numbers says they are going to dominate, just a matter of when.
The only thing they are waiting for and attempting to delay is the current administration in any way shape or form from raising tariffs again. Not because they are going to give in, they won't. They are stalling because every 90 days they "negotiate" and waste time that is time that tariffs aren't in place. They know as well as most people that the current administration is likely to face an uphill battle for reelection and in a relatively short period of time all of this will be over.
That is what they are waiting for.
The United States waiting? That is foolish. The only thing we are waiting on is a negative rate experiment when the next recession comes and at best maybe we crawl out of it with 1 or 2% growth for our boom cycle.
Don't say "we pulled out" of TPP--
No one asked MY opinion
I don't think Congress voted a resolution on that decision...
And we are seeing Apple--for one--paying the price right now to certain extent for tariff/trade policies...
It will likely get worse as you explain...
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