Thursday, December 12, 2019

Quora: Was China's attempt to destroy America's economy an undeclared war?

Masao Miwa, answered

You got it backward. ‘Was the US attempt to destroy China’s economy an undeclared war?’ The answer is yes.

The US under the guise of a trade war attempted to cripple the Chinese economy. It attacked ZTE and Huawei, it banned US companies from selling to 140 Chinese tech companies. It banned the sales of Huawei 5G and cell phones in the US. It warned other countries not to buy Huawei 5G equipment. It had Meng Wanzhou, the CFO of Huawei, arrested by Canada. It added tariffs to mostly tech products from China and threatened more tariffs if the trade war could not be settled. Trump demanded that US companies return to the US after his voluntary request to return got no response. And just recently, Trump signed a bill that meddled in the domestic affairs of China in Hong Kong. Now, we wait for China’s response where they said they would if the bill got approved.

There is a tough road ahead for American companies in selling to China with the damage that Trump has done to commercial relations with China. The sales of $600 billion in exports and ‘foreign affiliates sales’ in China are at risk of falling. FDI has already dropped off a cliff. The 3 million Chinese tourists that used to visit the US are falling. The 360,000 Chinese students enrolled in American schools and universities are taking a hit. The exchange of research between the US and China is now broken with the US demanding those that do so be fired. Trump has declared all Chinese students potential spies and restricted Chinese STEM students and basically banned Chinese STEM grad students. Our Silicon Valley tech talent is draining off with Trump’s immigration actions. SV employs about 75% of its tech force by immigrants, much of it from China are leaving. US grad schools in STEM are populated with 80% foreign students, much of it from Chinese. What Trump is doing is neutering America’s future in technology and encouraging the flow of tech students back to China. Is Trump a Russian agent? Trump is McCarthyism 2.

All these actions have made China happier. From accelerating China’s technology rise to increasing its tech workforce, Trump has supercharged China’s rise instead of blunting it. With the so-called ‘democracy bill’ passage, don’t be surprised if the trade war negotiations come to a screeching halt and more punitive actions from China ramp up again. All the efforts by the trade teams over the past year and a half will have been in vain and more pain to the US to come. Recession is no longer a case of maybe, it is becoming a reality.

Further, with the US demanding exorbitant increases in costs to station US troops in South Korea and Japan, it is another notch in these countries reexamining their relations with the US. There is a move underway for both to move closer to China. This just adds to that tendency. ASEAN and the SCO are moving closer together, as is Russia and China. The BRI successes now pull South Korea and Japan closer to China because now they see business opportunities in international infrastructure projects that were not available to them before. Trump is creating a huge political and economic block that will be the polar opposite of the US. Russia now is having more influence in Asia as the US loses its influence. Not only that, the US has lost both Pakistan and India as they both join the SCO and begin closer trade and military relations with Russia and China. Both China and India have purchased S-400 missile systems from Russia, and India has on orders for submarines and fighter aircraft. India and Vietnam have denied requests by the US to establishes naval and airforce bases in their countries.

Americans are being fed a false narrative. The changes in influence in Asia and Europe are happening at a quicker pace than ever. You can thank our POTUS for this situation, it all happened on his watch. BTW, the recent refusal of the US to pay its share of NATO costs has been paid by Canada and the EU. US influence in NATO is on the decline and the day of an all European military force is on the rise. Another point. With US sanctions being used like water, the EU, Russia, and China are seeking an alternative to the SWIFT and dollar system that makes the US sanctions effective. Today, the media announced that Venezuela is using the Euro and Yuan for paying its bills to creditors. If true, Venezuela will have an alternative to bypass US sanctions. Iran will probably also take this path. As this happens more and more often, the power of the US in ‘power diplomacy’ will become impotent. Sanctions will have less and less an impact.

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