China and Trump

For a period of 1500 years, China had barely changed. They had a fertile and rich nation, a large and efficient labor force, they were surrounded by natural barriers that made invasion unattractive, and produced goods that other civilizations wanted. Other civilizations such as the Romans, the Arabs, Ottomans, etc. all wanted the goods China produced. Many of the wars that were fought in Europe and the Middle East were centered around securing trade routes with China. And China only accepted silver as payment for their goods.

The Chinese became the most conservative people the human race ever produced. For 15 centuries they had no need to change their political structure, economy, or culture. The only thing that mattered to them was their empire and its heavenly mandate.

This is where things get complicated. Here in the US, and in Europe, the resulting period was known as Pax Britannica, Pax Americana, the industrial age, the space age, the age of information, etc. The Chinese have a term for it, which translates as "The Century of Humiliation." It became a period of foreign domination that was unprecedented in their entire history.

China had no choice but to do something. In 1911, they formed their first republic in an attempt to keep up with the rest of the world. This started civil unrest and wars between different states. The communist party of China was founded in 1921 and after WW2, they took control of China permanently.

Unfortunately, the Chinese communists did so by plunging their people into starvation and poverty, and had lost its economic and trade influence it once had.

In the late 1980s, the communist party instituted reforms. They broke up the collective farms and gave the land back to the peasants. Then they permitted private enterprise and foreign investment. This saved their economy.

In 2005, things changed dramatically for the relationship between China and the west: authoritarian capitalism. While similar regimes existed throughout history, these regimes collapsed through revolutions led by the impoverished classes, and not middle classes. China was still politically communists, but they were economically capitalists. This helped them avoid the inevitable economic collapse that the Soviet Union experienced. Eventually, the communist party took a stronger stance, and nationalized much of its private industries. Its years of economic growth coincided with a return of conservative communist rule. Privatization was stopped, and a system of national champions was created who would earn massive bonuses if they could rival private enterprise. Chinese communist power extends to individual private lives through social media, and in every aspect of private life. 

Unlike North Korea, China practices a more pragmatic communism. And the west has failed to truly understand how the profits from China's economic growth are used to fund what is arguably the world's most powerful communist totalitarian / authoritarian state.

The more things change, the more they stay the same.

Most crucial to China’s agenda is the rebuilding of the geopolitical power China once had. China knows that the best way to reclaim their former glory is to observe and learn from how others did it. 

China's strategy is obvious. But what's not obvious is that India is factored into this strategy in a very different way. It is not being assimilated through loans; it is being isolated from global trade routes China is establishing. 

Throughout this process, China insists it's not establishing military bases, and that it is not copying the American method of military presence worldwide. This is, of course, a lie. A year into the Trump administration, after making this promise, Chinese military bases were established in Djibouti. Xi's reasons for doing this are obvious: the US, France, Britain, and Germany all have (or had) military bases there, because it's a key location in anti-piracy actions and allows quick access to the Middle East. It underscores China's obvious attempts at world domination, and their expertise in quietly taking advantage of opportunities.

Africa is their next target. For centuries, Africa has been plagued by stagnant economies and lack of commerce. The reason for this is that individual countries have set up enormous barriers. This was, at least in part, due to the result of colonialism. The taxes and tariffs involved were created in a post-colonial era that crippled many African economies. The only African nations that do well economically are the only ones who did away with these archaic trade restrictions.

China saw an opportunity for its free trade concept that isn't free at all. China's move into Africa was predetermined to create a source of materials to make new products, and a source to sell these products to. Africa is now a market for Chinese goods; but China is not buying what Africa produces.

It is essentially a return to China's old way of trade.

China does not respect democracies. It sees them as a chaotic mess that breeds infighting and serving the interests of greedy oligarchs and capitalists. They believe democracy deliberately undermines itself with populism and corruption. They teach this to school children.

This, of course, doesn't stop them from associating with democracies, and investing heavily into their infrastructures and industries.

China accomplished something the Soviet Union couldn't even dream of: soft power. China, the world's largest communist nation, is a part of European democracies, almost to the point where they cannot function without them. It can influence political decisions and government policies from the inside. And they did this without force or coercion.

Here is where Donald Trump comes into the picture.  

The world was distracted by a clownish American president and his equally clownish followers, while China quietly and brazenly inserted itself into all the major economies of the world and built up its military presence to the point where it is no longer exclusively defensive but has an international presence.

One of Trump's first acts as president was to pull out of the Transpacific Partnership. This was expected to be a defeat for China, and Trump's supporters hailed it as a victory. But China turned it to their advantage by leading the negotiations for a new free trade agreement that did not include the US, with China as the dominant power.

January 15th, 2017, at the world economic forum, Xi was the opening speaker, lecturing the world on how to do greater and more efficient free trade - and how China would take the lead in this. Trump wasn't even present.  

The tariffs on Chinese goods made in China became more expensive to US consumers and businesses. So, China simply sold the same goods to others at reduced cost. In the meantime, prices for goods made in China, and for things dependent upon Chinese made component prices skyrocket. Many small businesses were forced to close because they couldn't keep up with the cost of parts they needed.

The situation was exacerbated because Chinese are selling the same products Trump put these tariffs on to the American people - without tariffs. They did this by opening factories in Vietnam and Malaysia, assembling products to about 90% completion, shipping the products to the factories to be completed, and then selling them to the US. 

If Trump was the shrewd businessman / stable genius he claims to be, this trick would have been obvious to him. But he couldn't see it coming.

It gets worse. Vietnam and Malaysia have always been in opposition to (or at least suspicious of) China and their presence in Asia. This is why they forged deeper ties with the US before the Trump administration. The tariffs gave China the opportunity to create jobs in Vietnam and Malaysia. While the two countries profited from this, China's position was strengthened in Southeast Asia. And we have Trump to thank for it. 

He was outwitted, out-maneuvered, humiliated, and made to look like a fool by the Chinese at every turn.

Trump actually believed he achieved economic victory for the US. But the game he's playing with China is ultimately geo-political; a concept Trump cannot understand.

Trump's idiocy is further manifest by his imposing similar tariffs on China's regional rival, India. This inadvertently strengthened China's position over India, and further isolated a potential ally of the US. A sane and intelligent man would have seen India as indispensable in strengthening the US' geopolitical position in Southeast Asia. Trump destroyed it. Now, India may soon have no choice but to go hat-in-hand to China. And the US would have lost all its bargaining power in the whole of Asia.

It's obvious that Trump believed that China would come crawling to him begging him to lift the tariffs. His sloppy leadership, error ridden strategy, and narcissism divorced from reality actually strengthened the Chinese economy, and their geo-political position in the world.

These failures are even worse than the TPP, or Obama's failed attempt at a trade agreement with the EU.

Yet at the same time, Trump admires Xi and his like (Putin, Kim, etc.) to the point of veneration.

It's arguable that Trump's failure cost the US its economic future. Trump's foreign policy seems to consist of berating US allies, and making random and stupidly destructive moves that force our allies to deal with our greatest rival; China. Trump doesn't understand how his isolationist / "America First" nationalism policy plays into the Chinese politburo’s agenda perfectly. China would love nothing more than for the US to seal itself off from the world, so it can take its place. They clearly want to return to the "good old days" where all world trade centered on China, and they would hold control over everything.

Trump handed this to them on a silver platter. And his followers still think this is "winning."