It may be a tough road for China, but the nation has withstood and grown through harsh economic and social crises within the lifespans of today's Chinese population. Along with a centralized government and economy, and a history of patriotic isolationism, China is well-equipped to deal with a little economic stress. Their leaders also know that Americans are weak, having seen that a relatively robust economic recovery under Obama was not enough to avoid electing a con man.
3
Difficult competing with a manufacturing giant that has an enormous poverty level work force that has no ability to affect labor change. US companies do not offshore factories because they they want to help people of other nations, they do so to exploit the low cost labor force.
We've off shored call centers and claims payment services to India, autoplants to Mexico and we rely heavily on cheap Chinese products for everything. Try getting your iPhone made in American and see how much it costs.
The Republicans are masters of destroying the economy and then passing the buck to the Democrats.
2
The underlying, and building, resentment against China's expansionist and domination plans have been growing for the last several years. I agree with President Trump that China needed to be confronted. We had an opportunity to use the WTO to force major reforms in China, including their military expansion. Unfortunately Trump's egoistic "go it alone" strategy missed a great opportunity to put China in a box and keep the US as a leader of global trade.
1
How can anyone now trust the USA? Trump pulled us from agreements we made in good faith and has undone anything anyone else might get credit for. How can anyone trust what deal the USA makes now when elections are every 4 years and we have proven a liar and historical illiterate like trump can win control of our policies and just undo them? Often he makes a worse deal but at least his name is on it! Wake up people...do not let fear and prejudice overrule your morals and ethics.
3
Does Trump actually have a strategy? (For China, or indeed, for anything?). Disregard his words (he reverses himself daily; but he also belies his own policies; .e.g. started to break with NAFTA, but then renamed it with a few changes, and stayed in). If there's any strategy, it's just to sow chaos & resentment, and to vent bile. Maybe chaos bears fruit. If he could skip the demagoguery he might be more acceptable to more people - but then his base would vanish.
1
News paint Xi in dire straits but what if he had to face TPP instead. Now, the U.S. is the foil he can use domestically and internationally. So maybe he is the lucky one
@Bos So TPP could have stopped exports from China? Given US import tariff is under 5% for most goods ... unless US gets out of WTO at the same time getting into TPP.
May I remark concerning US economic policy.
The report from Nelson D. Schwartz
Sept. 25, 2018
Congressional Budget Office is a great source.
Mr Schwartz references CBO I checked.
Within a decade, more than $900 billion in interest payments will be due annually, easily outpacing spending on myriad other programs. Already the fastest-growing major government expense, the cost of interest is on track to hit $390 billion next year, nearly 50 percent more than in 2017, according to the Congressional Budget Office.
Burdened by debt I ask what is the money being spent on?
I have some knowledge of accounting.
What is the collateral to back the loan?
Mr Trump is not a banker.
The run-up in borrowing costs is a one-two punch brought on by the need to finance a fast-growing budget deficit, worsened by tax cuts and steadily rising interest rates that will make the debt more expensive.
With less money coming in and more going toward interest, political leaders will find it harder to address pressing needs like fixing crumbling roads and bridges or to make emergency moves like pulling the economy out of future recessions.
Within a decade, more than $900 billion in interest payments will be due annually, easily outpacing spending on myriad other programs. Already the fastest-growing major government expense, the cost of interest is on track to hit $390 billion next year, nearly 50 percent more than in 2017, according to the Congressional Budget Office.
I
Pres. Clinton was pushing for P.R.C. entry into the W.T.O. and the agreement was signed early in the Bush administration period. W.T.O. was ‘engineered’ to create the hoped for level playing field among countries but China’s whole economic structure was built on industrial subsidies and governmental support for S.O.E. (state owned enterprises) so no one looked carefully at that conflict until it was all slipping into China’s favor.
Why? Governments are poorly structured to police Trade and stockholders and C.E.O. were pleased with mounting profits. Had either the Business Community or the Government wished W.T.O. rules could have save a lost of lost industries and workers jobs; but who carried about them?
In current times looks like countries and the E.U. in particular is beginning to get the message.
What to do with Trump another problem.
1
The Chinese have long memories, they have not forgotten the Opium Wars, when European countries dominated their economy. They had a long proud history and were treated as not worth anything, leading eventually to the Communist takeover.
It is not going to let that happen again, they expect to be treated as equals. There are still several hundred million of them living below standard, the government wants to fix that, but can not let it get away as it would result in anarchy, just too many people not cooperating.
China will prevail, they are smart, industrious, and are learning the ways of Capitalism without putting the country in turmoil. They are not going to be any ones doormat again.
3
@David Underwood
I think it’s important to keep a few things in mind, besides the fact that nobody remembers the Opium wars.
Of course it’s all history now, but China is not the old ancient China the communist party they would have you believe.
Mao wanted his new China to break from his past. So he at least at the cultural wars to devastating effect in China has not been the same sense. China’s collective memory is fragmented highly selective and very very revisionist. All carefully managed by the CPC.
I want all sides to reach an agreement that can be respected, the United States has real grievances. The US wouldn’t have sponsored China to the WTO, over the objections of it’s European partners if it knew then what it realizes now.
The US is an information services economy. The value of its corporations is not a factory or some physical object that is information which is stored on the computer which the Chinese have been looting. If that is allowed to continue, we don’t have anything left of value to switch to.
If China ultimately wins this war, it’s up to the United States to at least make sure that their victory tastes as bitter as defeat. This is not an honorable war or one they deserve to win.
1
Important and interesting article, but rather too much opinion and too little reporting. I prefer to have evidence presented so I can make my own conclusions. Still, a helpful article though.
2
Trump is right to concentrate on bilateral deals.
The reason our trading partners want multilateral deals is because multilateral deals dilute American negotiating power. They are not interested in changing a system that benefits them. But lets face it: US is not able to customize products for foreign tastes, and products that are made for the American market may not be very saleable in other countries since the other markets are too small. US is a very large market which can absorb a lot of different products. An example is our automotive market: Americans just are not buying small cars, but in most countries people buy small cars because gas is very expensive. So other countries want to multilateral talks just to gum up the works, that negotiations move very slowly. Lets not forget, it is US that is running trade deficits with our trading partners. Status quo for them is preferable to changes that rebalance the trading relationship in US's favor.
1
China will sign trade and security agreements this month with Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei, Vietnam, Laos, Myanmar, Cambodia, China, Japan, South Korea, India, Australia and New Zealand, says PriceWaterhouse, currently producing forty percent of the world’s economy, will generate fifty percent by 2050.
1
@godfree
We all hope the China will honor the agreements that it signs. Including those past made with other nations.
"Mr. Trump is deeply unpopular among the public in many countries, particularly in Western Europe, "
So when the world laughed at Trump when he spoke at UN General Assembly last month it wasn`t a mistake.
America , you are better than the Trump-Kushner crime family & their abettors ………. aren`t you ?
5
Hopefully the rest of the world stands up to the wolf in sheep's clothing that is China.
1
The rogue behavior of expansionism with unilateral declaration of what is mine is mine and what is yours is negotiable made all countries around China to never ever trust China with the exception of couple of little league rogue countries. The death trap infrastructure loans under BRI made those countries resentful of China. Adding to all this, China is communist country with no openness government, no free press, no independent judicial system, stealing intellectual property and currency manipulation, and they all make China not trust worthy. There would not be any changes in that country for ever. Now is the time for all countries around China to extract every thing they can with false promises.
If "openness has become a trademark of China," then openness to communicative freedom would be shown, to wit: full internet openness.
I had an academic dialogue ongoing with a philosophy student at a Chinese university which suddenly stopped, evidently because Facebook access was cut off in China.
The notion of fair market pertains to letting scholars fully enjoy the global commons of ideas.
1
The 17th century China silk trade to Europe, in trade for silver, created markets. This is an old story, except for us.
@northlander
Trade issues have a very, very long history with China. Pliny complained in Roman times of the flow of Roman silver to China in exchange for silk, in the early days of the Silk Road. That complaint was a very mercantilist stance, long before economists like Ricardo helped us appreciate that free trade has broad economic benefits as well.
For Pliny, China and the Silk Road, you can see my 2006 article here:
https://www.nytimes.com/2006/02/26/weekinreview/from-the-silk-road-to-the-superhighway-all-coin-leads-to-china.html
For how China is reviving the Silk Road now as a freight train route, you can see my 2013 article here:
https://www.nytimes.com/2013/07/21/business/global/hauling-new-treasure-along-the-silk-road.html
SIOUX CITY, Iowa — Earlier this year, President Trump announced the creation of a $12 billion dollar fund to help farmers affected by Chinese tariffs on AG products, including soybeans and pork.
Now, a Chinese owned pork producer with multiple locations here in Siouxland, Smithfield Foods, is eligible for some of that money according to the US Ag Department.
2
@Jacquie. Are you talking about ethnic Chinese? Chinese American? Or Chinese Government affiliated company? Unless it’s Chinese Government affiliated company, any legitimate civilian business should be entitled for a fair share of policy!
2
@Vivian No one has any real evidence that the government of China was directly involved in the Smithfield purhase. The government Bank of China put together the $5 billion purchase of Smithfield at 30% over its value in 24 hours. A Congressional committee looked into this but no Chinese government official was ever present at any of the negotiations, although the Chinese company claims to be "private," the purchase was described as fitting in the national strategy. China wants to maintain food security. So pork is now like cars; it's a global, international business. That is the direction of the arc of the universe.
When and until China creates a domestic consumer goods driven economy, consumer goods exported world wide will have to sustain their consumer goods manufacturing based economy.
"China as a big buyer of foreign goods." Oil, ore, grains, few finished products unless they need them to produce exports then those are no longer imported when they seal the technology to make them themselves.
"China would strengthen intellectual property protections so that firms would worry less about theft and copycats..."
The same promise they have been making for more than 30 years with no enforcement.
10
I would appreciate perspective on the possibility that China would begin selling US Tbills in order to bolster its economy, and the potential effect on the US. And what about the 94% drop in Chinese purchasing of soy beans (and other products)? The problem seems to be not only a short term change, but shifting markets to other countries permanently. As to the EU's complaints, it looks like there may be an ongoing realignment of trade and supply chains to build a separate third world market. Kind of like the TPP, but led by China?
1
@Eero
The situation with the soy beans is unfortunate, but the damage to the Chinese could be a lot worse. If both sides sanction each other equally tit-for-tat. Soon, China will run out of US imports to sanction. While United States imports far more than China does. So the US can keep playing this game for a great while longer.
Of course the Chinese can continue to keep up if they would simply import more US goods which then they can then tariffs.
"he also said China would strengthen intellectual property protections so that firms would worry less about theft and copycats..."
Show me the money, Mr. Xi. It took the Europeans some time to gather the courage but getting a fair deal from CHina is a matter of survival. Even more so for developing nations, that the Chinese lend money to, bankrupt, and then seize their ports, land and future.
7
China has a long history of being a mercantilist country. A developing country typically runs a trade deficit, yet, China runs up surpluses against most countries of the world. They rig the system. However, tariffs are not the solution.
5
@alan What do you think the solution should be?
a better solution would be targeted prohibition to import to the US certain Chinese produced goods. This would have to be a long term prohibition so alternative manufacturers of those goods would have the confidence to invest in alternative production facilities in other countries.
Another alternative would be for the US to adopt many of the same strategies that the US says the Chinese use, such as subsidizing certain industries and state ownership of others along with targeted bureaucratic slowdown of Chinese imports to the US.
It's ridiculous for US businesses to complain about intellectual theft in China. They all ran to establish cheap factories and R&D centers there because it was cost-efficient. I am sure their attorneys all read Chinese laws ahead of time and KNEW there was no protection for intellectual property in China. Now, they are acting like it is a big surprise. And ... the American public believes that it's China's fault! Also, US-made goods are too expensive for Chinese to buy. Chinese are very good at making copies (not particularly high-quality, but affordable for mass consumption). There are still over 1 billion poor people in China who are just trying to survive. US is waging a propaganda war against China because it's easier to make American people think that whatever is not working here it's China's fault. This "trade war" hurts American small businesses whose business models depend on cheaper materials/components from China. Trump is so good in manipulating and playing the media, that when they think they are reporting the truth, they are just emphasizing exactly what he wants them to. He might know nothing about geopolitics, but he sure understands how the US media works.
17
@IGK
Maybe you are right, Mr. Yang. The problem is that China has opened its geopolitical cards, and what emerged is scary - wholesale bullying of neighbors, attacks on Taiwan, ethnic cleansing in Xinjiang and Tibet, huge producer of pollution and mounting threats to the West.
All of this a direct consequence of the cheap factories, stolen IP and millions of 'students' sent to the West to transfer the know-how. Say of Trump what you will but he has been the first President with the guts to call it as everyone sees it.
13
Part of the reason US goods are too expensive for Chinese people to buy is the tariffs China puts on foreign goods.
1
@IGK China is known to be anti-competitive. The fact that China runs trade surpluses with Kenya should tell you everything you need to know about their practices. It's good that the world is wising up.
2
Since the WTO was formed, American multi-national corporations couldn't outsource American manufacturing jobs to China fast enough. When these corporations brought their goods back to the US for sale, they paid one percent or less in import tax to the US.
The outsourcing not only took jobs away from American workers, but also crippled manufacturers who stayed here from making a decent profit. America's competitive edge has been destroyed.
When we talk about huge deficits in that trade in favor of the Chinese, where do we place the outsourcing of American jobs by American corporations? Or is that a separate deficit? Many trade experts agree that allowing American corporations to outsource jobs without penalties when their goods are brought back to the US for sale was a big mistake. Of course it brought tremendous profits to these corporations while devastating American manufacturing .
Trump, in his quests for tariffs, failed to persuade American corporations to pay them while still bringing these products to the US for sale.
Our manufacturing capacity was devastated and our manufacturing cites were destroyed, as well as the economies around former manufacturing sites.
Still undecided is what part the American multinational corporations played in this destruction. And they were rewarded by getting tax cuts!
21
@Donald Coureas. I would add to your comments that outsourcing by corporate companies was a message to organized labor. That message also gutted the middle class with a triple edged sword - first by destroying middle class manufacturing jobs that provided medical insurance and pensions; second by getting America addicted to warehouse sales of cheap goods; and third - foisting the costs of medical insurance and pensions upon the remaining middle class for those unemployed manufacturing workers. So when you ask what role the American multinational corps played in this destruction - I would say 'a lot'.
9
This is such great news that the world is finally doing something. However, whenever a power vacuum is created in China, we know it can lead to massive volatility.
1
What an odd way to frame this issue. How many world leaders show up for a trade show? How many world leaders ever show up for a trade show? Typically, its just trade delegations which is what you see in Shanghai right now. (The US not sending a delegation is noteworthy but not much of a surprise given circumstances.) What is remarkable is that any "world leaders" showed up at all and Bradsher is right that obviously the ones that did are most beholding to Beijing. No surprises here. But to suggest keeping a scorecard on how many world leaders show up for a trade show is some how indicative about how sentiments are developing towards either side of this trade war is pretty weak analysis and definitely no cause for smugness.
But I guess that's better than looking too closely at what China is doing with Japan or for that matter the joint Naval exercises they conducted with ASEAN members recently. Don't want to cloud the NYT's hammer China all negative all the time China narrative. Any chance will see any discussion of the rational for that ongoing editorial policy? (I mean apart from serving as yeoman stenographer and handmaiden to US geopolitical interests.)
7
@Belasco
I think you missed the point of the article. The trade fair was set up to specifically attract leaders of foreign countries. Almost none came.
2
This is the same Xi that talks openly on the "destiny of communities" on global stages, but viciously attacking Uyghurs and trying to eliminate them with fascism with Chinese style!
Sane people are not gullible!
No one believes China until Xi shuts down internment camps with Chinese style and release millions of innocent Uyghurs to freedom and let them live with dignity as other humans...
7
People talk about China as if their economic power is some kind of natural phenomenon. They are a consequence of the desires of Wall St., big banks, and corporate interests. They created this monster, and profited from it very handsomely while the rest of us got screwed. They are the enemy, it's their monster.
25
Trump's legacy is as certain as that of his predecessor models, Smoot, Hawley and Hoover.
3
@H Hanover
There are some differences. The 25 percent tariffs being imposed by the Trump administration are fairly low compared to those imposed during the 1930s. They are only imports from one country, China, and for now they are not on all imports from that country. Perhaps most important, academic research by Ben Bernanke (before his time at the Fed) and others has suggested that bank failures, and the lack of an effective government response to them, played a much bigger role in the Great Depression than trade restrictions.
The tow major issues that matter the most for me, are fair trade and illegal immigration. I don't think China does care about the US at all. It wants our dollars and looks at us as a dumping ground for their cheap useless goods. My vote, as a long time Democrat goes to who ever puts an end to this travesty. As disgusting and as misogynistic as Trump is, I give him credit for tackling them head-on. The Democrats to my greatest disappointment are wimpy and have absolutely no clear and compelling platform at this moment.
10
I work in a specialized tech industry for which China is the largest market. Xi's promises about controlling the theft of intellectual property are not to be taken seriously; in this industry it is a given that if Chinese companies can't steal our intellectual property, they will get help from the government to do so. This is based on hard experience.
Our Chinese business partners shrug this off with tech versions of "If you don't want someone to steal your money, you should hide it better." That attitude will not be changed by anything Xi says to foreigners.
27
@Benjamin Teral
Your industry must oppose this theft of technology by not allowing the Chinese to purchase your products.
Or better to place trojans inside the technology to destroy Chinese users
I don't agree with Trump about much. We do need to do something about the transfer of technology that we have spent billions in R&D on just so we can take advantage of the cheap labor and lack of environmental laws.
I just wish he we come out and say we want this and this and the trade war is over.
7
Xi is a gangster. Openness in China is a Trumpian caliber outright lie.
23
If only we had a competent, intelligent President in the White House to deal with the rise of China. We had better elect such a man or woman in 2020 before it is too late. And the new President will of course have to undo all the harm that Trump has done. Some of the damage will take generations to undo like restoring relations with our long term allies. Even the long suffering Canadiens are disgusted with us.
14
$54 BILLION trade deficit in September. The goods deficit with China rose by 4.3 percent in September to a record $40.2 billion.
Trade wars are easy to win......
8
@AWENSHOK
Yes. This is because the American consumer (backed by free market purists) think they deserve the lowest price for everything. This same thinking allowed them to turn their backs on the American worker while trying to blame the demise of "Made In America" on everything from laziness to unions. There should always be a recognition that the consumer has the right to demand quality and competition or that workers can't expect unlimited compensation however, even with the tariffs, many goods will continue to pour in from abroad as cheap labor, unfair trade practices, and money from tax cuts as an offset will still make the prices attractive.
While Trump has brought the problem of fair trade vs free trade to the forefront, his framing of the solution as a "trade war" suggests that governments with whatever fiscal munitions they choose to implement would be more effective than the willpower (or lack thereof) of the consumer, of the corporate profit motive, or of the sheer magnitude of a global economy.
Absent a change in mindset regarding what a truly healthy national economy should be, in the end, consumers will pay more, the government brings in a little additional revenue to pay for tax cuts, and not much else changes. Meanwhile we have a healthcare, infrastructure, and debt crisis (among other things) in this country. Oh, and yes you're right, all that winning to deal with as well.
3
The problem is, American workers CANNOT produce the products worth their wage. Globalization will put everyone in a fair match. You just can’t work less and earn more nowadays.
American "allies" have to be very careful here. One thing the Trump administration has demonstrated is that it is a completely untrustworthy, lawless regime which is determined to pick off other countries one at a time. Bilateral deals are good for the bigger, stronger actor. Unfortunately, many Western and Asian allies of the US continue to hope that, after Trump, the US will go back to some kind of "normal" Presidency. This kind of wishful thinking follows from the fact that so few countries really want to lead or think for themselves. So, they are willing to be pushed around, at least for a while, in the hope that the bully will eventually regain its senses. But thinking in those terms simply encourages the US to think that it can get away with coercive actions towards the rest of the world. There needs to be a counterbalance to American power; the rest of the world will need to reach this conclusion eventually. In the meantime, smart statesmen will recognize the opportunities to play China and the US against each other. The Europeans, for example, have an excellent opportunity here to make inroads into China at the permanent expense of American companies. They should take it, while they still can.
9
Considering the economy size and population, China GDP growth of 6.5% is still decent, respectable, but not great. Watch quite a few YouTube episodes shows the people's optimism and forward looking attitude towards the future. China is still growing. In addition, China just signed a huge commercial deal with Japan including currency swap and joint project development in foreign countries. These are significant progress forging alliance between the 2nd and 3rd largest economy in the world. Japan also determined to advise China on issues that dealing with US not to make the same mistakes Japan made many years ago. After 2 years commercial idleness, Australia finally got another chance to visit China resuming the dialog to further expand business dealings. All these, I think China is going ahead with globalization while we seem to favor unilateral dealing.
7
Most countries are starting to realize, as Trump has said, that China is handing everyone the very short end of the stick. On top of that they will steal/pirate anything their trade partners have not nailed down. Xi's promises of openness are laughable.
35
Disagree in theory and practice.
The demagogue Trump is in a major trade war with most of the world.
China only is involved with a major trade with the USA.
China has hundreds of potential allies, the USA none.
The incompetent demagogue Trump doesn't realize or care that the USA is not the only game in town like from 1945-1970 economically.
33
@Paul Your partisanship is clouding your ability to see that Trump is actually right on this issue. Even other European nations are recognizing that trade with China has been a one-way road for a long time now.
28
@Jonathan-thank you for your reply. I am not a republican or democrat but I am against Trump because he is an ego maniac demagogue.
The other countries may have disputes with China but they deal with it with arbitration and not an all out trade war.
I am not against tariffs if they are selective, well thought out, fair and non onerous.
The demagogue Trump is a free trader because he would have brought his and Ivanka's trinket factories back from slave labor India before they went belly up.
Trump will gets a few sops from China just like he did with Canada and Mexico and declare he is the greatest president since Lincoln.
He is an ego maniac pathological liar and not a republican or democrat or for that matter any party.
12
The last 20 years of watching China has taught me that their words mean nothing. They'll say whatever you want to hear and do the opposite. Only countries where they're throwing around bribes to corrupt leaders willing to sacrifice their own nations future with terrible deals for personal gain are "willing to work" with China.
The government installing hardward spy chips into server boards should have led to a complete moritorium on electronics with any supply links to China. It hasn't, yet, but it should.
30
@David I guess nothing can kill the bogus zombie imbedded chip story. God, I wish the left had conspiracy theories. Ours always end up in indictments instead of legends.
2
Not a Trump fan but he got this one right
32
@J Clark- what rotted soy beans in the midwest?, a trade war against the whole world the demagogue Trump can't win, a record of incompetence with any business deal he has made in the past? a free trader otherwise he would have brought his and Ivanka's slave labor trinket factories back from China and India before they went belly up.
Which one did he get right?
He is a pathological liar. He is good at that.
2
Obama had 8 years and did absolutely nothing about China and its theft of our IP.
Trump comes in realigns our entire posture for the better and is even convincing the Europeans. Critics said that would tank our economy - guess what employment at the lowest level in 60 years
44
@Jay Lincoln The Obama administration conducted extensive negotiations with China for eight years in an attempt to persuade Beijing to lower tariffs and reduce other barriers to imports. Obama administration officials had made some progress when they left office, but they were to some extent counting on a bilateral investment agreement with Beijing to lock in those gains, and that agreement did not happen. While the Trump administration has moved very assertively on trade toward China, it is almost certain that a Hillary Clinton administration also would have taken a more confrontational trade stance toward China. Many Democrats inside and outside the Obama administration were starting to question by the end of the Obama administration how much progress was being made in negotiations.
23
@Keith Bradsher - "The Obama administration conducted extensive negotiations with China for eight years"
8 years of negotiations? Seriously?
Trump gave them 3 months and when nothing happened, tariffs. That's how it's done folks.
29
@Keith Bradsher
You lost credibility and undermined your objectivity with your rather weak defense of the Obama administration and your statement about Hillary Clinton.
It was painfully obvious that China did not respect President Obama, and you also failed to mention the instrumental role that Hillary's husband-a Democrat-played in China's entry into the WTO, which is in many ways the root cause of much of the turmoil across the developed world at the moment.
This newspaper's coverage of the rise of China was woefully inadequate for many years, but has been improving recently.
You need to decide whether you want to be a reporter or on the Opinion page.
20
The recent noises of compromise from Xi show that he can read the writing on the wall and knows that their hopes for a Democratic win to weaken Trump domestically looks ever more unlikely.
14