I think you're naive, Tom. The Chinese have no intention of sharing first-power status with anybody. That's why they play a zero-sum game. Many in our commentariat have excitedly predicted that China's rise would slow or stop - that they would have to begin doing things the West does - to succeed. Those predictions have been re-issued every year for 25 years and been wrong every time. Now some in the West are beginning to perceive the threat that China poses. They see that China is winning the game and that they are weakening the rest of us in the process. The best response I have seen to this was Mike Pence's speech to the Hudson Institute in October. Here's a link to it.
https://www.whitehouse.gov/briefings-statements/remarks-vice-president-pence-administrations-policy-toward-china/
The best way to protect Western prosperity, political systems and values is to "disconnect" from China and other like-minded states to the extent possible. China is - culturally and politically - nothing more than a super-sized North Korea. Trump is - unfortunately - a poor choice to take us intelligently in the direction we need to go, but he has correctly shown the best direction for us to take.
18
China built its economic success on a command economy and a gigantic labor pool willing (or forced) to work under bad conditions and for low pay. that gave them huge economic leverage. they also didn't care who got hurt in the process.
America built its economic success, at least in part, on slavery (mainly in agriculture for export) and a bullying type of international piracy. and we also didn't care who got hurt.
both China and the USA systematically raped the Earth, and are still kicking and screaming at any restrictions on exploitation.
bottom line: buy low, sell high, ignore consequences.
4
Anything that requires Trump to be honest is probably never going to happen. Sad.
5
By supplying manufactured goods at low prices, China has benefited the relatively poor in USA...at the expense of the rich who have been chased out of the market.
Hooray for China!
I have always admired Mr. Friedman's analysis, in this newspaper, in his books and on Charlie Rose. I especially respect his even handed presentation of information. Once again this article follows this pattern. Yet the whole story is not told here and it comes as a surprize that American exceptionalism rears its' inaccurate head. What I mean is that the US has employed its economic and military might to disasterous ends during my lifetime alone. Vietnam, Iran ( pre 1979), Indonesia ( Marcos), a plethora of latin American countries ( El Salvador, Chilea...), Iraq. I remember "Yankee go home " as ubiquitous as the Beatles in the 60's. In retrospect, in many indicators of human flourishing ( various health indicators, educational standings..) the US with its' massive wealth is embarassingly lower than most ( all? ) of the OECD countries. Add high suicide rates, gun deaths, stagnent wage growth for 30 years is often noted in Tom's articles where exceptionalism seems to exist for only a few Americans. Whereas, as noted by Graham Allison Jr. (Harvard) China has managed since 1979 to lift 90% of its people out of extreme poverty which is 2/3rds of world poverty. It has the largest middle class, 45% of gain in world GDP only since 2008 and much more in this stats list. They cajoled, cheated and took advantage and change js needed but the result seems to have been positive.
3
This is so intelligent. Can you be our president?
I honestly don't know if containing, or not containing, China will bring anything good to the US. But pundits like Friedman have been saying for years that "trading with China" and the internet will invariably make China more open, more democratic, etc. The results have been the opposite and I have not heard too many of them admitting their false conclusion.
As to forced technology transfer I honestly cannot blame China but the capitalist greed. Nobody puts a gun over there head for the transfer It is there greed to enter the Chinese market that "made" them do it. Like Karl Marx said - the capitalists will even sell you the rope with which to hang them. So whose fault is it?
4
It behoves us not to be too self-righteous about what China is doing. Earlier in our history we did similar kinds of things in furtherance of our economic growth and political power. We pursued a protectionist trade policy during the early stages of the industrial revolution. Later, when our manufacturing matured, we often took the rest of the world's raw materials but imposed tariffs on their manufactured goods. We also developed oil fields in other countries with our investment, our management and engineers but the result was that most of the oil and money came back to the US leaving the source countries impoverished. As we became richer, we invested throughout the world, as China is now doing, for our gain. That is not to say that we did not sometimes invest to help someone else such as Europe after WWII. But as has been pointed out by others, the benefits of that too redounded to our advantage.
China is now using its economic and political power in similar ways to take advantage of the rest of the world. That is what growing economies with power do.
6
This is a very enlightening. I am relieved to know that Trump has accidentally done something right, although I'm sure he will figure out a way to do more damage than good. I have one small disagreement. Education in the technical world has been lifelong learning for many years. Anyone who worked for a software company as I did knows that the tools and methods constantly change. Any tech company that wants to stay relevant has to be constantly developing and changing. This is nothing new.
3
It is China's goal to surpass the USA as the world's superpower by 2049. One of the ways China exerts force upon the world economy is through tariffs. President Trump is countering China with tariffs of his own; he's confronting China by its own rules. Confucius say "there's only enough room in heaven for one sun," and like it or not that sun is and will be the USA! I support the President. I support Trump. MAGA! Thank you.
2
But if China doesn't open up its markets and stop stealing our intellectual property?
Then what should bot the US and the rest of the world do?
China’s success is not mysterious or due to American help or policy. Every one of the countries that are most similar to Mainland China culturally and historically, such as Japan, South Korea, Taiwan, Singapore, and Hong Kong, grew faster than Mainland China for longer and is much richer than Mainland China today. Mainland China in 1980 was similar to Taiwan or South Korea in 1950, but after 40 years, Mainland China is still a relatively poor developing country with a GDP per capita lower than Mexico, while after 40 years of development (by 1990), both South Korea and Taiwan were first-world countries with globally recognized companies and industries. That’s partly because those countries had more market-oriented policies than China, and partly because they really were within the US security and free trade umbrella whereas China has never been. In short, China is succeeding in spite of and not because of America’s and its own government’s policies.
1
I have only one complaint about Friedman's column, toward the end he says:
"and the most open immigration system to attract both high-energy low-skilled workers and high-I.Q. risk-takers"
It is a big mistake to equate low-skilled with low-I.Q. This country has benefited greatly from immigrants who began as low-skilled workers and evolved into so-called "high-I.Q" risk-takers. Their intelligence did not necessarily change during this evolution.
8
The US Navy protects sea lanes - from Hormuz to Malacca to Taiwan Straits - so that China's merchandise can get around the world -
and in return it enables the U.S. dollar to be world's dominant currency by buying US Treasuries, in essence lending to the United States Government and Navy at the world's lowest interest rates.
2
Nice clear summary, but still way above the comprehension and reasoning skills or interest of the no IQ president that risks all of us for his exclusive benefit.
You missed the other pillar that enabled China and disabled America - the American plutocrat and leaders of industry shipping jobs to China wholesale that enriched the very few - like the Walton family who forced their suppliers to move to China.
Yes, it will take lifelong learning of facts, figures and ideas, not self-indulgent beliefs, conspiracy theories and lies.
GOP thinks the private sector alone can compete against all of China rather than all of America - private and public - to win.
The only thing sustainable that trump wants is dynastic power. He obviously does not care about sustainability - look at his unsustainable view of climate change. And Xi is looking to restore its dynastic rule as he consolidates power and eliminates term limits. Both are unsustainable by planet Earth.
8
@PAN
@PAN
Well said about the plutocrats.
3
The United States became a superpower for another reason also: it exploited the resources of an almost virgin continent. Many of the resources are now much scarcer, the space for highly individualistic innovators is shrinking, an economy can no longer shut out the world and intellectual innovation can no longer be protected.
After 150 years of humiliation China is resuming its natural place in the world.
3
No. The victor of those hypothetical 30 competing companies is the one who's owner: 1) pays the biggest bribes to gov't officials, 2) who has relatives in gov't to get them advantages, around rules and access, or 3) both items 1 and 2. Nothing more.
Please. Let's not perpetuate the fiction that Chinese communist/capitalism is something other than what it is. You should know better.
3
The major mistake was that China became a member of WTO. It is too late now for us to handle the cheating Chinese leaders. Mao Zedong was successful because of he knew how to cheat Chinese people. He cheated Chinese people in order to defeat Chiang Kai-shek in 1949. Now China is trying to cheat the whole world. Sad. There are more than 350,000 Chinese students in the US and they are here trying to steal our advanced high tech knowledge. They have more people and more manpower.
1
“jungle capitalism,”
No Tom. The victor of those 30 competing companies is the one who's owner: 1) pays the biggest bribes to gov't officials, 2) who has relatives in gov't to get them advantages, around rules and access, or 3) both items 1 and 2. Nothing more.
Please. Let's not perpetuate the fiction that Chinese communist/capitalism is something other than what it is. You should know better.
Regarding the "vetocracy", McConnell's power grabs for the sake of party over country must also play into the calculations regarding our newly diminished standing economically and politicaly on the global stage.
3
Wise and compelling. If only Washington would listen.
Nice clear summary, but still way above the comprehension and reasoning skills or interest of the no IQ president that risks all of us for his exclusive benefit.
You missed the other pillar that enabled China and disabled America - the American plutocrat and leaders of industry shipping jobs to China wholesale that enriched the very few - like the Walton family who forced their suppliers to move to China.
Yes, it will take lifelong learning of facts, figures and ideas, not self-indulgent beliefs, conspiracy theories and lies.
GOP thinks the private sector alone can compete against all of China rather than all of America - private and public - to win.
The only thing sustainable that trump wants is dynastic power. He obviously does not care about sustainability - look at his unsustainable view of climate change. And Xi is looking to restore its dynastic rule as he consolidates power and eliminates term limits. Both are unsustainable by planet Earth.
2
I don't disagree with Mr. Friedman. What I don't understand is why are there so many our companies continue investing and doing business in China for so long without pulling back. Past presidents always dealt with China in a way that benefitted both countries. We may have a trade imbalance, but it helps our dollars freely flowing in the world as the ultimate exchange currency and safe heaven in the world. We control the dollars and interest rate changes which affect stock markets and trades in the world, thus can be used for sanctions against hostile countries such as N. Korea and Iran. The current trade war only provides an opportunity for China to divest in US dollars.
1
As someone who lives in neither country, China or the US, I believe neither the US or China wear white hats. If Americans believe their country is always noble in trade, they are drinking the KoolAid. The US uses its market power to demand unreasonable changes to trading relationships. Softwood lumber, Bombardier airplanes and steel/aluminum tariffs are recent examples of that. It's interesting to watch the US-China battle because for once, the competitor is as strong as the US. Unfortunately for us, we are taken advantage of by both countries. It's why we are driving hard to diversify our trade away form the US and negotiating with the Chinese.
3
Not to mention Bombardier NYC subway cars. Been to La Poc many times for NYCTA. Lovely hosts. Almost a regular on the 7:00 am LAG to Montreal. And what's a little cold; 50 below feels like 20 below. Nothing beats a sugar house when the sap starts to run. Or wiping out in an SUV on black ice on the Trans Canadian Highway (no planes to La Pocatiere). Survived that rollover. Towed over roads where they grooved the ice. Tertiary roads; forget it; get out your snowmobile, which was all Bombardier was known for when they first came to the NY market, taking business away from Kawasaki Heavy Industries. Yeah, I go back a long time.
The past four US presidents have been politely and deferentially giving away the shop to China. During that same time, any objections to Chinese overreach or unfair policies were treated by China with scornful resentment and bellicose chauvinism.
Our current president may seem to be acting like a rude lout, but he is the first president in over twenty years to give China pause in its outright theft, its predatory trade, and its expansionist bent. Rather than offer the Chinese comfort with such a false equivalence between us and them, journalists should be broadcasting long and loud the excesses of the dictatorial, repressive, and belligerent Chinese Communist Party and its enablers.
5
Trump's trade war against China is based on his doctrine of nationalism, which is now the avowed policy of the U.S. government. Economists such as Paul Krugman have argued that a trade war has a harmful effect on the GDP, reducing welfare. https://www.nytimes.com/2018/06/17/opinion/thinking-about-a-trade-war-very-wonkish.html
Trump doesn't seem to have an exit strategy for his trade war. He is not a chess master, maneuvering toward a favorable end-game; his whole plan is that trade wars are easy to win. This reminds us of another nationalist policy, George W. Bush's war against the Iraqi people. Remember how its proponents told us his soldiers would be welcomed; instead, they perpetrated a holocaust against innocent people, the first holocaust of the 21st century. Even more remarkable is the many educated people bamboozled into supporting it.
The evil of Trump is not in the same category as that of Bush or previous presidents, but they all invoke nationalism to elicit support for their evil behaviors. Trump isn't their first nationalist president; we can rationally expect more.
4
What a pathetic fantasy that America can miraculously "contain" China and block its unstoppable destiny to be the world's hegemon within a short time, and for the rest of history. How can a relatively small country like America, only one-fourth the size of China (and India) hope to dominate the world in the future as it did in the past, when never China nor India had awakened, to use Napoleon's metaphor? China and India are much bigger relative to us than we were to Britain when we passed it and its fading empire in the fast lane in the last century. No rational president (which obviously leaves out Trump) can do anything more than manage America's foredoomed relative decline. Between them, China and India are about four times as populous as America and Europe combined. The entire future of humanity will be more dominated by Asia for the rest of time than it has been dominated by the blip of Western power in the last five hundred years. Goldman projects that India's economy will tie us for second by 2050. From then on, India will clearly be viewing us in the rearview mirror. China by 2050, of course, will have a much bigger economy than either us or India. America's "omnipotence" was just a little blip after World War II that crested some time back, never to return. Let's hope Americans can somehow grow up and deal with brute reality, instead of fantasizing along with demagogues like Trump that they can be "great" (meaning the world's hegemon) ever again.
3
And Alexander conquered the known East. He would gone to farther, but his army rebelled. They suspect he also wanted to conquer the West. Rome did that. Look what it got them. Find the book When China Ruled the Seas (sorry, forgot author, maybe I should run for president). Point is, China was once a great empire. Empires rise, and empires fall.
Once again Thomas Friedman demonstrates that significant issues are complicated, many-faceted, and have histories that can't be ignored. To view international issues as cases of good guys vs bad guys, as us vs them, as freedom vs Communism, is not just simplistic, it is fatal to finding a solution that resolves the issue in a manner that keeps the world functioning without creating more, and dangerous, strife. I don't know enough about the Chinese system to know how to affect its thinking or decision-making. I know enough about the U.S. system to know that making decisions out of ignorance, out of slavish adherence to an economic philosophy, or out of a desire to please one's political base in order to get reelected, is a recipe for failure. Thomas Friedman isn't the only smart American, and there are foreign policy experts who understand things better than he, I'm sure, but our approach to the world and the world economy is not currently being determined by the experts or the smartest people in our society. It is being determined by following all the wrong reasons I cited above. It's time to elect people who are thinkers, not just sloganeers and simplifiers. We want our government to reflect our best ideas, not the prejudices of our most partisan or least educated members.
2
So. Your message. Trump needs to change or be replaced in 2020 with a president who gets history, who will act as other presidents have, guided by "pillars" that maintain our values and plays by a set of rules. So when we put up candidates for president, they must have this "trade" sophistication that will enable us to work with but also hold China accountable. Have we had such a president in the past? Was the TTP one answer to China that would have worked? Will Trump being in power for the next two years scuttle our chances for recovery? Does he need to be "stopped now", will a replacement in 2020 suffice, or more darkly, is it already to late, kind of like the melting glaciers? In essence, what needs to be done now? What action needs to be take in the next few months?
1
Mr. Friedman should stay in his own lane, the Middle East, and leave the economics to others. Infrastructure hasn’t been seriously funded since the Eisenhower years. Education at the primary level is down to four days a week in some states, and under funded in most others. The only big winner so far is privatization and President Trump himself who received $500 million dollars from China to finance a project for the Trump Organization in Indonesia.
3
“There is an old Vulcan proverb: ‘Only Nixon could go to China.’”
Donald Trump is no Mr. Spock.
1
I ordered an electronics item from Amazon. I could get it in 2 days, or if I waited 6 weeks I could get it (from China) at two thirds the price. Well, they took my money and never shipped the item. If that's how China does business then maybe Trump is right.
3
"[W]e always stood for universal values of freedom and human rights[.]"
Mr. Friedman--Tom--this is where you lost me. We have not always stood for those.
Ask the descendants of the various tribes that have been pushed onto reservations, and who even today face serious restrictions on their votes.
Ask black people who were redlined away from good jobs, good homes and good schools, and who still face the specter of neo-Jim Crow laws, including effectively being slaves even today while in the prison system.
Ask Japanese people who were sequestered in concentration camps on US soil without due process just for the crime of having Japanese ancestors.
Ask all the countries where our government helped overthrow democratically elected leaders who were iffy about working with the US and replaced them with dictators. Look at how many of those countries are currently trouble spots because of our ham-fisted thumbs on the scales, like Iran, Colombia, and so many more.
At our best, we stand for freedom and human rights. It is an ideal we strive for. Unfortunately, too often we fall far short of this ideal, and we are guilty of not paying attention to how our failures in this arena have led to some of our current problems.
I very much appreciate your optimism, but our policies must have a better grounding in our history so we can avoid repeating past mistakes.
4
@Jacob Sommer
I guess I’m getting tired of the tedious detailed litany of how we’re irreparably guilty and scarred by American policy and history. Rinse and repeat over and over.
Btw. I’m not MAGA GOP clone either. I’m a person of the progressive-democratic-left and committed to liberal principles. Sorry you got lost by Friedman suggestion that we stand by universal values of freedom and human rights.
If I could choose a president to lead the trade re-balancing with China, I'd choose one who was steady at the helm but unpredictable in policy. What we have is one who is unsteady at the helm but also unpredictable, and who might be one incident away from total raving lunacy.
But appearing to be crazy is a strategy also, as long as everyone believes it is true. And I believe it; Trump is truly crazy, or to use the PC term, suffering from a clinical personality disorder. He is dangerously unstable.
If anyone else had been willing to play hardball, Trump would not be president. So we got some of what we need, but at enormous cost to our prestige, and risk to our safety. So here we are.
It's what comes next that we need to worry about.
Presuming we survive Trump, if our next leader decides to kiss and make up, it was all for nothing. If our next leader decides to stay the course, but without the personal bluster and motormouth, we might come out of this ahead of the game, with a reinvigorated America and a reasonable trade relationship with China.
I don't see that leader on the horizon. The Democrats have about 18 months to figure it out.
2
It would be helpful if Friedman admitted that the US got where it did by stealing intellectual property and protective tariffs. That does not mean that we should not have some form of trade policy, but if we think in terms of broad strokes, like education, it won't work. We actually DO need to work with Japan and Europe to isolate China. If we do not, we lose the ability to stop China from forcing US companies to give away the store to China. So Google accommodate oppression and our tech sectors gives up trade secrets.
Broad strokes are not enough.
1
Part of the reason for China's very rapid rise to dominance in the manufacturing sector was/is a total disregard for the health of its people, allowing industry to pump out unlimited amounts of toxic pollution.
1
If anyone wants to know how China got so powerful, I suggest reading William Greider's 1997 perceptive "One World, Ready or Not". In it, he describes the deals American corporations struck with China in order to access all the sweet sweet cheap labor. We agreed to share our technology with them, which allowed China to leapfrog past that developmental stage like America did naturally, to develop industries. American corporations reaped the profits, and American workers become unemployed.
9
This is a clash of personality, Trump vs Xi, a point Mr Friedman did not evaluate.
Trump does not follow rules and logic. He was born rich, looks for glory (Trump brand) and works on ambition (his leveraged deals). America's failure is due globalization advocated by liberal economist.
Xi was born red, wants to glorify Chinese Communist Party and sees himself as the embodiment of this party. China's success was due to the leadership of the party.
Talk about Thucydides' trap: America is already at war, not hot war or cold war, but trade war. In the fog of war, cool logic rarely prevails.
17
@Eric C
More Clausewitz here. Has already begun, it seems. Looking more and more like WWI fronts. Real threat if China sees itself as alone. Still the cultural mix of Korea-Japan-China the greatest threat to economic stability. Ancient wounds that must be dealt with--perhaps our most challenging obstacle to success.
1
You suggest that both the USA and China acknowledge what they have done and are doing. Which includes known, unknowable at a given time, because of gaps in knowing-information, undertanding and in needed technologies, as well as unknowable-unpredictable-unexpected outcomes. This is part of realities' dimensions: uncertainties, unpredictabilities, randomness and lack of total control no matter what is done. When. For how long. Repeated or not. There is an additional issue which merits both noting and delineating. Accountability. For whatever was/is done. Undone, as well as the not done. Which needed doing if national well being, for both America and China, was a viable objective.THEN. Now. Tomorrow.
I give you credit for at least pointing out that the Chinese acknowledge the U.S. should have done this ten years ago. While they may think it is too late, it is not. If push comes to shove we can still crush them. They have a worker problem with an aging population, they need their biggest customer, countries like Vietnam can undercut their low costs and they cannot withstand our military might. If Europeans are as wonderful as you assert (they are not) then they will pick the U.S. over China. If we demand China be shut out of the world market or countries lose the U.S., its banking system and its military protection China will be so weakened that it will be worse off than Russia. Mind you we would pay a terrible price as well, but to remain on top may require the cut-throat instincts (or at least the perception of such tactics) of our President.
You have been wrong on so many economic issues over the years that I would think you would stop offering advice on the topic.
2
Consequently Trump is the biggest threat to the economy and the future. (To sum up your line of thought in the last paragraph)... right? America (and the world) needs a proper president - sooo bad...
2
Why no mention of the President pulling us out of TPP? That would have helped to contain China. Our President does not know how negotiations work even though he calls himself a master deal maker.
2
@DRM: Trump fancies himself to be a master of a limited negotiation strategy described by Robert Ringer in a book titled "Winning Through Intimidation."
The title says it all.
1
The United States is a consumer economy. Choose what you purchase from a non China provider. Read the label. Americans are mesmerized by the "bargain". Do you really need 25 cheap Chinese t-shirts? The holiday season is here and our addition to buying is in full swing. Buy one quality gift from some country other than China. Some space in your closets and drawers is a wonderful New Year's resolution.
1
Anyone expecting Trump to understand the nuances of international relations is going to be sadly disappointed. He is indeed the bull in the china shop and what mess he will make and leave behind we can only guess.
Before the election, when he would rant and rave and his supporters would cheer, anyone with a rudimentary understanding of government and international relations was aghast. What he was saying was not even feasible but his low understanding supporters could not grasp this. The days of the United States throwing its weight around in the world are over.
It may have worked for him in his little empire but not on the world stage.
3
" ...... and a Darwinian system of capitalism. In China’s “jungle capitalism,” 30 companies in the same business emerge and compete to see which becomes the alpha male and wins the government’s backing to go global."
Darwinian capitalism? Jungle capitalism? Is there any other kind?
Labor is not part of Friedman's narrative. The 20th century was largely a redistributive century, with the huge gains of the 19th and previous centuries making their way towards a developing middle class. But this was because labor stepped in as a powerful movement, helped enormously by the rise of the Soviet Union and the perceived threat of something like that happening here or in Europe.
Moving forward, if labor isn't included in this narrative, nationalists like Trump will continue to rise.
2
I agree that China should open its markets and stop stealing intellectual property, and perhaps enough outside pressure can move that. Be reminded however that every upstart economy including the US acted as China has. We should instead focus on what we can do by ourselves to rebalance trade. An increased and more progressive tax system here could direct US dollars spent here on more infrastructure, R & D, education and less US government debt: a form of forced savings. Chinese households save, US households do not. We do NOT need fancier handbags, shoes and mc-mansions. If we are going to go into debt we should be investing in a more productive future.
3
From Chinese business and government types
"We’re too big to be pushed around anymore. You should have done this a decade ago.”
YES
From Japanese
“Thank God for Donald Trump. Finally we have a U.S. president who understands what a threat China is!”
YES
Barrack Obama, was cool, elegant, and smart but he had no understanding of power.
Consequently his foreign policy from China, to Japan, to Syria , to Libya to Yemen was a disaster
Sorry
Trump may be erratic, self possessed, and a bully but he understands power and how to yield it.
And that counts when you are President
4
"When it was the cotton gin that meant universal primary education; when it was the factory, it meant universal secondary education; once it was the computer, some form of universal postsecondary education was required; and now that it is becoming big data and artificial intelligence, it’s going to be lifelong learning."
I can't quite put my finger on it, but there's something very McLuhanesque about this paragraph.
1
The biggest threat to the American economy and our future is Donald Trump. Period.
Trump is all image, no substance. To hide the fact that he is nothing more than a self-serving, parasitic con artists he attacks all who look too close, dare to question his "thinking," point out his prolific lies and grand failures.
Mr. Friedman rightly points out that Trump is "actually undermining and neglecting some of [America's success formula] key elements — immigration, allies, rules and regulations."
But it is more fundamental than that. Trump is dishonest in all he does. Dishonest in what he says. Dishonest in what he wants. Dishonest about what he is. Even dishonest in how he looks. (In fact, his fake tan, fake hair are just symbolic of his fake life.)
America can not sustain its ALREADY greatness with a liar and lie of a man as president.
2
The majority of of Chinese in the US are glad that the US finally has a President that stands up to China
They have no love for Xi.
2
Trump needs to be smart and honest?
Smart? And honest?
Now I know Tom is being unserious.
By most firsthand accounts Trump is a brooding menace who behaves like a spoiled petulant child — what he actually is — on his good days. His good days. On his bad days he’s “King Kong”, a tyrant, an obsessive-compulsive-impulsive vandal. He doesn’t read or study, can’t be persuaded to alter ignorant opinions and neither knows nor cares about human values. As for honesty and integrity, he is First Grifter every day in every way. One recalls an old poem, “There was a crooked man”.
There was a crooked man,
and he walked a crooked mile.
He found a crooked sixpence
against a crooked stile.
He bought a crooked cat
which caught a crooked mouse.
And they all lived together
in a little crooked house.
As for China, as corrupt a polity as money can make anything, smarts and honesty are alien to its nature. Gripped, as it is, by state-agitated ultra-nationalism that any citizen of Bismarck’s Second Reich would instantly recognize, it has entered an expansionist phase throughout the developing world but, especially, Africa and the South China Sea region. Doing this ultimately dooms it to the same fate that befell Japan during its “Greater East Asia Co-Prosperity Sphere” mania, an era that ended with Hiroshima and Nagasaki.
So, no Tom. What you ask of the parties might seem desirable, even reasonable. But, it’s impossible. Unachievable. Each is oblivious about what it is and where it’s going.
2
Trump is a disgrace as a human being, but I like his approach to trade.
Unlike decades of American administrations that were so very desperate to get a deal that they repeatedly gave away the factory (literally!). Trump has correctly recognized that WE are the world's biggest customer. Instead of begging for service and offering more concessions, Trump has demanded that we be treated fairly.
Take the Paris Agreement that allowed China to pollute and demanded the USA to close power plants. Why did we sign that? China's Carbon emissions are higher than the USA's.
Meanwhile, NAFTA encouraged factories to drive across the border and wipeout entire counties in America's heartland.
We need to stand tough against China, they have been stealing from us for years.
3
“China has to be a lot more humble about how its economy got so big so fast, and Trump has to be a lot more sophisticated about how America got so strong for so long.”
Um, do you know the Chinese? Do you know Trump?
1
2000 USA GDP 10 trillion Dollars. 2018 estimate is 20 trillion dollars.
What did China steal? It appears they rebuilt the USA. Qualcomm accuses Apple of stealing chip secrets and giving them to Intel is a current IP theft case proceeding in the courts. Are you going to blame the USA because some of their corporate entities have stolen tech from each other. This is just a common problem in all countries. Demonizing "CHINA" is just propaganda. Even saying that America has a level playing field is a lie. There are many restrictions around security issues stopping FDI in the states. Then there is this issue of SOE's. Just because Lockheed Martin Corporation,The Boeing Company. ...Raytheon Company. ...General Dynamics Corporation. ...Northrop Grumman Corporation. ...United Technologies Corporation etc, are considered private companies they are really all highly dependent on USA gov contracts. Therefore their dependency and lack of ability to market their products freely rank them as USA SOE'S. They are not part of the free market capitalist system. They are basically hybrid corporations being part Gov subsidized and part private. So let's be honest and say that this is all about containment and not about trade. That's the reality. As far as human rights are concerned I think USA has huge transgressions of human rights with the mass shootings and racial bigotry occurring daily. Set an example in the USA and then accuse. But with our record we should not throw stones.
1
Like most of you, I'm a Friedman fan. He inspires thought but needs critical review. No doubt his Chinese, Japanese and European interlocutors were an useful Greek chorus. And no doubt the pillars synthesis is genuine, even profound and insightful. But where's the beef? Either Trump is a Falstaffian genius or Mr. Friedman tees up a violin to distract from economic flames. The optimist in me makes me no better than Trump's toadies - I must take the good however achieved and find some way to temper or reverse the bad. Hard on one's compass, as it is.
Excellent, accurate, and a path forward. My prayer is that this be a path taken by many. Acknowledging the truth is the best way to find an answer that offers sense and meaning.
Economic successes?? Based on massive government debt? wow.. Nothing we own is paid for in either country. Hilarious
3
An elegant solution and it’s not too late to do this.
Tom, ever heard of the phrase "Middle Kingdom"? China is not going to be humble, don't expect it. It was American business greed that got them grow so fast, without its hand, it could not have grown so fast. Should have thought about it back then. Once you open Pandora's Box, you cannot close it.
Friedman says the US has always stood for universal values of freedom and human rights. Tell that to the Central American countries who have been bossed and bullied by the United States for at least the last 65 years. Overthowing the democratically elected President of Guatemala in 1954, attempting to overthrow the democratically elected government of Nicaragua, training and supporting death squads in Honduras and El Salvador. Etc. That's why there is a caravan heading for America. The overwhelming American demand for illicit drugs has corrupted Mexico, not the other way around.
Then there's the coup against the democratically elected government of Iran in 1953, America's role in the asassination of the democratically elected Patrice Lumamba of the Congo, and the murder of Allende in Chile, the illegal and immoral invasion of Iraq, etc. I could go on but spare us the nonsense about America's love for other countries freedom and human rights. The United States government believes they have the right to interfere with that freedom and those human rights when it suits them. They also have troops stationed in 160 countries. There is a word for a country that does these things. Empire.
5
We just forgot, let it slip by, and Congress gave up its responsibilities of being the watch dog of our political system. It took only a few months after Trump took office that one realized our president was an autocratic, indecent, person who was only concern was for himself. The model that allowed for the U.S. to be #1 in the world was being attacked by Trump's new model that attacked people, bullied people, failed to listen to people, disregarded wanting to work with people. It was all there, and now two years later it has only gotten worse. The best example for today would be the lack of holding the Saudis accountable for the blatant murder that took place in Turkey. Trump's concern: we don't want to upset the weapons arms sale to the Saudis. Pitiful.
5
@Me Too: 51% of us knew who Trump was before the election.
1
China has a different worldview so does POTUS and both differs from Tom`s. There will be no such thing as containing China ever again. Appreciate your well intended call to both sides but most likely there will be no takers, I am afraid!
The real thing, besides trade imbalances, is definitely that the business types, whether they are Chinese or American, don't really act as if this planet is finite (resources). It's NOT about how much money is made or a zero sum game. It's about that this is a finite planet (as they all are). You think we can just keep taking the earth apart for your profit and your family's? Think again business types. It's definitely not about me and mine have ours.
Too bad about you...
1
Very nice analysis.
Sadly, if I put my money on who will be smarter in this process---Trump or the Chinese---I would be all in on the Chinese. I am certain Mr. Friedman that somewhere in the Chinese bureaucracy some individual is reading and studying this piece you have wrote---with a follow up summary and analysis that will be read by higher ups in the chain of command. I am certain that no one in the Trump administration reads your article, and even if by some mistake, someone read it, who would be brave enough to try to explain it to our commander in chief? I guess, if you were brave enough, I would start with redecorating the Oval Office with 3 gold pillars...
I don't remember ever seeing the words "Honest" and "Trump" used together in a sentence.
This is an interesting and well balanced piece, a little above my comprehension level since I am not an economics experts.
A few comments:
1-Being fair and balanced like you are, is the right way to go. Establish the differences and negotiate from there.
2-Try to resolve differences with arbitrators, intl. courts etc. If not successful only then try tariffs but they must be fair, non onerous and focused with a desired outcome.
3-Last but not least, besides being an incompetent, ego maniac demagogue, Trump is also a free trader. Soon he will get a few bones from China, just like he did from Mexico, Canada and Europe and declare he is the greatest negotiator in history and the greatest president ever.
Bottom line he wants the same foreign slave labor system in the world today otherwise he would have brought Ivanka and his slave labor factories back to America from India and other countries before they went belly up.
1
The Empires on this planet, some great, some small all had one thing in common; they all failed over time. The United States, Russia & China are no exceptions. One day, either sooner or later will also fail.
I was born in the late 30’s, but my memories didn’t even start to come to fruition until the early 40’s, during the war. After WW2, after WE beat Germany & Japan, WE were considered the Greatest Country in the World. When I use the word WE, that’s what I was told happened. I really believed that the US did it all by themselves. As the years went by, I started noticing “cracks” in the wall of the U.S. In 2016, with the election of Donald Trump, the wall broke open and the flood waters of Hate, Mistrust, “Fake Everything” and Political Rivalry wiped away that beautiful image of The Statue of Liberty and America as the Land of the Free, and the Home of the Brave.
Did Donald Trump really start all of this? No. He was just the parasite that latched onto the Cancer that is America today.
Is there at least a temporary treatment for this cancer? Yes, but only if each individual replaces Nationalism with a true desire for Truth, Beauty and Goodness in their daily lives. If we can do that, then we can truly Make America Great!
4
Remember that it was the Republicans (Nixon) who opened the doorway for China to trade with us, and thus become an industrial powerhouse. One wonders why. Why so eager to do business with a country that is
1. Communist
2. authoritarian
3. a human rights abuser
I thought one of the principle values we always held as Americans was using carrots and sticks to promote freedom and democracy abroad. I guess that vision was never shared by the Republican Party after about 1960. I guess it was always about doing the bidding of fat-cat campaign donors who salivated at the prospect of selling their products to a country the size of China and using cheap Chinese labor - never mind that enabling the economic awakening of China was always known to be a gigantic risk.
I recall learning this in school:
“China is a sleeping giant. Let her sleep, for when she wakes she will shake the world.” -- Napoleon Bonaparte
1
Two things:
1—China can and is willing to suffer for the future
2—Chine will not tolerate losing face in the international stage
These are two reasons (among many) why China will fight and win the trade war.
4
The key paragraph asks the Chinese to be humble and Trump to be sophisticated. What are the odds?
4
One makes a serious mistake thinking Trump cares about doing the right thing or the wrong thing, the responsible or the irresponsible, the long term or the short term benefit or harm. He doesn't. Those thoughts are not any part of him. He is guided by flattery, impulse, revenge and attention. The rest is just an annoyance.
2
Before Trump no one seriously took on China for it’s unfair trade practices. Now it is on the front burner and even the wise Tom Friedman is jumping on the bandwagon.
Trump wants China to continue to do well and has made it clear the US will not tolerate Chinese imposed advantages on trade now that they are a strong economy. He doesn’t see it as a zero sum gain and stated all will do better when trade barriers are removed.
1
Mr. Friedman, you mention the high levels of innovation, Alibaba, Tencent, DJI etc. I live in a part of Asia that is included in the so-called Chinese sphere of influence and trying to deal with these companies is a nightmare. They will cheat and lie as if that is their business model.
1
I despise Trump, but think that dealing with China is long overdue. My fear is that he and his advisors are not strategic, smart or savvy enough to do it well or wisely.
China’s has a seemingly unquenchable Charlie thirst for power and control. As has been described in other articles in the NYT and elsewhere, China has bribed and loaned its way to control of minerals, ports and infrastructure in Africa, Asia and elsewhere. It also has done little to tamp down North Korea and appears to enjoy having Kim Jong Un tie up American foreign policy in knots and distract us. At the same time it has been expanding its global reach over the world’s waterways through its growing naval capabilities. And all of this has been accompanied by widespread cheating on WTO rules, as Tom has noted.
China is playing a long game, while Trump only seems to be able to see deal to deal, like the short sighted real estate developer he is. And we all know how many of his deals have ended up. I wish we had someone smarter and more strategic making decisions for us than Trump, Navarro and Kudlow.
3
Suppose this trade war with China is a horse race, which side has a better horse? more importantly a better jockey?
If the old saying of "betting on the jockey, not the horse" is true, I am not optimistic.
Mr. Trump has no trade policy other than "me first". A creative parent dealing with two children fighting over the division of the last bit of cake would have one child cut the remainder and the other child choose the piece to take. Mr. Trump wants to cut the cake AND choose the distribution.
He deprecates immigration, allies and rules and regulations in every way imaginable. His quantum anti-presidency would address these issues through annihilation and given his inclinations, our position in the world would disappear in a shower of photons.
I can work and have worked to reduce his ability to destroy my country and will continue to seek to drive him from the authority to hobble our future, but who can reach President Xi?
The WTO has all the trade rules necessary to beat China at the stolen technology and subsidized exports problem. American businesses most often did not take the trouble to use them. So now what do you do? Hold them down in a wrestling choke hold and make them stop? That is stupid. Only an improved WTO works. China is willing to do that. When does TRUMP start?
Why they broke it and what were the grounds of quarrel I will set forth, that in time to come no man may be at loss to know what was the origin of this great war. The real though unavowed cause I believe to have been the growth of Athenian power, which terrified the Lacedaemonians and forced them into war;
Thucydides, HISTORY OF THE PELOPONNESIAN WAR, I, 23
1
You're trying to rationalize two grifters. Won't work.
1
Great article. Too bad that the one human on Earth who should read it never will.
A smart analysis begins with the observation that in 2016 Clinton and Trump actually said many of the same things about China.
This is from the New York Times, June 29th, 2016:
" For Asia, the bad news this week was not that Donald J. Trump detailed a seven-point plan to toughen American trade policy, especially toward China. It was that Hillary Clinton’s campaign accused Mr. Trump a few hours later of purloining her ideas, noting that she favored similar action on those issues."
Of course I doubt Clinton would have done anything, just as Obama never did anything about NAFTA despite the promises he made in Ohio in 2008. This is actually the major difference: the establishment viewed such talk as a way to appease the public (See "Yes, Prime Minister"). Trump actually intended, and indeed is doing something.
In this way the US foreign policy establishment has long been tone death and worked mostly to sweep disputes under the rug. This is true on China, and on things like European Defense spending (Obama made similar statements to Trump on the later).
The problem, of course, is Trump has little idea what he is doing, and is motivated by some of the worst instincts that exist.
Donald Trump is what you get when the establishment fails. What Donald Trump is doing is why you desperately need a smart establishment.
1
The bigger problem is that trump always looks at someone to blame but takes no responsibility. China may have some problems but our problems, under trump are far worse, everything he sees he has a need to destroy.
We are currently on the home front undermining everything from fires, immigration, lies, our allies and ballots (of course this is just this week). The daily chaos is strangling any intelligent investment, such as infrastructure, education, healthcare. How do you a build a competitive workforce without this investment in ourselves? The Republicans gave a large piece of our revenue back to the 1% and Corporations, that hinders moving forward.
Thank you Thomas L. Friedman!!!
For the CHINA - AMERICA situation it was the best most concise review of the predicament put in simple short understandable chunks along with the solutions.
WELL DONE!
TRUMP is not smart enough to understand it even if he reads it AND the solutions simply will not suit him because they do not cause problems the way he likes - never mind the rest of us.
In my view, these are wise and informed words from a wise and informed man. Too bad Trump has no interest in being wise or informed. He will not read this, and he would not understand it if he did.
1
Yea Tom, how's that "World is Flat" thing workin' out?
China does what's in the best interest of China( which they should, big surprise) while the US has been wearing love beads and contemplating its navel for the last 25-30 years. At that time, China used the siren song of low tax and labor costs to lure multinationals' manufacturing there. In exchange, we hoped China would open up its consumer and service sectors to us. Fast forward to the present, the US manufacturing base has been eroded, its IP has been stolen and our firms can't get a foothold in China's markets (so much for fair trade). Along comes Trump with his tax bill which incentivizes US multinationals to move their operations here(i.e., our corporate tax rate is now lower than China's) while imposing tariffs on China products, all in the interest of achieving "fair trade"... and, he's on to something( of course, you wouldn't know it, listening to the MSM): China must achieve double-digit growth in order to avert domestic unrest. Similarly, due to the current trade imbalance, China has more to lose from a tariff war than we do. So, keep playing hardball President Trump; don't listen to these reformed globalists who are trying desperately to stay relevant !
2
Here's my fear: the US is becoming more like China instead of the other way around. Instead of encouraging China to adopt OUR values we are adopting theirs... especially the "Darwinian system of capitalism" where billionaires can buy support from the government to increase their profits (Amazon, anyone?) And has Mr. Trump championed the WTO or any "globalist" organization that fails to bow down to America? And I seriously doubt that Mr. Trump or the GOP leadership understands the importance of our navy in the Pacific. Have you ever heard him mention it or read a tweet about it? China IS a plutocratic state... we're becoming one. If we want to MAGA, we should go back to what you purport to be our first pillar and educate ALL our children to take advantage of the prevailing technology of the day. We're not doing that now and we haven't been doing it for decades. The plutocratic class hasn't suffered from underfunded public schools, though... they've survived and now think are the fittest. It's past the time for us to offer the same chances to ALL children.
1
You are attributing qualities of strategic thinking to DJT that he does not possess, in the same way that an avocado does not possess them. His advisors might...but insofar as that is true, do the plutocrats who run this planet even think in terms of nations anymore? If so, then only in terms of how the concept of "country" serves to keep them in power. Most of these people, though, might as well live on an island in the sky, where they tussle over a checkerboard that uses five, ten and twenty-billion-dollar tokens for pieces.
China and the U.S. can have a non-zero sum economic relationship?
I have never really understood the concept of free trade and the idea of a non-zero sum free trade possibility between two DISTINCT parties of any type for any length of time unless the two parties can be kept at an appreciable distance from each other, KEPT DISTINCT, or they bleed into each other, become a single entity.
Obviously with the world becoming globalized, the world actually a planet in space with a human species increasingly interconnected by obviously technological advancement, it's impossible to have nations, cultures, religions, races, ethnic groups kept distinct from each other so conflict is inevitable, and obviously we are in a zero sum situation economically and politically (concept of World Wars bears this out).
And obviously we cannot go backward, cannot retreat to distinct and distant peoples, places, and times, therefore we must go forward and overcome all racial, ethnic, religious, national, cultural distinction or have at least such distinctions ameliorated or we will be in a close, tight, zero sum situation politically and economically.
But what is typically current political and economic thinking? Nothing less than the idiotic concept that a non-zero situation, stability, can occur between distinct entities in close proximity to each other, that peace can exist between entities neither safely distant from each nor willing to truly cooperate and become one with each other.
What capitalism is about is profit at all costs masked as "free trade". Multinationals from the US went to China to maximize profit. If they didn't like China's control and the fact that China "stole" their secrets they could have left. They didn't because, in terms of cost benefit, the profits were great. In other words, the profit-seeking multinationals helped to create China, and they didn't see or care to see the unintended consequences because they were blinded by their fetish.
5
"that we’ve lost sight of who we are and how we got here."
All to true and a great piece from Friedman as all of us expect. I would only comment that a reactionary oligarchical society is not the way to get there.
This painful and shameful interlude of a party and president are simply not capable of the sophistication recommended by Mr. Friedman will end. The sooner we rid ourselves of this pestilence the sooner we can intelligently deal with our bi-lateral & multi-lateral relations with the PRC.
We can do this. To our satisfaction and more importantly theirs. We have done so in the past with Europe. And we know how to provide for ourselves vs a vis investment in people, transportation, and new technology. We just need to get the greedy and selfish out of the way of progress and the creation of wealth for all; not just the few.
In this era we of good will and sound mind know what to do: keep resisting.
2
"Finally, we always stood for universal values of freedom and human rights, always paid extra to stabilize the global system of which we were the biggest beneficiary, and therefore always had allies..." You mean as in Iraq, Iran, Nicaragua, and before that Native Americans and Africans? This nation is, first and foremost, about economic empire and, like all economic empires that have come before, finds easily dispensable its values when they get in the way of profit. We are no worse than those who came before us, or those with whom we now compete, and on occasion we do much good in the world, but we should not pretend that we are always better. Trump is but a much cruder example of what we've always been. And, anyway, climate is going to do us all in, and with the way things are going sooner than later.
1
"This trade war can end well only if China is honest about all the pillars of its formula for success and if Trump is honest about all of ours."
Any plan that relies on honesty from Donald J Trump is dead on arrival.
3
Pillars, formulas and values are well and good. But this is about only two things and China has them both: bulk cheap goods and “unlimited” consumer market.
America has lived very nicely off the former for decades and would be hard pressed to adapt to the type of inflation that would result is they were taken away. American business has lusted after the latter for twenty years and begrudgingly paid significant costs to continue.
As our self-proclaimed “best” negotiator might say “Got em where we want em.”
Unfortunately, while the traits of humility, sophistication, honesty and intelligence have been temporarily (we all hope) replaced in our country by greed, corruption, ignorance and pettiness, this vacuum has allowed the Chinese to take advantage of our short-term vulnerabilities to further their long-term strategic goals. We’ve seen this movie before during our relatively short history because we’ve been on their end of the seesaw playing the same high stakes games with other countries.
To oversimplify, what’s required here for both countries are plans based on purpose, goals, objectives and the rational strategies necessary to ensure those outcomes are mutually beneficial.
Guess who’s ahead in this still peaceful war today? Not us.
How much longer can we wait before too much more is lost?
When it comes to patience, the Chinese have few rivals.
The biggest threat to the economic well being of the United States is Donald Trump. His shoot from the hip polices result in chaos and confusion in the market. His tariffs on Chinese imports resulted in the Chinese ending the purchase of American soybeans. Now there is a glut of soybeans and prices have collapsed. One result is the price of chicken has gone up and the price of pork, fed with American soybeans, has gone down. Now they have again raised the issue of tariffs on imported cars without recognizing that BMW, Mercedes, Volvo etc. are building cars in the United States for shipment overseas.
2
"In sum, I worry that America has become so focused on who the Chinese are and what they’re trying to become that we’ve lost sight of who we are and how we got here. That's the biggest threat to our economy and our future."
Yes Mr. Friedman you are correct. It grows frightening every day.
1
By no means am I an apologist for China, but China did what any country would do: given an inch, why not try for that mile. While we in America got fat and happy on our hubris, the belief that the future will always look like the past. Your comment on China reminds of what we hear from some (many) of our economic leaders: "I did it all by myself." And where is that getting us? A country with half its population more concerned about maintaining its racial superiority that ensuring all our citizens, and thus our nation, a place in the 21st century -- and a political party that is tearing down this country in that aim. Trump isn't doing this to help America. He just found another convenient, and popular, target to bully.
3
Mr. Friedman states the accepted view of all professional economists, the view taught in Eco 101, that international trade is not a zero-sum game, the "Law of Comparative Advantage". He writes :"China can thrive and rise, and we can too, at the same time." The problem with the present Administration is that it is led by someone who rejects professional advice, considers himself too smart to follow the conclusions of others. So he does nothing to ameliorate climate change accepted by the scientific professional community (global warming is most likely partially responsible for the fire devastation in California) and promotes coal production and CO2 emissions which will exacerbate climate problems. He makes light of environmental devastation as he promotes the cutting of regulations set up by professional environmentalists to keep air and water pure and healthy. Trump believes he always "knows better" . Furthermore he is plagued by a hatred of giving credit to anyone else---never acknowledging the good things that predecessors have contributed. It is always, "those who came before me were disasters". These attitudes of rejecting the conclusions and accomplishments of others will probably sink our economy and government into greater chaos than it presently suffers.
6
Another column which counts on rationality to supersede the irrationality of Trump and his advisors..
I'm 80 years old and I am training to run a four minute mile. I have a bad knee but if I can just train hard enough I'll be able to accomplish my goal. The chance of accomplishing my goal is about as realistic as getting Trump following Mr. Friedman's advice.
As long as health care remains tied to employment, the United States holds a losing hand. Not only do Chinese products not include the cost of health care, they are actually subsidized by the government. Then you add disproportionate tariffs, and wonder why we can't compete. The playing field just isn't level.
In the near future, we will program the human mind in the computer based on a "survival" algorithm, which will provide irrefutable proof as to how we trick the mind with our ridiculous beliefs and manufactured values about what is supposed to survive - producing minds programmed de facto for destruction. These minds would see the survival of a particular belief or made-up value as more important than the survival of an individual. When we understand all this, we will begin the long trek back to reason and sanity and trade policies that actually make sense.
See RevolutionOfReason.com
Friedman neglects to mention a key element of Trump's China policy, or what's lacking in it. His withdrawal from the Trans-Pacific Partnership greately reduced our ability to influence Asian allies and get their help in curbing China's unfair trading practices and technology thefts. They now see China as the big player intheir region -- one that actually recognizes climate change and is doing something about it -- and thus the one to curry favor with rather than the United States. And instead of using the WTO to resolve legitimate trade issues with China, Trump is ramping up a trade war that hurts both our economies.
4
The key to succeess in any business deal is to become a good listener. Niether of these countries are listening to each other, their people or the world. They insist on talking at each other. This 100 years after the world did the same thing, is a formula for disaster that doesn't have to happen. There must me someone mature enough to explain the rules. That is why we have the WTO and the United Nations and why these things are vital to the successs of the world.
3
There's no mention here how the Chinese attempted, many times in a few ways, to manipulate companies that went public? The Chinese business ethic, if you can call it that, is far different than that of the U.S. The Chinese govt. has a stake in over 85% of Chinese businesses, not just investing in the ones that loom larger than competitors and show promise. Communism controls everything from economic trade, media, living conditions... and the corresponding corruption abounds.
Trade war with China? Yes. The soy bean farmers in the mid-west still support Trump even though they've lost out on sales to China, because Trump is spot on on trade with China. They own the U.S.'s largest pork producer and have tried again and again to buy U.S. arable farm land, which they must NEVER get their hands on. Once a country loses its ability to grow and fully control cropland, it becomes a weaker nation. Let the Chinese attempt to grow on their soil, or African and South American, as they case may be. If Europeans are afraid of a cold war because they will be forced to decide, given China's history of tainted and inferior products, the EU will choose us.
Thomas Friedman is a cheerleader, not an analyst. In the midst of all this tariff bluster why doesn't the US simply use the WTO rules to bring China to account? After all, we wrote those rules to settle disputes so that trade wars wouldn't happen.
As for Friedman's understanding of American history, I think our naval commanders would be surprised to find that their mission was simply to sail around and fly the flag.
They are there to send a message to China that we have the ability to cut off all maritime traffic to China, including access to oil.
But all this is being done as if this were England and Spain and it was 1718, not 2018.
The real issue between the US, China and also India is that the current model of every expanding capitalist production and consumption is unsustainable for the earth.
If these three countries don't figure out how to work together to stem global warming all of this trade talk will mean nothing.
There will be no Chinese market unless its for desperately needed food. And the US will be too busy with torrential storms and draught to worry about technology transfers.
Trade is not the pressing issue, climate disruption is.
5
Stop doing business with authoritarian regimes. And punish those that do. There must be consequences for not choosing democracy, liberty and rule of law. Moreover, because the individual can posses truth, she trump group-think. 3000 years of liberal democratic order can't be wrong. People first.
1
@Private
Typo: "she must trump group-think."
The TPP was our best offense. tRump has unilaterally disarmed, and replaced a growth strategy with a lose lose trade war.
2
The technology transfer argument has a subtle smell to it. If the technology in question was originally possessed by US companies, nobody forced them to manufacture in China. Wall Street financed all of that outsourcing to lower labor costs. Transportation costs were much higher from China. Had these companies focussed on "making America great again" they would have upgraded US facilities and paid American workers more with the same capital infusions. The banks made out great, the companies prospered and America is a lesser nation. The trade trade-off is conspicuous.
6
Mr. Friedman misses the point completely. China's entry into the WTO was implicitly predicated on progress toward democracy and a constructive role on the world stage. Instead, the Chinese Communist Party has installed a president-for-life, cracked down brutally on free speech, put in place internet censorship regarded as a model for dictators, and quarantined members of religious minorities in reeducation camps, all while enabling the survival of the North Korean regime and its nuclear and missile development, threatening Taiwan and bullying its neighbors in the South China Sea.
The Chinese regime is, quite simply, our enemy, the enemy of all free peoples and the oppressor of its own. Our trade policy should not in any way help to strengthen it. Such an approach would cost us dearly in the long term, and would in any event be incompatible with our core values.
4
China industrialized in much the same way as Japan, other East Asian countries and the US: by protecting its market and making sure that it got the right technology. I won't blame them for that.
However, they are now becoming such a big economy that they do need to behave more mature. As we know, China looks with horror at the Plaza Agreement that "tamed" Japan. But it will need to recognize that its present type of behavior doesn't fit a major world power.
But what worries me the most is China's aggressive foreign policy. It reminds me of Germany in the 1930s: with each success it is becoming more ambitious. However, just as in the 1930s this carries the risk that at some time the rest of the world will say no and that point China will be so full of its own greatness that it won't have the capacity to compromise. That would bring us to World War III.
2
"This trade war can end well only if China is honest about all the pillars of its formula for success and if Trump is honest about all of ours."
Two oxymoron sentences. Additionally, it is not clear who we are anymore. We also have to work in making America one again. Conservatives, liberals, "in-betweens", all in one America.
1
This is a very sophisticated analysis with a high level set of solutions. Is it politically feasible? In short no!
Politics and economics in China is dominated by a Communist Party. It makes the rules, exercises the norms and directs investment and thus employment. It has had much success so why should it change.
The US government has no such powers. Private corporations in search of profit will do the bidding of the Chinese Government at least to a point.
Climate change is the dragon in the room, and will make all this moot. The entire world needs to cooperate and stop thinking that it's all about all growth, all the time, with no care for the consequences. And as a side note, the US and China sell weapons to anyone with a pulse, and then we wonder why all these low intensity conflicts erupt all the time. Maybe if the US and CHina just stopped selling arms and starting telling the strategies, technology and tools we need to deal with climate change, massive pollution, and environmental degradation, we'd get somewhere.
3
We can't forget that the US also grew economically because of domestic consumption from domestic companies during the middle of the twentieth century. Now we have domestic consumption from foreign companies because Wall Street does not celebrate benefits to American labor. It only rewards stock buy-back programs. Trump can forget punishing China and work on punishing Wall Street, but that will never happen.
1
It doesn’t have to do with governments, it is our businesses willing to give up their secrets for short term gains.
2
You don't address the most significant difference, although it's clear from your piece: the power of government over business in China vs the power of business over government in America, now at its height with Trump. It is far easier for China to steer economic policy and shape business attitudes.
5
There's much we coud do for ourselves if we had the political will. We have neglected our own infrastructure, brought about by the concentration of wealth that pays little in taxes. We need up to date communication, transportation and renewable energy. Europe and China are ahead of us. Oil and gas interests throttle our ability to move ahead on transportation and energy. We fight wars and repair old infrastructure that amounts to huge subsidies to these international corporations that scrap over the last of market share. The rest of the world moves on. Our educational system cuts the funding for the arts and therefore the support for critical and imaginative thinking needed for innovation. Our people are squeezed with low wages and high rents, while the elite hoard more and more of the nation's wealth. Want innovation? Enforce the anti-trust laws. Restore Glass Steagall.
4
Trade issues required a reasoned, firm and bipartisan approach.
Sadly, our country currently is unable to deliver one.
1
That is, without a doubt, the best description of the current situation, how both countries got here and what should be done that I have read.
Unfortunately I fear that although the Chinese government is able to modify its model if appealed to correctly, President Trump is unlikely to change his point of view at all as he believes only in a game in which he wins.
Sadly that means that the world is going to be reliant on China to not only see reason, but to reign in some of its ambitions.
2
Our immigration system is mooching from the rest of the world, stealing educated workers from the rest of the world instead of developing our own people, and stealing hard-working low-skill people from other countries (people who will put up with low pay and few paths to advancement) instead of developing them from our own communities and making sure they have our pay levels and the ways to progress that will keep them at their jobs.
Some of our winning helps others win too; this is how free trade works, in theory at least. But much of our winning occurs by making sure others lose, as we have done for generations in Central America and some of our own communities, and our policies there are returning to haunt us.
Honesty includes seeing the areas where our winning connects to others losing and working to redesign these areas.
4
"The second pillar was a system of cheating on World Trade Organization rules; the forced transfers of technology; the stealing of the intellectual property of others; nonreciprocal trade rules; and massive government support for the winners of both its Darwinian competitions and inefficient state-owned industries."
The "China cheating WTO" thesis is overexagerated. The truth was presented with very generous rules to entice it to enter the WTO, because US companies were looking for a cheap source of labor that is made efficient by an authoritarian government with zero regards for labor rights or the environment. The US simply did not anticipate that China would every grow this fast to the point it can compete with it.
As for forced technology transfers, it isn't forced when companies agree to it. If you don't want to transfer technologies, don't open shop in China. Again, greed was the driver here for Americans to share their technology in return to access to Chinese labor.
As for intellectual property, this is overblown as well as China is not able to export products that infringe on IP laws, and domestic consumption in China has been a more limited part of their economy.
Nonreciprocal trade rules were simply part of the terms upon which China admitted to the WTO
The US government massively supports its own industries with subsidies, cheap loans, espionage etc... In fact, the US overthrew governments in the past just so that its industries can profit.
8
“Finally, we always stood for universal values of freedom and human rights, always paid extra to stabilize the global system from which we were the biggest beneficiary, and therefore always had enduring allies — not just intimidated neighbors and customers like China does.”
Huh?
Tell that to Haiti, Nicaragua and Chile. I doubt they remember the 20th Century quite the same way.
14
There is one simple message we should have been reiterating to the American people since 2009 - Save your money!
That's right, we are coming to a turbulent phase of an economic experiment started by Kissinger and Nixon back in '72-73. We have been growing the Chinese economy, (and how!) from a shambolic centralized lunatic dictatorship leading to a culture trying to eat itself, to the apparently modern, apparently capitalistic society it is today. This is akin to a nuclear fission reaction, where there are rods used to control the rate of the reaction and have been manipulated deftly (?) by the Chinese authorities with a lot of input from US, British and other advisers. Right now the reaction is turning critical, either it will manage to become a self-sustaining and self-regulating (largely) process or it will burn out in a fizzle or explode violently.
In political terms, China's leaders need to open up the political process for more ideas, and eventually more political parties, eventually ending up in a representative democracy suited to their people's ambitions. If they think they can control it as they have in the last 30 years, they would end up harming the very thing they built.
As for Americans, we need to save up, update our infrastructure - physical and intellectual, and brace for the turbulence China's political adolescence crisis is going to create. And also pull back from our own Low-T midlife crisis of the Boomers threatening to undo our Republic.
2
Whatever the motives behind the US-China trade war there's no option but to negotiate the main friction points, be it the bilateral trade imbalance or forcing China to respect the rules and norms of the global trading system. Such recalibration of the US - China bilateral trade policy becomes an imperative once the interdependent nature of the world economy and its interconnected organic supply chain is well recognised.Finally,Trump shouldn't forget that apart from the other economic and trade linkages, China also happens to be the biggest debt sharer of the US, and market for the US products and services.
Among the three pillars, the second pillar should be controlled, but not the other two.
The first pillar is an internal power that has pushed economic growth; any country needs to do it.
The third pillar is an international power that America enjoys for itself and for the world.
The second pillar has to be dealt firmly with China from legal and ethical standpoints.
America,
Put into practice the Chinese first pillar and live a life within means. Take good advantage of your own world power for yourself and for the world. Exercise firm control of other countries' illegal and unethical practices of 'stealing'
We shouldn't try to contain China because we won't succeed. Even if China is shut out of the US market the government there will find an alternative engine of growth.
The large bilateral trade deficit has benefited New York City because New York banks finance it. That is why the New York media including the Times and the Wall Street Journal support 'free trade.' It has been a disaster for the rest of America as factories have closed and towns have been abandoned. Also, it is not sustainable.
We need to raise tariffs on Chinese imports to provide an incentive to reduce the trade deficit. Rebuilding industry to eliminate the deficit is at least a 5 year project. Some would argue that 10 years is more realistic. In principle there is nothing the Chinese make for us that we cannot make for ourselves. In practice factories cannot be built overnight. Also, the Chinese might decide to reduce the deficit by buying more American products.
Finally Mr Friedman needs to be a lot more sophisticated about how America became strong. Our current high levels of trade and immigration are an anomaly. Throughout most of our history we grew a strong domestic economy behind high tariff walls. The highest levels of middle class wage growth occurred in the 1950s and 60s when immigration was at far less than current levels. Things went wrong for the US middle class when trade and immigration levels increased.
3
@Schrodinger
1. Middle class wage growth occurred in the '50s and '60s due to the changes put in during the New Deal (esplly physical and social infrastructure, more stable financing, stabilization of farming, Rural Electrification Act, etc) So you had a motivated and trained workforce, you had cheap electricity, you had a consumer class which could afford to borrow for homes, cars, trucks, inventory, etc... all while the main competitors in Europe were decimated and leveled to the ground. Do consider that in 1945, only the US, Canada, Australia and Brazil had undamaged infrastructure and political stability. Pretty much everywhere else needed American involvement to rebuild.
2. The structural problems we have in the US are primarily due to World Trade, specifically with China. Put plainly, our workforce went from about 100M moderately skilled workers to 100M + 300M in a couple of decades, and the larger portion were working for a tenth or less of the American portion. Immigration or not, this was it. But politicians and economists deceived everyone about how the "magic" of the free market would make everything happen smoothly. Immigration seems to be more of a cultural issue - Steve King's "we cannot renew our civilization with other people's children" succinctly puts it in words. Every culture goes through this. You can be sure the wealthy were saying this when FDR was carrying out the various experiments they got going in 1933.
1
Superb column.
Here in Quebec we did all the right thing and every business is hanging out a we're hiring sign. Start-ups are done by those undergoing the highest personal and family demands 25-40, we provide safety nets and we create a very high number of new startups. Sane societies understand safety nets protect what is our most valuable of assets and our future. America sees not the most valuable of assets protected by a safety net but only its least deserving.
I hope you can survive making your worst ever President RR an ikon and again become America.
In 1775 the great English Conservative etymologist Samuel Johnson wrote a letter to the Congress of the United States of America called Taxation NO Tyranny.
https://www.samueljohnson.com/tnt.html
You have given us Trump to tell us you can no longer lead. Macron said it best we need protection from Russia, China and the USA. Military war is unthinkable we need to protect ourselves from your values and ethics as well as those of China and Russia. Canada has already been condemned by China, Russia, the USA, the Philippines , and the Saudis for adhering to our values and ethics.
1
Friedman here says Japan wants containment of China, but not a trade war. He says that Europe wants the opposite, a trade war but not containment.
The Japanese fear China's military power. The Europeans don't.
The Japanese are heavily tied into the Chinese economy and run their own biased trade rules, and want all that to go on. The Europeans don't.
That is a stark divide among our allies, dividing our side. It is even bigger, since Taiwan and Korea agree with Japan. Even Vietnam agrees with Japan.
What about South America, Africa, and the Middle East? Their actions suggest they agree with both -- they want an economic free for all, and they have no fear of China. They want all left well enough alone.
This means the US is not free to just do whatever, and have its allies all on board. In fact, there is nothing it can do that will not make large numbers very unhappy.
Looking at the world alignment, there is no path.
If there is one country that shares US views on China, it is Russia, both a neighbor afraid, and tied into the economy in ways that are important but troubled by tech raids. That suggests a Nixon to China moment, but of course we can't do that either, because of our domestic politics.
Given those problems, it is no answer to tell Trump to do what always made us strong, in a fantasy view of a golden US past.
3
Tom,
Thanks for the Trip Report and insight on these two important trading partners. Of course, there are others in the region like Korea and India.
Hopefully, we can avoid a trade war with all our trading partners and through our relatively higher income per capita market than our trading partners we can continue to trade with countries that are increasing in their income per capita.
Fundamentally, each country can contribute to a higher quality of life in a free trade environment, where countries can find markets for its goods and services that come from their comparative advantage, discoveries, and inventions.
China and Japan have much to offer in their markets, simply because we have great soils. access to water, and the technology to preserve and store food, and a very well developed but aging logistics system for moving goods from our growing, mining, and manufacturing regions to markets.
Clearly, we should renew our energy and transportation systems to go beyond fossil fuel energy sources. I believe we should invest in the R&D and testing of more efficient, electric systems like Maglev Transport for hauling freight trucks and vans to connect our producer areas and ports and populations with a much more efficient network first envisioned by the late Senator Daniel Patrick Moynihan, See www.magneticglide.com.
We also should invest in developing, non-fossil electricity sources to export to the World. We are crazy if we fail to lead in this new technology market.
2
Economists are wrong all the time because they think that economics governs everything without regard to politics, culture, or philosophy. What Mr. Friedman and all the other globalist cheerleaders failed to understand is that free trade and free markets cannot exist without political freedom. Xi’s China is headed back to the days of Mao- which was inevitable. Real free trade with China therefore was always impossible.
4
While China pursued its interests, so did the US.
US corporations and investors were China's enablers, setting up their profitable production lines there, and winking at the theft of technology.
US consumers were the beneficiaries, addicted to the low prices on the myriad of tariff-free Chinese-produced products.
US politicians let the party go on for too long in the name of "free trade", because for the time, everyone was OK with this arrangement, and politicians don't look much beyond the next election.
6
I fear that both Mr. Friedman and Mr. Trump are way behind the wave. Theoretically, the issues are far more complex than the metaphorical figure of speech about “stealing intellectual property” suggests. Practically, the Chinese might have already learned most of what they need to know to recapture from the West the leading oar which they had in developing technology until about the middle of the last millennium.
2
Mr. Friedman says about China, “…the global economic system you grew into was not one you built. Your biggest customer and rival did that — America.”
Well, American business, supported by both Democratic and Republican administrations, was gung-ho about the huge opportunity that China presented back in the nineties and the aughts. In pursuing this win-win strategy on the economic front, successive American presidents turned a blind eye on the political front, as China disingenuously slid towards increasing authoritarian rule. In fact, we more or less accepted China’s farcical concept of “state capitalism,” as an economic model worthy of consideration, on the false premise that it would lead to more freedom and democracy.
It seems like Trump is now trying to solve a larger political problem, relating to China’s superpower ambitions, by using trade as a weapon. The problem is that American business is so heavily invested in China that we cannot win a trade war without huge consequences to both of our economies. Trump believes that China has more to lose – and this is reflected in the Shanghai stock market, which is down over 20% YTD, while the S&P 500 is up 2% YTD. But, in “state capitalism,” the Chinese state is in it for the long haul, while we free people will bail on Trump’s trade war in the next election, if it happens to last that long.
4
Both China and the USA have terrible leaders who represent themselves and think little of their own people.
Theft of intellectual property and spying on both allies and non-allied countries has been going on globally since the first boat hit the water. The USA has been spying on China for decades. We even tapped Angela Merkel's phone a few years ago and the US government is clearly collecting mega data on US citizens. Yes China is stealing intellectual property. People act like that's not normal between sovereign nations. It is and we do it too.
China opening its economy and stopping its theft doesn't guarantee a better economic future for the USA or its citizens. It would greatly benefit China.
The US government stopping multi-national companies from manufacturing and selling their products in China doesn't benefit US companies, shareholders, US workers or US consumers.
We need China as a trading partner, a manufacturer and a customer for US goods and services. We need China to have a degree of peace across the globe. We need China to help combat global warming and the possibility of a global pandemic that could wipe us all out. We need China to help control the spread of nuclear and biological weapons.
This negotiation isn't about any of that. This is about the survival of Donald Trump and Xi Jinping. Neither one of them can survive a depression that this incredibly short sighted President has started.
3
In this situation it seems time to cut off access rather than beg for it over and over. If the US and the EU both installed a policy that all policies regarding access are a mirror of the country in question, then the ball is moved into China's court. Open up and keep access to those markets or stay closed and stay home. Back that up with huge trade and military agreement with the rest of Asia.
64
@Edward-Cut off access? A bit late for that as China's has made strategic investments in Europe's primary shipping ports. https://www.npr.org/2018/10/09/642587456/chinese-firms-now-hold-stakes-in-over-a-dozen-european-ports
5
@Edward
TPP was designed in part to confront Chinese barriers to trade--but Trump walked away and lost any leverage we might have had.
18
@Ann and all over Central and South America, they have massive infrastructure projects around the world.
5
To the Chinese business and government people, Trump does not have a strategy in terms of a desired bottom line or outcome based on his tariffs. He has not defined his approach to China as either a trade war or containment policy because he probably does not understand the differences. He rails against the country from his amygdala as a vague threat to American business. In his heart, he "feels" that he is right in his actions without a defined path or specific objectives. There are no details or particulars because this is seat of the pants diplomacy unlike the disciplined China policies that our previous administrations conceived and implemented hand in glove with our State Department and our allies. Trump decided to enter the heavyweight trade ring as an ill prepared brawler to bludgeon China with poorly conceived tactics if any and certainly no long term thoughtful plan as to the desired endgame. Forget about him grasping China's three pillars for success. Trump as a sophisticate? Spare me! Our soybean farmers are suffering due to the loss of the Chinese market and his irrational tariffs. When are their compensation checks arriving? The best that will happen is that Trump will declare victory over China for none of the logical reasons that you cite but for emotional and visceral ones. This is indeed a missed opportunity to work cooperatively with China on the meaningful initiatives that will shape our respective futures.
184
@JCT--Yep. Purchase of U.S. soybeans down 94% yet farmers by-and-large still support Trump. The large part especially relevant as large corporate farmers receive the lion's share of federal government subsidies and handouts.
31
@JCT Still all hysterical over style, huh? President Trump's done more in 24 months to grow the economy, strengthen our standard of living, and give all Americans the opportunity to get ahead. As usual, if you don't want to get ahead, you won't. If you want to sit there and wait for Obama's Nirvana Perfect Socialist World, you're backing up.
I learned the people screaming loudest about Trump are those sitting in comfy government jobs-for-life.
1
@JCT those "planned strategies" were complete failures! Go to China and speak to them. They will tell you that American presidents in the past have been too weak and scared to take the fight to the Chinese. It is long past due. Deal with them now and the inevitable hardships before it is truly too late.
2
I do disagree very strongly with Tom Friedman, because he grossly underestimates: (a) how much China loves playing spoiler and unleashing mischief, (b) China's territorial ambition in Asia, and (c) their self-pity and desire to act out some crazy script in which they dominate everyone.
They don't need big guns, they have already won the war of stealing technology, owning American firms, gun running, what not. To Tom, the silk road initiative, the forays into Africa, the complete ownership of Pakistan, the investment in ships, islands, stealth aircraft spell nothing. They have alarmed the rest of the world, particularly China's neighbors who were pivoting strongly to the US until Trump showed up like a bull in a china shop, with his brand of no-nothingism, nihilism, and commitment to ethnic nationalism.
Tom is also neutral in his observations of the second pillar (stolen technology). It is not neutral, it has hurt America. China must pay a price for stealing, spoiling, corrupting - and it currently does not.
It is a myth that a prosperous China (as Bush I believed) is a worthy partner. A prosperous China has copped a more nationalistic, belligerent pose, and made investments that spell warfare.
We should stop with the tariffs, and plain outlaw their banks. I.e., raise and not lower the ante. An emboldened China has not helped the world, it has tried to corrupt it entirely (see China's adventures in Africa and now Pakistan). Only we can make them pay.
59
@Kalidan China only plays "spoiler" when it has the cards and the upper hand. China's economy doesn't allow them to play anything right now. China will cut a deal for one reason and one reason only: It's the only way it can move forward with it's long-range agenda.
3
@Kalidan makes sense except for the preoccupation with Pakistan. I think Sri Lanka's experience with its port would have made a better example, no? But old habits die hard.
2
@Kalidan
Paranoia runs deep due to a lack of historical knowledge about China and in particular its relations with the West.
How about, " A prosperous USA has copped a more nationalistic, belligerent pose, and made investments that spell warfare."
6
Instead of cajoling the Chinese to open its market, Americans and Japanese can do well to invest in the training and education of their workforce. Chinese worker work hard because many still consider the $5-6 value they are paid to assemble a $1,000 i-phone is still considered a decent wage by their standard, and they have been trained to study and work hard from the time they are toddlers. But the age of hardworking Chinese workers will soon be over as the only children have grown up are increasingly taking over positions of importance.
Second, the Trump and perhaps the European positions on China is as much about free or fair trade as creating new barriers of entry to make it difficult for China to invest and develop markets that have been literally ignored by the West. Why is it bad for the Chinese to lend money to 3rd World country to help finance road building, bridge building and public transit projects that will help set the Foundation of future economic growth? Why should the Chinese keep their foreign exchange reserves in Treasury bills that pay little to no real interest when there are other investment options? If the US is not happy with this alternative, try balancing its own budget or at least reducing the growth of its Federal deficits for a change.
55
@Elizabeth-China graduates more English-speaking students with advanced degrees than America. Go figure.
6
@Elizabeth - agreed. This whole article makes it seem like America has always been the angel. It has not. It has actively contributed to China's belligerence. And it is acting recklessly by running up massive deficits, and electing politicians who do not have the country's best interests, or China's, on anyone else's.
1
Anyone who thinks China is going to open up is living in a dream world. They are incredibly xenophobic (and quite often racist). You will notice they have almost no diversity nor are they open to any type of immigration.
They often view the idea of foreigners doing business in China as an extension of their surrender to foreign powers during the opium wars and unequal treaties.
Given their history, they have legitimate reasons to be suspicious of "foreigners," so I'm not saying they're bad people. (Furthermore, the diverse nations of the West aren't exactly models of stability at the moment...)
I don't know what that means for the U.S.-China trade relationship, but I know that if the U.S. is waiting for China to open up, they are being played for fools.
68
@John Chenango
I know quite a few young Americans living and working in China and they like living and working there. I know others working in Eastern Europe and planning to stay. If I were not 78 I be there too!
7
Be careful what you wish for! Ask your Eastern European- American friends!
The number one pillar for friend and foe alike ought to be world peace and good will to all mankind. We often forget that as Albert Einstein noted, World War IV will be fought with sticks and stones. And that observation came before the advent of the hydrogen bombs. Wake up capitalists and communists alike.
44
An importer of shirts from China once told me that a typical 30$ shirt you buy in the US, was half a dollar to one dollar when he bought the shirt from China. The importer sold it to the US retailer for 2$. Thus the 28$ takes place in the US, to pay for advertising, the sales people etc. and a good profit margin. In view of this example it is laughable that the "Trump doctrine" means that China is abusing "poor US". No the US has never been abused. The US has always done what is in the best interest of the US.
151
Hmmm ... are we only talking shirts, or core industries - equipment, manufacturing, intelligent systems, everything a “great” nation should be able to control for itself? In this respect i’m not sure America has acted in Its own best interest as a nation or for its people, nor whether we’re not too late in correcting this path
6
Your description certainly seems true, Mr. Sorbris, and it explains why US businesses import goods from China, as well as why US manufacturers outsource to China. In this respect, China resembles other low-wage countries.
However, the low wage jobs that make these goods cheap in the US and provide leeway for large profit markups have two negative effects: 1) they cost US workers comparable jobs here, and 2) the low wages they provide Chinese workers are inadequate to create the buying power needed to increase PRC demand for more expensive US goods. So those who benefit are US import companies and retailers, as well as Chinese manufacturing units, but not US exporters or US labor. Those losing sectors are the ones putting pressure on our economic China policy.
My understanding is that this situation is less severe than it used to be because China's wealth has raised domestic wages, and this kind of outsourcing has increasingly dispersed among other lower-wage countries. More recent stresses have been around US perceptions that China manipulates its currency so that rising wages grow domestic demand, but keep US goods out of reach (a situation that I believe has eased), as well as the important issues of lack of open US access to PRC markets and intellectual property theft that others have written of here. Those last seem to me the core of the tensions and of Mr. Friedman's analysis.
9
@Ralph Sorbris That may be changing. In B2B the Chinese have been selling directly, one example is Huawei selling IT material to telecoms at dumping prices which has cost companies like Ericsson and Nokia dearly in Europe. Alibaba is now building large warehouses in Hong Kong, Dubai, Kuala Lumpur, Moscow and Liege in Belgium. This will significantly reduce shipping delays of Chinese products, but it's of course also a small step to sell directly to consumers from these locations as they have successful consumer platforms already in China.
1
I take from this article that the main problem is China's market access barriers.
What I don't understand is what is being barred.
The Chinese seem to buy the things that they want from America (Soybeans, Boeings.........) so what do they prohibit.
I doubt they want to buy American gas guzzling pickups.
They lead the world in some aspects of the next great leap in industrialization - renewable energy.
Someone please tell me what it is that America would like to sell to China that is banned? Also what do you have to sell that the Chinese WANT?
130
@James Rennie: Anything that contains the Disney label. America remains the entertainment capital of the world (although Chinese investors are now bankrolling much of this, too). Beyond movies and amusement parks, it's hard to see what we've got that the Chinese want or need.
16
@James Rennie, Our technology companies have products that we want to sell to China. The designs and innovation are all American, even if some are manufactured there. However the Chinese insist on:
1) You must do business through a company based in China. It can be a subsidiary but it must then be majority owned in China.
2) You must license the technology to the Chinese company, not just sell the product there. Now the Chinese company has effectively bought (or effectively misappropriated if the price is low enough) the intellectual property. And the Chinese company gets a license to do more that IP.
3) You must meet arbitrary standards that are unique to China. Your cost of developing the product is this higher because it's no longer a global product.
4) If you happen to be a consumer internet company, e.g. Google or Facebook, you must agree to include censorship controls in your service that give control over the consumer experience to the government.
These are open secrets. I've left out the whole matter of industrial espionage.
74
@James Rennie I am not sure that I agree with Mr. Friedman on this point. As an American, I can tell you what I want to buy from China: Nothing. No tainted chemicals, drugs, or drywall; no electric gadgets, no electric Santa Clauses or Christmas lights, no Chinese Yugos, certainly no foodstuffs of any type. I would be willing to pay more to buy American made products, and leave much of Asia (sorry, Australia too, as I don't know a thing that I want that comes from there) to buy and sell among themselves.
As for (few) things that we may "need" from Asia - we had better do what we did years ago, and provide those things for ourselves!
38
No one should waste time giving advice to Trump. Trump will blunder ahead pushing whatever rattles around his ossified brain.
Until this administration is removed and replaced with competent people with some comprehension of how the rest of the world works nothing good will happen. The only silver lining is that the incompetence is such that the present Federal government is incapable of fully enacting the boneheaded Trump initiatives.
4
Tom you forgot one pillar for America “We enslaved folks and got free labor for centuries.”
41
@Kelvin
Oh dude you had to bring that up? Not to mention Native American genocide. (cough, cough)
3
@Kelvin
At the current below poverty-level minimum wage, we still enslave people.
1
Wouldn't the TPP have created a multi-national structure with the potential to mold China's economic evolution in exactly the ways Friedman advocates? And, with far fewer of the risks that currently give his European and Japanese interlocutors the jitters.
So, how is it that his friends are relieved that an American president is "finally" addressing China's aggressive behavior? I sure hope Friedman isn't cherry-picking here, in order to concede a point in a misguided spirit of cooperation with those who support President trump's trade policies. We are in a struggle for the future of our country at the moment, and ideas are the battlefield. I personally don't have a bully pulpit, and people like Freidman do. So, please don't pull your punches. It isn't the historical moment to make nice.
5
I laughed out loud, and basically stopped reading when I came across this sentence: “This system has produced high levels of innovation — Alibaba, Tencent, DJI — despite a censored internet, lack of a free press and an authoritarian government.”
High levels of innovation? Really? Tell me this, Mr. Friedman (I realize counterfactuals are not easy) — could any of them come close to what they became unless the Chinese government had restricted market access to the likes of Google, Facebook, Amazon, LinkedIn, Twitter, eBay (I could go on) etc?
Can you name ONE product or service that China has genuinely innovated — i.e., not copied or stolen or restricted or reverse-engineered — in the past few decades that has become a global product or service? Just one?
I’ll wait.
6
@Whatever if you had read more closely he makes that point quite clearly in the article. In fact, that was one of his main arguments about how China is not playing fair while taking advantage of the trading system. The example he was using there was how the government picks its winners.
@Whatever
There are some extraordinary entrepreneurs in China who are blowing the doors off of Silicon Valley.
Yes, the Chinese government provided the conditions that allowed them to flourish, at the expense of foreign companies.
Imagine that. A government that makes the economic well-being of its citizens, not those of another country, its priority.
Meanwhile, for the past decade, Wall Street has been more concerned about the Chinese government providing pensions and health care for the middle class in China so they could consume more than they were about the American middle class, who Wall Street threw under the bus a long time ago.
And that's why Trump is President.
The enemy is within. Always has been.
4
@Whatever
China's speed of innovation is about 10 times that of Silicon Valley.
"We also always aspired to have the best infrastructure (roads, ports, airports and telecom), the most government-funded basic research to push out the frontiers of science so our companies could innovate further and faster, the best rules and regulations to incentivize risk-taking and prevent recklessness, and the most open immigration system to attract both high-energy low-skilled workers and high-I.Q. risk-takers."
Certainly in the world of competing popular mythologies, Friedman takes a back seat to no one. If memory serves correctly, this screed rates right up there with some of his more eloquent justifications offered in support of Bush's scheme to invade Iraq and topple Saddam. The same bombastic moral certitude. The same penchant for grand oversimplifications, for conflating coincidence and causality ("When it was the cotton gin that meant universal primary education...").
In this wild and woolly world of turbulent chaos and epidemic madness, it is reassuring to know that a few things never change. Keep up the good work, Tom. Steady as she goes. Here's to flatness forever, as far as the eye can see.
7
"And to Trump I want to say: America became great with a formula that every great American president refreshed and reinvested in. And you’re not doing that. You’re actually undermining and neglecting some of its key elements — immigration, allies, rules and regulations."
That's when you lost me.
And that has what to do with China or markets or trade?
2
It has to do with keeping the U. S. strong enough to complete with China—not making it easy for them.
5
But WHEN will cities, states and our federal government recognize the critical importance of ZERO to FIVE education?
"When it was the cotton gin that meant universal primary education; when it was the factory, it meant universal secondary education; once it was the computer, some form of universal postsecondary education was required; and now that it is becoming big data and artificial intelligence, it’s going to be lifelong learning."
By definition, lifelong learning should include ZERO to FIVE.
Please read James Heckman's work, or read the white paper from the American Academy of Pediatrics. The research exists, but will people pay attention and do something about it?
2
Forgive me, Mr. Friedman, but I cannot put too much faith in the analysis of a man who cites Francis Fukayama approvingly. He was the man who wrote the book who declared the "end of history" after the fall of the Soviet Union. It may be that there has never been a more ignorant book written. He is certainly not Machiavelli, whose ideas survive after 500 yeras. Fukayama's ideas were out of date 5 years after his book. How can you possibly take him seriously?
4
@James Ricciardi agreed. More like history froze from the end of WWII until 1989, then broke loose again at an accelerating rate.
3
@James Ricciardi Francis Fukuyama wrote a lot more than just “the end of history” (a book that adequately captured the ethos of its time, by the way). For example, his “origins of political order” and “political order and political decay” are read in political science undergraduate and graduate courses throughout the world. Dr. Fukuyama is one of the most respected Political Scientists in the US. No need to diss him because a book that he wrote in his 30s has not withstood the test of time.
1
Friedman:
"We always educated our children to take advantage of the prevailing technology of the day. . . When it was the cotton gin that meant universal primary education . . . .”
Wikipedia:
The invention of the cotton gin caused massive growth in the production of cotton in the United States, concentrated mostly in the South. Cotton production expanded from 750,000 bales in 1830 to 2.85 million bales in 1850. As a result, the region became even more dependent on plantations and slavery, with plantation agriculture becoming the largest sector of its economy. While it took a single slave about ten hours to separate a single pound of fiber from the seeds, a team of two or three slaves using a cotton gin could produce around fifty pounds of cotton in just one day.The South was providing two-thirds of the world’s supply of cotton, and up to 80% of the crucial British market. The cotton gin thus “transformed cotton as a crop and the American South into the globe's first agricultural powerhouse".
Because of its inadvertent effect on American slavery, and on its ensuring that the South's economy developed in the direction of plantation-based agriculture (while encouraging the growth of the textile industry elsewhere, such as in the North), the invention of the cotton gin is frequently cited as one of the indirect causes of the American Civil War."
Universal primary education in what universe?
15
All of TF's analysis is very reasonable. Sadly, however, ge might as well be trying to explain neurosurgery to an empty oil drum. Hearing our president talk about the cause of the California wildfires, or confusing the Balkans with the Baltics, or expounding on the changing fortunes of two world wars, only one conclusion is possible; the ship won't be righted until our national leadership changes.
12
Not too many years ago Investors Business Daily was touting the rise of Walmart. How it was bringing low cost goods to Americans and making life better for them.
Even though many of those goods were inferior in construction and material, many low to middle class Americans flocked to their stores. Walmart had the formula for success, sell products that had to be replace frequently at a low cost so you think you are getting a good deal.
This also brought the Chinese into the global market, they knew with their huge population and wages far below the western world's, they could takeover the mass production industry. Of course in order to compete, American manufacturers flocked to China to take advantage of this low cost labor. But to use it they had to agree to China's terms such as sharing processes and even patents.
They did engage in espionage hacking into companies computers for trade secrets, that could have been stopped by legal means, but the trade secrets shared by those American companies is their own fault. That was the price of doing business in China.
Now the Chinese have caught up to the west, they are trading world wide, producing quality goods, building business in Africa, and a railroad to Europe.
Dishonest Donald and his cohorts are too conceited and arrogant to understand they are putting us behind. Their policies will bring even more failures in diplomacy and trade.
16
That is simply the best column on China/UW/World economics and politics I have ever read. I sure hope the best people in China, US and Europe read this. Thanks. Pay more attention to the fact that the Xi/Mao Dynasty is completely consistent with 3 thousand years of Chinese history.
2
Oh, give me a break.
China got wealthy because the US pushed it to open up whereupon China adopted all the Western technology that it could steal. And, when it got some success, it is now trying to lock itself up again so that it controls everybody and everything it can.
8
@Amy
Stealing technology is not such a big deal because it becomes obsolete very quickly.
3
@Amy Bunk. Or rather, sour grapes. The Chinese are really smart and work really hard. Our strategy should be to start stealing from them in AI, Robotics and other key 21-st century areas.
11
@Fourteen "Stealing technology is not such a big deal because it becomes obsolete very quickly."
This is absurd logic. Really.
8
All great powers rise and fall. Those who develop the most alliances tend to sustain their rise. The European Union is perhaps the best current example. Bringing 27 countries into a single union and currency, for all of its challenges, is a huge achievement. They rival the US in the products they manufacture and market all over the world, with integrated supply chains within Europe. And they can leverage a powerful market for favorable trading relationships. And they face some of the same tensions of regulated capitalism, though with arguably better social outcomes.
The Soviet Union was probably the worst modern example, whose "alliances" were maintained with secret police, walls and brutal military power. Even today, the products Russia can export are largely weapons and commodities.
The North American and Asian economies are newer experiments, with social challenges created by rapid transformation and some of the world's income inequalities. NAFTA and the updated USMCA represent a powerful nearly $1 trillion trade.
The Chinese had to be overjoyed when Trump picked fights with NATO and NAFTA partners and abandoned the TPP, a Pacific Rim free trade zone that would have been both an economic and geopolitical counterweight to an expansionary China. TPP and EU cooperation would have had much more leverage in applying pressure on China.
Now China and Russia see the Atlantic and Pacific alliance splintering at a most opportune time.
41
What credibility do the 'China experts' and generally Trump's opponents have with regard to handling China. Prediction after prediction has proved incorrect.
Trade was supposed to open up the regime, yet President Xi Jinping has recently had the two-term limit on the presidency removed. The Communist Party's clamp down on dissidents has only increased and they are now employing AI ( https://www.theatlantic.com/magazine/archive/2018/04/big-in-china-machines-that-scan-your-face/554075/) to clamp down ever more efficiently.
Amnesty International credits China with the largest number of executions per annum and Chinese companies continue their widespread industrial espionage.
Almost none of the positive predictions, except for continued economic growth, have proved correct. Yet the gigantic potential of the Chinese market is just too tempting for any effective counter measures to be taken. Even Google which initially took a stand has succumbed to re-entering the market.
6
While this piece's heart and mind is in the right place - both countries can continue to prosper. Its compulsion to set the China narrative in American terms causes it to descend into a bit of a flag waving, intellectually fragile, jingoistic jumble. Crucial omissions include the fact the US did not build the post WWII system alone but with crucial equal partnership from the British and even the Canadians. In fact, in this period it was the US who resisted the creation of many of the international institutions that period bequeathed and crucially their capacity to "enforce" (Egads! Globalism) their policies. The US Congress during this period in particular was obstructionist and active in ensuring "US sovereignty could not be impacted by this new world system A legacy we still live with today.
In addition, the idea that China has been swaggering around the world boasting of its progress and emerging power is a geopolitically convenient American fiction and reveals the exceptionally thin skin the US demonstrates in the face of an emerging power. (BTW, remind me what country constantly describes itself as the greatest country "ever" and "exceptional"?) Furthermore, the idea that the only positive factor we can give the Chinese a nod for as contributing to their enormous success is "hard work" without acknowledging the incredible innovation, creativity, energy and ingenuity pouring out of that country sounds a lot like something dreamed up by the Harvard admissions committee.
8
@Belasco
Britain & Canada were never equal partners in the building of the post WWII system. Never.
The postwar multilateral institutions were overwhelmingly establish by and with American leadership.
And speaking of thin skin, it’s clear where you stand. Grant China the benefit of the doubt, withhold it from America.
Sounds like a grudge to me.
This is the type of shallow analysis that comes from a one-week visit to Asia by American “thought leaders”. The Three Pillars analysis is simplified, and wrong.
1) Alibaba and Ten Cent became strong with government support, succeeding because of authoritarian government support, picking winners early, not despite of government support.
2) Stealing intellectual property. The Chinese government has made it clear that if American firms want to manufacture in China they must use their best technologies. No Chinese forced American companies to come to China. No one forced factory owners, bankers, trade negotiators later Beijing consultants, to move to China. They invested in China and brought the technologies to arbitrage labor rates and access a rich market. Many highly rewarded.
3) The U.S. Navy? Really? China’s future is in Eurasia. Very little to do with the US Navy which has been trumped by geography, political withdrawal from the Trans Pacific Trade Pact, Trump’s personal diplomacy, and killing the State Department as a functional entity in Asia.
The writer is right on one thing. The current US administration needs to look in the mirror to start assessing where many of the problems lie.
31
@bob fonow
Your 2nd point misses the outright theft of intellectual through hacking and other criminal acts.
4
@GeoI didn't mention that because it wasn't in the context of the article. But it you mention hacking then you also have to mention the cooperative transfer of technology through PhD programs in American and British universities.
5
@bob fonow
Hello Bob,
I’ll leave you with the glass half-full side of the relationship.
On the glass half-empty side:
https://www.nytimes.com/2014/02/05/us/chinese-implicated-in-agricultural-espionage-efforts.html
My read on the CCP is that they are aiming for control, and not only within their boarders. It doesn’t matter that Western corporations bargained/gambled away thier technological advantages in pursuit of gain. What matters is that the CCP is pushing for advantage from a real politic standpoint and it has to be dealt with in that context.
I doubt Trump could reliably locate China on a map of the world, let alone devise a strategic vision for future economic relations. Trump is an ignorant buffoon. Any grand strategy will have to wait until after 2020.
33
Wolfowitz doctrine. That no other player must rise to be a competitor to Amrica.
Really.
Tell us Mr Friedman, how much of today's anti China activity is driven by American needs to be the only player in town.
And you are right. At the OK Corral both sides suffered losses
7
This is Tom Friedman at his best -- concise, precise and filled with insight.
I just wonder if the challenges we now face go so far beyond whatever an analysis of what's worked in the past offer that Mr. Friedman's insights won't matter.
For example, is a culture built on the holy trinity of money, power and pleasure not one which has already sowed the seeds of its own destruction? If our modern "faith" is based on just give me some more "stuff" and make sure that anything which "threatens" me is beaten down whatever the cost either financially or spiritually, then will recognizing the value of the global economic system which America built (your duty, China) or recognizing the value of "immigration, allies rules and regulations" (our duty, America), really going to make a difference?
I think that we are at a much more significant cross-roads. Sadly, though, I don't think that we have the capacity to deal with it, especially as it appears to me that some of our most informed and thoughtful pundits are living in the past.
4
"Both sides need to be smart and honest about how the countries became economic successes. "
Dishonest Donald, his cabinet, his staff, the GOP leadership and honest is a contradiction in terms.
6
There goes Friedman again with the "lifelong learning" trope. What marvelous new skills have you learned lately Tom, how to maximize your frequent-flier miles? Most humans are not built for lifelong learning; they find it onerous, coercive and unrewarding. Culture has evolved to inculcate those skills necessary for survival at an early age, when the minds is ripe and plastic; graduate school is already pushing the limit. Friedman and others, who foresee a declining job market, are always eager to advance this nostrum, but when you ask them what people should be learning for the "jobs of tomorrow", they become strangely silent. If the "experts" don't know, why would anyone gamble their savings in an area which probably won't pan out? Companies are loathe these days to conduct on-the-job-training, where they might actually have to spend a few bucks to get the employee the want, instead depending on the market to furnish them with a million clamoring candidates, none of whom are just right. I'm sure "lifelong learning" will go over just great in China, where hundreds of millions stand to be replaced by robots. How about learning from your misapprehensions Tom?
25
I'm not a student of this part of US history, but we were as protectionist as any country has ever been in our infancy. As our industry developed, we figured out we're better off (export more) with fewer trade barriers.
China has far outgrown their infancy, which for them was rebuilding after WW2 and their civil war vs our early 1800's ...
Past time for China to open up and stop protecting like a 3rd world country.
And way past time for US and Europe to keep looking at their shoes on these technology transfers.
2
Let us imagine for a moment, that we start a trade war and a new Cold War sets in, for a decade.
If the outcomes of world trade are globally wide-spread modest gains for everyone and locally-focused shape pains for a small group, then the reverse would happen: most will suffer modestly but a select group will gain substantially – Midwest, the Carolinas in the U.S. for example. This is a form of redistribution, not the most efficient but since we don’t have the political will to achieve such through fiscal policy, trade policy will do.
China will be excluded from the dollarized world economy, the communist elite will lose, including hundreds of billions of ill-gotten gains hidden in the West. This threat alone should break that faction of the ruling (and winning) faction who think it’s their birth-right to rule the world as China has done for centuries.
Problem is, Trump is transactional; this won’t happen. He will get some superficial concessions and declare victory and move on, just like he did in North Korea. The rest of the globalist elite will breathe a sigh of relief and continue to stretch global income inequality, until something much worse breaks out.
7
I get it - you want us to be able to sell more stuff to China...
Things like:
> $500 sneakers they manufacture for $8
> $50K pharmaceuticals they could manufacture for $8
Did I miss anything...
PS
Just for yuks – took your piece and replaced:
> “China” with “Amazon” (20 instances)
> ”Chinese” with “Amazonian” (5 instances)
One paragraph as example (still fair use):
“...And from me to both my Amazonian and Japanese interlocutors: I’m glad Trump is confronting Amazon on its market access barriers. Those are the real issue — not the bilateral trade imbalance. This is long overdue. But trade is not a zero-sum game. Amazon can thrive and rise, and we can, too, at the same time. That’s what’s been happening for the past 40 years. But we’d be even better off if Amazon offered the kind of easy access to its market for U.S. manufacturers that it enjoys in America. It’s time to recalibrate U.S.-Amazon economic ties before it really is too late...
10
@W in the Middle
HEAR, HEAR!
I was just about to remark on the same exact thing...you gotta wonder if pundits like Friedman actually have any business sense or are merely parroting the party line dictated by their paymasters -- did Amazon "rape" NYC for getting +1 billion in taxpayer funds or did the liberal/progressive politicos once again sell out the workingman??
All this focus on "China, China" is simply the Democrat strawman to the Republican "Israel, Israel" strawman...and once again the dumb-as-beasts proles on both sides swallow it all!!!
5
I think Mr. Friedman leaves out an important factor on each side, factors that many Chinese are keenly aware of and that Americans generally are not.
On the US side, it is that those who came here from Europe (predominantly) to settle were presented with an opportunity virtually unique in historical times: the right to possess the most resource rich land of the era at almost no capital cost. In centuries where Europe and Asia were straining to locate and develop resources for their expanding states and populations, Americans were devoting energy and hard work to tap continental resources far beyond their needs. America become successful through hard work, but other peoples worked as hard. The advantage of the open American resource base was enormous.
On the Chinese side, when European powers such as Britain, France, and Germany sought to address their resource needs through colonial domination in Asia, China was coerced through war into devastating concessions that led to a loss of control of its own resources and descent into a century of social chaos and economic poverty. The US was not a leader in this, but it came along for the ride. China's century suffering semi-colonization is understood by every educated PRC citizen, and forms an ironic backdrop to Western nations now instructing them to play by gentlemanly rules. More decades will have to pass before the PRC no longer feels a certain entitlement to even things out, even if it means breaking some rules.
62
@R. Eno Excellent points
9
@R. Eno
I will be surprised if China stops at 'evening things out'. China's ambition is to return to the status of the Middle Kingdom where all others kingdoms are lesser.
7
@Geo
I don't agree. Chia's ambition can be fulfilled by continuing to meet the needs of a huge population plus making friends around the globe building infrastructure.
America is stupid by comparison. Trump thinks there's nothing better than a warlike stance, being friends with countries that are bad actors: currently Saudi Arabia, Israel, and Russia. Ask how many Americans want to prove that we're great by fighting a war? Let's forget Trump's love of fantasy and deal with reality.
10
It is a testament to America's solidifying Plutocracy that people like Thomas Friedman continue to sell their snake oil from their protected perches provided by monopoly media outlets like the Times. To hear Friedman tell it, globalization of which he was one of the leading hallelujah singers was some kind of new magic where developing nations infused with the ill gotten gains of the American 1% suddenly started rocketing moonwards in their GDP. It is time someone told this Capitalist lackey that the penny dropped a long time back. We all know what happened with Globalization. The 1% , once the fetters were lifted from capital, rewrote legislation where CEOs could be paid in company stock (illegal till Reagan) and thereby made them partners in a con game they played. It worked like this: Move all manufacturing to China, move all White Collar jobs to India. Use 'thought leaders' like Friedman to peddle the theory that China and India have magically woken up due to investment of capital from America. We now know what bilgewater this is. Today China is treated like some kind of technology powerhouse when 99% of its manufacturing is from American and Eurpoean companies that played a zero sum game and moved their operations there for lower labor costs. By the way, the fix was in from the time of Clinton. He was the prime mover aided and abetted by people like Friedman and Krugman.
11
@Paul Art You obviously don't know anything about China. (I just got back from there) 99% of its manufacturing is most definitely NOT from American and European companies.
6
Mr. Friedman makes perfect sense. The only honest takeaway is that anything that depends on Trump listening is hopeless. The Chinese may listen and comprehend. But they are to self centered to take heed. Grim
I'm 69 and although I don't see much hope out there -- I want to stick around for as long as I can just to witness the results. Throw in climate change and this is going to be some adventure.
5
Though I have a lot of respect for Thomas Friedman, at times it seems he seems a bit too optimistic as he seems to be in this case.
One of his optimism seems to be that he believes that the emergence of China as a trading power is similar to that of the USA. A mistake he seems to make is that China had toiled just like the US. This cannot be true.
China has taken advantage of the openness of market in the US and other western countries and kept their own closed.
The rampantly stole - this is common knowledge - intellectual property to develop their own.
Another optimism Friedman exhibits in assuming that the Chinese will negotiate in good faith. Not that the US is an angel in this, but compared to China it is.
They have an opaque system because of TOTAL lack of democracy. No democracy, no checks and balances and no transparency. There is no rule of law except what the Communist Party dictates. Their word is the rule of law. The words can very well vary. The local Communist Chiefs essentially run feudal fiefdoms. As long they keep their federal bosses happy, the local Chiefs can write their OWN rule book!
So how can one assume that China will negotiate in good faith if they do not believe in openness?
Chinese have also and always been suspicious of westerners. That is another reason to doubt the Chinese.
The US must deal with China EXTREMELY carefully and should join hands with local allies. Trump was an idiot to disband TPP! America will pay dearly for his lunacy!
15
Yes, America was the Super Power that built the international organizations that strengthen its hold on prominence, including the W.T.O., The I.M.F., and the World Bank. But all those organizations had flaws as seen by others so China efforts to add options have not found opposition, and the W.T.O.’s rules to create a level playing field in matters of trade were gleefully ignored by domestic corporations moving their knowledge and facilities to Asia. So jobs disappeared who cared? Now Trump is playing the ‘I care’ theme to rise to power and shaking the system without understanding his impact.
U.S. largest navy, China over 200 cargo carriers and new super efficient ports about the globe. Who’s up on that one?
3
"Honest and smart." 0-2.
2
Trump be smart and honest? That is an oxymoron!
5
Actually this is the same old dog eat dog contention between and among capitalists on a world scale. Since the death of Mao China has evolved into a State Capitalist System.
Neither really care about Human Rights. The U.S. invades countries at will and commits war crimes with impunity.
China will enforce it’s State Capitalist order by any means necessary.
Hopefully Humanity will bring forward a real revolution that puts an end to Capitalism Imperialism before a third Imperialist War is
launched or our planet is devastated by catastrophic climate change.
The probability of either happening is remote.
Improbable but not impossible.
Mike
17
@Michael
I mirror your hope, but the devastation of the climate is upon us now, while too many are selfish for their meager tax cut. or too busy looking down on the phones to notice/care. There are signs of a revolution afoot. but 2 years seems like an awfully long time ...vigilance.
5
The US media is the biggest problem and threat for the American people. You spend too much wasted time on bias human rights, lecture others but refuse to acknowledge there are problems in your political, social and economic system. Maybe you all should learn from Chinese media which focus more about how government trying to improve the livelihood of the Chinese people. Stop wasting your time talking about how bad China and the World. Start talking about yourself. Maybe you should go and learn Chinese Wisdom. Know yourself know your enemies, hundreds of battle are won. Mean know yourself first before you talk about others. US weakness is purely your American own making. Sex, Drugs, Guns, self interest indulgence and media exploitation and prejudices. Maybe I should enlighten you where is US problems.
1. US political infighting has stagnant US economic and create divide among yourself
2. You should acknowledge that your white supremacy mentality is the cause of all major and social problems in US
3. Check your own creditability rating. The American are sick and tire of fake and prejudices media which is why they select Donald Trump.
4. US overspend in military budget and give more tax relief to the rich while the poor and average American suffers. High National debts and collapsing infrastructure
5. US create more havoc to the World since World War 2 in Korean War, Vietnam War and Middle East. Wake up America!
16
@Andrew Teo Bunk. The mainstream US media is the best and most honest in the world. Otherwise why would people like you read it?
7
Not quite, Mr. Friedman. China's success was built on a side effect of the Marshall Plan in the hopes that the country would join the ranks of social democracies.
Theft of intellectual property was part of the 'deal.' The relationship now needs to be adjusted along the lines of America's standards for labor, safety, and the environment. Stop importing 'dirty' products.
Then - imagine the benefits for a world where China and America work together to repeat the economic miracle in the rest of the world, say, the Meddle East. Now that we know how not to make America great again, the next president of the United States has a real shot at making the WORLD a better place.
3
Good luck with that thought Tom have you forgot Trump is the Wizard of Oz the munchkins need to let that balloon go.
4
Great column. And the big takeaway is for me is that China's model is quite sophisticated, and deliberate, and unfair. But Trump doesn't grasp the subtlety of the problem. He looks at trade from a 20th century, goods-for-money perspective. We buy too much from China and they don't buy enough from us. In the long run, it's the stolen intellectual property and the closed Chinese market due to arcane rules that does the real damage.
10
@Ken L China's trade policy is unfair to whom? If one believes that there are gains from trade (otherwise why does it happen?) then China's restrictions diminish the potential welfare of China's consumers, while America's more open system generally enhances American consumer welfare--ask Walmart shoppers. The fact is that the debates over trade policy almost always reflect the perspectives and interests of a limited number of producers rather than the diffuse interests of consumers. That said, protectionism may be a rational strategy in the early stages of economic development--as America embraced in the 19th C--but it is eventually a losing strategy as China should now realize.
Just an outstanding column. Thank you, Tom, for seemingly always making many of the complex and important issues of our time more accessible. Please keep up the good work.
1
We've got lots of hard-working, intelligent Chinese students who come to the U.S. to study and train at our universities- and then go home. Why let them in unless they intend to stay? That may sound hard-hearted but if we are now in such a vigorous state of competition with the Chinese why help to create the next generation of Sino-industrialists and innovators? I'm certain our universities can get their tuition funds from other sources including the families of American students who are being squeezed out by those from East Asia.
7
@stu
Indeed, but why not go a little further, and offer free higher education for Americans, while still letting Chinese students participate? The Chinese tuition can support the Americans.
Just a thought ...
4
REBUILD AMERICA-2020- Vote for Democrats.
There, I’ve said it. Now, refute it. Go ahead, I’ll wait.
6
What is it you don’t like about how things are going? Economic prosperity? Trump standing up to an oppressive China? What are the Democrats going to do, except return us to years and years of stagnation? I’ll vote for Trump again, thank you very much.
@Greg Here's a short list: endless lying, attacking the press and the rule of law, racism, corruption on a grand scale, massive deficits, no respect for science and facts. The economy is on the same trend as under Obama, no better than under Clinton. You dont need to cause so much damage to get 3.5% GDP growth. Standing up to China is great but being done quite ham-handedly.
7
@Greg
One word : embarrassed. If you aren’t the same, you’re not paying attention. HE is a national AND international disgrace. Seriously.
10
This is made up. After WWII the US took over global capitalism along with Great Britain because they had the oil and the oil would rule the world.
Our economic system is nothing special, easy to copy, and dumb as a board in many cases.
China has nothing to compete with. They have oil and they have a reasonable world currency.
The US will decline with more integration with the Chinese economy. China will rise.
The same goes for India.
Everyone knows this. There's no secret. Just be on top when it happens, or be treated like a slave. It's happening now.
American slavery again is no more than a couple of decades away. And that marks the next big war, both locally and abroad. The war to end all wars. 2 decades off.
2
@DudeNumber42
China has no oil and their currency is worthless outside China.
1
Is this what they are teaching in worthless college liberal arts programs these days?
A very good analysis as usual. Unfortunately, the usual issues as well:
1. When the US does something not right, it is one person, in this case, Trump. When it is China, it is "China" or the "Chinese" or the Muslims and whatever, for that matter. Why do the western press and opinion writers always have this blinkered way of thinking?
2. It seems to be political correctness to repeat blindly the trope that China is unfair. Some writers are even amusingly pathetic in their obligation to do so. But here is an article by a director of the Center for European Studies, https://www.businesstimes.com.sg/opinion/myth-of-chinas-forced-technology-transfer challenging this lemming-like groupthink. Also, everyone seems to be ignorance that the US did intellectual "thefts" from the UK, and Nazi Germany after WW2.
What is the point of having free speech and freedom from "dictatorship" and authoritarian governance when people behave like lemmings and are unlike to think for themselves, led by the nose by opinion writers shouting and repeating from high pedestals?
1
This problem should have been addressed many years ago but, it was so much easier politically to just kick the can down the road. Now we can see the end of the road. The Chinese have proven time and again that they are unwilling relinquish unfair trading advantages they've become accustomed to through the subversion of rules. We allowed them to do it. Now their economy is that much larger and the problem is arguably unmanageable. Beyond the obvious loss of jobs and industry decade after decade, the fight is now for no less than the future of world order as we know it. If the Chinese are allowed to continue on their present course, they will eventually come to dominate the world economy, and with it the world security. Military might is closely correlated with economic might. America's security is at risk, and not just economically.
3
Well, this is the bait and switch that occurs so often with Trump: Agree that there is some sort of issue with China trade, or NATO, or immigration, be hopeful that what seems to be mindless aggression will address those issues without total destruction because there's something worth saving there, and then be disappointed to find out that Trump shares absolutely none of your goals or values and has no strategy beyond burning down the house.
9
Friedman’s astute article is mis-titled. It should be: “China and Trump Advisors, Lead!”
There’s no hope that Trump can distinguish smart advice from misled advice. Yet, Trump has to believe that he’s in charge. So, the challenge is within the team of advisors—Treasury Secretary Mnuchin in particular—to lead Trump smartly; and Chief Kelly, to see that Trump is led smartly.
Friedman might have emphasized that one epochal factor causing China to take an adversarial stance toward the U.S. is that China is unable to believe that the U.S. can be a reliable ally.
Friedman’s most important theme might be that “enduring allies” make the world go ‘round. China has to durably believe that the U.S. really—still and deeply—appreciates its own historical importance as ally builder, ally sustainer, ally partner.
Trumpism is failing the greatness of America in his behavior toward Europe, as well as toward China. China, like everyone, doesn’t primarily look at the U.S. relation to China for insight into what Trumpism really is. China looks at the entire picture.
Listen up, everybody!: The planet is shrinking, due to tight economic interdependence, due to communicative immediacies, and due to becoming a hot house that will make all our grandchildren born into suffering.
3
I’m afraid that Trump is not listening. And that China is.
4
The US can easily pull ahead of China, which by some measures already has the larger economy.
You just have to think different.
Technology, education, and cheap oil are nice resources but they're not the ultimate resource. Human capital is the ultimate resource.
We can easily stock up on human capital far better than China. Because everyone wants to come to the US, not China. China can't compete with that. Furthermore, everyone in the world speaks English, not Chinese.
What we need to do is to open all of our borders. That's it.
We'd get trillions and trillions and trillions of dollars overnight. For free.
Economists estimate that open borders around the world would jump gross world product (now 75 Trillion) by 75 to 100 Trillion dollars.
If we open our borders and no one else opens theirs, we'd get most of that. Note that the benefit of open borders accrues regardless of what other countries do. As an aside, this is also true with tariffs - if all countries have tariffs, and one country does not, that one country wins.
To be clear, that 100 Trillion dollars is free. It only requires that you Think Different, which of course is disruptive.
There is an added benefit, which is even better than all that free money. All those hard-working and extremely productive immigrants will wash away the Trumpsters.
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@Fourteen
From whence would we get trillions and trillions of dollars? Where would we put all of these people? Which credible economists estimate that gross world product would jump 75-100 trillion dollars? Who is going to deal with the fallout from the massive disruption this would cause? Or build the necessary infrastuture and water treatment facilities? Or deal with the enviornmental falllout? Countries have tariffs to protect vulnerable industries or industries that are essentail to their national security Are we really prepared to dispense with the concept of national sovereignty? Seriously, would love to understand the answers to these questions.
@Tim
Good questions.
openborders.info
https://tinyurl.com/ya48dzdp
the economist
https://tinyurl.com/yauhkxeo
wapo
https://tinyurl.com/y9s3xkzd
or google:
trillion-dollar gross World product open borders
Studies show that undocumented immigrants, right now, produce billions more in tax revenue than they receive - they are far more responsible for our current economy than Trump is.
The US, by the way, is currently below it's population replacement rate (16% below), so we need more immigrants.
1
What utter nonsense. You cannot have open borders and a social safety net at the same time. The U.S. already has congestion in its cities, and housing shortages. Shall we just pave everything?
1
Xi and the Don are both autocrats. They like that both countries became something because that means they own a lot. Your barking at numb skulls whose concerns are not with their countries or their people. Beside that, your assuming that it was the engines of commerce that make us great and that is most definitely false. We are great despite the leaches on the labor of the people, not because of them. That is true in China too. Trump and the GOP and all the corporations are about to break that greatness permanently through their cruelty and greed, because democracy has been undermined by evil.
3
Trump's Republicans just can't look at themselves in a mirror. They are afraid to see what they really are.
1
Mr. Friedman mentions some of the major reasons for America's rise in the world in the 20th century: universal education, up-to-date engineering and infrastructure, government support of science and innovation, and learning the lessons of history. Donald Trump has earned an "F" in all these subjects.
1
''China has to be a lot more humble about how its economy got so big so fast...'' - How about freeing it's people and not trampling on human rights ? How about America stand up for those human rights and demand that China adhere to them, before any negotiations even start?
Of course none of that is going to happen because the west cannot function unless they have the newest version of their smart phones within 6 months.
What there can be achieved is some sort of detente (as least economically), but even then it will be at extreme costs, that pundits on both sides will never talk about.
For China, if there is a cost to be paid, then it is in human lives, that will simply lose homes, be displaced or worse.
For America, we are already seeing the effects, as whole sectors are being wiped out due to the crushing new republican taxes (tariffs) Already this administration is trying to plug holes by subsidizing and failing.
The real question is who are the benefits going to go to ? We do not have the President's tax returns, but we have already seen people within this administration that are shorting in the market to gain millions, upon billions.
The bottom line is that it is all an effort to enrich a few at the top monetarily, and ultimately politically. It is a craven ploy that is made for short term gain coupled with massive pain in the long run for people and businesses trying not only to compete, but survive.
Not worth the yuan...
31
I don’t get it. Are you in favor of the President standing up to China on trade or not? Very confused.
@FunkyIrishman-I hope you'll keep pointing this out. Perhaps Prof. Krugman will provide the analysis.
1
@Greg
He's saying that the President IS NOT standing up to China, at least not in a way that would actually help the U.S. and global economy in the long term. Trump's trade war is probably just a short term get-rich-quick scheme for individuals within the Administration. The actions against China give the APPEARANCE that Trump is getting tough on China. But, if the goals of Trump's "trade war" were legitimate, wouldn't we'd all know what are the long-term concessions that Trump wants from China? Wouldn't China know exactly what Trump wants from China? How else could they participate in an informed negotiation or to concede anything?
The reality is that this President and his appointed band of criminals isn't capable of putting together, let alone executing on, a smart and sustained strategy for bringing China in line with the rules of fair trade.
I think Mr. Friedman is giving the Trump Administration far too much credit for
1. having legitimate goals (goals that align with the long-term interests of the U.S. and its allies, for example: interest in global economic stability & peace & prosperity, and environmentally sustainable growth for all)
2. having strategic and diplomatic competence
They don't possess either. They are a cabal of shameless criminals. They are in government to loot. Period. And we will all pay the price for our 2016 electoral recklessness.
Arrogant and hypocritical in the most typically American way.
"Standing for universal values of freedom and human rights" and "always paying extra to stabilize the global system from which we were the biggest beneficiary" are actually self-contradictory. Think Saudi Arabia, Israel and Central America, where American forces, blatant and covert, have been creating chaos for decades.
It is ridiculously arrogant to talk about China's "intimidated neighbor" when the US has the largest military in the world, and accuse China of "cheating under WTO rules" when the US put up tariff in wanton fashion.
The global trade system works because for more than half a century the US has been its biggest beneficiary and hence is the most eager to keep it that way with its military. Now that China has somehow found a way to benefit from the system too, the US has suddenly decided that the system is no good after all.
The only value the US stand for is America first. Stop pretending otherwise.
131
@Alex
Hoka hey! In the spirit of Crazy Horse and Red Cloud you are right on.
Think Syria, Libya, Egypt, Afghanistan and Iraq.
7
"In sum, I worry that America has become so focused on who the Chinese are and what they’re trying to become that we’ve lost sight of who we are and how we got here. That's the biggest threat to our economy and our future."
Very well stated.
Also apart from the hard work, delayed gratification, investment in infrastructure and education China had the advantage of using the global trading system built and maintained by USA that made it easier for China to engage in trade with others.
Another reason was because of all the American companies that rushed into China to take advantage of cheap labor. The technology transfer that happened, shortened their time to rise. Rise of China is good thing and both America and China can grow together along with the rest of the world.
Containment mentality and considering trade as a zero sum game is a losing proposition. Negotiating to open Chinese markets as we do ours is a better strategy. Trade war is going to be disastrous for both and also for the rest of the world.
101
You're assuming Trump knows what he doing,
The result from his action ensuing,
When the cortex is limp
Of a neuronal simp
The End? Is a chorus of booing.
150
@Larry Eisenberg
See " The Half Has Never Been Told: Slavery and the Making of American Capitalism" Edward Baptist; " Dog-Whistle Politics: How Coded Racial Appeals Reinvented Racism and Wrecked the Middle Class" Ian Haney Lopez
1
Read The Hundred-Year Marathon: China's Secret Strategy to Replace America as the Global Superpower. Obviously President Trump has read it because he taking the Chinese on at their own game: high tariffs. Friedman, and other globalists, are playing right into the hands of the Chinese. I support the President. I support Trump. MAGA! Thank you.
2
@Southern Boy
You think Trump has read that? Really? He doesn't read, and he admits he doesn't read. He's just guessing, and you're being fooled.
5
Trump doesn’t read books. Or write them. He cannot string together 140 characters without at least one typo.
6
Would you trust Trump in any deal? IMHO there is no way to stop this war without one of those countries losing face...and,mark my word, it won't be China, no matter high will be the cost.This whole thing, drive by Trump in his usual confrontational mode, will end badly for all of us.Too bad
54
@yves
For China, they will just throw millions upon millions into the churn to force any deal. (also will use North Korea as a proxy to make America spend more trillions for detente in the South China Sea)
For America, this administration will just throw millions upon millions into the churn for economical gain for the leader,his family and backers. (trademarks and deals galore behind the scenes )
Which is worse ?
7
@FunkyIrishman
Sadly both economies are destroying the environment. That will bring down any political power. Toxic capitalism at its worst.
12
@MLT-Well, you have to appreciate that even China is no longer accepting container ships reporting to port full of U.S. trash and so-called recyclables.
4
Trump has addressed an issue that was ignored by leaders of both political parties for a long long time - unfair trade practices by China. However, without any mention of global corporations, most U.S. based, and their influence, is a very relevant factor which often has more influence over global trade than does the policies of either the U.S. or China.
12
@GLO
Trump may have identified a genuine issue but his approach to fixing it is idiotic. He is causing global instability with his aggressive brinkmanship, he may have been able to push his casino subcontractors around but they didn't have the ability to hit back; China is clearly not going to be pushed around, even if it costs them money.
3
Pretty much right on. I would note that US companies wanting to rush into the huge market of China were often knowing accomplices of the transfer of know-how to China before understanding the country and the environment. Wiser but poorer US corporations are beginning to push back and not be so gullible.
Trumps obsession with trade balances is totally wrong but to less sophisticated voters he sounds like he is "fighting" for us which is why his advisors have often failed to tone down his public rhetoric.
79
@Howard I also remember the giddiness of US companies having access to over 1 billion potential customers. They happily signed on to gain access to that market. Nixon was hailed as the one who opened China. And now the complaint is the Chinese stole American companies. I don't believe any US companies reported a robbery. They all moved eagerly.
10
Mr. Friedman, welcome to the non-Flat World! The inequities you mention in this op-ed, the unjustified barriers China has been imposing against us, have existed for nearly four decades, since well before you wrote your book "The World is Flat" (2005). "Experts" like you, wearing Globalist blinders, are also responsible for the situation we are in, including Trump's election. In any case, it is good to see that you now realize and admit that China has unfairly gained advantages against Americans. It would be good if you also admit that our (American) multinational companies and their shareholders have also been co-opting this unfair situation. Trump is often uncouth and crude in his statements but he has been one of the very few who have been pointing out the trade inequities since the late 1980s. As for the American issues you point out (immigration, allies, rules and regulations), they are all valid but, for the most part, they are the other side of the same coin. We will fix them too. Thank you.
8
@John L The trade inequities with China have been well known to every alert educated person since the 1980's. The issue was and is, how severe are their effects on the US and what to do about them. What distinguishes Trump is his willingness to demagogue the issue for his own personal benefit.
Well put, whether anyone listens, less sure.
4
This column is dripping with ridiculously broad generalizations that were made with a brush the size of the goodyear blimp. I have hard time accepting that those three pillars are equal - which is not discussed. Cheating and coercion would seem to me be a lot more influential and punitive than discussed. And frankly there's no acknowledgement that trade is really about leverage and China's growth is a recalibration of that. There are lots of other fish to shoot in this barrel, but standing (not enforcing, mandating) for freedom and human rights allows the US to look good but not use the full force of its leverage, as that would require some introspection towards policin and, incarceration rates among different racial groups, among other things.
5
There seems to be a fourth pillar. They use the West's greed against it. Companies see all those consumers and they want into China. They will allow a bit of cheating or suppression of speech in order to placate the Chinese.
83
@Daniel
Indeed. Do we not see every other week another trade mark granted or deal done with the President or his family ? Where are the tax returns ?
I feel the economic writers and pundits are not seeing the forest through the trees ...
45
How nice that Mr. Friedman has finally come to love America and take off his Chinese rose-colored glasses. Too bad he still can’t acknowledge the fundamental failure of free trade with China to produce political liberalization in China- which was the whole point of having free trade with China, and how it was sold to America by the Bill Clinton. Because China is still basically a dictatorship that is becoming more Maoist by the day, it is highly unlikely that they will have epiphany described by Mr. Friedman. And so the trade war must continue. Thank goodness we have a president who actually has a spine.
5
Thank you for a candid and well balanced piece. Unfortunately, Xi Jinping already understands precisely how China performed its economic miracle and he has no reason to abandon the basic strategy that has served his nation so well. Trump, on the other hand, doesn't understand or care about very much unless it enriches him or soothes his ego. Knowing this, the Chinese will provide loans to Trump Inc and flatter him while pursuing the same long-term ambition of economic and political dominance.
190
@Kasper Exactly we have a POTUS who isn't smart enough to understand that China will play the long game and they won't give up. They will give Trump and Kushner some Money/ Loans to shut them up,Then Trump will declare they fell in love. But china won't back down it will cause them to lose Face. Everyone knows Trumps Playbook by now . What vexes me if that Trump and Kushner have so much money, why are they always asking for loans . It is like the Billionaire Beggars
1
The American century survived because America's government insisted on holding on to its ideals of democracy, the rule of law and fair play ( to workers, to immigrants, to women, to minorities) even when segments of American society dragged their heels on these issues. An autocratic government cannot compete with a democratic one over the long term.
The autocratic tendencies of the current administration will, if continued, result in America becoming a distant second to China in a world made poorer by the governments of both countries.
56
@GP-China and Russia are already collaborating to move the world away from dependency on the dollar.
China calls for new global currency
https://abcnews.go.com/Business/story?id=7168919&page=1
1
@GP
America is not and never was meant to be a democracy.
America was and is meant to be divided limited power constitutional republic of united states. The Founding Fathers malignly meant for only White Anglo-Saxon Protestant men who owned property to be deemed divinely naturally created equal persons with certain unalienable rights. America is no parliamentary democracy nor Athenian democracy.
America was built upon misogyny, African enslavement and separate and unequal along with invasion and occupation of aboriginal Native land.
" A republic, if you can keep it" Benjamin Franklin when asked what kind of government they were making during the Constitutional convention.
I pledge allegiance to the flag of the United States of America. And to the republic for which it stands.
3
@Blackmamba
I enjoy your takes. May not always agree, but please keep up the good work.
1