The breathless moralizing about China's "unfair trade practices" is just silly. What is international economic "fairness"? If a country decides to develop based on a state-managed state-equity manner and as a result creates technology in a more timely and comprehensive manner, what does it mean (and how does it matter) to call them "unfair"?
Keep in mind the U.S. is no angel when it comes to IP theft or international espionage. Did the U.S. achieve nuclear weapons "unfairly" by immigrating German scientists in the 1940s? All's fair in love war and geopolitical competition.
It turns out that Washington Consensus Capitalism where corporate profits are generated by Congress/K Street collusion is not all that productive in succeeding on trade. Go figure.
4
oh, so much winning, I'm getting tied of winning already.
1
How naive. This is what happens when you just see the U.S. - China relation from a purely economic/commercial perspective.
《SinoAmerican Context》
Since its founding ~240 years ago, the US has progressed from mostly wealthy, white, slave-owning, land-owning, heterosexual, Christian, males having human rights, to an expectation that these human rights be guaranteed to all of its citizens and people living beyond its borders. On a global scale, it has further advanced the Scientific Revolution and Age of Enlightenment through its soft-power, opposed to hard-power, raising billions out of poverty through technological innovation and spreading democracy on a scale never seen before in human history.
China, in contrast, in its ~70 year history as a modern state, is not any more or less unique or innovative than other developed East Asian democracies that have benefited from the US-led liberal international order. It is currently following the same trajectory Taiwan, Japan, and S. Korea did as they transitioned from an authoritarian agricultural to a democratic cognitive-labor based economy. The only thing particularly unique about it at this point is its nominal influence due to its sheer size.
When China finally frees itself from the shackles of the CCP it will have accomplished something to celebrate. It can brag that once human rights only applied to a few select CCP members, but now there is an expectation that all Chinese citizens have them. However, if its aberrational legacy is a population of well-nourished CCP consumer cattle, may the universe have mercy on humanity’s existence.
"The best outcome for negotiations is that tariffs imposed by the United States won’t get higher and broader. . . . but not a rollback"
Why?
These tariffs are recent, and conditional. What makes them suddenly permanent?
This needs explanation, not just simple assertion at the end of an article.
2
"However, such provocations play into the hands of Chinese officials who see it as part of an American plot to contain China’s development."
It is. Who is kidding whom here? Yes, America is now suddenly driven to maintain dominance in certain tech fields, and more generally contain China's economic expansion.
2
Does this Op-Ed really tell us we don't already know? I mean, even casual observers who make moderate efforts to stay informed on this issue is aware that China wants a deal. In fact, both sides NEED a deal, because the fundamental feature of a trade war is that it is mutually destructive. It is a war where both sides lose, the only question is comparatively how destructive it is. Both sides have been talking about they want a deal from day one...the problem is the two sides have very different ideas of what that deal should look like.
So Professor Prasad really doesn't add anything new here, because he can't be sure how far each side will compromise. And that has always been the big question since day one. Professor Prasad doesn't really tell us how the current divides will be gapped. China still wants to mingle state and private enterprises, which is anti-competitive and poses national security issues for the US. China has not indicated it will make commitments on artificial currency depreciation. If the future deal doesn't address these core problems, then what was the point to Trump's Bigly Trade War to begin with?
@citybumpkin
All wars are mutually destructive in the short run.
The long run outcome can be beneficial to the winner in some cases, but often the winner cannot recover from the costs of victory, e.g., Britain and France after WW2. Curiously, Germany and Japan, the clear losers, have done better economically than the winners in the 70+ years since the end of fighting.
At this point we should double down, screw China to the wall until we have recovered trillions in reparations for their decades of intellectual property and counterfeit copyright theft, illegal by trade rules subsidies to Chinese industries, tariffs that violate the letter and the law of "free trade", organized crime poacher destruction and rape of forests and wildlife around the world, illegal overfishing of the oceans and the act of war chemical warfare fentanyl poisoning of 10,000 of thousands of our citizens. The United States is fully capable of being self sufficient regarding resources and manufacturing and does not need to corrupt itself morally or materially with no-rights slave labor made cheap and often dangerous produces made in no rule of law China that usually break or are designed to go out of style or not work within a few months.
2
I am becoming more and more convinced that the only way to manage trade kerfuffles, trade disputes, and outright trade wars with opponents like China, who can take a decades-long view and just wait out any current administration that is too intransigent, is to have an independent office, rather like the Federal Reserve, only for implementing trade retaliation, and carrying it through multiple administrations, if necessary.
2
You have to give the President credit. He understands that we have the real leverage - market size and buying power. Unparalleled in the world. The Chinese and Do know Trump understands that and what the Chinese strategy is. That's why they respect and fear him. In the end the one with maximum leverage always wins.
1
Xi is caught riding a tiger and his hanging on hard. He has to avoid a situation where there are tens of millions of angry young men with frustrated aspirations. Part of his problem is the imbalance in numbers of young men and women due to abortions of daughters in favor of sons. Millions of men, some estimate 30 million, can never get married.
Add to this structural problem the technological displacement of low skill workers by AI/robotization. Advanced technological products cannot be produced reliably at an adequate level of quality to compete in the world market by low skill handwork. China's corporations are adopting robots by necessity. Doing so cannot be avoided but is creating the potential for mass unrest.
Reduced exports due to a trade war is a threat to the regime because a recession would put millions out of work. For a time Xi can simply print money and expand public works to absorb them.
To deal with potential unrest Xi is stoking the fires of xenophobia and using a Big Brother approach to total surveillance and tightened police state tactics. He depends on tens of millions of informers and over a million police employees using a sophisticated super computer system that listens to every call and reads every text or email, able to quickly detect new coded slang and able to suppress flash organizations as they form. Their separate but equal internet is 100 percent government penetrated.
To say this is an unstable situation is an understatement.
1
China always wanted to make a deal but trump asked for to much. Protectionism will lead to less competition. Why would Trump allow China to tax Us goods at a higher rate then Chinese good imported into the US. Both import taxes should be at 2.5% for both sides. Chia has to recognize patents or no deal should b e done. The constant theft of US technology nearby ends.
1
"The trade war comes at a delicate time. "
basically, the mistake that the Chinese made was that they opened their hands too soon. Revealing the plan for total military and economic domination. Now they blame the West for - finally - realizing there is a dire need for corrective action to contain the power supporting the most autocratic and vile regimes on this planet.
5
Until we have safeguards for out intellectual property being stolen by China, the trade war should continue. Yes we suffer in a trade war too, with higher prices on all the crap we buy. But those low prices we've enjoyed are illegitimately low - low because we've been doing business with an expansionist power whose goal is to rule us and the world. We can't afford those low prices.
5
@KI Real
We should send them a bill for 50 billion every year for theft or add a 200% tax.
The more I read about Xi's plans for Chinese society, the more convinced I am that it is headed towards becoming a dystopia right out of a cheesy science fiction movie. A billion fearful robots, kept under control by an omniscient surveillance state assigning each individual a "social credit score" that follows them, invisibly, through life, affecting every option they have. We used to call it "Fate". There is no court of appeal, no way of determining how it was arrived at. It's also a system ripe for manipulation by the authorities for friends and foes. The population remains voiceless and insular, with their energies directed into mindless consumerism by a steady diet of state propaganda. Since I don't see any signs of rebellion, perhaps a strong economic downturn would be a good thing for China, since it would create unrest and unleash what I hope would be waves of pent-up frustration. Of course, the many parallels with our society are not lost on me; we are not far from it either, just ask Mark Zuckerberg, Jeff Bezos, or the NSA.
3
Of course they want to make a deal now. Which is exactly why we shouldn't.
Right now, China is searching for the most expedient deal that will minimize disruption and allow them to continue doing what they're doing (industrial espionage, closed markets, etc.).
Eventually - perhaps even soon - China will be in a much more precarious position. Not China the country - it will do just fine. I mean China, *the Party.* That's who is really in trouble here.
3
"The trade war comes at a delicate time. It hurts foreign and domestic investor sentiment: investor nervousness has pulled China’s stock market down by about 25 percent this year"
What time a good time to have this showdown with China?
1
Yeah, on the subject of our getting the job of arresting that CFO, and America's helpful support to Canada and her kidnapped citizens: thanks for nothing.
1
China has been, since the revolution, a country run for the benefit of the Party, which become a rationale for a strictly regimented kleptocracy. Xi has simply injected more discipline and has made himself the strongman - for - life. That will not change.
Chinese mentality has been, since the revolution, one of loathing of the West and a focus upon never again being subjugated to western powers, as it was in the last dynasty. Leveraging Chinese nationalism, Xi can play tough for a long time, blaming US hegemony for China's problems.
There are structural inequities that China has in place which have to be shifted to make it a reasonable trading partner, and which requires a disciplined, nuanced approach. Staying with the TPP, for example, would have given the US a platform to work from. Current US policy has none of this and plays into the anti-western ethos of the country, to Xi's benefit.
If China flexes on Trump's demands, it will be simply be a bit of tactical retreat to ensure long term strategic victory, and we will have lost an opportunity to achieve structural change in how China deals with the rest of the world. Regrettably, Trump is out of his depth in this relationship.
6
@MassBear The Chinese are playing go,. and Trump is playing tic-tac-toe.
1
If Professor Prasad is correct that the Chinese are willing negotiators then the proper inference to draw may be that the Chinese believe they can get the better of Mr Trump in any negotiations. The Chinese will be unwilling to negotiate from a position of weakness. The century of humiliation is over. Just ask the Canadians. The Chinese will now only negotiate from a position of strength and expect to essentially dictate terms. The rise of China is unstoppable.
@Loup: my parents grew up during the Roaring Twenties only to suffer through the Great Depression.
Nothing is unstoppable.
3
NIce try, but this is Trump. He will certainly squander the opportunity. He alreday threw away the TTP which would have done more than nay stupid agreement he cooks up. Thanks for the Trump worldwide recession!
2
For most of the past 2200 years China has been a socioeconomic political educational demographic diplomatic military scientific and technological superpower.
About 20% of the human race is Chinese and ethnic Han. While China has the nominal # 2 GDP on a per capita basis it ranks # 80 near Bulgaria and the Dominican Republic. Despite bringing 300 million Chinese into the middle class over the last 40 years.
This is Deng Xiaoping's China. A China that adopted capitalism with Chinese characteristics aka one-party term limited collective rule. Mao Zedong's China lives only in his mausoleum and smiling face overlooking Tiananmen Square.
Xi Jinping has rejected that China by becoming the first Chinese leader since Mao whose thoughts are deemed worthy of study by members of the Chinese Communist Party, the first "core leader" since Deng Xiaoping and the first Chinese leader since Puyi to rule with the" Mandate of Heaven".
The effete lazy ignorant inexperienced corrupt cowardly incompetent son of unearned inherited New York City real estate wealth who played a businessman on reality TV aka Donald Trump is no match for Xi Jinping.
1
@Blackmamba
“Donald Trump is no match for Xi Jinping.”
Yes, but American democracy was designed and functions despite its leaders’ perceived weaknesses. Dictatorships only last as long as the people fear the dictator.
Thanks for the brief history lesson on that one time regional power. Xi is just the most recent of dictators to rule those people.
Deng said “to get rich is glorious.” Xi encourages his subjects to steal. Little wonder Xi fears Islam: imagine a country of 1.4 billion people all missing a hand.
3
These negotiations are very important
and the outcome will have major impact
on not only US and Chinese economies
but the whole world. Many comments
here have limited view of imports
and exports. If the negotiations fail
numerous American companies
doing substantial business in China
will aslo suffer. Apple does $40-50
Billion business there and GM makes
more cars there than in USA. Many
more such examples. It will be
foolish to deprive American companies
from one of the largest market in
the world. Any successful negotiations
involve compromise. USA also has
to accept less than the maximum demand. We win, they lose will
gaurantee failure and likely plunge
the world in recession. US economy
is also slowing. Watch the stock and
the bond markets that NYT highlighted
yesterday.
1
Not since GW Bush declared "Mission Accomplished" has US victory in a war being declared so prematurely.
3
Help us in Canada! Does the author of this article not understand the importance of the arrest of Huawei’s CFO? He mentions it but says Americans mostly see it as a “sideshow”. It is the main show! Please get it right dear neighbours. Just imagine them arresting Apple’s CEO and thinking America isn’t going to be enraged. Seriously her arrest is not a sideshow. They have arrested 3 Canadians already. And they are not finished. Canadians should flee China and please stop talking about trade war with China until this issue is resolved. Help!
4
@Rosemary Kirby: "Just imagine them arresting Apple’s CEO and thinking America isn’t going to be enraged. "
If the Apple's CEO was arrested I would want to know what the charges were and background.
Would there be diplomatic hubris? Of course. It would be just as expected as the current situation with the arrest of Huawei's CFO.
Take a look at the charges against Meng Wanzhou. They are serious and legitimate.
Here's some recent background:
https://www.nytimes.com/2018/12/14/business/huawei-meng-hsbc-canada.html
@Rosemary Kirby If Apple's CEO were arrested they would be arresting one of the biggest importers of Chinese high-tech goods, not likely to happen. I feel bad for the lady who was a schoolteacher who got detained, but haven't been able come up with any tears yet for the 2 members of the North Korean fan club. Still, I wouldn't worry about them too much-- Trump has made it clear in the negotiations that the Huawei lady is for sale, and I would expect all the Canadians to be released as soon as she is.
1
I find Prof. Prasad's argument hard to follow, but apparently correct. Let me dare to offer a somewhat different exposition.
Since China became open to dialog with, and advice from, western experts and institutions, until Trump became President, a theme of western advice was that the proposed reforms would benefit China -- not only its people, but also its government which from Deng on has based its legitimacy on economic results. The Chinese government has in general followed this advice, albeit slowly. Oversimplifying, this advice as a whole could be characterized as "stop doing stupid things." China was so strangled by its own legacy from Mao that it was easy to see how policies could be improved.
Under Trump, this benign dynamic has been replaced by harmful actions by the US, and threats of more. It remains to be seen what China's reactions will be; my bet is that Trump has changed a positive-sum dialog to a negative-sum game in which the parties have become combatants, both of whom are losing.
Chinese governments, like all governments, make mistakes from time to time. But they play the long game. Trumpian actions and threats are just a blip in time to them. They will continue to outrun us in better infrastructure, more STEM graduates, and just plain steadfastness -- including stealing intellectual property while they still need to. We are not even winning the battle, let alone the war. Now it is the USA who needs to stop doing stupid things!
2
I wouldn't take as factual any statistics that come out of China as they are known to manipulate the facts to get the results they want - keeping in mind it is a communist nation and there is no transparency. A New Zealand company, Fonterra, learned that the hard way when they invested in a Chinese company on the advice of some highly paid Chinese consultant and found out, once it was purchased it was a deadweight liability, and the facts about the company had been manipulated.
1
The United States needs to balance trade with the world, not just China. We need a long term policy which ends our annual 800 billion dollar trade deficit. We also need to end our budget deficits. And while we are at it we should end immigration. None of these will be done. We are like the people on the Titanic. Everyone has a reason to keep going on, the captain, the wealthy passengers, the crew, the stowaways, everyone. Everyone also has an interest in slowing down or changing course. I'm retired and stability is in my best interests but there is a part of me which wants this liner to hit the iceberg. It doesn't matter what I want though, We will hit, either next month, next year, or in 10 years and the collision will be devastating.
6
Are we finally waking up?
The Chinese harness what is basically slave labor, with nets underneath the dorms to collect the suicide-intenders, to make excellent and cheap products that dominate our retail shelves.
As today evidences, they further their interests by stealing vast amounts of commercial and governmental secrets.
They take the resultant earnings to buy our ever-increasing debt, as we mortgage our future to pay for our out-of-control current levels of personal and governmental consumption.
Net net: They have huge cash balances. We have huge debt.
They increasingly can and do dictate terms to us, because they finance us.
We have become helpless consumers unable to resist the $39.95 cashmere sweaters and very well made iPhones.
Today's indictments are a long overdue step forward. But way inadequate to the task.
11
Several years ago I sold two Mont Blanc pens on Ebay. In both cases, the winning bidders were Chinese, and they both had me ship them to the same address in Seattle.
When I became suspicious, I looked up the address and found out that it was a warehouse owned by a Chinese company. I decided that there was nothing dishonest or illegal going on, so I accepted the money and shipped the pens.
While the business was legitimate, it gave me an insight to the Chinese mindset. The wealthy might be buying up properties on the West Coast, but lower down on the economic food chain, it looks like they were buying anything that they could to protect their wealth, and they had an organization with a warehouse in Seattle to help them do it.
This does not seem like the actions of people who trust their economy or their government. It seems more like what people might do if they believe that their economy is brittle, and who might panic the first moment things turn around.
Or maybe they just like fancy pens.
11
@mlbex If people resort to buying Mont Blancs for moving their assets offshore, that's gonna take a lot of pens. Chinese shoppers love luxury goods and many luxury department stores (or ebay) don't shipping overseas. So they ship their purchases to a US address and then the warehouse (probably operated by a Chinese American) combines different orders and ships everything to China in one-go. Not everything has a conspiracy theory behind it ya know.
5
@Lulu: I didn't imply a conspiracy, I described a mind set. A conspiracy implies something illegal or immoral, and I believe that his was neither.
Warehouses can hold a lot of pens, but I suspect that you are correct: these were bulk shipped to China, then distributed locally. I don't know whether they are luxury goods or a hedge; I made a guess.
You can still buy new Mont Blanc pens if you want an overpriced luxury.
The warehouse was owned by a Chinese company, not that it matters much.
trade war hurts them much more than us. why would we want to negotiate ? For example, policies like these will help their economy improve by 100% while ours would only improve by 10%. Not a fair trade off.
Its conciliatory approaches like this that got us into this mess in the first place.
9
Two bullies making a deal on not bullying. What a joke!
2
Who will blink first? Hasn't that always been true?
The idea that China would comply with any deal is ludicrous on its face. We now have more than forty years of a track record on this. They don't care about agreements, and will never - not now, now ever, not never - abide by anything.
And if they were disposed to (they aren't), would anybody seriously consider negotiating with Trump and his gang that can't shoot straight? Trump can't negotiate his way out of a wet paper bag and, as evidenced by the 3,500 plus lawsuits to which he is a party, he is just as untrustworthy as the Chinese.
For my money, don't waste your time contemplating deals with these characters. Moreover, anybody that puts their intellectual property at risk in China is a fool and, as the saying goes, a fool and his money are soon parted. That is the real game here.
14
@PB
The US pulled out of the Iran deal although there was no evidence of Iranian non-compliance with its requirements. NAFTA torn up and replaced under pressure by its biggest partner. The Paris Agreement pullout. Threats that NATO agreements to defend allies depended on military spending.
How is the US record for honoring deals?
7
The headline is misleading. There might be voices in China willing to make a deal but for that to happen they will have to dump Chairman-for-life Xi.
6
China is willing to make a deal? What is a Chinese promise worth? Anyone, Chinese and nonChinese who have worked in Chinese society, can tell you a Chinese promise is worthless. The cheating and nibbling starts the day after the deal is signed. Chinese know Americans will feel bound by law and ethics to ‘keep their word’. Chinese have no such limitations and use American integrity to fleece Americans. Even if a deal is reached what will it bring? Chinese aircraft carriers, jet fighters, island building, space weapons, an expanded Chinese spy network and the mass transfer of all data and technology from American corporations into the pocket of Mandatory Chinese “partners”. There is Dumb, Dumber, and then there are Americans.
16
Deal? Will China stop putting Uyghurs in concentration camps? Will they stop stealing our intellectual property? Will they stop threatening their neighbors around the Spratly Islands. No appeasement. The Communist Party of China is a cancer and must go. Keep the pressure on. This is not about business. This is about human rights and acceding to international business norms.
8
China will find it's way to imfluence Trump for a just settlement. As one has followed the leadership style of Trump, he always starts with a bang but ends with a whimper. China has repeatedly any decision which did not serve it's interests; the prime example being the award of the International Court of Arbitration which decided the dispute over Sparty Island in favour of Phillipines. What happened? China is aggressively militarizing the Island.
Unfortunately, the UN became a silent spectator. Probably, the huge donations from China sealed their lips.
Take it from me China will work around Trump to protect it's interests.
why do higher prices for Americans due to Trump tariffs constitute any kind of victory for the United States? The author is simply wrong.
1
@Rhporter
That’s because you Chinese think that all Americans care about is price — so much so that you use it as an argument hoping to sway public opinion. Allow me to disabuse you.
Here is the Kennedy Doctrine:
“Let every nation know, whether it wishes us well or ill, that we shall pay any price, bear any burden, meet any hardship, support any friend, oppose any foe, in order to assure the survival and the success of liberty."
2
Lol your you Chinese comment. I am a born in America American. Not that that affects the logic of things. your reference to JFK is pointless. But let me paraphrase Emerson: the louder you talk of your patriotism, the faster we count the spoons.
someone once said that if goods and services don't cross borders, soldiers will. By reducing complicated trade and intellectual property issues to a game of arm-wrestling--one winner, one loser--the US is certainly setting the course to a more direct confrontation within the next 5 years
1
@Gordon
The Chinese government has been begging for a confrontation. The world has, until now, avoided the awkward situation of calling attention to the fact that our guest, China, is pocketing our silverware at the dinner table.
As for a military confrontation, the Chinese haven’t a chance. The difference between us and dictator Xi is, we care about the lives of our troops; he cares not a whit about the Chinese. Best that the PLA confine it’s activities to its areas of competence: rounding up innocent Uyghurs and attacking unarmed Chinese civilians.
1
“Its leaders are talking tough...”
China has no leaders; only rulers.
Our policy should be to beggar China until it ceases its theft of intellectual property, reverses its military expansion and intimidation of its neighbors, and adheres to international law and conventions.
Trade deal? No deal.
2
Economics Professor, Edward Prasad, should perhaps take a broader view than just this economic trade-war (and increasing real war-footing) between a formerly and millennia long term experienced Empire in China and our far younger country which was birthed in a “Revolution Against Empire” [Justin du Rivage], but is now dealing with it’s first obvious ‘virtual’ Emperor Trump.
As the professor references in an earlier NYT article, “President Xi Jinping” has mentioned control of the economy — but other NYT articles reported that Xi’s speeches have also emphasized socialism, “Socialism with Chinese Characteristics for a New Era”, (not communism) as the way forward for China and the Chinese society.
Having worked for a meteoric computer and office automation company formed by a brilliant Chinese American gentleman, I remember being impressed by his son (who I once shared an office with) saying that “China takes a much longer term view of history than America” — which makes me think, hopefully, that China, and its leader Xi, may well have a more informed view of whether Empire, or some form of social (even socialist-democratic) governing is superior to centuries of Empire under Emperors or leaders who act like Emperor Trump.
That brilliant young Harvard-educated U.S. business founder, who invented core memory, which made modern computing history possible, always voted for democracy over Empire.
2
@Alan MacDonald
Bottom-line, I’m betting that Trump acts more like an Emperor than Xi, and that Xi could well & hopefully turn out to be more like Gorbachev than Trump.
In the “Art of the Deal” for social democracy over Empire, my revolutionary hope (rather than money) is not on Emperor Trump.
Such belief and hope on my part is based on the Chinese people’s distaste for 3000 years of Empires and our American people’s distaste for an Empire just less than 300 years ago, and that these are our similarly human feelings of most citizens of the world today.
1
WE SHALL SEE What the Chinese will and will not do. Unsurprisingly, they respond to threats from others, such as Trump, with threats of their own. So much hot air! So little reason.
People like this author are the reason that we have a global trade imbalance with China. They are also the reason that China has been able to pursue its global ambitions without pause while still stealing from us. Whatever his faults, DJT called China a strategic competitor to the US and he is absolutely correct. Dealing with a strategic competitor means taking a very different approach to deal making than with friends. Doing anything else would be foolish and reverting back to the method of years past which has caused untold pain in the entire western world. The author's advice holds no water in the real world.
7
Prof. Prasad fails to understand that it is normal for an economy breaching $12 trillion to grow at a more modest percentage than a $2 trillion economy. Percentages are not as important as the actual amounts in cash. You can't bank a percentage. I don't see the gloom and doom predicted everyday by the talking heads in the USA regarding China. What I see is explosive growth. Positive people creating all sorts of businesses filling all sorts of needs. It is sad that the USA needs to talk down China to make Americans feel better as their living standards, longevity and savings slip into oblivion. Bad governance in the USA has created a real drop in living standards for the majority of Americans. Good governance in China is proving all the "Economists" wrong. They have been predicting China's demise for decades. When will they get it. The Chinese people are creative and hard working with the right economic incentives to stimulate consumer driven growth.
6
The piece ends with a very silly artificial dichotomy. No hiking/broadening of tariffs or "a total capitulation by China". There are many shades of US victory between the two. And that victory is not just for the US but for the rest of the world that believes in open, fair trade/investment environment globally.
CCP has already been down-playing MiC2025. But, as Xi just very plainly spoke a few days ago, every entity in China exists to help CCP. That line of attack is the acknowledgement by Xi that the Chinese regime is not compatible with the rest of the world where private entities are not obliged to help the government or political parties first. As many people have observed, this requirement by CCP makes any Chinese nationals and entities "criminal" if hey refuse to engage in "criminal" conducts in the US and in many other places. As the Chinese side declares at least for now that PRC would not move an inch on this sort of ideological issue, the rest of the world, especially the US, should only engage with PRC selectively. Trump may only be able to avoid failure by making the stakes a little higher early next year through tariffs, which are a crude tool but a biting tool in the eyes of the Chinese players. In the meantime, as the handling of Huawei in many countries shows, the US would regain respect by talking to allies more closely on the issues of economic and other security issues.
9
I think this article fails to understand China's leader. There will be no protection for intellectual property, no matter what any agreement might say. True protection for intellectual property would impede China's single-minded drive for world hegemony, and General Secretary Xi will accept nothing less.
Dan Kravitz
16
The Chinese Communist party and its leaders, have always wanted China to be the most powerful nation on earth, both economically and militarily. The Chinese leaders have not misled the world about their intentions and have steadfastly pursued them since Deng. It was the West that assumed that China will change as it developed economically. That did not happen and I do applaud President Trump and his advisors for confronting China on trade. Will this lead changes in China and a fairer trade deal. I sure hope so,
The track record of the Trump administration, is not that great. They seems to start all negotiations with great bluster demanding major changes, but then settles for far less. I am sure the Chinese have noticed that trend too. So, I wonder if they would be willing to make significant concessions quickly.
I believe that Mr Trump is rattled about the US economy and the impact it may have on his re-election effort. So, I am sure he wants to end the trade war with China quietly and quickly. I wonder if the administration will compromise way too much to get that. If that happens it will be an opportunity lost.
8
@PP Let me see. Are you saying that America doesn't wantt o be the most powerful Nation on earth? Isn't it America First? Oh what am I not getting here?
At a minimum, China must agree and put in place strong measures to stop all of the theft of intellectual property, along with corporate espionage to steal methods and processes of production, etc. In a nutshell, the China must stop stealing from foreign companies and abide by international codes on intellectual property and proprietary knowledge.
China agreeing to buy more goods from the U.S. is secondary at best to stopping them from stealing.
11
Professor Prasad states;"China is not about to abandon its state-owned enterprises, although it may be willing to subject them to greater market discipline." The problem is that almost all large Chinese corporations, even those listed on the stock exchanges of the World's financial capitals are state owned in one or other.
The only difference is between these and the enterprises owned outright by the state is how government control is exercised, however, make no mistake, that control is definitely there.
10
I agree with the author. There has never been a better time for a win-win negotiation with China. Both countries have a LOT to gain. The talks should stick to areas where compromise is possible. China is not going to abandon state-owned businesses (nor will the US end subsidies to major businesses in the US). China is not going to get rid of re-education camps in Xinjiang Province. Trump might be able to get Chinese businesses or consumers to buy more from the US, and China could place tighter controls on Copyright piracy and theft of intellectual property. If we stick to what's possible, there's room for a significant agreement.
4
@ShenBowen
There was never possible a win-win with Stalin and the US, and it is similarly not possible with dictator Xi and the US.
No win-win is possible with a country whose key to success is to steal from other countries, suppress free expression at home, bully its neighbors, and ignore international law and conventions that it finds disadvantageous to its rapacious activities.
In the words of Ronald Reagan, “Here’s my strategy on the Cold War: we win; they lose.”
4
Small sample size, these "bureaucrats, academics and business executives." Non-scientific survey consensus.
@Yunnan Ha! As if any foreign organization was allowed to conduct scientific surveys. They would be kicked out of China in the blink of an eye. China's government does not want the truth to come out. As a matter of fact, this economist is probably now at risk of being able to visit China.
6
@Justin
In fact the World Bank has conducted many scientific surveys in China. I participated in one of them. You don't know what you're talking about.
1
For so long China was not confronted for its unfair trade practices because of the same excuse that upsetting China will cause negative impact to global economy. Past 3 administrations kept on punting the problem. Free trade economists like Mr. Prasad were advising that when low cost manufacturing goes to China, US can move up the value chain. But China outright forbids our tech stalwarts like Google, Facebook, Netflix, Amazon and systemically harasses others such as Cisco, Microsoft and in addition engages IP theft through forced transfers to local partners and outright corporate corporate espionage. China also uses monopoly pricing practices and currency manipulation to drive others out of business like in Solar Panels.
Trump admin has confronted China correctly and unless China reforms we should be taking countermeasures to prevent Most Favored Nation status access to US Market. Unfortunately Trump admin with myriad distractions might not be in the best position but at the same time since they are the only admin to call spade a space, they deserve support in their efforts. Since EU and Japan are starting to come around, China will realize that if they don't deal, rest of the world will come around before they can divide and conquer.
20
@Matt
Amen, god forbid we experience a bit of short term pain for long term benefits.
1
@Matt The breathless moralizing about China's "unfair trade practices" is silly. Espionage, IP theft, and other forms of ruthless competition are being committed by the United States as well.
1
I've always thought Trump, by accident, had to strong hands to play: 1] immigration; and, 2] China trade. Liberals have had no answers to either and have taken a handwringing approach.
Both have an inherent problem: immigration, no matter what liberals may hope, think and say all the down on their luck people South of the border or the rest of the world cannot come to the U.S; and, with China something had to be done with its trade practices. Trump knew we had the market that could force China to rethink their policies. It's funny when supply-siders submit their ideology to the demand side.
Both are shinny lures that his uneducated base can latch onto even if they don't understand either. Both have a fundamental truth tangled up within them, which Trump uses as the hook.
How these dilemmas end, nobody knows, but DJT's track record is not promising. This is the Grand Wizard that drove a casino into bankruptcy.
But Trump has an uncanny way of always landing on his feet while others are destroyed.
21
@Prometheus
Congress and prior presidents have clearly failed to deal effectively with either of these fundamentally difficult problems.... and the failures continue.
Stumpy is right to highlight the failures, but his M.O., to blame and posture, then waffle, is exactly wrong.
2020 must bring sane problem solvers to power.... and, to give stumpy credit, the messes he's enlarged, make it impossible to ignore them any longer.
4
Now we are supposed to forget the TPP, which was intended as a counterbalance to the Chinese communist model. We are to forget that the Obama administration deported more people than any prior administration and that important parts of the southern border are already protected by a wall, by drones, and by very effective border patrol.
What we get from Trump and his smirking psycho sycophants is lying grandstanding and racist showboating. It's time to muck out the stable genius.
6
@M. Johnson
...And we are also supposed to not remember that Obama tried to give over 6 million people amnesty and also changed the parameters to pump up his deportation numbers. Also, TPP may have been intended to remedy the situation with China but there is no evidence it would have worked.
1
I believe China has to decide if it wants to be a capitalist country or a communist country. When they say they want more control over the economy by the party they really want to create a country in a bubble which is impossible for other countries to trade with.
19
@Thomas Renner
What China wants to be is an authoritarian semi-capitalist country under full control of the Chinese Communist Party.
2
@Thomas Renner
That's not true.
Whatever China is - semi capitalist and semi communist - has made China the 2nd greatest economy in the world. And in only three years, nine of the top twenty tech companies in the world are Chinese.
I don't think that whatever they want in terms of control over the economy has hurt them at all in terms of trade with other countries or in competing with America.
@Thomas Renner The USA is in an imperial bubble. The rest of the world is metric. Is this not a form of protectionism? Kids study STEM in metric but live in an Imperial world?