Opinion | The U.S. and China Are Finally Having It Out – by Thomas Friedman – NYT

“The assumption was that as China grew, and the W.T.O. moved to a new regime, China would quickly cut its tariffs — like its 25 percent tax on car imports, compared with the 2.5 percent tariff imposed by the U.S. But the W.T.O. still has not completed a new trade round and China has refused to voluntarily lower its tariffs.

Moreover, China developed an industrial policy that often bent W.T.O. rules. The government gave away cheap land, and state-guided banks granted cheap loans for new industries, but foreign companies that wanted access to China’s market were forced to pay to play — to have a Chinese partner and be willing to transfer their advanced technology to them.

As a result, over time, Beijing was able to force multinationals to shift more and more of their supply chains to China, and grow Chinese competitors to Western companies in its protected market, and then, once they were big enough, unleash them on the world as giants.

Even when the U.S. protested to the W.T.O. — as in the case of how China unfairly kept U.S. credit card companies out, then lost the arbitration case at the W.T.O. — China still dragged its feet before following through on promises made 17 years earlier to open up. By then, Chinese companies, like UnionPay, so dominated China’s credit card market that U.S. companies, like Visa, were left with the crumbs.

Meanwhile, Chinese government-guided companies and investment funds went abroad and began to buy up strategic industries to bring their technology back to China — like Germany’s biggest and best robotics company, Kuka.”

Source: Opinion | The U.S. and China Are Finally Having It Out – The New York Times

Thank you Thomas Friedman. Yes. And here are some of the top comments at the NYT I recommended.

allan slipher
port townsend washington
Times Pick

“..there is a trade imbalance today because we’ve been investing in our future and you Americans have been eating yours.”

Spot on. Wake up call, America.

Our choice is self indulgent consumerism, cheap political theatrics, empty celebrity worship, and self absorbed rants, or redirecting ourselves and doubling down on basic research, education, infrastructure, well paid work, investment in the well being of our children and grandchildren and upholding the rule of law.

Bruce Rozenblit commented May 1

Bruce Rozenblit
Kansas City, MO
Times Pick

China employs state run capitalism. The US employs market capitalism. China views government as an asset. The US views government as an enemy. China pays to have its brightest students educated in the worlds greatest universities. In the US, we question why we even have universities, let alone want to pay for them. China follows decade long economic plans. The US is ruled by quarterly profits. China cheats. We don’t tax the billionaire class. In China, civil rights are forfeit. In the US, money has more rights than people. China is destroying the environment for quick growth. In the US, we want to destroy the environment for feeble growth. China pursues multi-national trade and investment policies. In the US, we used to and now want to pursue only unilateral policies.

So who wins? China will win. Trump did have the right idea about China getting away with murder. Many of our largest corporations made a fortune off of cheap Chinese goods, so we went along with it for years.

Until and unless we straighten out our twisted and self defeating ways, we cannot out compete China. The first step is to stop demonizing the government and allow government to participate in business. The ExIm bank is a good example. Big business in the rest of the industrialized world has government involvement. It’s about time we joined the club. We call it redistribution. They call it public investment.

Cap’n Dan Mathews commented May 1

Cap’n Dan Mathews
Northern California

So everything you wrote is pertinent, Friedman. What you fail to mention is that China did not engage in expeditions in search of missions, including the Iraq war which you enthusiastically supported, thus saving untold trillions of yuan which they used to do much of what you mention regarding enhancing their position.

Golflaw commented May 2

Golflaw
Columbus, Ohio
Times Pick

Tom, nothing new here regardless of your 3 part play. Some of us dumb intellectual property lawyers wondered 30 years ago why our US Fortune 100 clients had us draft joint venture agreements with Chinese companies that licensed US high end intellectual property to those ventures. We were told it was worth it to have access to a market of more than a billion people. Never happened but the Chinese got US technology and
US companies got rid of US factories and employees for higher profits of Chinese “stuff” exported to the US and sold at WalMart.

Christy commented May 2

Christy
Times Pick

If this is a battle for the future we are not only late getting out of the starting block but racing to the past. While China invests in infrastructure and education we have allowed our infrastructure to crumble and stifled education spending. As a result, we have fallen far behind the rest of the world in STEM graduates. While Xi focuses on next-generation industries like artificial intelligence, renewable energy, biotech and aerospace, Trump wants to reopen coal mines, keep us dependent on fossil fuels and restore a nostalgic but hopelessly out of date manufacturing base. While the rest of the world embraces science and accepts the challenge of climate change, we have a political party in charge of government that denies science and dismantles the environmental protections enacted by prior administrations. And we have a president intent on tearing up all the treaties and alliances that help preserve our national security.

Posted in: China, Thomas Friedman

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