“SINGAPORE — One of the most negative byproducts of the Trump presidency is that all we talk about now is Donald Trump. Don’t get me wrong: How can we not be fixated on a president who daily undermines the twin pillars of our democracy: truth and trust?
But there are some tectonic changes underway behind the Trump noise machine that demand a serious national discussion, like the future of U.S.-China relations. Yet it’s not happening — because all we talk about is Donald Trump.
Consider this: On Nov. 9, European leaders gathered in Berlin to mark the 30th anniversary of the fall of the Berlin Wall. It was an anniversary worth celebrating. But no one seemed to notice that almost exactly 30 years after the Berlin Wall fell, a new wall — a digital Berlin Wall — had begun to be erected between China and America. And the only thing left to be determined, a Chinese business executive remarked to me, “is how high this wall will be,” and which countries will choose to be on which side.
This new wall, separating a U.S.-led technology and trade zone from a Chinese-led one, will have implications as vast as the wall bisecting Berlin did. Because the peace, prosperity and accelerations in technology and globalization that have so benefited the world over the past 40 years were due, in part, to the interweaving of the U.S. and Chinese economies.”
Archive for Thomas Friedman
“A U.S. businessman friend of mine who works in China remarked to me recently that Donald Trump is not the American president America deserves, but he sure is the American president China deserves.
Trump’s instinct that America needs to rebalance its trade relationship with Beijing — before China gets too big to compromise — is correct. And it took a human wrecking ball like Trump to get China’s attention. But now that we have it, both countries need to recognize just how pivotal this moment is.
The original U.S.-China opening back in the 1970s defined our restored trade ties, which were limited. When we let China join the World Trade Organization in 2001, it propelled China into a trading powerhouse under rules that still gave China lots of concessions as a developing economy.
This new negotiation will define how the U.S. and China relate as economic peers, competing for the same 21st-century industries, at a time when our markets are totally intertwined. So this is no ordinary trade dispute. This is the big one.”
“HONG KONG — I’ve been in Tokyo and Hong Kong this week, and if I were to distill what echoed in all my conversations, it would sound something like this:
From Chinese business and government types, some real anxiety — “Can you please tell me what is President Trump’s bottom line in this trade war? Is this about rebalancing trade or containing China’s rise?” — combined with some real bravado — “You realize that you Americans are too late? We’re too big to be pushed around anymore. You should have done this a decade ago.”
From the Japanese it was gratitude — “Thank God for Donald Trump. Finally we have a U.S. president who understands what a threat China is!” — combined with real anxiety — “Please, please be careful. Don’t go too far with Beijing and break the global trading system.”
And from a smart European consultant it was bewilderment — “Boy did the Chinese have a failure of intelligence. They had no clue just how much both Democrats and Republicans, and Europeans, all want to see Trump hammer China in these trade talks. But please, please don’t start a cold war with China that will force us to choose sides.”
And from me to both my Chinese and Japanese interlocutors: I’m glad Trump is confronting China 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. China 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 China 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.-China economic ties before it really is too late.”
Thank you Thomas Friedman. Here is a comment I support.
“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.”
Thank you Thomas Friedman. Yes. And here are some of the top comments at the NYT I recommended.
“It is impossible to visit China these days and not compare and contrast the drama playing out in Beijing politics with the drama playing out in Washington politics. While the differences are many, I am sorry to report that some of the parallels are getting too close for comfort.
Let’s start with the fact that the anti-corruption crackdown by President Xi Jinping has created a climate of fear in China these days — whether about interacting with foreigners or saying the wrong thing or behaving too extravagantly so as to attract the state “anti-corruption” detectives.
But because “corruption” has not been clearly defined — and can be used to get rid of anyone for any reason — people don’t know where the line is, so they’re extra cautious. That’s why during a week in Beijing the most frequent expression I heard was, “You’re not quoting me on this, right?”
But if the Chinese are afraid to talk to one another, in America we’ve forgotten how to talk to one another.”
Thank you Thomas Friedman, for another good op-ed.
I found very intersting the following. All in the first paragraph was news to me.
“On this I often pushed back on my Chinese interlocutors to be humbler and warier of what the future may hold. Their one-party, one-man decision-making system can make big decisions fast. But it can also make big wrong decisions fast. For instance, Bloomberg News reported in February: “In 2008, China’s total debt was about 141 percent of its gross domestic product. By mid-2017 that number had risen to 256 percent. Countries that take on such a large amount of debt in such a short period typically face a hard landing.”
But Xi and the Chinese Communist Party at least stimulated their economy in order to avoid a real economic crisis — for themselves and the world. Trump and his Republican Party just added $1.5 trillion to America’s debt to pay for tax cuts for businesses and individuals at a time when our economy was already on the rise. Trump did so knowing that he would be here to take credit for any boom — and be long gone when we have to do the belt-tightening necessary so that interest on the debt doesn’t devour all nondefense spending and lead to a bust.”
Here are some of the comments I particularly liked:
Thomas Friedman is great in this column. He writes that China is a big problem, but the Trump steel tariff hurts our allies and not China. Then:
“So what would a smart American president do? First, he’d sign the Trans-Pacific Partnership trade accord. TPP eliminated as many as 18,000 tariffs on U.S. exports with the most dynamic economies in the Pacific and created a 12-nation trading bloc headed by the U.S. and focused on protecting what we do best — high-value-added manufacturing and intellectual property. Alas, Trump tore it up without reading it — one of the stupidest foreign policy acts ever. We Brexited Asia! China was not in TPP. It was a coalition built, in part, to pressure Beijing into fairer market access, by our rules. Trump just gave it up for free.
Once a smart president restored participation in TPP, he’d start secret trade talks with the Chinese — no need for anyone to lose face — and tell Beijing: “Since you like your trade rules so much, we’re going to copy them for your companies operating in America: 25 percent tariffs on your cars, and your tech companies that open here have to joint venture and share intellectual property with a U.S. partner — and store all their data on U.S. servers.” “
“In May, I visited Vietnam and met with university students. After a week of being love-bombed by Vietnamese, who told me how much they admire America, want to work or study there and have friends and family living there, I couldn’t help but ask myself: “How did we get this country so wrong? How did we end up in a war with Vietnam that cost so many lives and drove them into the arms of their most hated enemy, China?”
It’s a long, complicated story, I know, but a big part of it was failing to understand that the core political drama of Vietnam was an indigenous nationalist struggle against colonial rule — not the embrace of global communism, the interpretation we imposed on it.The North Vietnamese were both communists and nationalists — and still are. But the key reason we failed in Vietnam was that the communists managed to harness the Vietnamese nationalist narrative much more effectively than our South Vietnamese allies, who were too often seen as corrupt or illegitimate. The North Vietnamese managed to win (with the help of brutal coercion) more Vietnamese support not because most Vietnamese bought into Marx and Lenin, but because Ho Chi Minh and his communist comrades were perceived to be the more authentic nationalists.”