China and the globalist elites cannot win or survive the trade war with America
Copyright: Louvre Museum [Public domain]
Working as a mate on a deep sea fishing boat for tourists on Prince Edward Island this summer, I met many Chinese families. These people were clearly not rich; they often asked me for ways to save money on food, lodging, and other such items. They wore no brand name clothing. But they were rich enough to travel half way across the globe to have a nice vacation with their families. This is the Chinese middle class, the great hope of the Chinese economists, because it is they and only they that can replace the voraciousness of the American consumer for “cheap Chinese-made goods”.
Unfortunately, looking at the Chinese GDP of just over $12 trillion and their population of just under 1.4 billion, we must realize that this internal market is far from reality. The Chinese middle class, folks who have per capita GDP of roughly $30 thousand and up, likely consists of no more than 200 to 300 million people, leaving the rest of the Chinese, a population still greater by far than any other country in the world save perhaps India to subsist on Africa-like $2,000 in per capita GDP. While I am fully aware that per capita GDP does not a person’s income make, in general there is correlation between a person’s contribution to their economy’s GDP and their average income. Hence the rough equivalence.
In 2006, Niall Ferguson, a Harvard economist and author of popular books on economy and economic history, coined the portmanteau “Chimerica”, describing the symbiotic relationship between the endless voracity of the American consumer for cheap goods and China’s infinite capacity to produce them as an unholy creature, a chimera of Greek mythology fame, a thing not of this world, but cobbled together from parts of different things, things that had to die to make it come to life.
It should be clearly stated that Chimerica is not a natural phenomenon. It was midwifed into this world by the unbridled greed, the endless lust for power, and the moral abdication of American elites on both sides of the political aisle. These elites realized that China, just emerging from the nightmare of the communist years of failed economic and demographic policies with over a billion hungry mouths to feed would, if presented with such an opportunity, take the bait of a shortcut to prosperity, rather than do the hard work of rebuilding its political system and internal markets.
So they dangled in front of the Chinese communist regime the carrot of becoming America’s supplier of manufactured goods from shoelaces to iPhones. In return for providing the hundreds of millions of slave laborers, the Chinese would get all the intellectual property they wanted, duty free access to American markets, and membership in the World Trade Organization. Additionally, they would get no hassle from America about their atrocious human rights record and be chaperoned by it into the halls of power of the Western Hemisphere.
The deal was struck, the great sea cocks on the money pipeline were opened and billions of dollars immediately rushed into the breach. East to west flowed the manufactured goods, west to east flew American manufacturing jobs and intellectual property, much of it developed on the American taxpayer’s dime. The globalist elites, of course, tapped into both pipelines and attached themselves like leaches siphoning off a few percent here and a few more there, a few percent that quickly became countless billions, more than capable of buying all the political power they could ever want back home in America.
Chimeras are unnatural and they must die, so that the beasts that form them can resume normal, independent lives. Chimerica was the worst thing that could have happened to both the US and China, ravaging the American manufacturing heartland and giving away the invaluable fruits of American ingenuity. Most unfortunately, Chimerica and its ill-gotten gains created in America a vicious and corrupt elite, one that uses words like “deplorables” to describe everyday Americans, the very people to whom they have pledged their allegiance. In China, Chimerica protected the corrupt and immoral communist regime, enslaved the Chinese people, and prevented China from organically developing and reaching its true potential.
President Trump is killing Chimerica as we speak by slowly tightening the tourniquet on its arteries, closing the spigots on the trade pipelines between America and China. The simple truth, one that Niall Ferguson failed to grasp, is that really there is no Chimerica and there never has been. What there is, is an America that was betrayed by its elites who allowed a large and hungry parasite to feast on its blood. If untreated, such a parasite may prove fatal to the host, but if separated in good time, there is no question of who will live and who will die.
America will only be stronger if trade with China comes to a complete halt. There is nothing that is made in China that cannot be made in America, and for a comparable cost, considering the rapid advances in automation technology. China is another matter. It must import vast quantities of food paid for in foreign currency in order to stave off starvation. It cannot allow the hundreds of millions of enslaved factory workers to be simply laid off and return to their villages; there are no jobs waiting for them there. China, of course, will survive, but it will have to change and change is not something that comes easily to anyone, let alone countries of that size with an entrenched and massive hierarchy.
As the US tries to free itself from the Chinese parasite, it will lash out injecting the poison of Fentanyl into America’s bloodstream, provoking international incidents in Hong Kong, the South China Sea, and possibly in Taiwan. It will try to unleash its lackey DPRK to fire more missiles or conduct more nuclear tests, and these actions will have an effect. They will destabilize the global financial markets and cause some pain for Americans who are overexposed to them. They will also have effects which the Chinese government does not desire: they will expose, as they are already doing in Hong Kong, the vicious nature of the Chinese communist regime and they will hasten the flight of international business from China because image-conscious consumer goods internationals the likes of Apple do not want to be seen operating in countries that attack and murder their own citizens.
Tienanmen Square happened when China had almost no exposure to the outside world; today, an event of that magnitude would cause a slew of international consumer boycotts against Chinese manufactured goods, shutting off the influx of forex into the country. This is not something that China can afford.
This is the fate of a parasite: it can gorge itself on the host’s blood and grow big and fact, but in the end either both the parasite and the host or only the parasite will die. There is no happy ending in the parasite business. If there ever was a chimera, it was not Chimerica, it was Sinoglobus, a tick-like creature cobbled together by threads of corruption and power lust from Western globalist elites and Chinese communist leaders, both of whom do not give a rat’s behind about the fate of their own people, the very people who will now be stuck with the bill for the cleanup.
3 comments
With no special information but general alertness to world affairs, I have reached through inference alone almost the identical conclusions as the author. Especially, I believe he has correctly identified the corruption of the American elite in caring little to nothing for the continued success of our nation (taken completely for granted) or for the wellbeing of their fellow countrymen. They were willing to sell us all out only to act as the middlemen and take a small percent of the hundreds of billions of dollars in transactions that go in both directions between Communist China and the US annually. The one thing I disagree on is that China will now [slowly?] die. No, we have equipped China to be a world power technologically, economically and militarily and raised China to an entirely new level that it would never have otherwise reached. Now it will leverage that power for all advantages against the USA but even more so against its more vulnerable neighbors. Will the US have the staying power to persist in containing another communist menace with high technology and 1,400 million strong?
The powerful and dangerous Chinese military was paid for by the American consumer, through the annual $500 billion trade deficit that the U.S. runs with China.
Thetrade deficit has also caused U.S. jobs to be outsourced to China, resulting not only in lost jobs, but also reduced wages for American workers.
Both the Democratic and Republican parties have enabled this disastrous trade situation with China. It seems an act of God that the U.S. now has a president who is willing to buck both national parties and tackle the China trade problem.
It is urgent that Trump continue to raise tariffs until the trade deficit is erased.