Enter the Dragon – Made In China 2025
Trump’s Tariff’s…Now or Never
Most Americans have enjoyed our relatively fortunate lifestyle, when compared with those elsewhere in the world. In fact, on the world stage, according to the IMF, the U.S. is one of the top ten richest countries nominally, while the CIA reports our GDP per capita (ppp) as the 19th best in the world. We are the second largest economy only behind one…China. (Economic Output: China $23.1T, United States $19.4T, the European Union together $19.9T)
But if China has their way – this will change and sooner rather than later. Under the communist government, China was not an international trade participant until the 1970s. The ‘80s brought about trade agreements with China doubling their US trade exports (our Chinese imports) from about $50 billion in 1996 to over $100 billion by 2001, when they became a part of the World Trade Organization. At the same time, U.S. manufacturing dropped 34% from 1998 through 2010. We cannot complain really, as we have enjoyed our low-priced goods enabled by cheap Chinese labor, even at the expense of our more expensive American jobs.
However, now it is time for the adult conversation about how we have backed ourselves into an unholy alliance with the Dragon who is literally unequivocal about their path to global domination. The party is coming to an end, President Trump knows it and that is why he has taken the almost dogmatic stance he has… something I’m sure he sees as a necessity to protect America from a China that would rule the world.
I know, I know it seems overly dramatic, like something out of a science-fiction movie but like the Skynet of Arnold Schwarzenegger’s Terminator, China launched a national mass surveillance program named, you-guessed-it Skynet, in 2005 and has vastly increased this program to include 170 million cameras through 2018, according to Business Insider Australia. China’s social policies of censorship, unlimited data gathering and surveillance, leading to the Chinese Communist Party’s Social Credit System and individual citizenship scores are deeply intertwined with their economic policies because of their laws including their National Intelligence Law where “all organizations and citizens must support, assist with, and collaborate in national intelligence work…” and their National Security Law which makes clear that China must defend its security interests everywhere including China’s interests in the global economy.
Their economic initiatives are even more telling. In 2015, they introduced their Made In China 2025 initiative, the path to moving their economy from low wage electronics assembly, clothing, and footwear manufacturing to a globally competitive player in telecommunications (think Huawei) and information technology, advanced robotics, next gen cars, aerospace, and artificial intelligence. This shift from a low skill, low wage labor force to a global competitor of sophisticated engineering and manufacturing will bring the country’s per capita GDP in line with the West. China’s middle class alone will exceed the entire US population by 2026. Not only is this a threat to our now American way of life, because there will be no more cheaply assembled goods coming from a low wage China, but their rise as a competitor in these industries is deeply threatening to our American multi-national corporations. Not because America cannot compete shoulder to shoulder with China, but because China cheats to get where it wants to go.
The Council on Foreign Relations August 2018 report outlines how China will provide hundreds of billions in subsidies and tax breaks, with state controlled financial institutions providing low interest financing, the awarding of lucrative contracts to Chinese companies granting access to the Earth’s most populated country at 1.4 Billion, while concurrently requiring foreign corporations to create joint-ventures with Chinese companies in order to acquire access to the Chinese market. Such joint ventures require the dissemination of proprietary and sensitive trade secrets – the so-called forced transfer in order to gain access to the Chinese market. They also acquire trade secrets through outright acquisitions, valued at $45 billion in 2016 alone. All the while, they walk a very fine line with the World Trade Organization as they use their per capita GDP to depict a ‘developing’ nation, entitled to practice some trade protectionism while simultaneously stating that Trump’s tariffs are meant to contain their rise as a global economic superpower.
But their plans go even deeper. In March 2018, the mostly symbolic legislature approved the repeal of presidential term limits allowing all-powerful President Xi Jinping to rule indefinitely. Government supported Huawei, the world’s second largest cell phone manufacturer behind Samsung (Apple recently moved into 3rd place) and a global leader in 5G technology, is an integral part of China’s 2025 plan. FBI Director Wray has stated that Huawei’s smartphones can carry out “undetected espionage” and “steal information” with the US now banning them from all military bases. Huawei’s promotion and implementation of their 5G technology to countries around the world expose such countries to potential undetected and unlimited data sharing with the Chinese Communist Party and, according to the Epoch Times, the Party’s ‘One Belt One Road’ infrastructure program includes exporting China’s model of totalitarian governance. Protectionism, forced transfers, espionage, coupled with their censorship, mass surveillance, citizenship scoring, and their outright explicit goal of global domination makes them the DRAGON they are.
Many have complained about the disruptive impact Trump’s tariffs have caused American companies (like Apple in its downward revenue revision), the impact and potential impact of interruptions in supply chains, and the market volatility caused by an escalating tariff for tariff exchange that only America can win because we import nearly $400 billion more than we export. Realize though, that we have already been where China is going – we have already traded most of our manufacturing for a next generation economy with many of our factories having been shuttered for a long time. Once China does the same, who will supply Walmart with our cheap wares…will our American companies still dominate the world stage…? Understand this, knowing what we know about China, our acquiescence to the status quo now means America will be guilty of contributing to their continuing rise, very probably too somewhat of our own demise. So, President Trump… please deal away and get it done.
* Rebecca’s article was featured in Fox Business! Check it out below –