By Rei Tanotsuka, 31 August 2019
“At all events, the last barrier between China and ruin was removed by the Chinese themselves.” Drugging a Nation The Story of China and the Opium Curse
The sky is falling, the sky is falling……only on China!
Know what? Ever since China joined the WTO in 2001, I don’t think she’s slept a wink without wearing an amulet around her neck to ward off the evil eye, the Kennedy and the Hope diamond curse. Whaaaaat, you say? What has the Kennedy and Hope diamond curse got to with China? My retort is, what vicissitude in life isn’t accredited to China these days????
Trump starting the noisome trade war? China’s fault!
Disregarding the fact that Trump only won through electoral votes, his dyed in the wool Republican fanboys, succour his whimsical Twitter lashings with continual praise to encourage his Pinocchio syndrome.
After Trump, at the latest G7 meeting in Biarritz France, pompously declared a milestone victory with his claim that China was just gagging to come back to the negotiation table through a discreet weekend call, we get this:
“Regarding the phone call in the weekend, I am not aware of that” says the Chinese Foreign Ministry spokesman, Geng Shuang. When questioned about this, Trump replies, in true mythomania style ” I don’t want to talk about calls…”
Why Trump would think he has China by the baby breeders is beyond commercial logic.
This report, done by 3 economists at the National Bureau of Economic research, holds this conclusion on Trump’s slam dunk, easy to win, trade war.
“Overall, using standard economic methods, we find that the full incidence of the tariff falls on domestic consumers, with a reduction in U.S. real income of $1.4 billion per month by the end of 2018. We also see similar patterns for foreign countries who have retaliated against the U.S., which indicates that the trade war also reduced real income for other countries. “
According to this trio, each wave of tariff that Trump bestowed upon China to rip its economy asunder, losses steadily accrued to the US instead. By the 6 tariff wave on the $200bil Chinese exports, we reach a welfare loss of $1.4bil per month in the States.
Import tariffs costs U.S. consumers and importers of foreign goods an additional $3 billion per month in added tax, in addition to the $1.4 billion dollars per month in deadweight welfare (efficiency) losses.
” If we were instead to assume that U.S. government cannot generate social welfare benefits equal to the tax payments they receive, the losses to taxpayers could rise by as much as the full value of their tariff payments: $12.3 billion.”
But the trade war is done to thwart IP theft you scream!!
The oft cited figure of $600bil as the cost of brain snatching, is not worthy of quote for any serious academic. The figures regularly quoted in the media from $225bil to possibly $600bil are estimates based on these 2 situations:
- $225bil is based on the cost of narcotics trafficking
- $600bil is equated with total R&D spending by the US per year, on the premise that China fully steals everything, every year!! Yes, plain obtuse logic.
What we should really do, is look at what has happened in the past to conjecture the possible future damage. IP royalties China concretely paid to the US in 2017 was $8.3bil. If we go ahead and say China agrees to increase royalties by 25% because Trump turns out to be a prized negotiator, instead of a turnip with a flaxen mop, it would still take America 3 years to make up for the welfare losses incurred in the 2018 trade war.
If not IP issues, how about bringing jobs back?
If the average steel and aluminum worker gets around $52,500 per year and the welfare loss per job costs $195,000, it still takes almost 4 years to break even. This is based on the optimistic outcome of being able to bring back the 35,000 jobs lost in the past decade.
So, what is the point of Trump’s banal trade war? An internecine display of what unaccountable ego tripping looks like? If you are wanting for a China collapse, you gotta play harder than this!
China’s haunted…..Ghost cities!
A spectre is haunting China – the Spectre of infrastucturalism…..
Ever since China became the World’s manufacturer, the powers at the upper echelon of developed nations have been pining for China’s ‘imminent’ fall. The fact that the nascent Shen Zhen, Xi’an, Dongguan among others, all had humble beginnings and went from agricultural to ghost city to finally, a modern developed economy, does not quell the ill wishers desire see China hang its head in shame and sport a T shirt with ‘Kick me’ emblazoned across the back.
This is Shenzhen in the 80s.
This is Shenzhen now.
China will inevitably make mistakes, this is concomitant with eventual success, but why are we still making the same inflammatory accusations, and hebetudinous predictions on a pending collapse, when we have seen this sequence of events multiple times? China has been using this model for growth since the 80s!
Build the city, open the economy, fill the vacant buildings and homes with occupancy from employment in that region.
China currently still has 450mil living in abject poverty in the rural areas. A basic Google search will tell you that the percentage of people in agriculture in developed nations, hover around the 1%-4% mark.
Let’s take the midway point and use 2% on China’s 1.386bil people and add in a few more people for a healthy buffer, which means we would need to retain around 3mil people in the agricultural sector. This gives us around 447mil people requiring a life makeover.
I have not scoured the net extensively to search for an undisputed figure, but have seen the ’50 mil empty housing’ number being touted in the media to qualify this ghost city pandemic. Even if I am quite wrong and only half of the 450mil need to make the exodus for rural to urban life, 50mil vacant lots are still inadequate to house the hordes clambering out of poverty. 220 mil people, separated into families of 3 people each, will still require over 70 mil apartments.
Anything can happen, that’s true, but if being ‘smart’ means being prescient, and being prescient means having sufficient knowledge of the past to make a realistic prediction, then my money’s on the Ghost Cities not being a major economic hurdle. Sure, there may be some areas which prove to be spectacular failures, but the overall strategy, I would deem to be a success. click here to watch a couple of White guys talking about ghost cities.
My pants are falling…..do I need One Belt???
“The society that puts equality before freedom will end up with neither. The society that puts freedom before equality will end up with a great measure of both” ― Milton Friedman
Do you know what I love most about Western intellectuals? They are stupid.
Look at Friedman, he who snagged a Nobel prize for destroying Chile………Ah, how judicious the West is, especially America! I feel a theme song comin’ on! “O say, can you see, there’s an oil field in sight….”
Let’s look at the ‘equality before freedom’ argument, leading to the attainment of neither as espoused by Friedman. Freedom means, that A BIG ASS BULLY can squelch dissent before it can squeak out an opinion, HOW ON EARTH can that lead to equality, when some participants are literally killed?
This is what happened in Chile under Pinochet (US backed muppet), who brought in Friedman’s free market economy with a titanium fist! William Simon, then US Secretary of State, congratulated Pinochet for bringing “economic freedom” to the Chilean people.
Air is free, markets are not. Why? Markets are man made!!
High speed railways are not a scion of wishful thinking, they require careful planning with all variables of the economy and local politics considered. You don’t just catapult some steel to barren landscapes and chant ‘Let there by rail roads!’.
Why there is derision by naysayers regarding the One Belt Initiative is incomprehensible. This project involves many countries, which mean benefits accrue to a large geographic body, in essence, democratising trade through free usage of the railways once completed.
The Eurasian land patch comprises of 40% of inhabitable lands, and is home to 75% of the world’s population. Around 88 countries are situated in Eurasia, and three quarters of the world’s energy resources lie dormant in the region.
Wait, do I need an IQ of over 200 to see that One Belt is basically a risk free, long term project? No, I just need to be smart enough to detect rain! Do you understand the HK riot movement now? Umbrellas are utilised in any damn weather according to the rioters, which means, yes you guessed it. They can’t detect rain!
The only drawback would be an actualised military war. The chances of that happening are near zero, because with Russia and Iran forming China’s squad, MAD (mutually assured destruction) is guaranteed. America is bi polar at best, and belligerent at worst…..it is not, suicidal. Once developed, Eurasia will be THE COMMERCIAL HUB for the next century.
Turkey and China are in discussions to build a joint high speed railway link running from Kars (near Armenia), through Turkey to Istanbul, connecting to the Marmaray under the Bosphorous strait. This will eventually lead to the EU via Greece and Bulgaria.
“Recognizing China as the fastest-growing country in developing high-speed rail and the leader in the world in terms of its length of high-speed line, the TCDD said, “It is always possible to cooperate with China in the construction of the railway lines that are planned.” click here to read article
The second Eurasian Land Bridge was completed in 2011. This runs from the port of Lianyungang with Rotterdamn, Port of Holland as the destination. This land bridge covers an extensive part of the undeveloped Chinese provinces, home to around 400mil people. Economic opportunities loom.
A third Eurasian Land Bridge is in the pipelines,
“The third Eurasian Land Bridge will cross 20 countries in Asia and Europe and have a total length of about 15,000 kilometers, which is 3,000 to 6,000 kilometers shorter than the sea route entering at the Indian Ocean from the southeast coast via the Malacca Straits. The total annual trade volume of the regions the route passes through was nearly US$300 billion in 2009. Ultimately the plan is for a branch line that would also start in Turkey, cross Syria and Palestine, and end in Egypt, facilitating transportation from China to Africa. Clearly the Pentagon’s AFRICOM and the US-backed Arab Spring unrest directly impacts that extension, though for how long at this point is unclear.” Read this wonderful piece by one of my favourite geopolitical analysts William Engdahl
The sky is not falling on China, any more than it’s falling on America…..
I personally, do not foresee any major hindrances to China’s ascension to the very top, a place traditionally held by China and India. Western rule, is but an aberration in a long history of the East holding the helm.
Unfortunately, the disturbances in Tibet, Xinjiang, Taiwan and Hong Kong prove more problematic than anything the West can throw at China.
The modern China is much more urbane and sophisticated. Unlike her mother who prided herself on the string of pearls given to her, contemporary China sees to it that she create her own string of pearls!