This was meant to be a debate about the “challenges of trade” (substitute for Trade War) between the US and China. But, it was quite clear from the beginning that this was not a debate at all. Perhaps a discussion then, it would have been as informative to hear both sides’ position on the big issues that will affect global prosperity, continued trade dominance by the US and even world peace. It turns out this wasn’t even a discussion between the two news anchors from Fox Business Network and The Point, CGTN. Today’s debate was an interview in fact. Liu Xin the interviewee who made it clear she is not a member of the CCP. She wasn’t gifted with a convenient list of questions in advance but she proved to be gifted with a quick mind and ample knowledge about the subject at hand. The self proclaimed “American girl” Trish Regan the interviewer, read from her prepared notes with a rather condescending arrogant manner, according to many viewers.
What was this about? A battle between two presidents, Trump and Xi by proxy ? A battle between East and West? USA vs China? Or was it simply a tit for tat spat between two female tv anchors? For many, it was about the escalating trade war between America and China, the two largest economies in the world in terms of GDP. For the two participants, it was perhaps about winning the hearts and minds of their viewers. For Liu Xin, she was glad it wasn’t a debate, she wanted a conversation, a meeting of minds that would allow her personal viewpoints to be aired. Facts that aren’t readily available in the West for the viewers to think, with open minds of course, so that we may have a better understanding of the complexities of the vexing issues. This is also her chance to dismiss the broad brush unhelpful statements made by her American counterpart that would only encourage bigotry and conflict. e.g. China, A state economy with unfair advantages? Well, 80% of China’s employment comes from private enterprise, not from the state. Misinformation and the information deficit in the US about China is the bigger deficit, more damaging than the trade deficit. Another issue: Intellectual Property (IP) infringements (and theft) by China, but this has never been denied by anyone. China have the highest applications for patents in recent years, they would be as concerned about protection of IP rights as well, perhaps even more so now. At one point, Trish Regan implied that the Chinese do not pay for using American IP, they simply “take” or steal. That of course isn’t true. According to China, China’s IP royalties paid to the US was US$3.46 billion in 2011, this year payments surged to US$27.4 billion to foreign entities, i.e 0.25% of GDP, coincidentally the same also for the US. In the US, IP rights used to last 20 years but now can be extended indefinitely (?) with good reasons or from minor variations. Maybe China can also unilaterally change their patent rights to last two thousand years and make the whole world pay for the use of paper and gunpowder. In 2015, Apple Inc was ordered to pay US$533 million after its iTunes software was found to infringe patents owned by Smartflash LLC. Last year, Apple Inc also lost a patent infringement case to VirnetX to the tune of US$595m. And, that’s just one American company. So, Trish Regan, it’s not just China that we cannot trust.
One major reason for Trump’s trade war against China is the huge trade imbalance between the two countries. A whopping US$419 billion deficit by the Americans just in 2018. Trump is attempting to force the Chinese to buy more from the US to correct this lopsided trade relationship. So, the champion of the free market economy no longer believes they can rely on the economic system of voluntary supply and demand with little or no government intervention. Trump reckons this trade war is an easy one to win, just hike the tariffs on imported Chinese goods until the Chinese are brought to their knees. The urghhling has not revealed to us so far that he understands it is the American people who will ultimately pay for the tariffs.
Of course, we ought not be surprised that the trade war is being waged. Qing China in the early 1820’s was the richest nation on earth, selling silk, porcelain and tea to the world. Between 1839 and 1860, the British Empire waged a trade war on China, due to the massive trade imbalance between the tea-loving Brits and the self sufficient Chinese who did not need much from the West. The Brits stumbled upon opium in one of their colonies, India and used the illicit drug to fix their trade deficit. When the Qing government tried to stop the illegal smuggling of opium into China, the Brits sent in their warships and bombed China. Tens of millions of Chinese died from the conflict that was the First Opium War. In 1856, the Second Opium War was fought to force the Chinese to open up even more of their country to the opium trade. Control of much land and many sea ports were ceded to the Western invaders. That was how the West justified and agreed to “Free Trade”. The lasting legacy of the Opium Wars, apart from the collapse of the Qing Dynasty and the rise of the Chinese Communist Party, is the reminder that China must not be weak again when they are strongest in trade. They will remember the scourge of the urghhlings.