There is always a price to pay for security in a democracy, albeit through the blood and tears of battle, or now perhaps in protecting our economic interests. China’s Belt and Road Initiative (BRI) is little more than a disguise to present itself as opening up to the West. The desperate countries of Europe will sign on to allow the Chinese to march through their land, as they have no economic choice. An Obama-era regime would not be prescient in this matter. One only need to look at the $1.8 billion that would have been put on pallets in cash and given to Iran. Point being, you would not be hearing about China in the news night and day, day and night. Their ancient desire of conquest is millennial, and would have flown over any other administration. America should be able to agree that maintaining its sovereignty without going to war would always be the better decision. So now we are fighting internally over ostensibly the control of the world economy. This is the first victory for the Trump administration. A non-physical war.
Despite the polemic rhetoric thrown at you by pundits who don’t know the supply line from the demand line on the axis of economics, there are some that do. We know the world’s second largest economy is growing slower of late, and it too has an issue with mounting debt and corporate defaults. Patti Domm of CNBC (Not NBC) reported that, “China’s growth could be slowed next year by as much as 0.6 percent due to tariffs, and is likely to take a bigger hit to its economy than the U.S. from the escalating trade wars because of its much greater vulnerability to exports.” In a manner that even Alexandria Ocasio-Cortez could understand (maybe), if 4 ships leave China for the U.S., and 1 ship leaves the U.S. for China, each with the same tariff, China will pay 4 times more. Remember, 2 plus 2 does not yet equal 5. Ethan Harris, the head of global economics at Bank of America Securities, explained that, “If you put tariffs across the board on both countries, it’s a four-times bigger hit to China because they export four times as much as they import.” Joe Biden will need to know that math will be involved with being a President.
Sanctions are effecting monetary policy in regard to the Fed and the Peoples Bank of China (PBOC). President Trump has always asserted that the Chinese manipulate their currency to make them more competitive internationally. Trump is still pounding that theme, relentlessly attacking the Fed to lower interest rates to offset what the Chinese are doing. Unlike the PBOC, Chairman Powell and the Fed have stressed that they will make moves independent of any political considerations. Meanwhile, back in Beijing, Chinese Premier Li Keqiang warned that China is facing a serious unemployment situation this year, with 15 million jobseekers expected to enter the market. The U.S. wins again here on the labor front. Another notch for the Trump administration.
Capitalism will win this go around with Chinese communism. China only seeks entrepreneurial success to better control those that gain it. Don’t think for a minute that from the Chinese perspective this isn’t all about ideology and the dogma of Chairman Xi and Mao. The lemmings in the U.S. still think it’s about how the prices at Walmart will go up on that summer above ground pool that they have to have. It isn’t. As put forth by Jack Burke in the National Review, “America is facing a challenge to its preeminent place in the community of nations from an ascendant China, much as traditionally free-trading Britain faced such a challenge from the more protectionist German Empire at the turn of the last century.” The question is then postulated by asking does economic development correlate to representative republics in the decade or so to follow. History in the West would say yes, but it is an unequivocal no in the East.