By Nalliah Thayabharan

The US is going isolationist while China is going the opposite way, what an exceptional  phenomenon. China was happy to buy instead of making their own chips, but the US cut them off. So China has to develop chips by themselves. Once they do, the US chip industry will suffer greatly. Chinese think long term, the US thinks quarter to quarter. China is actually adapting with realities and pragmatism, they’ve incorporated/embraced the best essence of democracy, socialism, capitalism, Communism, meritocracy, and confucianism.

The more the U.S., EU and their allies push China closer to the edge of a cliff, the more innovative and more global China would be, and even be more self-reliant in economic development and defense. China was not born 248 years ago.

The US expected China to fold like Japan did just after the Plaza Accords. The US is now in uncharted waters and doesn’t know what to do except double and triple down on failed policies. People in the west still think they are the “world”.

Americans are only 340 million people in a world of 8 billion people. China does not need the USA as more than Americans think China needs the USA. Do Americans have a replacement for the Chinese Market?

China is not interested in a trade war. The focus of China is not on the US. China has a new trading system and a new globalization network.

The USA can only shut off one channel, but China will reshuffle the other pieces and they will realign. In fact thanks to the blockade internal drive has never been as high in China and you have an entire nation going after the cutting edge technology. The objectives of the US trade War were to reduce Chinese exports to the US and thereby reduce the bilateral deficit or to mitigate China’s Global position in manufacturing. In that sense the US has totally failed since trade wars really accomplish very little except to hurt the countries involved. Going beyond that there are also unexpected consequences which is that it’s really been a long march since the first trade war where Chinese companies have already been braced for this new uncertainty and it has set off a globalization frenzy among Chinese companies.

If we look at the data in many major sectors, the majority of these Chinese companies have either already considered or already implemented going Global plans and that would not have taken place as rapidly had there not been the first time trade or tariff war.

Moreover if we look at the data, Chinese exports really seamlessly flowed away from the US to other countries and that is why currently Chinese exports are back at pre trade war levels. Chinese exports as a share of Global exports have actually even climbed up meanwhile the US share is declining which means that China is even more integrated in the global economy than in the past.  It’s not just the US that is the only country which China can export. China has a huge Market in the developing countries. China is selling to Europe and especially with Trump’s incoming presidency the potential to weaken the ties with the US allies in Europe means that there’s an opportunity for China to embrace to strengthen and to reinforce these relationships and create new ones – that’s what US-China trade war has accomplished.

This is a new trading system, a new globalization network which is not static; it’s dynamic. We are seeing a lot of countries around the world against this background of US-China competition, signing up new trade agreements; building new trade partners; reinforcing regional trade ties; and so on and so forth as a reaction and this is also what China is doing.

There’s a reshuffling dynamic optimization in  trading networks, financial networks or Technology networks because in the end it is no longer just uUS and China in this world; it is really a global economy. For all of these tactics or strategies or restrictions, there are always unintended consequences to consider and China is not a place where they would voluntarily just submit to these aggressions like Japan and Germany but would actually react to it.

If we look at historical cases at either sanctions or restrictions or export controls or all kinds of barriers to another country’s progress has ever worked. In fact most of the time they have backfired in so many historical episodes including the Spanish blockade of Portugal, where Portugal built an entire navy thanks to the blockade.  

In China there is a massive reaction to the technological restrictions. China used to comfortably import semiconductors from the USA.  Now all that demand is given to domestic companies which are seeing more profitability, more capability and more scope to invest in research and development and it’s really just pushing them; forcing them to accomplish something that they didn’t need to achieve before.

Internal drive has never been as high in China and you have an entire nation going after the cutting edge technology – this is coming from central to bottom but also bottom up where the local governments work with private sectors and entrepreneurs and forcing the private entrepreneurs who are actually the driving force of innovation to do more and give them more opportunities.

The world is much better where technology can be to a certain extent shared for the advancement of the entire global economy but in this context it is not as easy to just stop a very rapidly developing big nation with lots of engineers and hardworking people with big market access. It’s not possible to stall it – in fact you can spur them to achieve more.

First of all, the Chinese government’s response is first let the companies decide right; if it’s a mutually beneficial thing; they will go ahead with it. That’s up to them; shouldn’t be imposed from the government. This is capitalism – you’re trading one thing for another which is trading technology for market access and Chinese companies understand that very well.

If you look at the EV sector or the batteries, Chinese companies are heavily investing in Europe-  they’re setting up factories and joining ventures; shifting some of the production or research centers – not into the US but in Europe and that is good for both the Chinese companies and for Europe.

China is not interested in a trade War; China is not interested in engaging in more economic financial confrontations with the United States because it’s not going to be good for China and it’s not going to be good for the US either.

The majority of China’s economic challenges remain within the country – it’s internal. It’s not external –  the focus of China is not on the US contrary to the dangerous obsession with China in Washington DC.

China is going to be the world’s opportunity meaning China is going to open up widely, deeply broadly and even unilaterally if needed. China is going to impose zero tariffs on the least developed countries. That is a symbolic gesture of a big country trying to be part of a global story trying to lift up other countries in the network as well. This is a shifting paradigm, both geopolitically, and economically speaking, China’s approach make as many friends as possible – a very different approach from the US with President Trump pursuing a more anti-globalist anti-multilateralist Global strategy.

China is embracing the opportunities to create more alliances, forge more partners, new trading partners, and new economic collaborative possibilities around the world and it’s trying to come up with new paradigms. There is scope to create this new paradigm among developing countries because China is being more sensitive to the needs of developing countries. It is a learning curve of how to pursue strategies that really is a win-win situation for everyone but China is still very much embracing that win-win possibility rather than the Zero Sum concept.

The sooner Europeans stop being Washington’s lapdog, the better off Europeans are. China only has one country to compete, and that is China itself.

When the US could just as easily cooperate and prosper together, why does Washington keep talking about going to war with China?  How many countries has the USA been in wars with in the last forty years, and how many has China been involved in? The biggest employers in the US are military industries. The USA will have to find a different soul if it is to choose cooperation over confrontation. Even though the US was so much more powerful as compared to Vietnam and Afghanistan, the US lost both wars because the Vietnamese and the Talibans were fighting to unite their country whereas the US military were there to fight somebody’s war. So when it comes to Taiwan, which is part of China, the US will not win for sure for the same reason plus the fact that the country is as strong, if not stronger, than the US right now economically and military-wise.

If we look at the amount of investments that China has put in the world class infrastructure, ports, airports, roads, rail and so on and so forth that China has built, that kind of world class infrastructure reaps dividends, plus the Chinese Communist Party in many ways one of the most meritocratic organization in the world and the quality of mind of key Chinese policymakers has never been as good as it it today. If you have a government which have a remarkably good minds taking advantage of a world class infrastructure, we all will see the possibility of China maintaining good growth there.

If anybody has any doubts about the capacity of the Chinese mind to do well, look at the exam results of the Chinese students in any leading American university. Look at the list of PhDs that the Chinese come to collect. You see the success of the Chinese intellectual. Western education was developed for the Western mind, but one thing many people haven’t noticed is that in the last 15 years when you take western education and combine it with an Asian mind including the Chinese mind, it has an explosive effect. So the Asian are thriving with Western education and inevitably this is gonna fuel the rise of China in a big way.

The probability is very clear that if you have a country with a 1.4 billion human population which is China and a country of 335 million which is the United States, if the average Chinese can perform at 25% the level of the average American, China will have a bigger economy. And I’m confident that the average Chinese person can perform more than 25% the level of the average American.

Why is Washington worrying about the rise of China? The western countries have dominated the world in a quite unfair manner for decades. Asian and African countries prefer working with Chinese companies due to more reliability and fairness. The West should rethink themselves, and should step back from Washington’s militarism, which developed away from securing economic development to securing exploitation. Taiwan reunification with Motherland China is inevitable. No one should interfere in their family affairs. The One China Policy is very clear.

US hegemony in Asia has been TERRIBLE for Asia. Let’s look at the record.

The Korean War – around 5 million Koreans killed in a tiny country and most of the buildings destroyed by saturation fire-bombing, only to return to the status quo, with no clear winner.

The American War in Vietnam – up to 4 million Vietnamese killed, again with massive bombing and defoliant use against crops with long-lasting effects (‘Agent Orange’). The war was started by the US after they thwarted the 1954 Geneva Agreements, which would have reunited the country by 1956 following the Viet Minh defeat of the French colonialists aided by Washington at the 1954 Battle of Dien Bien Phu. The US lost the war in 1975, but applied swingeing economic sanctions to Vietnam for many years afterwards – what a country! As is widely known, the neighbouring countries of Laos and Cambodia also suffered from devastating bombing and other war crimes committed by the US.

The US government and its allies, particularly Britain, acted to undermine and remove the government of President Sukarno, seen as too close to the USSR, leading to the ascension of President Suharto  in the 1960s and his thirty years of authoritarian rule. In the convoluted process, a massive genocide of suspected leftists and communists occurred, with around a million people killed. Vast numbers were also imprisoned and tortured without trial. These events have been largely covered up in western discourse.

China has never been a warmonger like the US. The people of Taiwan aside from the indigenous Ainu have full Chinese heritage – mainly from Fujian province, and each person/family have their ancestral home on the mainland.  It’s a deep-rooted cultural identity thing. War with Taiwan and spilling Chinese blood on both sides of the strait – NEVER GOING TO HAPPEN.

Also while China has been grumbling about Taiwan for the last 75 years, nothing happened and commerce just carries on, however the US and its acolytes would have you believe that China is about to invade Taiwan today and simultaneously go to war with Australia.  

The intended effect of this misinformation is threefold:  
1. to surround China with US military bases already in place to blockade China’s trade shipping routes in the South China sea,  a real threat. Look at what the US did to Iran….UN sanctions…
2. launch attacks on China from those bases,
3. keep selling enormous amounts of arms to the nearby countries because if they don’t buy and ‘China attacks them tomorrow’, the US won’t assist.  Sounds familiar?  It’s called extortion.

Australia then gets suckered into the AUKUS contract to pay billions for nuclear subs that will never be delivered, or if delivered, they’ll be defective and have decades-old technology.    Australia really needs to have a close look at its inept, short-sighted marriage to the US which is entirely capable of divorcing us at any time convenient to it and develop a wise inclusive foreign policy but of course it won’t.  

The US has adopted the one China policy, so why does the US want to defend Taiwan? Taiwan is a breakaway province of China, unification of Taiwan is unstoppable. China does not need to unify Taiwan by force. China could simply stop all trades (water, foods and essentials) with Taiwan and blockade Taiwan coast; that may achieve unification. The US has been waging wars all over the world because it is protected by a big body of ocean. With todays’ military might and capability, China’s supersonic missiles could reach the US. If the US decides to hit China mainland, China will retaliate by hitting the US mainland. It is a bloody no win situation for either party! The US Administration knows full well, but maintains the propaganda because US politicians want to make as much money as they can. They have basically lost faith with the US broken system! BTW, the US could not win over China in the Vietnam and Korean Wars some 50 years ago; How would the US win now?  The United States cannot win a war with China over Taiwan because the Chinese have very effectively developed the air and Maritime capabilities to deny the United States the capacity to project power to the waters around Taiwan which they used to take for granted now.

The US has relied on being the reserve currency but now the US itself is forcing countries away from its reserves by poor management and abuse of that status.

Western countries and the US Empire wouldn’t think in terms of win/lose.  China won’t “win” – China will thrive. To aim to “win” is entirely different from aiming to “thrive”.  To thrive isn’t about competition – the Western fixation. Thriving is about self-fulfilment.  To “win” is to stop when the opposition is bested.

It is much harder for the United States to preserve its primacy in East Asia. We’ve all been living with the rise of China for so long that we’ve stopped focusing on what a remarkable thing it is. Today China’s economy is 19% of global GDP whereas USA’s economy is 16% of global GDP. In 2035 China’s economy will be 24% of global GDP while USA’s economy is 14% of global GDP.

China’s economy is changing in composition as it matures and that really matters because throughout history strategic weight power does derive essentially from economic scale. Why was Britain the world’s strongest economy and the strongest power all through the 19th century because it had the biggest economy; why was America the world’s strongest power all through the 20th century because it had the biggest economy. So China is going to be the most powerful country in the world in the decades ahead. It’s the change in the distribution of wealth and power in the decades since the end of the Cold War which has been the biggest and fastest and most significant shift in distribution of wealth and power probably in human history.