Thread: Is Trump really pushing back against China’s quest for world leadership?

Is Trump really pushing back against China’s quest for world leadership?

By John A. Quelch
University of Miami
December 06, 2018 03:28 AM
Updated 16 minutes ago

The 90-day economic agreement with China on Saturday is causing havoc with the stock market, but it just basically kicks the can down the road. It is a trivial gesture in what will be a long war for world leadership on several fronts — economic, cultural and military.

As a director of Reebok in the 1990s, I voted to move production of simple sneakers to China. Korea would continue making the complicated ones.

How clever to outsource production to a low wage economy where workers had no rights and would work very hard for very little.

The Chinese, with faux humility, were grateful to become the factory to the world, sucking up the manufacturing pollution that Western countries could not tolerate. No one forecast the speed of Chinese progress. Instead of plateauing gracefully as Japan did in the 1990s, China’s economy has repeatedly outperformed western forecasts.

Rather than increased wealth spawning democracy, a grateful populace has accepted one-party rule.

Alarm bells were sounded and ignored. While military experts feared a rapid China arms build-up, U.S. multinationals profiting from access to Chinese factories and its large domestic market lobbied Washington into doing nothing other than complain about human rights abuses.

Meanwhile, Chinese investments of their trade surpluses in U.S. Treasury bonds created an illusion of cooperation and interdependence. The problem is that China is more than four times as populous as the United States and, in the 19th century, was a great trading nation.

Today’s Chinese, young and old, believe it is their duty to restore Chinese leadership and to earn the world’s respect. Unlike us in the West, they are prepared to work weekends to make this happen. And while we distinguish between the state, the military and the private sector, Chinese leaders do not. Industrial espionage is as valid as state spycraft, subsidies to state-owned firms are equivalent to defense spending.

That private Chinese company with whom you are negotiating a joint venture is likely partially owned by the military.

Enter President Trump. Like Peter Finch in the movie “Network,” he’s had enough and he’s not going to take it anymore. He’s pushing back against the long march of China towards renewed world leadership, slowing them down and maybe even turning back the hands of time. He’s taking a page out of China’s playbook by citing national security concerns to prop up strategic industries, as well as initiating the usual anti-dumping reviews. While Western leaders will never publicly support him, they applaud behind the scenes.

Following his G-20 meeting with President Xi, Trump has postponed for 90 days a 25 percent tariff on $200 billion of Chinese imports, about 45 percent of their total imports into the U.S. China, in return, cut tariffs on American-made cars and agricultural goods.

During the 90 days, negotiators are to agree on Chinese protections against intellectual property theft and forced technology transfer to obtain market access, opening Chinese industries currently off-limits to Western companies and allowing majority foreign investment in foreign joint ventures. China cannot afford to give all this up.

Trump may therefore be in the driver’s seat for now. China runs a $375 billion annual trade surplus with the U.S. so it runs out of goods on which to retaliate first. Trump’s unpredictability is rattling Chinese consumer confidence and strong Chinese consumption is essential to continued economic growth.

The current tariff disputes will continue unabated. They are skirmishes in the long war for global leadership that depends on the U.S. outpacing Chinese innovation in key industries like high-end chips, artificial intelligence and life sciences. U.S. universities still outstrip China’s but for how long?

China’s imitators are rapidly becoming innovators.

John A. Quelch is dean of the University of Miami Business School and vice provost for executive education.

https://www.miamiherald.com/opinion/...222706315.html

Trump will be in the driver's seat for as long as he's President, hopefully 6+ more years, because of who he is and how he operates. His motive was never to be President, he ran for President to fix our country because he knew he could and no one else would. Trump doesn't strive to be President of the World, he strives to be an effective results-oriented, fix our country, President of the United States. Trump doesn't care if the United States is the "world leader" or not, if that happens as a result of fixing our country and setting a good example to others, fine, but most Americans and none of our good President have ever striven to make the US the "world leader". Most Americans and our good Presidents have no such design because we don't want a "world leader", whether it's US or someone else . We prefer the dynamics of nation states, independent, doing business for the benefit of their countries, and working together when necessary such as in wars to defend themselves.

Has Trump himself become a "world leader"? He is a world leader, one of them, because he's President of the United States. Does he influence opinions of citizens of other countries and their leaders? Well, when you accomplish what he's accomplished for our country already and in such a short period of time against all odds and forces, people pay attention to what you're doing, what you're fighting for, what you're getting done for them, and when you win as much as Trump has won, I think there's a good chance that other countries will say to themselves, gee what have we been doing, we need to do what he's doing. If they choose to follow some and perhaps many of Trump's policies he has set for our country, for their own country, that would definitely be a form of leadership, possibly the strongest form of leadership.

On China trade specifically, the important negotiations that were conducted in Argentina with China, covered 142 trade issues with China. That's right, 142. And Trump got Xi agreement on those. Xi will need to gain approval and support from his home countries and Communist Party which apparently has been achieved once he returned to China and this was announced by China yesterday. The details and language of the deal still have to be ironed out and that is what the 90 day, now 86 days left truce period is supposed to accomplish. Will it be finalized? Who knows? You never know if you have a final deal until you have it signed. I mention the 142 issues, because that's the level of detail that this President pays attention to. He doesn't just want a fix of a couple of things for a hollow political victory, he wants a fix of 142 issues to permanently fix the entire business relationship with China.

It's no different than the US Mexico Canada Agreement, which was far more than an update or "modernization" of NAFTA. The only thing that's similar to NAFTA in the new US MCA agreement is it involves the same countries.

It took almost 2 years to do the US MCA that involved two neighbors with similar style governments. With China we're dealing with a country very far away that's run by the Communist Party, so it's going to take a little longer. How long it takes, is China's choice, Trump is firm on tariffs if enormous progress isn't made in the next 86 days.

It's a very exciting time in our country. I truly hope my fellow citizens pay attention to what is happening, so every American can enjoy and appreciate these fantastic moments of Trump History-Making as he fixes our country.