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Handling of U.S. trade dispute causes rift in Chinese leadership: sources (reuters.com)
94 points by microdrum 7 days ago | hide | past | web | favorite | 79 comments





One good thing that could change from the tariffs is finally breaking the forced sharing of intellectual property with Chinese companies before allowing production. That was supposedly going to end around the end of 2018 already. A second positive change would be ending requiring selling a part of any foreign venture to a local Chinese company, which I don't think was planned to change. But the overall idea that trade deficits were generally bad for the us is a silly idea, so wrong.

The us has done a terrible job helping workers find new employment when their old factory or similar manufacturing jobs were lost to another country. It's hard to see how we'll ever do a good job on that because half the country has an ideological resistance to helping each other (social security, medical insurance, a job, those are all things we should make on our own). I can't see that these tariffs can ever bring back many factory jobs to the us. We need a strategy to find new jobs and industries. The current plan is just not going to accomplish much of anything.

But, and it's a big but, lets not forget that trade between countries has a good chance of reducing the potential of wars between them. I really believe that extensive international trade between the us and china will have a good tampering effect on potential war between the two countries. Chinese building of military bases in the south china sea against the wishes of your neighbors and and asserting your power won't help anyone to trust china, but when there was extensive and growing trade between the two powerful countries war should be less likely.


Saying the other political party has “ideological resistance to helping each other,” is ridiculous. That kind of bigoted dismissive ignorance just fuels our bitter partisan gridlock and helps nothing.

Of course are fringe nutters in the world and unfortunately some of them even get elected, but the vast majority of Americans, Republicans and Democrats, are just ordinary people who care about their kids and their neighbors, want to see everyone prosper, and even agree about a lot more than they disagree about.


But Paul Ryan, leader of the house, wants to cut social security, medicare and medicaid. He's against unemployment. He's the titular leader of 1/3 of the govt. That's not an exaggeration, those are his stated goals in multiple interviews over many years. I agree that the vast majority of Americans want those things but the leader of the house does not.

He's not just a fringe figure that managed to get elected but has no real power.


But Paul Ryan, leader of the house, wants to cut social security, medicare and medicaid.

I don't think that he's against helping people. Rather, he thinks that those programs have long term externalities which outweigh their benefits. We're talking about actual people here, not villains from a 60's cartoon.


Good point, in fact there's plenty of folks on the other side who would like to replace all these programs with a more efficient system (aka basic income).

I think that is extremely unlikely. If you were to have a scale of the volatility of security where a zero is potentially being entirely on your own and a ten is a very modest utopia where everyone can perpetually live like a student then functioning universal basic income is probably an eight. Much of Europe today would be around a five, with the Nordic countries maybe a six. The US, being unique in many regards when it comes to developed countries, would today overall be a something like a three. Without even the most basic assistance it is probably a two. You don't just go from a two to an eight overnight. It is just so far from what exists today that it is a pretty safe bet that a functioning universal basic income system is never going to happen in the US.

a zero is potentially being entirely on your own

I met some people in Alaska who were trying to approximate this.

a ten is a very modest utopia where everyone can perpetually live like a student

I guess some people historically would see it as a utopia. One's perspective changes with age and life experience. Some would find it depressing.


> I guess some people historically would see it as a utopia. One's perspective changes with age and life experience. Some would find it depressing.

Most people in the world, if not the US, spend at least five days a week working to have even far less then that. I would put a true utopia, with e.g. the good parts from unlimited free energy, at a hundred or more on that imaginary scale.


I would put a true utopia, with e.g. the good parts from unlimited free energy, at a hundred or more on that imaginary scale.

Sure. I'll have that instead of the 8-ish student life.


> half the country has an ideological resistance to helping each other

> I agree that the vast majority of Americans want those things

I had to double check that this was the same username. You seem to have disagreements with yourself. Which comment is the accurate one in your eyes? Either way, lumping half the country into one harmful ideal, then not apologizing or explicitly admitting you were initially wrong to do this or actually believing it, is not ok.


I don't think it was meant to be a reversal, and I don't see it as one.

It's a claim that half the country holds inconsistent beliefs - wanting things for themselves which entail people helping each other, but being ideologically opposed to the mechanism.

You may disagree, or consider it exaggeration, but it doesn't seem to be incoherent as a claim.


Half the country and half the people are not the same thing. Someone told me that the US voting system is designed to make sure more populated regions (e.g. big cities) don't overrule the less populated parts.

There is no mention of "half the people" and definitely not worth the pedantic differences here on a large generic statement.

That doesn't mean that Paul Ryan (or 'half the country') is against helping people. He thinks that government programs aren't the way to do it.

Then what are his ideas on the replacement? Because all we ever hear are," these are not good programs, they need replacement." We still haven't heard about the replacement.

A similar question one might ask is, before we offshore all of our labor do we have a decent, actionable plan to replace the jobs?

> The us has done a terrible job helping workers find new employment when their old factory or similar manufacturing jobs were lost to another country. I can't see that these tariffs can ever bring back many factory jobs to the us. We need a strategy to find new jobs and industries. The current plan is just not going to accomplish much of anything.

....and similar opinions identify a problem, but this manner of thinking where people say we'll "just" find new jobs (it worked out in the past few hundred years, therefore it is guaranteed to continue working indefinitely) is irresponsible, as is pointing out the simplistic isolated fact that "it's more efficient" to offshore jobs. Thoughtful, responsible leadership listens to all opinions, and considers all consequences, before rushing headfirst into incredibly transformative change in an extremely (on a relative basis) short period of time.

Indeed, many things are getting so much better for millions of people around the world. But if one takes a calm, unbiased look under the covers, some potentially very serious cracks are starting to appear economically and socially. I'm not a huge student of history, but I know enough that sometimes seemingly good and stable systems can destabilize very quickly.


I'm only vaguely familiar with Ryan's plans. However, he very plainly lays it all out on his site.

He is extremely clear in his language about Social Security.

"As Speaker of the House, one of my top priorities is to preserve the Social Security safety net and make sure the program remains solvent for future generations."

https://paulryan.house.gov/issues/issue/?IssueID=12227


So nothing concrete then. I've read the statement and it doesn't explain anything. Though, it appears everyone has backed away from privatization from the go-go fast days of the early aughts.

The way I see it they can either cut entitlements and piss off their retired voters or they can make the young pay more and piss off their working base.


By their statements, Republicans like Ryan say they want to save health care and social security for all. But by their actions, they just want to kill those things. As far as I see, they never work on the replacements. Like the dozens of votes to kill Obama care. Please also spend time on doing the new thing. You control the house, senate, and white house. You can pass legislation now. Just negotiate with 8 democrats in the senate and you can pass anything. But they don't, because they don't really want to replace these things.

The only thing that fuels partisan gridlock is a refusal to hold the parties responsible for their moral failings, including and especially Congressional Republicans' ideological resistance to helping each other.

There are a great many Republican voters who support social safety nets and yet continue voting for the party that is ideologically opposed to them. Continuing to pretend this doesn't happen, as you propose, cannot fix the problem.

(Note: My comment is in response to your comment about the parties. I cannot and will not defend GP's comment as applying to "half the country," as I think this is overbroad.)


>A second positive change would be ending requiring selling a part of any foreign venture to a local Chinese company, which I don't think was planned to change.

It was not a requirement for many many years already, and before that on case by case basis.

The list of industries in which it is still a requirement is well known.

On Qualcomm and NXP, that's kinda bizarre - nor Qualcomm, nor NXP is a listed company in China, nevertheless, China orders a block on merger of their units in USA.

But were they not be compliant, they could've fared worse: remember Sigmatel, they tried to bully a Chinese competitor with patent trolling, but instead got shipments of their chips tracelessly vanishing at Chinese customs. That was a death sentence for them as a company: it doesn't matter that they were selling chips to foreign companies for as the final product was assembled in China


> But, and it's a big but, lets not forget that trade between countries has a good chance of reducing the potential of wars between them.

Was this ever true? The old saying, "If goods don't cross borders, then troops soon will."

Europe was very commercially integrated before WW1.

I think nukes are what will prevent a war.


Nukes cannot prevent war as long as military higher ups believe that a nuclear war is "winable"/surviveable, and seeing as they get special bunkers in the event of said nuclear war, I don't think they will smarten up any time soon

I really believe that extensive international trade between the us and china will have a good tampering effect on potential war between the two countries.

The article could be interpreted thus: Extensive international trade between the us and china will have a good tampering effect on trade war between the two countries.

Chinese building of military bases in the south china sea against the wishes of your neighbors and and asserting your power won't help anyone to trust china

The long term plan of US strategic planners is to keep China bottled up behind their coastal waters with the help of Taiwan, Korea, Japan, and other allies and neutral parties who want to avoid Chinese hegemony. As a distant hegemon, the US is much preferred. On the other hand, China wants to realize the Greater Asian Co-Prosperity Sphere envisioned by pre-WWII imperial Japan, but with China as the head and local hegemon.


It seems to me that these tariffs really do make sense regardless of political orientation. The big difference between Chinese and American labor is that we place a much higher standard on human and worker rights. Chinese workers manufacture e.g. $1000 iPhones earning literally a few dollars a day, living in on-site dormitories, all the while surrounded by suicide nets to try to deter the frequent suicides.

That's obviously not a great situation. Yet we, as in American companies, vastly incentivize such systems by shipping trillions of dollars worth of production to China. So we pride ourselves on more humane standards, yet send trillions of dollars to the lowest common denominator on labor that's a hair's breadth above slavery? This never made any sense to me.

I think free trade is a great idea when nations are comparably developed with comparable values. But when you have asymmetric value systems, you just end up greatly rewarding the lowest common denominator while hurting the nations that place a greater value on labor rights.

Anyhow, glad to see the effect of these tariffs is almost certainly going to end up favoring American interests, and perhaps even the Chinese people as well if I can be allowed a bit of optimism.


> The big difference between Chinese and American labor is that we place a much higher standard on human and worker rights.

I used to believe this until I read up on how prisoners in the US basically work like indentured servants for pennies.

There's a few news articles and occasional "anger" at the situation, but I read about it 15+ years ago and nothing has changed.

It's not like the average Chinese person is against human and worker rights. If you talk to them, of course they will say they value it.

It's just those in power don't care. And those that do care, don't have the power to change anything.


Most of the prisoner work programs are optional. Same with foreign labor, yes working conditions are not optimal and there are improvements that could be made.

However having an an alternative option is almost always better than not having that option. This problem may be best solved by actually making it easier for companies to participate in prisoner work-release programs, thereby increasing competition and driving up prisoner wages.


> That's obviously not a great situation. Yet we, as in American companies, vastly incentivize such systems by shipping trillions of dollars worth of production to China. So we pride ourselves on more humane standards, yet send trillions of dollars to the lowest common denominator on labor that's a hair's breadth above slavery? This never made any sense to me.

That's because American capitalists _don't_ value human and workers rights. And to a large degree, the American labor movement doesn't either - as long as it can escape the oppression of the American capitalists at home and have cheap consumer goods as a result of the export of capital to poorer countries.

The only ways to alleviate this within the capitalist system is to either decrease the mobility of capital, or increase the mobility of labor (i.e. immigration). Unfortunately, neither of these are in the immediate interests of the American working class.


Even though I disagree I think these are reasonable arguments. I'd like to present what I think is the other side of the case:

First regarding wages. I think Foxconn is around $2.50/hr. The suicide rate is actually lower than the national average I think, they are just the size of a small city so it's likely to happen (from mental illness). The nets seem to be them fighting bad publicity in a tone-deaf way that also generates bad publicity (and hopefully saves some people too).

Of course, Foxconn is famous and gets more scrutiny. I'm sure other factories in China are worse. But, these people are probably not quitting their high-paying jobs to work in a factory. If they lose these jobs, they will probably not be better off! As the economy has been developing, wages have been going up in China, and more factory jobs have been moving to Bangladesh, Vietnam etc. But this has been due to economic development in China, not a trade war.

I've only been talking about if it hurts the Chinese factory worker so far. But let's look at America.

The Chinese factory worker is not literally being payed in dollars that are leaving the country. He is payed in RMB. When a dollar 'leaves' the US, someone is trading it for RMB. Now someone else owns the RMB and someone else owns the dollar. But the dollar generally stays in the US.

So why do we have a deficit with China? It depends on what happens to that dollar that stays in the US. If they (overall) spend it on goods and we spend it on goods, it would be in balance. If they spend it on accumulating a big US bond balance and we spend it on goods, that is the trade deficit.

Now, this is similar to how banks work. When you put your money in the bank, it doesn't disappear, it is spent again by someone borrowing it. And when you buy a bond, the company or government can invest that money how it likes.

The important thing is that China does not necessarily 'win' by doing this. US bonds pay very little, China might lose money overall. And for a while now their government has been doing the opposite (selling US dollars in order to keep the currency up).

On a side note, most of the 'China' deficit is actually from other countries in Asia and just passing through China. For example, for an iPhone, the screen and CPU are much more valuable than assembling it, and those pieces are coming from Korea, Japan etc. It ships from China but most of it is not "made in china". And of course, most of the money goes to an American company.

Hopefully I've at least managed to convince you that it's complicated.

The good news is it doesn't seem to be a 'race to the bottom', at least for countries with separate currencies. In theory, if China allows strip mining and has an advantage there, that will make their currency more expensive and give their engineers a disadvantage.

Edit:

To be clear, I'd like to see human rights improve in China (and many other places). I'm just not sure trade is what is stopping that, it seems like if Foxconn shuts down the employees will just take lower-paying jobs under worse conditions and they'll open a factory in Vietnam or automate it.

One last note about jobs in the US: I don't think economists view there being a fixed number of jobs - if there is more unemployment, the government can (via fiscal or monetary policy) step on the gas more without generating inflation. Of course, there is the problem that the jobs that are created may not be in the same location or need the same skills (and the US shares a currency, so there aren't the same self-balancing factors). Then that ties in to housing policy in the cities where jobs are being created, education etc. But these are things we can improve (although we probably won't).


My own view:

It is "a not a secret secret" that a lot of party higher ups covertly own big parts of Chinese industry, including export oriented ones.

The squabble is about them being caught in the crossfire. Their message: "make peace with USA for as long as we make money." Now the talk is over them being thrown under the train. Naturally, they are frustrated by that.

I want to remember that Xi Jingping himself came to power on the promise of "making party membership great again" and rode the wave of anger of minor and midtier party bureaucrats over them being sidelined during Jiang and Hu's eras. But now, he himself is busy throwing its own "powerbase" under the train.


Maybe so, I don’t know. One thing is sure. Clinton’s and W’s and Obama’s illusion that eventually China would follow the example of free trade some day because that was the supposed natural progression has led to this dispute that had been brewing unattended for decades.

Xi seems to have overplayed his hand over the past few years. Instead of China quietly amassing power as it had done since the early 90s, Xi pushed China into a much more assertive role before it was necessarily ready.

The US and others had looked the other way on China’s mercantilist actions in the past on a strategic gamble that China would slowly evolve into a more democratic state, with open markets, freedoms and rule of the law. This strategy had worked out well with South Korea and Taiwan as they made their transitions from poor dictatorships to wealthy democracies (and peaceful US allies).

During the reign of Xi’s predecessors this did seem to be a possibility but Xi’s policies and perhaps most importantly his ascension to President for Life ended any illusion that China would make this sort of evolution.

The Made in China 2025 program for example explicitly codifies what many had long assumed - that China is directly targeting the most advanced foreign industries with a state backed industrial policy.

With China moving away from even playing lip service to liberalization and now directly threatening US/European interests with Made in China 2025 and other initiatives, there is no longer any reason for the US to play nice with China.

Frankly if China had simply continued quietly moving forward as they had under Hu and made perhaps some nominal reforms or concessions they probably could’ve continued their plans unabated.


> ...South Korea and Taiwan as they made their transitions from poor dictatorships to wealthy democracies (and peaceful US allies).

If I'm not mistaken, both these countries became wealthy during the dictatorship period. It was only after the stability and wealth that they become democracies.

Taiwan's first democratic vote was in 1996 and South Korea's first public election was in 1987.


Yep. They were also basically peaceful US allies at almost their onsets.

> The US and others had looked the other way on China’s mercantilist actions in the past on a strategic gamble that China would slowly evolve into a more democratic state, with open markets, freedoms and rule of the law. This strategy had worked out well with South Korea and Taiwan as they made their transitions from poor dictatorships to wealthy democracies (and peaceful US allies).

One important difference is that both Taiwan and South Korea have been continuously dependent on US military protection from WWII until now.


I agree with many of your points but I do take issue with one: "during the reign of Xi’s predecessors this did seem to be a possibility but Xi’s policies and perhaps most importantly his ascension to President for Life ended any illusion that China would make this sort of evolution."

It may look like that to us now, but these things have a way of unraveling themselves faster than we expect. Xi is 65 and it's unlikely he'll try to hold on to power for more than the next 15 years. China's GDP/capita is currently right around where SK and Taiwan's were when they switched to democracy. And SK, Taiwan, and Japan all have tried, in many ways succeeding, to have their own advanced industries - it didn't spell the end of the world when they did so.

Dictatorships often crumble suddenly, and China is still on the approach of the trajectory that SK and Taiwan followed. For that reason I think it would be silly to write off China just yet.


I always found the leaked reports on Xi were fascinating [1]

> Xi is apparently painted by US officials as an elitist ‘who believes that the offspring of Maoist revolutionaries are the rightful rulers of China.’

> On the question of human rights, the cables apparently have little to say on Xi’s views, but they do note that his father was critical of the crackdown on the Tiananmen Square protesters and also that the Dalai Lama apparently had ‘great affection’ for Xi’s father.

> There’s also mention of Xi’s now notorious (and not very diplomatic) outburst during his trip to Mexico a couple of years ago, when he complained to some overseas Chinese that: ‘There are some well-fed foreigners with nothing to do, who point to China and make unnecessary accusations.’

1. https://thediplomat.com/2011/02/wikileaks-on-xi-jinping/


> The squabble is about them being caught in the crossfire. Their message: "make peace with USA for as long as we make money." Now the talk is over them being thrown under the train. Naturally, they are frustrated by that.

The similarity in outlook with Western business interests in that respect is striking, and much obscured by the lack of Chinese democracy and the resulting difficulty in news-gathering.



That article is interesting, but not very much so, given that it was written before the full implications of the ZTE incident were made clear (https://www.nytimes.com/2018/06/10/technology/china-technolo...)

> A backlash is being felt at the highest levels of the government, possibly hitting a close aide to Xi, his ideology chief and strategist Wang Huning, according to two sources familiar with discussions in leadership circles.

> A prominent and influential academic whose views have found favor in some party quarters has also come under attack for his strident views on Chinese power.

> Wang, who was the architect of the “China Dream”, Xi’s vision for China to become a strong and prosperous nation, has been taken to task by the Chinese leader for crafting an excessively nationalistic image for the country, which has only provoked the United States, the sources said.

> “He’s in trouble for mishandling the propaganda and hyping up China too much,” said one of the sources, who has ties to China’s leadership and propaganda system.

Wang Huning is a noted neo-authoritarian ideologue and a member of China's most powerful leadership body, the Politburo Standing Committee. Understanding his views gives a lot of insight into the Chinese government's current outlook:

http://www.judeblanchette.com/blog/2017/10/20/wang-hunings-n...

https://www.nytimes.com/2017/11/13/world/asia/china-xi-jinpi...


Huning is one of the most underrated and understudied people right now.

Totally disagree, he survived so long just because he was near invisible, while being to some extend useful.

He got great luck that his scholarly postulates happened to align with prevailing winds during Jiang's era. From then and on, he was just an obscure speechwriter and unofficial chief of propaganda, with some "strategy advisor" cred.


Nit in case you didn't know: Huning (or Hu Ning[1]) is his given name, and Wang is his surname.

[1] really it would make more sense to write Chinese names in English in a way that reflects that they are three separate characters, e.g. Wang Hu Ning, but for whatever reason that isn't done.


The best article on this matter, by the best journalist on China, John Garnault.

http://chinaheritage.net/journal/imminent-fears-immediate-ho...


Just a subtle reminder that China isn't a monolithic entity, but is instead made out of people, like all countries.

Except that its business model IS being a monolithic entity.

Yes. The world’s largest population is relying on an unsustainable economic model, under a political system that is not beholden to or representative of its people, propped up by western nations that aren’t going to need it anymore in a post-robotics and post-automation world.

That really should worry people more than it seems to.


There is no reason a country of 1.4 billion people with strong work ethics and good results on STEM education cannot have a self-sustaining economy when organized with their largely capitalistic system. The only two critical resources China still lacks are oil and state-of-the-art electronics. They have alright homegrown alternatives to the latter, and those are improving every year. They are also addressing the oil security issue using many approaches in tandem.

"But China’s continental economy of 1.4 billion people could achieve almost all possible economies of scale while still maintaining intense internal competition; in principle, India could, too. The United States, with 300-plus million people, would suffer only slightly if it exported and imported little beyond its borders, and the same is true for the European Union’s single market of 520 million.

Beyond some point, the potential benefits of wider trade between equally rich countries inevitably decline. If there was less trade among the continental-scale economies of China, the US, and Europe in 2050 than there is today, the direct impact on living standards would be small." [1]

In addition, China's AI research is already the 2nd most advanced in the world [2]. They are trading heavily with the west in order to grow faster, but they would still be growing without trading.

[1] https://www.project-syndicate.org/commentary/protectionism-c...

[2] http://csrankings.org/#/fromyear/2015/toyear/2017/index?ai&v...


"The only two critical resources China still lacks are oil and state-of-the-art electronics."

This seems like an odd thing to say.

China produces about 1/3 of the amount of oil Saudi Arabia does. So it's not the top oil producer in the world, but it is a major one.

And Intel's Fab 68, which produces 3DXPoint, is in China. Then again, I'm not sure how state-of-the-art electronics can be considered a "resource".


> And Intel's Fab 68, which produces 3DXPoint, is in China

Are they done fully reverse engineering it yet, and have they in the process learned everything they know to build the next generation?

Not that they necessarily need to though, as the parent above observes, many large economies could largely cease international trade and after a period of adjustment, get along just fine on a historical standard of living basis. Of course, this would come with its own new problems, but if everyone started accepting reality maybe societies could start having some more productive evidence-based discussions on how to best get along on planet earth.


China still needs to import most of the oil it uses. Any major economy would be crippled if it needed to cut down oil consumption by half or more within a short time frame.

Since oil is distributed all over the world, I don't think losing access is something that China should worry about any more than the US. Historically, the nations that had to worry about others cutting them off were the ones that set out to conquer the world and got everybody to oppose them together.

Geopolitics is much more complex than that. The US is still the world's number one power with global influence as well as allies and several bases in the most important oil-exporting region in the world. China does cultivate friendship with their big oil-exporting neighbor to the north but they do not want to depend too much on that either.

In any case, less dependence on oil import is a major reason they push EVs and renewable energy very hard.


> when organized with their largely capitalistic system.

Their system is almost the exact opposite of capitalistic in fact. It's a mercantalist, hyper-nationalist, hyper-protectionist, quasi-fascist economic system, with de facto state control of all businesses, lives and property.

You can't have the state controlling and owning all your major industries, and claim that it's primarily capitalist.

Fascism typically presents a fake veneer of private property and Communism doesn't bother with the veneer. China is ok with pretending you own a business or a condo, until or unless they decide your ownership is no longer in their strategic interest or you upset the wrong powerful member of the party. Thus their economic system is more like a traditional fascist one, as opposed to a communist approach that doesn't pretend you have a right to property at all.

They have few property rights protections and the ones they supposedly have, are not real (which gets demonstrated constantly). It's almost entirely illegal to own farm land, and farming is entirely state controlled. The banking system is almost entirely owned by the state, the rest is aggressively controlled by it. Your property can be taken from you at any time by the central government, for any reason it decides to invent; you will not get it back, and you will not win in court. You have no freedom of speech / press / expression, which is a critical requirement for a market economy; without those things, you cannot properly argue in the realm of ideas, which is needed to maximize all forms of research, innovation, trade and economic action (without it, you're handicapping your potential dramatically, which is going to inherently restrict China's ability to innovate). The economy is overflowing with operate-by-bribe requirements, you can't do anything economically in China without bribing people (at the beginning, during, and or throughout); that's a top to bottom, systemtic failure of property rights and judicial + political integrity. You can't pretend you have a capitalist system when your competitors can trivially destroy you by using the state (and no, pointing out that this happens occasionally in market systems in the West, is not a proper rebuttal; it's the difference between a system that operates routinely that way, versus one where that's considered a crime or scandal).

Xi's crackdowns the last few years perfectly illuminate that no rights in China are solid. They can be removed at any time and for any reason. There can be no functioning market economic system in that type of atmosphere. You can't be at all confident that your property rights will exist tomorrow or 20 years from now, which means you can't really make confident long-term business plans, you can only shrug and keep going regardless, hoping some powerful person doesn't randomly destroy you. This is why Chinese capital is so desperate to flee the nation (so desperate that China had to almost entirely lock it down, so you can't get your wealth out of China any longer; that's a hostage situation, not a capitalist system).

What China has is economic activity on a tight leash. They gave a lot more slack to the leash thanks to Deng, and Xi has pulled in the leash a lot.


Wait till you hear about eminent domain and civil forfeiture

...if it's unsustainable, why should we worry about it, because by definition it'll be gone in a few years?

Strong economies prevent people from dying of starvation, disease, and violence. Social issues all start as economic issues, they are a luxury of the wealthy. There are 1.4 billion people in China, and if that economy is "gone in a few years", a few hundred million people will die of starvation and disease, and a few billion people all over the globe will descend into poverty.

That assumes nothing will replace it.

Most of the time, when unsustainable economies collapse, they get replaced by something else. Collapse a few times and eventually you get something sustainable, if only through survivorship bias.


Did you intend for this description to also nearly perfectly apply to the United States?

....BUT WHAT ABOUT....

There is a real possibility of escalation as I doubt Trump will capitulate.

Trump seems to like the pomp of a 'win'... real or imagined.

I think it will come down to how quickly things escalate and if Trump runs or wins in 2020. It's possible the Chinese will hold out until then and adjust accordingly... I think the stakes are high on both sides. Thus far China has had virtually no economic push back to the transfer of jobs and wealth from the US. If the Chinese can break through, I doubt anything will stop China's accent. Likewise, if Trump doesn't persist it's possible he'll lose his voter base and it's unlikely that any other administration will have the stomach to take on China.

I think it's possible that if a few other things go Trump's way (North Korean, Iran, the wall) he'll have enough voter support for a second term. I don't see a blue wave forming if that happens, nor do I see a large pool of credible Democratic Party presidential candidates emerging no matter how uncouth Trump's rhetoric. A perfect example is Ocasio-Cortez and her socialist policies who I don't see appealing to a large enough voter base.


It's too early to predict outcomes. I will say the Dems putting out more Ocasio-Corteses is a gift to the Reps. The afterberners have very specific constituencies which only exist in special environments. They don't have any broad appeal.

Reading Nassim Taleb's article [1], I feel politics will become more and more extreme in the coming years.

Where it will become the far-left vs the far-right. And honestly, the US "far-left" isn't really that extreme compared to some European parties.

1. https://medium.com/incerto/the-most-intolerant-wins-the-dict...


But isn't that because the electorate itself doesn’t support such candidates? The Dems going hard left will make it easier for Repubs to be electable.

Only to the degree that the Republicans don't go hard right.

I think their appeal is broader than conventional Democrats. Sanders won northern rural Democrats over Clinton in the primaries, which seems to indicate a precise rift that hasn't been fully elaborated: https://www.nytimes.com/elections/2016/national-results-map

Clinton was the worst possible broadly electable candidate dems could have put forward. Gephardt would have been better. She was and remains a devisive figure. Dems who broke didn't as much vote for Bernie or Trump but voted against Hillary.

Good. Anything that rattles Red Emperor Xi is a good thing.

This is a bad HN comment, regardless of your views on geopolitics. Please don't unsubstantive and flamebaity comments, especially not on divisive topics.

If you'd review https://news.ycombinator.com/newsguidelines.html and follow the rules when posting here, we'd appreciate it.


Well, you may be glad to learn that there has been lots of rumors on Chinese websites in the past few months that Xi’s position is being challenged and he might even be in danger

Ruler for life is an attractive title.

Slightly off topic, but I read somewhere that some online video games censor anything that has the word "Xi" in it. Not sure if that is to prevent badmouthing him or to prevent Chinese political discussion altogether.

> Slightly off topic, but I read somewhere that some online video games censor anything that has the word "Xi" in it. Not sure if that is to prevent badmouthing him or to prevent Chinese political discussion altogether.

They can't prevent it altogether. I don't speak Chinese, but my understanding it that it's a punner's paradise, and online political discussion in China occurs using a dense and ever-changing system of slang and puns.

https://en.wikipedia.org/wiki/Homophonic_puns_in_Mandarin_Ch...:

> Xiǎo Píngzi - Students participating in the pro-democracy movement in Beijing's Tiananmen Square in 1989 smashed little bottles as a means of protesting Deng Xiaoping's handling of the movement. Deng's given name, Xiaoping (小平) sounds a lot like "Little Bottle" (小瓶子, xiǎo píngzi),

https://chinadigitaltimes.net/space/Grass-mud_horse

https://en.wikipedia.org/wiki/Grass_Mud_Horse

https://en.wikipedia.org/wiki/River_crab_(Internet_slang)


Basically the Chinese McCains vs the Chinese Trumps. This ought to be good!

Anyone who follows Chinese politics will realize the CCP has factions just like any other large political organization. However, factional divides are usually restricted to smokey rooms and kept out of public eye. But when personal wealth is at stake, they are bound to be more riled up.

And those factions have economic ties. I would expect that the sanctions lists would be exploiting those relationships. In China you have an entire village producing something like patio umbrellas or golf carts. This creates systemic risks because the US could wipe out industry of an entire village — takenit offline for six months and you can do a lot of political damage. China may be authoritarian but they are not immune to the will of the people. The Mandate of Heaven is almost an early version of democratic ideals. Lose the people you lose the mandate.

If you look at thousands of years of history, it is the power over-reach that causes a swift loss of the Mandate of Heaven. Tied to human nature. Always has been, always will be. There is no superiority to the system's design.

Of course. The Chinese government isn’t immune to criticism even if they try to suppress it. In fact, they know that their position is very brittle, which is why they are trying to stave off a crash/recession at any cost.

Trump’s trade war is enough I think to set an economic reckoning in motion. However, it also gives the leadership a nice scapegoat if they know they can’t avoid it. That might not be good enough, however.




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