When hearing a number of conservative (some real, some alleged) figures speak about China, the tone and rhetoric are usually a mix of concern, anger and fear. Donald Trump, one of the alleged conservatives, has spoken at length on the issue, which is probably a chief reason why he gained some traction while contemplating a run for president. Trump has lambasted China for manipulating their currency and “stealing our jobs”. To be clear, China has seen a number of American companies open up facilities there; but I hesitate to calling it “stealing” when we generally push our businesses their way. China, a partially communist country, has a lower corporate tax rate and much fewer regulations than the supposedly capitalist United States. In that sense, its our fault, not their's.
Does China manipulate their currency? Yes, they certainly do. Do we manipulate our currency? Yes, we certainly do. Is the federal reserve endlessly printing money economically beneficial or does it have a brief minor stimulative effect before damaging an economy long term? Most people would agree that its the latter. So if us doing it has negative effects on ourselves, how does China do it to their long term benefit?
China also gets talked up by President Obama as a nation that has invested in “green energy” and that if we don't also invest in green energy, we'll fall behind them. First, China does have a fair amount of factories producing green energy products; and not coincidentally GE has exported a large number of jobs there (yes, that’s correct, our President's chief economic adviser has outsourced thousands of jobs overseas). China also actively builds as many coal power plants as it possibly can. According to the BBC, China is the world's worst polluter; this is not a nation we should always take our cues from. In 2007, a study released by the World Bank has shown that 760,000 people die yearly from pollution related illnesses. But back to green energy briefly, I don't want to insinuate that I hate green energy, because I don't. What I hate is paying billions yearly to companies that produce products that don't work or people don't want. If green energy had such great potential, why do companies need the government to invest in it, wouldn't investors be lining up to make money in such a terrific venture? I am still curious what the realistic expectations from when solar/wind has been sufficiently explored; as far as I know, they aren't expected to be a main source of energy, just complimenting main energy sources. My next question is, why don't we let China dump tons of money into green energy, and if they come up with a product that works, our companies will begin improving on their methods and creating a better product. If not, and so far green energy has been a money sink, then the joke is on them; they've wasted billions of dollars in mal-investments.
Another fear is that China's military is growing stronger and has started to use advanced technology. China spent $100 billion last year on their military budget, the US by comparison is proposing a national defense expenditures of over $950 billion. In terms of money spent, they won't overtake us for a long while. At the moment, China has no bases outside of its borders and hasn't expressed plans to do so. If in the event this does happen, one can expect conservative talk radio to be paranoid and abuzz for weeks, but in my opinion this offers us an opportunity. China has been pressuring North Korea to quit threatening everyone with nuclear war, being as they are in the region, they have quite an interest in stability. If China is dumb enough to ever want to put military bases in locations that we currently police, we can give them the reins to the costly burden we currently carry. If they want to spend tens of billions to put bases in the Korea's and such, we should not only let them, we should encourage them. If needed we can pull the “rope a dope” and fund insurgents to bog them down, however we should be grateful we've found an idiot willing to pay the full cost of an expensive liability that yields no tangible benefits.
Lastly, another of Trump's main issues was the trade war with China. Trump proposed a 20% tariff on Chinese imports. Now, if our goal was to stick it to them, that would be one way of doing it. The problem though is that the goods purchased here by our lower income citizens would cost 20% more, a burden which they cannot afford. Worse, as was caused by the Smoot-Hawley tariff under Hoover, a trade war would likely ensue and China would put a 20%+ tariff on their imports; harming not only our companies but our diplomatic relations. So the best analogy I can think of to this whole 20% tariff on Chinese goods would be comparing it to the Middle Eastern punishment for thievery, which is cutting off the thief's hand. Except when the enforcer went to cut off the thief's hand, he accidentally cuts his hand off as well. Actually its a bit worse than that, because the Great Depression saw the harmful consequences of protectionism and trade wars, so really it'd be more like the enforcer seeing an instructional video of what to avoid doing when severing hands, and still screwing it up anyway.
Do not conclude from this writing that I am a fan of China. As a libertarian, I despise a collectivist state that crushes the individual and China assuredly is that. It is natural for Americans to resent China, as they see our nation's power and prominence transfer to China, in a tragic “changing of the guard” ceremony. But trade agreements only work if they are beneficial to both nations, and our trading with China is mutually beneficial. Spiting them will only cause diminished prosperity in both nations and besides, you don't really want to get on the bad side of your main creditor/a rising power. As Calvin Coolidge once said, “Don't expect to build up the weak by tearing down the strong”. China's rise doesn't have to be America's fall. Be skeptical of all governmental action, foreign and domestic, but don't let irrational fears cause irrational actions.
