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The current Sino-US relationship is not sustainable in the long run. The US won’t give up its global hegemony. China won’t give up developing its economy and national power. US hostility is open and palpable. China is defiant and confident. There is no way to square a peg in the round role here.
A Plaza Accord type of arrangement, when Japan self-castrated, is out of the question. The balance of power between the two, at this point, is such that neither side will back down. Time is on China’s side and the US knows that. So, a delay game is unlikely to sustain.
Decoupling is inevitable. Trump’s tariff war provides both sides the perfect opportunity to unwind economic and trade relationship.
The economic ties between the two countries include –
- $440 billion Chinese goods and services export to the US and $190 billion import from US
- $500 billion US direct investment in China (Apple, Tesla, Starbucks, etc.) with $700 billion annual revenue generated in the Chinese market
- Most large US companies have significant China domestic sales in every industry from GM, Nvidia, Nike, P&G, McDonald’s, Coca-cola, to Citibank.
- Revenue from China sales for US multinationals range from 20% global sales for Apple and Du Pont to 10% for Starbucks and Johnson & Johnson to 6% for Walmart. Many count China as the second largest market after the US.
- Most US MNCs are dependent on Chinese supply chains for both sales in China and outside. Large US retailers like Amazon and Walmart source 60-70% of their merchandise from China
- 10-15% Hollywood global box office is from China, the second largest movie market in the world
- 300,000 Chinese students go to study in the US every year and roughly a million is currently enrolled in US universities. Annual tuition from Chinese students is $12 billion
- $28 billion annual China direct investment in the US, including in manufacturing, real estate and equity market. $80 billion annual revenue for Chinese companies operating in the US; largest Chinese manufacturer in the US is Fuyao Auto Glass in Ohio and Illinois with $448 million annual revenue
- Few Chinese brands count US as a large market. None of the 100 largest Chinese companies (such as PetroChina, Alibaba, Huawei, BYD) derive more than 2% of their revenue from the US.
- China holds $760 billion US Treasury; total Chinese foreign reserve is $3.2 trillion, in a mix of dollar and non-dollar assets
- There is no known US government holding of Chinese assets
- Around 280 Chinese companies are listed in US stock markets with total market cap around $1.1 trillion
A full decoupling would entail the following –
- Severe all trade, including service trade in tech, intellectual property, media and entertainment
- Cleanse supply chains that are dependent on the other side
- Liquidate financial holdings – China sells its US Treasury and other US assets, US delists Chinese companies on US stock exchanges. US could steal Chinese assets as with Russia. China could confiscate US companies’ assets in China in return.
- Expel each other’s businesses operating in the other country
- Stop flow of students and tourism
A full decoupling is good for both countries as –
- Trading with the enemy is risky business for both sides
- Dependency and vulnerability can be exploited when two countries are geared up for a showdown, including a kinetic war
- Severing economic ties remove frictions on one important dimension, negating any further quarrel on unfair trade or one side taking advantage of the other (e.g. Chinese peasants lending money to the Americans to buy stuff made by the same Chinese peasants)
A full decoupling is good for the US –
- Removes China as the economic bogeyman and a distraction from real economic problems in its system like inequality of wealth distribution
- We can find out how successful the US will be to restore trade balance and eliminate deficit with others
- We can find out how successful the US will be to reshore manufacturing and get factory jobs for Americans
- We can find out how the US will improve its inflation and standard of living
- We will find out how successful the US will be to establish alternative supply chains, source critical materials, and develop skilled labor to reindustrialize
Decoupling is also good for China –
- Accelerate the push to achieve technological self-reliance and fireproof its economy
- Reduce risk exposure to US financial assets
- Chinese companies can take over the domestic market share of US companies once they exit from China
- Stimulate domestic consumption and expand trade with others, especially countries not aligned with the US
- Internationalize RMB and accelerate alternative financial sytems (CIPS vs SWIFT, digital RMB vs. US dollar)
Decoupling is a win-win proposition. With an even playground, let’s find out who will succeed in the ensuing economic and technological competition.
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Fair enough. I don’t see the downside. Once China’s done it the rest of us can follow, and then review the situation after the US frees itself from Israeli control.
That’s exactly the plan I would authorise, approve, and execute if I were in Xi’s position.
It would be a bold and courageous move, proving to the entire world that China is NOT the paper dragon and cheap whore we have become accustomed to for decades.
However, China may nor just lose the US market and its treasury bills. It may lose markets and assets in all US friendly countries, which means every single country except perhaps Cuba, Venezuela, and especially Iran.
Tou might want to cross Iran off that list as Putin is helping dragging Iran in the US orbit. Iran hasn’t seen any Chinese investments except in countries hostile to Iran by China, so it had no reason to stick to China.
And Russia has good reason to be resentful against China for having backstabbed Russia once by ganging up with Nixon. Why should Putin not return the favour by ganging up with Trump.
You see China has no real friends outside China. Its declared policy is to will trade with anyone who buys our wares, and sell weapons to all sides of any conflict. No other principles, no loyalty, no friends. China sleeps with anyone who will pay, one day with Israel, another day with Arabs, and maybe another day with Eye Ran. Round Robin. Maximise income. No boyfriend, no husband, will sleep with anybody who pays.
No one will side with China as it refrained from siding with anyone.
Try Chinese Market only.
Who were the high IQ white geniuses who sent all of the USA manufacturing to China in the first place because of muh quarterly profits and stock prices?
Too late to complain now!
China must do everything within its power to keep out the Chazar Iudaeus parasite if it wishes to survive and not follow the similar fate of the West.
The Americans are afraid of decoupling from China, as Yababa revealed. Yababa should encourage China with fabricated incentive instead of scaremongering if the Americans are not scare of decoupling from China.
The Americans are big-mouthed chicken.
To make decoupling from the Americans successful, the Chinese need to innovate and build a marine Great Wall along the International Date Line.
The other benefit for China to decouple from the Americans is to block the flow of the ‘God-fearing’ morally defunct evil ‘Puritan’ cult brainwashing toxin seeping into China, creating herds of 崇洋媚外的河殤派 who are the Whites’ best slaves.
You are not wrong, Americans are afraid.
But you fail to mention that the Chinese are also afraid.
THe US only has to worry about decoupling from China. A big worry admittedly.
However, China has to worry not just about decoupling from the US, but all US allies who will be pressured to decouple from China as well.
Who can China force to decouple from US? CHINA has no real allies who can decouplefrom US. . Russia and Iran have already decoupled from US.
This is the first article I have read of Hua Bin’s and find persuasive.
In fact, I find the article completely persuasive, I think, on every single point.
Maybe we should decouple by stop buying so much stuff we don’t need! Once you are content with that old tv, and or buy good shoes that last, etc, then we can decouple. China is counting on you getting into debt to purchase their cheap stuff! So is not Trump, is you! I can do OK with ridding China of our commerce. I still have shoes that I bought 12 years ago. I do have a Levis Jacket from the 1980s! Stores are going bankrupt, I went last Saturday to a forever21, which was selling their stuff at 90 % off! They sold all that made in China stuff, cheap, and we took advantage of it. Since stores are closing right and left, take advantage, and keep those items for a while, even your cell phone lasts years, so I last year got rid of my iPhone 3! Still was working, but it finally gave up the ghost; refused to charge any longer. So it is up to YOU!
Mr. Hua, you’re not going to get anywhere speaking to Americans in such a condescending fashion. It’s not just asians who don’t like to lose face. Here is a good book for you to read. It explains ways to get your point across without coming off like an arrogant blowhard.
No relationship works when one side thinks it’s getting the raw end of the deal. Many conservative Americans believe the ability to print money and get other nations to produce products for freshly created currency is a perfect example of getting ripped off.
China’s best chance of living a peaceful life without the headache and slander of American is to stop trade and ignore all future contacts. Just as in a bad relationship concentrating on a lost cause is only distracting from future productive work and relationships.
Washington will never be content with an independent , prosperous China this is a fact I believe everyone can agree on. Hua I believe has come to the same conclusion. There will be no going back to the way it was.
The entire world hates America even its own “allies” and many countries would gladly side with China over America. China is already the leading trade partner of most countries in the world, why would they upend
their established trade with China to appease the belligerent Zionist controlled USA? The only country that will pick America over China is Israel.
The West, led by the USA and its Master, the Jewintern, will NEVER allow a non-Western, non Judeo-Christian state to rise to global eminence. N.E.V.E.R., ever. Even a ‘liberal democratic’ China is inadmissable, and a forcibly shattered China will just re-unite. So the object is genocide, as the SARS CoV2, and probably SARS itself, show, bio-warfare attacks that will, undoubtedly be followed by others.
China could easily practise full autarky, but you’ll find that most countries will NOT be bullied into submission by the Yankee Reich and the Jewintern. Arsetrailia, for instance, would go broke without exports to China, Chinese tourists and students. Even Arsetralians are not that dumb.
A very little familiarity with Gad Saad shows you, I would assert, that he is a deranged hater, even for a Judaic. He grew up during the Lebanese Civil War, so perhaps that had a malign effect on his mind.
https://www.icij.org/investigations/china-targets/china-transnational-repression-dissent-around-world/
Video Link
Not a single person cares about that. In fact, most normal regular people have very little sympathy for activist types of all stripes, especially ethnic activists. What type of person immigrates to a foreign country and immediately starts rabble-rousing against his old country? A troublemaker that’s who.
Not so sure.
I wouldn’t blame the Lebanese for judaic derangement, depravity.
5ds
“De-coupling” makes perfect sense, so there is no fucking way THAT is going to happen!
War is much more likely. Cold at first, then probably semi-hot. We’ll sink some ships, maybe bomb some ports… or, if we get bored, release another “pandemic” in China.
Trade war will be the first step, and rather than seek an understanding and some state of equilibrium, we’ll just move into our respective blocs- BRICS versus the G7/G20/EU/NATO.
It’s the great chess game of world domination, and there’s no point in trying to predict it very closely, because nobody can’t properly account for the madness that will ensue. Lots of stupid and short sighted decisions, silly escalations, nonsense, but mixed with some serious and dangerous actions as well.
Watch and see…
Well, their citizens may not be, but their government? I wouldn’t put much faith in them. Hell, Germany just watched it’s primary source for cheap energy get destroyed, and witnessed all of Europe sink into recession… so what’s the plan? “Let’s send troops into the Ukraine!”
Madness is baked in the cake! Every White nation on the planet is already committing suicide, so what’s to stop Australia from being just as dumb?
“Cutting off your nose to spite your face” is currently the highest “Western Value”; Nothing can surprise me.
All for it!! LOL!!!!!!!!
Cut all trade, vacation, student, and business ties. Deport those 270,000 Chink student spies, delist all Chink companies on US exchanges, force the sale of all US land and other property owned by Chinklanders, and restrict diplomats to 50 on each side.
Everyone else gets to go home! LOL!!!!!!
… aaand at long last the US can reclaim its rightful place in the Maff olympics –
behind Papua New Guinea 😎
Wong again!
This American is 100% if favor of decoupling. There is zero need to fund a country whose ruling class is aiming for your destruction. Fentanyl is just a small part of this.
I just had a chicken sandwich. LOL!!!!!!!!!
rage on HuMungus you magnificent bastard.
No high IQ. That is capitalism. Face facts including competition not rigged by oligarchs..