Friend-shoring seems like a great idea. I think a key to it would be to raise awareness about the products and services we receive from unfriendly/unethical countries. Just like the growing number of consumers willing to spend more to support environmentally friendly businesses, I would imagine you could sell people on the idea of supporting our allies. The sentiment for buy-American could easily be transformed into buy from our allies.
The rationale for decoupling from China is not because China does not share our values, Yan Shen. The PRC has never shared our values. It is because China has adopted the role of a strategic adversary. This has nothing to do with San Francisco's progressive policies. It would be a weak analogy; it's nonsense as a serious parallel.
There are features in common with our stance to Japan during the '80s and early '90s, and there are major differences. Our tensions with Japan were entirely economic; our tensions with China are both economic and political/strategic. Japan had become the dominant economic power in Asia, and was buying so much US debt that it seemed to be gaining decisive leverage. China is dominant in Asia economically (less so than Japan in 1980, I think, simply because it lacks the type of regional technological advantage that Japan enjoyed then) and also holds a lot of US debt (not on the scale of Japan in the '80s). But China is also a military threat to Taiwan and American naval power in the Pacific, with the potential for coercive influence over a number of smaller Asian countries. Japan was never a geopolitical adversary; the USSR was.
Americans are definitely ill informed about China's domestic situation, and tend to see it only through the lens of their own values. There are certainly many Americans who shape their views of American policy on China according to that lens and who are hostile to the government, assuming that most people in the PRC are as well. Those Americans are not shaping US policy towards China. That policy was governed by highly optimistic assumptions about China's economic strategy in the 2000s, but it no longer is. China lost economic goodwill by its violations of economic protocols, coercive economic and IP contracts for joint ventures, and large-scale theft of IP. China's global initiatives to use soft power to gain decisive leverage over small national economies, and its military moves in the South China Sea, which threaten the most dangerous power confrontation since WW2, are among the macro issues driving US policy, and there is nothing comparable to our relationship with Japan. There the parallels are all to the USSR, and the US most certainly had tight restrictions on trade with the USSR when it came to potential weaponization of trade (the case with policy towards PRC semiconductor trade now).
Some Chinese domestic policies are of legitimate concern because they touch on issues of international law and treaties that we have supported: specifically, the treatment of Uyghurs on human rights grounds and the de facto abridgment of the PRC/UK Joint Declaration on Hong Kong. China governmental authoritarianism is not a legitimate target for US policy: as you point out, for better or worse it has been a cultural norm for a long time (3500 years would be about as far as that could actually be pushed), and Americans aren't generally aware of the long history of violent political fragmentation that often seems the only likely alternative.
The US government has enacted no policies specifically addressing Chinese authoritarianism, intended to foster regime change, or anything similar. The uptick in criticism about Chinese authoritarianism over the past decade is directly related to the specific policies of the Xi Jinping regime in that regard. (I do not think you'll hear ringing endorsements of that regime from cabdrivers in Shanghai, whom I always found one useful barometer for measuring the popularity of government in the PRC.)
Much as I'm a big fan of Chen Jiongming and his attempts to create a federal China in the 1920s, I can certainly see why most Chinese people see any form of non-authoritarian central government as being liable to lead back to the fragmented and violent warlord era.
eg, I think no one believes China is currently capable of "projecting power" (in the sense of militry power) beyond the South China Sea, in the same sense that Russia is not capable of projecting power beyond countries adjacent to it. Your view is a consensus one.
Yan Shen, I do think you're conflating several different issues that it is important to keep distinct: The US government rationale for "decoupling," the attitudes of Americans towards the PRC, anti-Chinese attitudes in the US, and American judgments about authoritarianism.
In the university town I live in a woman attacked and stabbed a student unknown to her last month because the student was Chinese, and the woman viewed her as a part of a national threat. The woman was mentally ill but she had clearly absorbed attitudes you (and I) deplore that are rising because of political tensions between the US and PRC. This local event reflects a serious rise in anti-Asian prejudice and violence in the US. While it is still at relatively low levels, evenif it remains so the dynamics of race-based violence are a form of terrorism: individual acts degrade the security of an large class of people. It needs to be addressed with all the force government and cultural leaders can bring to bear.
I don't know what comment you refer to at the top of the thread, because they keep changing. The idea of boycotting any nation because it is "an unethical country" is not one I'm familiar with. Boycotts of countries are generally based on views that their governments are acting unethically, either towards their general population (e.g., Iran), or towards specific groups (e.g., South African apartheid), or towards other states (e.g., current sanctions on Russia). None of those examples I gave were "woke" policies, although people we might call woke might well support them. (Anti-abortion groups who advocate boycotts of states where abortions are legal are not "woke.") I hope you will drop that analogy.
As for whether China's government is acting unethically, I have mixed views--I think it is in Xinjiang and Hong Kong. "Authoritarianism" is a broad term. China's traditional authoritarianism had many triumphs and post-Mao China has delivered spectacular economic goods to its population by relying on familiar political patterns. Concern about Chinese authoritarianism is high now because Xi Jinping's ascendancy has altered its character. Traditional Chinese authoritarianism incorporated important checks on imperial power, most particularly an operational commitment to a governing ideology beyond the power of the head of state to significantly alter, in which virtually every bureaucrat was steeped from childhood as a qualification for office, which acted as a powerful institutional constraint most of the time. Leadership in the PRC has manipulated an imported lineage of communist ideology much more flexibly, and Xi is now treated as a contributor to that ideology, which brings his regime, like Mao's earlier, much closer to the model of 20th century strongman authoritarianism. Under these circumstances I think it would be very foolish not to take the escalating rhetoric concerning Taiwan seriously on the ground that the PRC has not launched wars since 1979.
I think I've already made other points about why I think the rationale for US government decoupling policy is appropriate, so I won't repeat them.
I’m perfectly willing to admit that I haven’t researched this to verify specific claims of the scale of IP theft, Yan Shen. I am certain, however, that US policy has been shaped in the belief that it is considerable, and that belief is of long standing.
The issue of espionage in universities is complicated. The PRC has a long history of sending some people to study here with the task of keeping tabs on others. But the cases you’re referring to involve much more, and I’m not familiar with them specifically. As for whether they were warranted or Red Scare-type operations, I wouldn’t be surprised either way. As you note they are separate from the issues Noah raises.
I don't think the point is germane, eg (and I suspect that the "short memory" you refer to would actually need to be longer than any living one), but I'd be interested to know what you're thinking of. It's a subject I know nothing about.
It's really because there is a vast, bloated and very effective lobbying organization that former President Eisenhower warned us against: the military industrial complex. During the Cold War they spread fear using propaganda about things like "the missle gap" to get public support to boost military spending. Then when that didn't work anymore they invented the "Global War on Terror" which blew through about $5T in taxpayer dollars and didn't accomplish anything. No one is afraid of Muslims anymore so they need a new adversary.
When the Cold War wound down, military spending dropped. It was the first time since WWII that spending dropped and it was a real hardship for the industries and political elements that depend on it. After about 2013 or so, military spending started dropping again, so a new enemy needed to be invented to boost the military economy.
Now the electorate is not completely foolish, so there has to at least be a thread of truth to the claims that they push upon the American people. It is certainly true that China's economy has grown fast enough to be a significant economic rival to the United States. And it has a much larger population. It is perfectly reasonable to call them our rivals.
But it's kind of silly to think that China is some kind of existential threat to the United States. There is no way they can project power half way around the globe, much less support a large military in the Western Hemisphere, such as we did in Asia (at great cost to ourselves economically) during the wars in Iraq and Afghanistan.
I think that our real strength lies in our economic prowess, not the size of our fleet. We won WWII pretty quickly once we ramped up production. To the extent that military spending is a dead loss upon the economy, it weakens us. Some of the spending is fruitful, particularly in R&D, and we should probably continue that. There are roughly 750 US foreign military bases; they are spread across 80 nations. China has three. We should try and spend our military budget more efficiently, not just throw more money at it.
How impervious to facts do you have to be to believe that the world is not a dangerous place after Russia just launched a war to try to rebuild its empire in Europe? The other thing that the Russian invasion demonstrated, not that people didn't also know this, is that what you start with in a war matters immensely. The US will not be able to out-produce China after the war starts.
Someone named Yan Shen sides with China against America. Lol. That's a point against Noah immigration ideas. Anyway, all your talk is irrelevant. The US and China are in competition, and the number of people in China or its long history is not going to change any of that.
The idea that China is not a military threat to the US is ridiculous. There is a high probability that China will attack Taiwan, and there is a high probability that the US will defend Taiwan if that happens, then war between US and China. The idea that it is smart for the US to fund and help develop the technology of its potential wartime enemy is preposterous.
The notion that US allies disagree with the US position against China is also absurd. Japan is starting to rearm because an aggressive and imperialist China is a threat to them, in fact a direct threat to their homeland, much more than the US homeland. Australia is also not happy with the idea of China's hegemony in the region. Taiwan obviously depends on the US for its independence, and Europe is less than happy with China supporting Russia. Yes, there are differences of opinion and interest in the Western alliance, but nobody there wants to see China expand without being checked by the US.
China pulled the mask off long ago in Tiananmen Square, it has not changed course since.
We are in agreement with the need to keep our allies afloat, both economically and under our secure military umbrella. America needs to restrain itself, gain a sense of perspective, and do what is necessary to insure that both America and its allies are strong economically and remain so.
According to a a pair of demographers, each a pair themselves, by 2100 China's population will be under 1 billion, that should do enough to give us some space going forward.
FWIW, it seems Sony (and probably Nikon and Canon) are moving their camera production out of China to South/Southeast Asia. Prior to late last year, all my Sony stuff was made in China, but the latest version of my main camera was made in Thailand.
Also, while previously most stuff I had ordered from Land's End was made in China, the most recent three (two shirts and a hoodie) were made in Cambodia, Bangladesh, and India.
I submit that the move away from China is happening faster than you think.
Great post. If we rewind the clock back to the 1990s leading up to China's entry into the WTO in 1999, who in the American political sphere was strongly advocating for unrestricted free trade with China? Was it large corporate interests, ala Wal-Mart, or globalists who believed that China would liberalize as it became integrated with the global free market, or some combination thereof?
Well, Wal-Mart is a thing that exists and as the No. 1 retailer did more than any other company to squeeze margins out of its suppliers, who chose to offshore production to China or else lose access to Wal-Mart's shelves and market share to a competitor who would've offshored production to China anyway.
And liberalization was always a canard. Kayfabe. Like the hunt for WMD in Iraq. American businesses, and the Washington Consensus, saw China's entry to the global market as purely transactional. They were negotiating with the Chinese government -- was the other side going to embrace an economic doctrine that was openly calling for its replacement?
Last I checked, Vietnam is still a communist country. Offshoring to Vietnam has nothing to do with supporting democracy. The US is playing protectionism. Period. You are trying to compete with the 2nd largest economy(China) with protectionism. Free trade is dead. WTO is dead. Shifting manufacturing from China to other countries still won't bring manufacturing jobs back to US. In the end, even the dirty strategy may hurt the Chinese economy but the US will gain nothing from the game.
When NATO was founded in 1949 it included then-fascist Portugal as one of its founding members.
The US would support offshoring to Vietnam because they view Vietnam as a potentially useful ally against China: remember that Vietnam resisted American imperialism for over a decade, it resisted French imperialism for close to a decade, but it has resisted _Chinese_ imperialism for millennia.
Admirable self restraint in saying nice things about people who say idiotic things.
I'd just add that there is no need to attempt to de-Chinafy all our imports. Not everything is strategic. Our beef is with the CCP not the guy on the teddy bear assembly line.
And are subsidies necessary to execute a friendshoring strategy?
I hope that means pointing out that the world can still benefit from trading and exchanging intellectually with China notwithstanding the CCP. "Decoupling" ought to be narrow and well targeted and aware of costs to ourselves of our actions. Perhaps subsidies are a way to be target better.
I think GDP is a stronger measure here. Logistics, IT, managing complex organizations - these are skills that are a really big deal for winning wars and don’t obviously fall into the manufacturing base bucket as well as simple GDP. Could be convinced economic complexity (so Russia power is overstated because of its oil wealth) is a bit better.
I'd just differentiate between manufacturing and manufacturing employment.
And there is always the future. Maybe the group that first cracks raising the productivity [TFP really] of services will the the superpower of the 22nd century.
Granted, you were not necessarily going through the actual specific subsidies here (which I regrettably am in the weeds on) but saying we need to give all of the tax credits, presumably including production tax credits, to foreign produced items is a “wut, LOL” moment for me. Quoting: “ We need to negate that advantage by offering Japan and Korea full access to the U.S. market, including all the same tax credits that we give to domestic producers. Otherwise it will look like the U.S. is the kind of country that hangs its key allies out to dry. And that is an image we absolutely can’t afford.”
A few points:
1. If it’s an image we can’t afford we’re going to be declaring bankruptcy because the political route to do this is very close to zero probability, at least for the next two years.
2. The consumer tax credits on things like EVs have very plausible arguments that they should apply to non-North American produced vehicles, but regarding the vast bulk of other subsidies - they are not consumer credits, but paid to the company which (presumably) has US tax liability to use them. Giving tax credits to a foreign company, doing the work in another country, booking income in the home country, and paying the bulk of its taxes in another country is not only politically difficult, but economically bewildering to me. Someone would have to convince me that this is remotely efficient and wouldn’t result in XYZ, Inc simply becoming an entity that has two business lines in the US - manufacturing and selling tax credits into the financial markets, with US taxpayers footing the bill issuing credits for items that likely would have been made and sent here anyway except for a small marginal adjustment.
3. It’s a small thing, but although the free trade country sourcing provisions for the EV credit have all sorts of issues - it is the ONLY pro free trade thing I can think of being legislated in recent past. It’s actually led members of the EU, Japan, Indonesia, some African nations, to start asking “what if we revisit those efforts”... Even Yellen has said as much, and floated the idea of reconsidering agreements with Europe and others, while bipartisan members of Congress have raised secure lithium and copper supplies as urgent reasons to support renewing the (soon to expire) Chilean trade treaty. It’s definitely swimming against the tide, but I’ll take small small victories.
I mostly agree, with the major caveat that one significant difference between “Cold War II” and version 1.0 is that last time the US didn’t have a domestic version of the “enemy” ideology that could take over the country.
Joe McCarthy was a demagogue, but he was at least aimed at the US’ stated adversaries.
Now, Trumpism/Putinism/Xi-ism are the other camp. The call is coming from inside the US House. Literally.
No less than Tim Snyder has said the Midwest was fertile ground for Trumpism because of deindustrialization. Isn’t reversing that the bet Biden is making, not sticking it to South Korea or France just because?
If the US is just another pole in the world, than the concern between allies and friends over socio-economic and political health should be mutual. We also have a duty to fight Trumpism here and not inflict it on our allies and friends again.
Xi literally developed a state-mandated personality cult. Xi Jinping Thought is a throwback to Mao, whose Thought ended up killing tens of millions through famine and state-sponsored terrorism. Besides ideology, the One Belt One Road initiative was China's efforts to promote an infrastructure diplomacy and bring nations into its sphere of influence.
Putin has an ideology, developed by Alexander Dugin. It's far right, but Dugin purports that he theorized the Fourth Political Theory. Steve Bannon is a friend of Dugin's and has through his brief stint in the Trump White House plugged himself into ultranationalist movements throughout the world. Orban, Erdogan and Lukashenko have applied his ideas in their respective governments.
Seems to throw doubt on the whole idea of a broader conflict, then. In which case, what's wrong with protectionism? After all, it was the dominant economic paradigm of the US from the 1790s to the 1940s, far long than any other.
Because in pure economic terms, protectionism doesn't work as well as free trade.
Now economic growth has to be balanced against national security, which is why we're talking about delinking with China. But there's not nearly as persuasive a national security argument against trade with Australia or Europe or the Phillipines.
The problem is that “buy American” isn’t just just about nationalism, it’s also about social class, regional resentment, and national stability. Fairly or not, American establishment has gotten a reputation for the last 40 years of destroying jobs of the working class in Ohio to enrich professional class people in in New York and LA. This is one of the greatest factors leading up to Trumps rise.. rebuilding trust in these communities, and the high cost of having lost that trust should has lead me to be a lot more sympathetic to protectionism even if I know it’s makes little economic sense. What’s the point in keeping South Korea and Japan happy to protect democracy if we lose Wisconsin to authoritarians?
Economists love to say this and that doesn't work because their model says so, unfortunately in the real world your models are useless. Assume we have a can opener. Down here in Oz we are having the same argument, pollies left, right, and centre are saying we should make stuff. Now, that doesn't mean we will but it is worth the conversation. The pandemic showed just in time supply chains and management that had cut every last cost out of their businesses to fuel share buybacks were left exposed and needed to be saved by the big bad government. Do you buy insurance? I do, why don't we have the ability to make stuff if we need to, and why don't companies (and governments) have enough things on hand if the world turns to shit again
Also FWIW, "semiconductors" are complicated. The latest greatest fastest whizz-bang chips from the latest fab aren't the ones in your car, or anything else (except, maybe, your cell phone, and even there, not really). The problem is that most "semiconductors" are made on fab lines that used to be latest greatest fastest whizz-bang lines, but now have been depreciated, so chips from them, while comparatively low-tech are almost free. But keeping a depreciated fab line going is still pretty serious high-tech, even for a line, say, 10 years old. And you can't really build a 10-year old technology fab line new. Thus the whole game is flaky. So far, it's not imploding on us. So far.
Also, "semiconductors" are made in two steps: the fab lines themselves and the packaging process. Those semiconductor packaging plants are pretty high tech themselves, but since corporations hate paying salaries, they tend to be in low-wage countries. China and the Phillippines come to mind, but my knowledge of where those plants are is out of date.
Anyway, I get nervous when people say simplistic things about semiconductors. Said simplistic things might not be actually wrong, but...
Great post, but not nearly deep enough consideration of India—it will be the biggest, and also politically not as committed to democracy as we thought.
Why do you think so? Certainly India has certain authoritarian tendencies and lots of internal conflict that could cause issues but the same can be said of the US.
I'm no expert, and would love to read more on the topic -- but my basic understanding is that BJP is more consistently dominating elections, and getting stronger. Further, India could have joined the US in punishing Russia for its invasion of Ukraine, but has undermined the US's sanctions regime. My naive understanding is that in the 80s and 90s, India was just a much more reliable ally and taken for granted as a secular, liberal democracy. For a country of its size and strategic importance, I just think the complexity needs a closer study, and risks of non-alignment need to be considered more carefully. But, maybe my skepticism is misplaced! Would love to learn more deeply on the topic.
It's a fair point that the US is trending in the wrong direction, too, but the balance of power between the two major parties has been keeping the less-democratic tendencies at bay, more than the BJP gets. In the US, social media bias is met with outrage and scrutiny. Not so much in India....
Fair points, although I dont weigh India's fence sitting vis a vis Russia vs Ukraine very highly because frankly I get their POV as far as their interests are concerned.
If you start from the premise that China is a military threat to overwhelm the world's developed democracies, in part because it's "so much bigger" than the US, then the rest of your discussion rests on quicksand.
Well I think the premise is that China wants to change world institutions in ways that we don't like, as proponents of liberal democracy (in the broad sense). China being 'so much bigger' means this will be hard to stop.
As for military threats, China is clearly a threat to at least one allied developed democracy - Taiwan.
China has friends in Africa, not just Russia and North Korea. I just watched a Bloomberg video of how Belt and Road being a debt trap is a fallacy, and that Africa appreciates China taking an interest in building infrastructure in Africa.
Sure but these friends are not much use to China outside of racking up numbers at UN general assembly votes. At least right now - maybe this will prove a very valuable investment in a region that will soon be economically significant.
Friend-shoring seems like a great idea. I think a key to it would be to raise awareness about the products and services we receive from unfriendly/unethical countries. Just like the growing number of consumers willing to spend more to support environmentally friendly businesses, I would imagine you could sell people on the idea of supporting our allies. The sentiment for buy-American could easily be transformed into buy from our allies.
The rationale for decoupling from China is not because China does not share our values, Yan Shen. The PRC has never shared our values. It is because China has adopted the role of a strategic adversary. This has nothing to do with San Francisco's progressive policies. It would be a weak analogy; it's nonsense as a serious parallel.
There are features in common with our stance to Japan during the '80s and early '90s, and there are major differences. Our tensions with Japan were entirely economic; our tensions with China are both economic and political/strategic. Japan had become the dominant economic power in Asia, and was buying so much US debt that it seemed to be gaining decisive leverage. China is dominant in Asia economically (less so than Japan in 1980, I think, simply because it lacks the type of regional technological advantage that Japan enjoyed then) and also holds a lot of US debt (not on the scale of Japan in the '80s). But China is also a military threat to Taiwan and American naval power in the Pacific, with the potential for coercive influence over a number of smaller Asian countries. Japan was never a geopolitical adversary; the USSR was.
Americans are definitely ill informed about China's domestic situation, and tend to see it only through the lens of their own values. There are certainly many Americans who shape their views of American policy on China according to that lens and who are hostile to the government, assuming that most people in the PRC are as well. Those Americans are not shaping US policy towards China. That policy was governed by highly optimistic assumptions about China's economic strategy in the 2000s, but it no longer is. China lost economic goodwill by its violations of economic protocols, coercive economic and IP contracts for joint ventures, and large-scale theft of IP. China's global initiatives to use soft power to gain decisive leverage over small national economies, and its military moves in the South China Sea, which threaten the most dangerous power confrontation since WW2, are among the macro issues driving US policy, and there is nothing comparable to our relationship with Japan. There the parallels are all to the USSR, and the US most certainly had tight restrictions on trade with the USSR when it came to potential weaponization of trade (the case with policy towards PRC semiconductor trade now).
Some Chinese domestic policies are of legitimate concern because they touch on issues of international law and treaties that we have supported: specifically, the treatment of Uyghurs on human rights grounds and the de facto abridgment of the PRC/UK Joint Declaration on Hong Kong. China governmental authoritarianism is not a legitimate target for US policy: as you point out, for better or worse it has been a cultural norm for a long time (3500 years would be about as far as that could actually be pushed), and Americans aren't generally aware of the long history of violent political fragmentation that often seems the only likely alternative.
The US government has enacted no policies specifically addressing Chinese authoritarianism, intended to foster regime change, or anything similar. The uptick in criticism about Chinese authoritarianism over the past decade is directly related to the specific policies of the Xi Jinping regime in that regard. (I do not think you'll hear ringing endorsements of that regime from cabdrivers in Shanghai, whom I always found one useful barometer for measuring the popularity of government in the PRC.)
Much as I'm a big fan of Chen Jiongming and his attempts to create a federal China in the 1920s, I can certainly see why most Chinese people see any form of non-authoritarian central government as being liable to lead back to the fragmented and violent warlord era.
eg, I think no one believes China is currently capable of "projecting power" (in the sense of militry power) beyond the South China Sea, in the same sense that Russia is not capable of projecting power beyond countries adjacent to it. Your view is a consensus one.
Yan Shen, I do think you're conflating several different issues that it is important to keep distinct: The US government rationale for "decoupling," the attitudes of Americans towards the PRC, anti-Chinese attitudes in the US, and American judgments about authoritarianism.
In the university town I live in a woman attacked and stabbed a student unknown to her last month because the student was Chinese, and the woman viewed her as a part of a national threat. The woman was mentally ill but she had clearly absorbed attitudes you (and I) deplore that are rising because of political tensions between the US and PRC. This local event reflects a serious rise in anti-Asian prejudice and violence in the US. While it is still at relatively low levels, evenif it remains so the dynamics of race-based violence are a form of terrorism: individual acts degrade the security of an large class of people. It needs to be addressed with all the force government and cultural leaders can bring to bear.
I don't know what comment you refer to at the top of the thread, because they keep changing. The idea of boycotting any nation because it is "an unethical country" is not one I'm familiar with. Boycotts of countries are generally based on views that their governments are acting unethically, either towards their general population (e.g., Iran), or towards specific groups (e.g., South African apartheid), or towards other states (e.g., current sanctions on Russia). None of those examples I gave were "woke" policies, although people we might call woke might well support them. (Anti-abortion groups who advocate boycotts of states where abortions are legal are not "woke.") I hope you will drop that analogy.
As for whether China's government is acting unethically, I have mixed views--I think it is in Xinjiang and Hong Kong. "Authoritarianism" is a broad term. China's traditional authoritarianism had many triumphs and post-Mao China has delivered spectacular economic goods to its population by relying on familiar political patterns. Concern about Chinese authoritarianism is high now because Xi Jinping's ascendancy has altered its character. Traditional Chinese authoritarianism incorporated important checks on imperial power, most particularly an operational commitment to a governing ideology beyond the power of the head of state to significantly alter, in which virtually every bureaucrat was steeped from childhood as a qualification for office, which acted as a powerful institutional constraint most of the time. Leadership in the PRC has manipulated an imported lineage of communist ideology much more flexibly, and Xi is now treated as a contributor to that ideology, which brings his regime, like Mao's earlier, much closer to the model of 20th century strongman authoritarianism. Under these circumstances I think it would be very foolish not to take the escalating rhetoric concerning Taiwan seriously on the ground that the PRC has not launched wars since 1979.
I think I've already made other points about why I think the rationale for US government decoupling policy is appropriate, so I won't repeat them.
This might be true, but Taiwan is certainly close enough to be vulnerable to Chinese military power and "regional dominance".
I’m perfectly willing to admit that I haven’t researched this to verify specific claims of the scale of IP theft, Yan Shen. I am certain, however, that US policy has been shaped in the belief that it is considerable, and that belief is of long standing.
The issue of espionage in universities is complicated. The PRC has a long history of sending some people to study here with the task of keeping tabs on others. But the cases you’re referring to involve much more, and I’m not familiar with them specifically. As for whether they were warranted or Red Scare-type operations, I wouldn’t be surprised either way. As you note they are separate from the issues Noah raises.
I don't think the point is germane, eg (and I suspect that the "short memory" you refer to would actually need to be longer than any living one), but I'd be interested to know what you're thinking of. It's a subject I know nothing about.
It's really because there is a vast, bloated and very effective lobbying organization that former President Eisenhower warned us against: the military industrial complex. During the Cold War they spread fear using propaganda about things like "the missle gap" to get public support to boost military spending. Then when that didn't work anymore they invented the "Global War on Terror" which blew through about $5T in taxpayer dollars and didn't accomplish anything. No one is afraid of Muslims anymore so they need a new adversary.
When the Cold War wound down, military spending dropped. It was the first time since WWII that spending dropped and it was a real hardship for the industries and political elements that depend on it. After about 2013 or so, military spending started dropping again, so a new enemy needed to be invented to boost the military economy.
Now the electorate is not completely foolish, so there has to at least be a thread of truth to the claims that they push upon the American people. It is certainly true that China's economy has grown fast enough to be a significant economic rival to the United States. And it has a much larger population. It is perfectly reasonable to call them our rivals.
But it's kind of silly to think that China is some kind of existential threat to the United States. There is no way they can project power half way around the globe, much less support a large military in the Western Hemisphere, such as we did in Asia (at great cost to ourselves economically) during the wars in Iraq and Afghanistan.
I think that our real strength lies in our economic prowess, not the size of our fleet. We won WWII pretty quickly once we ramped up production. To the extent that military spending is a dead loss upon the economy, it weakens us. Some of the spending is fruitful, particularly in R&D, and we should probably continue that. There are roughly 750 US foreign military bases; they are spread across 80 nations. China has three. We should try and spend our military budget more efficiently, not just throw more money at it.
How impervious to facts do you have to be to believe that the world is not a dangerous place after Russia just launched a war to try to rebuild its empire in Europe? The other thing that the Russian invasion demonstrated, not that people didn't also know this, is that what you start with in a war matters immensely. The US will not be able to out-produce China after the war starts.
Someone named Yan Shen sides with China against America. Lol. That's a point against Noah immigration ideas. Anyway, all your talk is irrelevant. The US and China are in competition, and the number of people in China or its long history is not going to change any of that.
The idea that China is not a military threat to the US is ridiculous. There is a high probability that China will attack Taiwan, and there is a high probability that the US will defend Taiwan if that happens, then war between US and China. The idea that it is smart for the US to fund and help develop the technology of its potential wartime enemy is preposterous.
The notion that US allies disagree with the US position against China is also absurd. Japan is starting to rearm because an aggressive and imperialist China is a threat to them, in fact a direct threat to their homeland, much more than the US homeland. Australia is also not happy with the idea of China's hegemony in the region. Taiwan obviously depends on the US for its independence, and Europe is less than happy with China supporting Russia. Yes, there are differences of opinion and interest in the Western alliance, but nobody there wants to see China expand without being checked by the US.
China pulled the mask off long ago in Tiananmen Square, it has not changed course since.
We are in agreement with the need to keep our allies afloat, both economically and under our secure military umbrella. America needs to restrain itself, gain a sense of perspective, and do what is necessary to insure that both America and its allies are strong economically and remain so.
According to a a pair of demographers, each a pair themselves, by 2100 China's population will be under 1 billion, that should do enough to give us some space going forward.
FWIW, it seems Sony (and probably Nikon and Canon) are moving their camera production out of China to South/Southeast Asia. Prior to late last year, all my Sony stuff was made in China, but the latest version of my main camera was made in Thailand.
Also, while previously most stuff I had ordered from Land's End was made in China, the most recent three (two shirts and a hoodie) were made in Cambodia, Bangladesh, and India.
I submit that the move away from China is happening faster than you think.
Yep, this will be a topic of future posts... :-)
Great post. If we rewind the clock back to the 1990s leading up to China's entry into the WTO in 1999, who in the American political sphere was strongly advocating for unrestricted free trade with China? Was it large corporate interests, ala Wal-Mart, or globalists who believed that China would liberalize as it became integrated with the global free market, or some combination thereof?
Well, Wal-Mart is a thing that exists and as the No. 1 retailer did more than any other company to squeeze margins out of its suppliers, who chose to offshore production to China or else lose access to Wal-Mart's shelves and market share to a competitor who would've offshored production to China anyway.
And liberalization was always a canard. Kayfabe. Like the hunt for WMD in Iraq. American businesses, and the Washington Consensus, saw China's entry to the global market as purely transactional. They were negotiating with the Chinese government -- was the other side going to embrace an economic doctrine that was openly calling for its replacement?
Last I checked, Vietnam is still a communist country. Offshoring to Vietnam has nothing to do with supporting democracy. The US is playing protectionism. Period. You are trying to compete with the 2nd largest economy(China) with protectionism. Free trade is dead. WTO is dead. Shifting manufacturing from China to other countries still won't bring manufacturing jobs back to US. In the end, even the dirty strategy may hurt the Chinese economy but the US will gain nothing from the game.
When NATO was founded in 1949 it included then-fascist Portugal as one of its founding members.
The US would support offshoring to Vietnam because they view Vietnam as a potentially useful ally against China: remember that Vietnam resisted American imperialism for over a decade, it resisted French imperialism for close to a decade, but it has resisted _Chinese_ imperialism for millennia.
Admirable self restraint in saying nice things about people who say idiotic things.
I'd just add that there is no need to attempt to de-Chinafy all our imports. Not everything is strategic. Our beef is with the CCP not the guy on the teddy bear assembly line.
And are subsidies necessary to execute a friendshoring strategy?
I would like to think that I can disagree with my friends without thinking they're idiots! Nobody gets everything right, including me!
And yes, I agree about China. That's a topic for an upcoming post...
Oh, and subsidies aren't necessary, but they help.
Admirable! No kidding!
I hope that means pointing out that the world can still benefit from trading and exchanging intellectually with China notwithstanding the CCP. "Decoupling" ought to be narrow and well targeted and aware of costs to ourselves of our actions. Perhaps subsidies are a way to be target better.
I think GDP is a stronger measure here. Logistics, IT, managing complex organizations - these are skills that are a really big deal for winning wars and don’t obviously fall into the manufacturing base bucket as well as simple GDP. Could be convinced economic complexity (so Russia power is overstated because of its oil wealth) is a bit better.
I'd just differentiate between manufacturing and manufacturing employment.
And there is always the future. Maybe the group that first cracks raising the productivity [TFP really] of services will the the superpower of the 22nd century.
Granted, you were not necessarily going through the actual specific subsidies here (which I regrettably am in the weeds on) but saying we need to give all of the tax credits, presumably including production tax credits, to foreign produced items is a “wut, LOL” moment for me. Quoting: “ We need to negate that advantage by offering Japan and Korea full access to the U.S. market, including all the same tax credits that we give to domestic producers. Otherwise it will look like the U.S. is the kind of country that hangs its key allies out to dry. And that is an image we absolutely can’t afford.”
A few points:
1. If it’s an image we can’t afford we’re going to be declaring bankruptcy because the political route to do this is very close to zero probability, at least for the next two years.
2. The consumer tax credits on things like EVs have very plausible arguments that they should apply to non-North American produced vehicles, but regarding the vast bulk of other subsidies - they are not consumer credits, but paid to the company which (presumably) has US tax liability to use them. Giving tax credits to a foreign company, doing the work in another country, booking income in the home country, and paying the bulk of its taxes in another country is not only politically difficult, but economically bewildering to me. Someone would have to convince me that this is remotely efficient and wouldn’t result in XYZ, Inc simply becoming an entity that has two business lines in the US - manufacturing and selling tax credits into the financial markets, with US taxpayers footing the bill issuing credits for items that likely would have been made and sent here anyway except for a small marginal adjustment.
3. It’s a small thing, but although the free trade country sourcing provisions for the EV credit have all sorts of issues - it is the ONLY pro free trade thing I can think of being legislated in recent past. It’s actually led members of the EU, Japan, Indonesia, some African nations, to start asking “what if we revisit those efforts”... Even Yellen has said as much, and floated the idea of reconsidering agreements with Europe and others, while bipartisan members of Congress have raised secure lithium and copper supplies as urgent reasons to support renewing the (soon to expire) Chilean trade treaty. It’s definitely swimming against the tide, but I’ll take small small victories.
I mostly agree, with the major caveat that one significant difference between “Cold War II” and version 1.0 is that last time the US didn’t have a domestic version of the “enemy” ideology that could take over the country.
Joe McCarthy was a demagogue, but he was at least aimed at the US’ stated adversaries.
Now, Trumpism/Putinism/Xi-ism are the other camp. The call is coming from inside the US House. Literally.
No less than Tim Snyder has said the Midwest was fertile ground for Trumpism because of deindustrialization. Isn’t reversing that the bet Biden is making, not sticking it to South Korea or France just because?
If the US is just another pole in the world, than the concern between allies and friends over socio-economic and political health should be mutual. We also have a duty to fight Trumpism here and not inflict it on our allies and friends again.
Xi literally developed a state-mandated personality cult. Xi Jinping Thought is a throwback to Mao, whose Thought ended up killing tens of millions through famine and state-sponsored terrorism. Besides ideology, the One Belt One Road initiative was China's efforts to promote an infrastructure diplomacy and bring nations into its sphere of influence.
Putin has an ideology, developed by Alexander Dugin. It's far right, but Dugin purports that he theorized the Fourth Political Theory. Steve Bannon is a friend of Dugin's and has through his brief stint in the Trump White House plugged himself into ultranationalist movements throughout the world. Orban, Erdogan and Lukashenko have applied his ideas in their respective governments.
Seems to throw doubt on the whole idea of a broader conflict, then. In which case, what's wrong with protectionism? After all, it was the dominant economic paradigm of the US from the 1790s to the 1940s, far long than any other.
Because in pure economic terms, protectionism doesn't work as well as free trade.
Now economic growth has to be balanced against national security, which is why we're talking about delinking with China. But there's not nearly as persuasive a national security argument against trade with Australia or Europe or the Phillipines.
The problem is that “buy American” isn’t just just about nationalism, it’s also about social class, regional resentment, and national stability. Fairly or not, American establishment has gotten a reputation for the last 40 years of destroying jobs of the working class in Ohio to enrich professional class people in in New York and LA. This is one of the greatest factors leading up to Trumps rise.. rebuilding trust in these communities, and the high cost of having lost that trust should has lead me to be a lot more sympathetic to protectionism even if I know it’s makes little economic sense. What’s the point in keeping South Korea and Japan happy to protect democracy if we lose Wisconsin to authoritarians?
Economists love to say this and that doesn't work because their model says so, unfortunately in the real world your models are useless. Assume we have a can opener. Down here in Oz we are having the same argument, pollies left, right, and centre are saying we should make stuff. Now, that doesn't mean we will but it is worth the conversation. The pandemic showed just in time supply chains and management that had cut every last cost out of their businesses to fuel share buybacks were left exposed and needed to be saved by the big bad government. Do you buy insurance? I do, why don't we have the ability to make stuff if we need to, and why don't companies (and governments) have enough things on hand if the world turns to shit again
Because it's really fucking expensive and that means everybody would have to reduce their SoL.
Also FWIW, "semiconductors" are complicated. The latest greatest fastest whizz-bang chips from the latest fab aren't the ones in your car, or anything else (except, maybe, your cell phone, and even there, not really). The problem is that most "semiconductors" are made on fab lines that used to be latest greatest fastest whizz-bang lines, but now have been depreciated, so chips from them, while comparatively low-tech are almost free. But keeping a depreciated fab line going is still pretty serious high-tech, even for a line, say, 10 years old. And you can't really build a 10-year old technology fab line new. Thus the whole game is flaky. So far, it's not imploding on us. So far.
Also, "semiconductors" are made in two steps: the fab lines themselves and the packaging process. Those semiconductor packaging plants are pretty high tech themselves, but since corporations hate paying salaries, they tend to be in low-wage countries. China and the Phillippines come to mind, but my knowledge of where those plants are is out of date.
Anyway, I get nervous when people say simplistic things about semiconductors. Said simplistic things might not be actually wrong, but...
So, given that it's all about EV and batteries... Cold War 2: Electric Boogaloo?
In the first Cold War, we wisely realized that when allies like South Korea and Japan and France got rich, it made the U.S. and the world more secure.
Great post, but not nearly deep enough consideration of India—it will be the biggest, and also politically not as committed to democracy as we thought.
Why do you think so? Certainly India has certain authoritarian tendencies and lots of internal conflict that could cause issues but the same can be said of the US.
I'm no expert, and would love to read more on the topic -- but my basic understanding is that BJP is more consistently dominating elections, and getting stronger. Further, India could have joined the US in punishing Russia for its invasion of Ukraine, but has undermined the US's sanctions regime. My naive understanding is that in the 80s and 90s, India was just a much more reliable ally and taken for granted as a secular, liberal democracy. For a country of its size and strategic importance, I just think the complexity needs a closer study, and risks of non-alignment need to be considered more carefully. But, maybe my skepticism is misplaced! Would love to learn more deeply on the topic.
It's a fair point that the US is trending in the wrong direction, too, but the balance of power between the two major parties has been keeping the less-democratic tendencies at bay, more than the BJP gets. In the US, social media bias is met with outrage and scrutiny. Not so much in India....
Fair points, although I dont weigh India's fence sitting vis a vis Russia vs Ukraine very highly because frankly I get their POV as far as their interests are concerned.
If you start from the premise that China is a military threat to overwhelm the world's developed democracies, in part because it's "so much bigger" than the US, then the rest of your discussion rests on quicksand.
Well I think the premise is that China wants to change world institutions in ways that we don't like, as proponents of liberal democracy (in the broad sense). China being 'so much bigger' means this will be hard to stop.
As for military threats, China is clearly a threat to at least one allied developed democracy - Taiwan.
China has friends in Africa, not just Russia and North Korea. I just watched a Bloomberg video of how Belt and Road being a debt trap is a fallacy, and that Africa appreciates China taking an interest in building infrastructure in Africa.
Sure but these friends are not much use to China outside of racking up numbers at UN general assembly votes. At least right now - maybe this will prove a very valuable investment in a region that will soon be economically significant.