China's Economic Cold War on the United States

Discussion in 'Americas' started by LETHALFORCE, Oct 28, 2012.

  1. LETHALFORCE

    LETHALFORCE Moderator Moderator

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    Richard A. D'Aveni is Bakala professor of strategy at Tuck School of Business at Dartmouth College. Strategic Capitalism, his fifth book, was just published. Professor D'Aveni is listed in the top 25 of the Thinkers 50, a global ranking of the top management thinkers in the world. See Richard A. D'Aveni - Professor of Strategic Management.

    Read the recent report by Congress on China's Huawei Technologies and ZTE Corp. and you could be excused for a sense of déjà vu. It sounds like it came from the U.S.-Soviet era. One passage: "The opportunity exists for ... espionage by a foreign nation-state already known to be a major perpetrator of cyber espionage."

    Many are worried that Congress has gone too far. But the truth is it hasn't gone far enough.

    Once the world admitted China to the World Trade Organization in 2001, we welcomed the country into our free-markets. We trusted the global economy would evolve toward free and fair trade. We then set our policies on cruise control, assuming the world would follow the U.S. model.

    [See a collection of political cartoons on the economy.]

    Instead, China got a hand on the steering wheel: It turned the rules of global business in its favor. We woke up to find a hijacking of our free-market system. China was manipulating its currency, subsidizing its firms, undermining nascent U.S. firms, erecting trade barriers, and stealing intellectual property. China was using its firms as instruments of state capitalism—it even coordinated them to monopolize critical resources such as steel and rare earths.

    We are now at odds with China. We are essentially in an economic cold war. The Huawei report—a notable bipartisan effort—documents as much. After hollowing out many manufacturing industries—tires, consumer electronics, auto parts, steel—China has gone after tech-heavy industries like telecommunications.

    The report focuses on national-security risks posed by Huawei and ZTE: spying via backdoor software implants, cyber attacks on key networks, and inserting malicious software in security systems. These are serious allegations: Imagine if China used Huawei equipment to shut down American water and electrical systems.

    [See a collection of political cartoons on defense spending.]

    But if we open both eyes, we can see the sun rising on a new reality: China has invented new economic rules to give it an edge. It is not pursuing Western capitalism. It never plans to.

    After the Tiananmen Square massacre, Deng Xiaoping said China should "observe developments soberly, maintain our position, meet challenges calmly, hide our capacities and bide our time, remain free of ambition, never claim leadership." China has taken that approach politically and economically. By hiding its capacities, it had hoped not to wake the sleeping giant.

    But the U.S. giant may finally awaken given the report's implications. Let me recast three recent developments to show how they fit the notion of an economic cold war.

    [Read the U.S. News Debate: Should Congress Interfere with China's Currency Policies?]

    Huawei's and ZTE's expansion. Huawei and ZTE had hoped to expand into the United States from places like Canada and the United Kingdom. This would foster American-style competition. But Congress has suggested Huawei's and ZTE's designs could be a ruse to pierce the integrity of the U.S. telecom system.

    Bankruptcy of solar-panel makers. Critics blame the U.S. government for investing recklessly in renewable energy—especially the $527 million of loans to Solyndra. Though justified, the criticism ignores China's strategy to underprice and gut the U.S. solar-panel industry. Whatever its economics today, the industry figures prominently in future U.S. energy security.

    Approval of Chinese bank expansion in the United States. The Federal Reserve in May gave unanimous approval for three state-controlled Chinese banks to expand in the United States. This gave China an opening to gather U.S. depositors' money to fund its economy—while gaining access to intelligence on U.S. corporate borrowers and an avenue for cyber warriors to cripple the U.S. banking system.

    [See a collection of political cartoons on energy policy.]

    It's time to expose China's real plan: To unseat the U.S. as a global leader, a strategy I detail in my book, Strategic Capitalism. The spin masters in China tell Americans otherwise, but we can't ignore recent history. Back in 2001 people thought China, by embracing capitalism, would move toward free markets and democracy. But it embraced what I call "strategic capitalism," a mix of free-market and state-managed capitalism integrated into a strategy to attack the U.S. economically and disrupt our competitive advantages.

    Big businesses like Huawei are one result—and often serve, as Congress noted, as state-supported "national champions" for dominating global markets. Such firms defer to internal Communist Party committees, watchdogs that monitor their compliance with government requests.

    [See a collection of political cartoons on Congress.]

    Many U.S. leaders thought that if we could ride through an uneven patch with these companies, they would mature into American-style enterprises, participants in free and fair global markets. This was naïve. Huawei's proposed incursions are but further moves to weaken the United States.

    It's a good thing that Congress has rung the alarm bells. The United States needs a strategic capitalism of its own—and before it's too late. Economic cold wars often evolve into military ones, and China already stirs up more trouble than we care to deal with in Iran, North Korea, Pakistan, and Syria. By fighting an economic cold war now, we head off something worse later: fighting a military one with a much richer and more powerful China.


    China's Economic Cold War on the United States - Economic Intelligence (usnews.com)
     
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  3. satish007

    satish007 Senior Member Senior Member

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    first we talk, and then we serious, we will ban chicken feet import from US.
     
  4. W.G.Ewald

    W.G.Ewald Defence Professionals/ DFI member of 2 Defence Professionals

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  5. SADAKHUSH

    SADAKHUSH Senior Member Senior Member

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    You guys are taught one liner in your education system. For you it might not an issue to be concerned but for us in the West it is since your regime is doing everything contrary to the WTO agreement. "What you sow shall you reap", in the foreseeable future.
     
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  6. satish007

    satish007 Senior Member Senior Member

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    It is an India forum and this thead is china America cold war. Please sale china chicken feet or f---- off,Canadan always think they are American but they are not.K
     
  7. asianobserve

    asianobserve Elite Member Elite Member

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    Strategic capitalism... a novel term.
     
  8. SADAKHUSH

    SADAKHUSH Senior Member Senior Member

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    Now, I know they also teach you to launch personal attacks and use vulgar language. You can update rest of us with any other characteristics that might exist in your profile. Is this why your Chinese gangs use to smuggle your brothers and sisters in to Canada stuffed into shipping containers like sardines?

    Just deal with the accusations as highlighted in the article and in future take out your frustration by standing in front of the mirror. Kindly change the Avatar that is insulting my Sikh brothers and sisters. Try to stand on your legs rather than being imposter. Keystroke cowards die by dozens in the web world.
     
  9. average american

    average american Senior Member Senior Member

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    I allways kind of though of Canada as USA 51st state with health care.
     
  10. Armand2REP

    Armand2REP CHINI EXPERT Veteran Member

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  11. amoy

    amoy Senior Member Senior Member

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    "National Security" or "energy security" is a double-edge sword. The author even calls for blocking Chinese bank expansion in the United States under that flag.

    It's catastrophic for China's solar panel industry. Green-blind? US wages war on Chinese solar panel makers — RT

    China needs to retaliate in the same fashion to save Chinese jobs. Let "strategic capitalism" be in full swing! :p
     
  12. Armand2REP

    Armand2REP CHINI EXPERT Veteran Member

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    Lets see, US trade/enterprise creates about 50-70 million jobs in China. China trade/enterprise in the US creates 300-500,000. Who is going to lose that trade war?
     
  13. s002wjh

    s002wjh Senior Member Senior Member

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    well walmart and other american 1%, and US consumer will suffer. both will hurt there is no winner in a trade war between 2 largest economy.
     
  14. Armand2REP

    Armand2REP CHINI EXPERT Veteran Member

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    There are other developing countries that will gladly take production and offer lower wages. There are not any extra consumers to replace the world's largest market.
     
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  15. s002wjh

    s002wjh Senior Member Senior Member

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    1. there are many reasons why company such as apple, sam, other electronic, GM etc etc haven't shift the manufacture to other developing countries, even though vietnam and other countries has lower wage than china. one reason is low labor cost sure, but other reasons are supply chains, decent skill worker, infastructure, efficiency etc etc.
    2. US not only import alot from china but also export to china. GM sold more cars in china than US, china is 2nd largest customer for apple and many other consumer products. luxuary products etc etc.

    so a trade war will hurt both, and damage world economy.
     
  16. Armand2REP

    Armand2REP CHINI EXPERT Veteran Member

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    Foxconn is shifting much production to Indonesia and they make most of the brand electronics. GM is bringing all of its outsourced IT jobs back and opening a couple of closed auto plants. There are dozens of major companies shifting back to the US as Chinese wages and shipping costs rise. There are hundreds shifting out into other developing countries including Chinese owned industry.

    US doesn't export many cars to China because they can't be sold there unless they are made there. China doesn't export cars to the US because no one wants Chinese cars. American cars are made in the US or Mexico, some parts are made in China. Foxconn makes Apple products and like I said they are already shifting production to Indonesia and getting ready to replace Chinese workers with robots because they are too expensive and riot too much.

    The only thing it would do to the US is raise consumer prices for a couple quarters until alternate sources can be found. Chinese workers get canned and replace CCP. US wins....
     
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  17. satish007

    satish007 Senior Member Senior Member

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    It is not personal attacks, it is whole country attack.

    you canadian is hopeless, you are the only America's state has health care because you keep importing smart Indian IT and Chinese billionmen.
    Kya Aap paagal Hai ?.

    I repect Sikhs bhai and make them my Avatar

    Obscenities Edited
     
    Last edited by a moderator: Oct 30, 2012
  18. Singh

    Singh Phat Cat Administrator

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    @satish007 Please don't use obscenities in your post. I have edited your post.
     
    Last edited by a moderator: May 10, 2015
  19. s002wjh

    s002wjh Senior Member Senior Member

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    lol are you one of those guys think everything will be replace by robots.
    currently almost all consumer electronic are manufacture in china, thats a fact. now no one can predict future so if you believe all the stuff are shift to other country thats your opinion. even if some shift occur its miniscule compare to current china manufacture capability. currently china is one of the biggest market for many US/european products. you can predict all you want, people saying same doom/gloom stuff for years now, but the manufacture is still there in china. its not just about cheap labor as i indicate before. if you look at china car exports, don't look at europe/US, but look at country such as russia, s.america, africa, asia etc. the fact is unless there some major thing happen, china economy is not gonna fail like many doom/gloom forum member predict. if it fail it will have effect in global economy, anyone with a brain knows global economy will be affect when 2nd largest economy slow down. in fact we already seen price drop in resource such as iron ore etc due to china slow down this year.

    you need take some economy class before saying the only thing it would affect US is for quarters. if you have pension, look at what your pension are invest in. and if you think anyone can find countries with manufacture capabilities of china in few quarter, establish supply chain and other stuff, well:tsk:

    Why Apple Has to Manufacture in China - Karan Girotra and Serguei Netessine - Harvard Business Review
    http://www.nytimes.com/2012/01/22/b...ass.html?_r=1&pagewanted=all&_moc.semityn.www
     
  20. s002wjh

    s002wjh Senior Member Senior Member

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    as for US exports to china

    U.S. exports to China boom, despite trade tensions - The Washington Post

    With a richer China showing a growing appetite for U.S. products, the flow of goods includes an increasing volume of American soybeans, cars, airplanes and medicine — and even garbage that can be mined for copper and aluminum. Overall, U.S. exports to China are up nearly 50 percent in value since 2008

    so if you think a trade war is no big deal, think again. just look at your retirement fund, ill bet its invest in china one way or another.
     
  21. average american

    average american Senior Member Senior Member

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    Labor is a comodity , like oil, wheat, lumber it sells best where its cheapest, with technology what matters is who invents and designs it. When it comes to science China is pretty backward, China has never even been awarded a nobel prize for science.
     

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