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Chinese Trade in the Aftermath of Covid-19
Connectivity
We indeed live in an era where it may seem the world is flat – world trade involves the fusion of the industrial world with emerging countries. It involves large and small entrepreneurs competing in a global supply chain where connectivity has taken root. It’s the world of “globalization”.
Forces that helped create the current economic environment can be found in the development of the Internet, workflow software, outsourcing, many technological developments, greater product demand and a number of other factors.
China with its vast and cheap workforce has been the center of much of this activity.
Chinese Demographics
China has always intrigued people because of its gigantic population, rich culture and ancient history. They currently wield economic power second only to the United States in size and scope. They have always been a producer nation but more recently are becoming a consumer nation. While many still live in poverty, their manufacturing base has been creating a growing middle class.
Half of Chinese workers live in more urbanized areas where incomes are rising and jobs are more plentiful. This group’s spending patterns go beyond consumer staples and will influence trends for the entire country as well as the world.
The other half lives in smaller cities with its own emerging middle class. Their clout will be noticed by companies around the world. China’s consumer base will overtake that of the U.S. if it has not happened already.
So while other parts of the developed world have already been enjoying the benefits of many non-essential – even luxury – items, China is barely beginning. As greater income levels grow and cover the basics of food and shelter, a Goldman Sachs’ survey found that the largest potential for growth is in the “having more fun” category. Health, wellness and family education will also get a lot of attention.
After all, China does not have an extensive social safety network for their aging society (although government subsidies in relation to personal healthcare spending are increasing) and saving, not spending, has been a priority for decades.
Chinese Politics
On the political front, China gained their independence in 1949 and then established the Chinese Communist Party (CCP). Sometime later, those in power vowed to overtake the world within one-hundred years including the United States as its primary target [see more below].
A new narrative had evolved in Chinese thought from one of class struggle against oppressive feudal powers in China to a struggle against the bullying and humiliation imposed by foreign powers. It was a nationalist movement of China against the rest of the world. But it’s not a struggle of military might – yet.
China uses deception when possible to carry out their policy. The Chinese public and Western press rarely get an accurate glimpse of what’s going on. Yet, General Secretary of the Communist Party, Xi Jinping, has come forth more boldly than others to express the “China Dream” and the year 2049 is to be the date of realization.
For sure, China has been “playing” the U.S. until the “new kid on the block”, President Donald Trump, stepped up to the plate.
Some have feared a trade war and that was their reason for not confronting China; Trump and his supporters reply, however, that we HAVE been in a trade war for decades – and losing – and now things are going to change. Indeed they have.
Chinese Expansion
The China Dream is not to be a military takeover initially but an economic, political and social infiltration and subversion. In this effort, there are two types of forces working in tandem in China and around the world:
(1) Qiaowu (pronounced “chiow-wu”) – these are Chinese people living abroad who are ingrained with a mission for “overseas Chinese affairs” that attempts to transform foreign societies into those sympathetic to China and its culture.
The Confucius Institute in the U.S. may appear to work as “building bridges” but, in essence, is part of the qiaowu. Yes, one may say, building bridges is good and even beautiful at that. Nevertheless, this is one example where it is so easy for naïve individuals to become totally misled.
Australia, especially, has been a target for Chinese qiaowu and many Australians are having a tough battle on this issue. They realize that their sovereignty is at stake. But, it’s right here at home too.
The University of Arizona (UA), a taxpayer-funded institution, paid $100,000 to launch a Confucius Institute on its Tucson campus several years ago and subsequently dedicated nearly $2 million and other public resources to keep it going.
Confucius Institutes are founded by the Chinese government and provide platforms to disseminate Chinese Communist Party propaganda, encourage censorship and restrict academic freedom. This has been noted by our Department of Justice.
Many have now closed over national security concerns and pressure from the Trump administration; nevertheless, efforts to propagandize will continue as more and more Chinese agents take to social media.
(2) Ying pai – these are the war hawks – generals, admirals and government hard-liners. Some scholars regard this group to be the real voice of China. The influence of the warring hawks has increased under Xi Jinping, China’s current communist leader, in whom this group thinks they have found sympathetic support for their mission of dominance.
The fulfillment of this mission has been, and IS, a long, slow grind for Chinese activists and many observers simply do not accept or understand this Chinese strategy. Chinese determination – however silent to the world – uses a political system that allows them to corral worker behavior in ways that open societies don’t have. They place strict social and political constraints on their populace. Further, they have little internal press coverage.
Thus, Chinese efforts to expand their influence – and defend their territories – face little internal obstruction against their goals of expansion and supremacy. There may be exceptions, of course.
Foreign policy makers and other high-level government officials need to gather a wealth of knowledge about Chinese culture and language if dangerous misinterpretations are to be avoided – the same responsibility holds for China as well. This ying pai group feverishly wants to see China’s rise to preeminence.
America Held Hostage at Its Own Doing
Let’s look at what happens when the U.S. literally gives control to Chinese entities in areas that impact everyday Americans. Let’s first look at the pharmaceutical industry as mentioned above.
Rosemary Gibson, author of “China RX”, testified in Congress about much of the world’s dependence on China for generic drugs. China literally controls the health for much of the world.
During the outbreak of the current corona virus in Wuhan Province, where many believe it began in China, there have been outcries in the U.S. and elsewhere to make China accountable for this grievous pandemic.
Senator Tom Cotton (R-Arkansas) and Congressman Mike Gallagher (R-Wisconsin) have introduced legislation which would end U.S. dependence on China for pharmaceutical manufacturing. The bill’s key restrictions would go into effect in 2022 and have no impact on the current coronavirus pandemic.
Cotton also states that, based on the past, the Chinese government will likely still attempt to steal intellectual property from the United States, including a coronavirus vaccine.
“[T]he Chinese Communist Party has been stealing America’s intellectual property for decades, and they aren’t going to magically stop in the middle of a pandemic,” Cotton said.
Let’s focus on Chinese theft, for a moment – Chinese theft is not necessarily direct in manner and approach. It’s subtle. This falls in alignment with centuries of Chinese culture and strategies. And, sometimes, the Chinese get what they want even without a theft occurring.
The Democrat-backed policies of allowing more and more Chinese conglomerates to buy out American properties and businesses gave China trade advantages that are, in part, responsible for the development of the current state of affairs in which China has a disproportionately large influence on American commerce.
Recently, however, the Trump administration killed a decades-long contract between the Obama administration and China that allowed the Communists to control the second-busiest container port in the U.S.
Other Chinese Theft
Let’s look at writer Clive Hamilton, former NSA contractor and author of “Silent Invasion: China’s Influence in Australia”. Hamilton states that Edward Snowden, an American whistle-blower, released documents revealing that Chinese hackers stole 50 terabytes of data (the equivalent of five Libraries of Congress) from Lockheed Martin. Vulnerable projects included the B-2 stealth bomber, the F-22 Raptor, nuclear submarines and schematics for America’s stealth fighter, the F-35 Lighting II.
China is effectively creating automatic bots and trolls in social media to implement cyber security wars against the West. They supplement this strategy with state-owned efforts to spread disinformation, causing confusion and uncertainty among sympathetic Americans who unknowingly help spread this garbage.
Do we need to refuse extending visas to Chinese foreign nationals? Senator Tom Cotton thinks we need to review that process. Many Chinese who are given the freedom to study and work in the U.S. are bent on stealing intellectual property. Cotton says “If Chinese students want to come here and study Shakespeare and the Federalist Papers, that’s what they need to learn from America. They don’t need to learn quantum computing and artificial intelligence from America.”
Be assured that China’s goals to dominate the world include mastering 5G technology and artificial intelligence (AI) both of which may be used to control outer space through weapons’ design and innovation.
The bottom line lesson to be learned as we move through the aftermath of the coronavirus is that no sizable U.S. based company that has sourced extensively with China should ever again make such a reliance on one country for production.
There has been, and will continue to be, a “re-shoring”, and perhaps a “near-shoring”, taking place that brings manufacturing back or closer to America. Innovation and adaptation are the keys for a successful transition.
Push Back
There have been warnings for years by scholars regarding Chinese expansionist tendencies and even their disturbing defensive postures. Unfortunately, for decades U.S. government officials of the highest sort have misunderstood or misinterpreted Chinese behavior.
Michael Pillsbury, author of “The Hundred-Year Marathon: China’s Secret Strategy to Replace America as the Global Superpower”, writes, “Ignoring the rise of China’s hawks may be the greatest intelligence failure in our history”.
Ignorance is dangerous. Miscommunications have consequences to the tune of over thirty-thousand dead American soldiers during the Korean Conflict that might have been avoided with a more thoughtful approach.
For years, “constructive engagement” was the norm that guided Chinese-American relations. The anticipated results of turning China into more of a cooperative nation did not happen. As Michael Pillsbury again notes, “Control is still in the hands of Communist party leaders in Beijing and with the shadowy hardliners, especially in the military, behind them”.
Impact on Global Logistics and Supply Chain
The recent covid-19 virus outbreak may be one of the most profound and dramatic incidents that is happening in this first part of this century.
This virus and the fear it engenders might have established the turning point in the way U.S. government officials and others view China. China holds the power over much of the manufacture of medications for the U.S. and other countries. They also hold the access key to rather finite deposits of rare earth minerals that only they can supply. These rare earth minerals are used in many strategic applications from making microchips to florescent lighting to magnets.
American companies are planning their response. The results of their planning and modifications to China trade will begin to become known over the next several months.
Changes After Covid-19
Production, global supply chains, quality control and pricing models are in for big changes. And there ARE alternatives to using Chinese labor. Even without them, new alternatives will arise or be created.
It’s this writer’s opinion that freight tonnage may decrease in the near to intermediate future due to some manufacturing being shifted elsewhere from China. Shifting supply chains won’t be quick. It’s presumed that port activity will return to near normal but still fall short of pre-coronavirus levels.
It’s just too early to predict the impact on trucking, rail and air due to the fear factor that has disrupted our economy.
Some Things May Never Change in China
Further, China’s internal problems of rampant corruption, lack of transparency, centralized control, censorship, political propaganda, lack of infrastructure, lack of pluralism and pollution all flow into their worldwide interactions to one degree or another.
Is this where America wants to be heading?
We need to learn and properly respond with what’s going on in China and understand that Chinese policy is to not only surpass us but to suppress us and our way of life. This is not acceptable.
Individual Americans Waking Up
There are all sorts of patriotic groups and alternative news outlets popping up all over the country in response to mainstream media unwilling to provide objective news reports and a polarized public some of which are posing threats to our Bill of Rights. Some groups may have started with gun rights’ activists but they now include concerns about other protected civil liberties that include the right to due process, equal protection, and a prohibition against any state law that supersedes federal law.
Not all is doom and gloom. Right now, as we all move forward, economic opportunities may open up such as never before despite some businesses in certain sectors that may have been unable to hang in there.
Nevertheless – look for opportunity!
Lastly, this article is in no way is making judgment on the great many U.S. Chinese citizens or many of the great Chinese people around the world. It is focused on a communistic regime whose goals, strategies and actions are in stark opposition to the founding values most people hold to dearly in the U.S. and the Western world.