A U.S. trade delegation led by Treasury Secretary Mnuchin arrived in Beijing in early May to negotiate with their Chinese counterparts on a number of controversial issues. While President Trump expressed great optimism about the development of relations between the two countries at the same time, the U.S. delegation presented very tough demands, including a drastic reduction of the trade imbalance by the end of 2020, the end of subsidies to certain advanced technologies planned, and opening up even more areas to foreign investment.
Just as the negotiations were beginning, CGTN ran an article by EIR’s William Jones, who is also a Non-resident Senior Fellow of Chongyang Institute for Financial Studies, Renmin University of China. Under the headline “US-China trade dispute: Where there is no vision, the people perish,” Jones notes that a trade war would be devastating for both countries alike. But, he shows, the problem is not really the enormous trade deficit of the U.S. toward China, but rather the failed policy of the successive administrations in Washington.
The opinion piece by William Jones begins as follows:
“The contrast between the tremendous growth of China over the last two decades and the relative stagnation in the US economy could not have been more dramatic. And the fact that China and the US over that same period have dramatically increased their exchanges, in goods, in people and in ideas, has created the illusion that the one development, the rise of China from conditions of poverty and underdevelopment, is the cause of the second, namely the stagnation and regression in the US economy.
“In reality, the sorry state of the US economy can only be attributed to the almost criminal neglect by its own leaders, by consecutive administrations and by the members of Congress in the decisions they have taken – or not taken – over the last four decades.”
Those decisions emphatically included outsourcing production to cheap-labor countries, refusing to modernize industries at home, and failure by the government to introduce a “science driver” to help the economy into new areas of technology.
Unfortunately, Jones notes, although President Trump promised to reverse these policies, he has pretty much followed the old model. Thus, the US economy continues to “languish from its self-inflicted wounds”, while China is used as a “convenient scapegoat”. Jones’ conclusion:
“Trade balances can easily be resolved through more purchases by China and more willingness to sell China things they actually need in the area of high technology. But if the goal is to throw a monkey wrench into China’s development program as some Administration officials seem to want, this can only be viewed as an existential threat to China. Rather, let’s resolve the problem by investing in our own infrastructure, reviving programs to support science, and remaking NASA into the scientific capability it has always represented and finding ways to cooperate with China in accomplishing that task.”