Posts from May, 2019
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May 22nd, 2019

War starts when people fail to communicate with each other. The current U.S. and China dispute is so complex and overreaching, any rational discussions online can devolve into flame wars. There are so many topics, making the multi-variable optimizations difficult. Overlaying all this with a gloomy long-term implications of technology, it is far easier to just pick a side and rooting for the red / blue team.

The Gloomy Long-Term Implications of Technology

It is far easier for the Bay Area people thinking themselves as a force of good. But the technology we developed over the past a few years greatly expanded central governments’ ability. It is too easy to track down a person, collect all their communication records, for profiling and categorization. Alternative technologies to combat these implications such as end-to-end encryption can be easily outlawed at governments’ will. It is pleasantly surprising to see the United States resisted so long. As Republican given up their ideology completely for the totalitarianism fantasy, finally, the expansion of the executive branch power will result, not necessarily a president for life (although likely), but at the very least, a one-party state. Whether it is Republican or Democrat are besides the point. Populists, on either far right or far left, come dangerously close in ideology terms. After all, the United States has a Republican president running unprecedented fiscal deficit and issuing orders to anyone by the name of national security right now.

The Chinese has been playing the one-party state game for too long. The art of ruling, lies in appeasing many, allowing a few to vent, and exterminating anomalies. The digital technologies allow them to scale up. With such surveillance power, the crime rate will fall, so does the freedom.

The Gear Up to a New War

When a new war begins to break out, both sides first stop talk with each other. The media on both sides seem to have agendas. In China, the media appeals to the nationalistic honor, tries to remind the average Chinese the the past under western imperialism with Opium War and Korean War. In the United States, the media paints an evil axis of China, tries to gain a moral high-ground for the U.S. position. The sheer number of fanatics for both sides makes civil discussion impossible. It seems that media are well-positioned to setup the war between the two power.

What the United States Wants

The current trade war is difficult partly because the United States demands are fairly opaque. It is a baggage of things, ranging from pure economical to pure political. It is understandable because the Trump administration are not known for making crisp clear demands. There are feelings, numbers, ideologies, all bagged together in the trade deal.

The Feelings: the United States felt that they were in a one-sided relationship. In the past two decades, it benefitted more to the Chinese. This can be seen from stagnation of the U.S. growth and the stellar growth of China. More specifically, the feeling can be seen from the broad ban of the U.S. internet companies in China, the joint-venture requirements for any U.S. adventures to the Chinese domestic market. The fact of great many made-in-China products means the less of made-in-America. That again, attributed back to the stagnation of the U.S. common people for the past decade.

The Numbers: the United States sees the hard-cold trade imbalance as a proof that the relationship is truly one-sided. If the Americans make less than the Chinese from this relationship, isn’t it enough to prove the United States lost?

The Ideologies: to many Americans, the Communist China by the prefix is evil. The behavior in Tibet, Xinjiang and South China Sea is a proof the communists will go far to suppress oppositions. Many years of propaganda in the United States attributed the end of the Cold War to the superiority of Capitalism over Communism (rather than, for example, the open government over the authoritarian government).

It makes the U.S. demand unlikely to be simply economical. If the U.S. wants a balanced trade, the problem should already be solved last year. The Chinese wants to buy from the U.S. to the extent of anything the U.S. wants to sell. The agricultural products in a little over the past decade rose from 0% to almost 20% of total U.S. exports to China. There are a long list of things that the Chinese want to import but banned by national security reasons.

Beyond the economical demands, the U.S. wants to fix the open-market problem. The Chinese was quick to extend the olive branch on that front with the 100% Tesla-owned factory in China, even with some Chinese investments.

The sticky points, lie in the alleged IP theft, cyber warfare and the humanitarian concerns. The Chinese was quick to promise. But the United States wants more than a promise.

What’s China’s Red Line

One misunderstanding from the U.S. media and discussions, is how serious the Chinese regarding sovereignty. There are many disputes in China about how the slow progress to implement open-market hurts the mutual trusts within WTO. During the interview with Ren Zhengfei on May 21st, he mentioned this as well. The humanitarian aspects with current regime is another topic has many resonating audience within China. However, imposing a U.S. based overseeing body in the Chinese governing system is difficult for the Chinese to swallow. The sovereignty issue is a big part of Chinese education in the past half a century. The extraterritorial rights granted to westerners since Opium War are something the Chinese will not forget.

The Endgame

With the United States being the only world super power, it has the full range of options to play out the endgame. Given the unpredictability of the Trump administration, the trade war could end tomorrow with only a lip service to appeal the electoral base. It is always back to what the United States views China in the long term. If the United States sees its role to contain China and sees China as the evil axis that endangers the U.S. dominated world order, the United States should escalate fearlessly to a war with China while it can, do what it is the most familiar with (toppling the regime). The consequence of that, is a far weaker, poorer China, with 1.5 billion people that cannot feed themselves. I wish to appeal to many of my American friends, this is an undesirable humanitarian dilemma.

Alternatively, the United States could fool itself into the sanction game. Even without coordinated efforts with Europe and Japan, the sanction from the United States will greatly damage the Chinese with limited negative impact to the U.S. corporations. However, it is unlikely the United States will see a more friendly China there. With the us v.s. them mentality, it is hard to imagine a pro-American regime being born that way. An inward-looking China will ultimately poses greater threat than an outward-looking one.

The United States has to recognize that without a hot war, it needs to work with China. The shared sovereignty request is not acceptable, by both the regime and the people. On the other hand, if the United States wants a friendlier China, the demands should be a rule-based mechanism that enforces IP protection and the participation of foreign capital. The right to participate made-in-China 2025 would also be a far more interesting play for the United States than forcing China to abandon them.