Friday, May 31, 2019

China unleashes saber-rattling video responding to US tariff pressure - Thomas Lifson

by Thomas Lifson

While it is possible to take alarm, it is important to realize that China is not going to rush into war while the United States possesses military superiority and enjoys the support of nearly all of China’s neighbors

China is whipping up patriotic furor domestically by allowing the posting of a propaganda video to an internet platform that it controls, castigating the United States’ escalation of tariffs in the economic confrontation underway. The video openly states that military conflict may become necessary --“China must be prepared to fight a protracted war” -- and uses rhetoric invoking violence:

YouTube screen grab

But keep in mind that there is an element of deniability built-in for the government and communist party, which are not officially the creator or publisher. Bill Gertz of the Free Beacon explains:
The video was posted on Watermelon Video, a short-video sharing platform that is under control of Beijing's State Administration of Radio and Television, the propaganda control office that regulates all online and broadcast content. Anything broadcast or published to the estimated 300 million Watermelon users is therefore considered approved by senior leaders of the ruling Communist Party of China.
It is four minutes long and is worth viewing in its subtitled version embedded below. A summary of it can be read at the Free Beacon here, including such highlights as:
"Trump's ‘outrageous and selfish' strategy might work for smaller countries, but it will never work for China," the video warns. "To quote a well-written article in the Global Times: If the Americans want to fight, we will fight them until the end! And we will fight until the Pacific Ocean splits into two!" Global Times is the Communist Party of China's nationalistic and anti-U.S. news outlet.

The Chinese Communist Party, which controls the government, understands that President Trump’s tariffs are inflicting genuine economic pain on its people. Indirect indicators, such as the 19% fall in diesel fuel consumption in April, demonstrate that a severe economic contraction is cutting overall economic activity significantly – and this is before the latest escalation of tariffs. People are losing their jobs as factories, truckers, and others cut back by a fifth or more, with more cuts ahead. This sacrifice must be explained and justified.

The video correctly, in my view, explains the larger stakes: that the United States is forcing China to change its economic model that steals intellectual property and aggressively exports manufactured goods as its economic engine of growth. This model has worked like gangbusters, pulling hundreds of millions of Chinese people in coastal areas and some of the inland major cities out of poverty and into modern middle class-like lives. (Keep in mind that hundreds of millions more living in rural areas remain mired in poverty.)

It is also important to understand the baseline historical understanding that early all Chinese people share: that China historically and naturally is the leading country of the world, but was brought to its knees by foreign imperialists who from the eighteenth century onward forced mass opium addiction on China, militarily defeated it, and divided up spheres of influence that stole China’s wealth for their own benefit. 

Officially, The Chinese Communist Party takes credit for ending this misery and bringing China back to the point where its natural position as the dominant world power is in sight. (The fact that communism kept China in poverty while Taiwan and overseas Chinese people in Southeast ASia -- for instance, Singapore -- began rocketing to a standard of living equal2 to that of Western Europe is ignored.) Presenting American pressure as a threat to this historical inevitability is a justification for sacrifices ordinary people are already making.

While it is possible to take alarm, and no doubt Democrats will hype “Trump’s war” as a fearsome possibility, it is important to realize that China is not going to rush into war while the United States possesses military superiority and enjoys the support of nearly all of China’s neighbors except North Korea and Russia.

I have no doubt that heated negotiations are underway and that the United States under President Trump is offering a way out for China that involves modification of its development model toward reliance more on domestic consumption as its economic engine, the way that Japan has adapted its own economic strategy, which was the model of export-driven growth that China has followed. 

Under President Trump, the United States is no longer willing to choose industrial decline, which is what China’s existing model requires of us to sustain its own rapid growth. China’s leaders can and will understand that position. A deal is possible so that China can tell its own people that their strength and sacrifice paid off, and in Trump, they face a deal-maker of the first rank.

Hat tip: Roger Luchs

Thomas Lifson


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