The U.S sanctioned China over the treatment of Muslims in the Uighur region of the country. We have been threatening more sanctions in regards to the protests in Hong Kong, have been blaming them for the “China flu” and have now accused them of espionage. This on top of the trade war, accusations they manipulate their currency and steal our intellectual property.
But what this really boils down to is we are mad. We are fundamentally upset China is unwilling to engage in laissez faire capitalism. We want the ability to go into their nation of 1.7 billion people and make money off their market.
China isn't letting us do it. They do not adhere to hyper capitalism. They instead have a much more mixed economy of socialism and capitalism. They won’t open their markets up to allow for wealthy capitalists to come in, make a bunch of money and run off shore with it, like what they are allowed to do here in the US. We have a nation that is up for sale to the highest bidder. Everything in this nation is for sale from real estate to businesses to politicians.
In fact, the Chinese have been able to buy many iconic American brands such as AMC theatres, Legendary Entertainment, Smithfield foods, GE Appliances, The Waldorf Astoria, Riot Games, The Brooklyn Nets and their arena the Barclays Center, Motorola. And those are just the companies they outright or nearly outright own, there are thousands upon thousands of companies in which the Chinese have significant investment in. On top of that, there are another batch of thousands of companies who rely on China allowing them to manufacture in their nation for cheap labor and cheap materials so they need to remain in good graces with the Chinese and have no intention of picking a fight with them. And those are just the businesses.
The Chinese have been the biggest foreign purchaser of US real estate for nearly a decade. Buying up homes and putting them into the rental market. Of the 284,000 properties sold to foreign buyers in 2018, roughly 40,400, or 15%, were bought by Chinese nationals and they had been doing that year after year. This on top of China owning hundreds of thousands of acres of US farmland.
You can imagine how this would influence US politics. Though Chinese nationals cannot directly contribute to politicians, American companies can, even if the company is owned by Chinese nationals. In fact, after the Supreme Court’s Citizens United ruling, money from the US subsidies of foreign owned companies have flooded hundreds of millions if not billions into political action committees over the last decade. Everyone in the country, republican or democrat should be against Citizens United if you care anything at all about this nation.
China isn’t breaking the rules. We put our nation up for sale because the ultra capitalists in this country don’t actually care about America, they instead only care about getting richer. They will sell parcels of land, businesses and buildings to the highest bidder and oftentimes that highest bidder comes from China.
The thing is, the Chinese haven’t put China up for sale. What China is doing to us, we cannot do to them. Americans cannot go into China, buy real estate, land, or businesses to make a profit. China doesn’t even let Americans freely set up businesses to make money off their 1.7 billion people without some really tight controls and an ultimate exit strategy to get us out of their markets after a period of time. This is where their socialism starts to show. They say China is for the Chinese. Imagine that.
This is where the trade war comes in. No one really cares that China has been our biggest buyer and they don’t really care about the trade deficit. America is not in the business of exports and won’t be anytime soon. We are not REALLY realistically thinking we can get China to buy the same amount of our expensive and limited number of American made products as we do their low cost Chinese products. That isn’t going to happen and that’s not what Trump nor Republicans going after China really want either. What they want is access to buying up China and they are trying to muscle and bully China into it.
Let’s talk about how the trade war plays into this. They have us in a little bit of a checkmate which is why we are seeing our anti-China rhetoric on the rise and why we are now escalating tensions over the virus, Hong Kong and the Uigyur wahhabists muslims. And by the way, side note, there has been an interesting rise in wahhabism - a form of extreme islam- rising up in nearly every port China intends to build it’s belt and road initiive. Coincidence? I think not… but that’s a different segment for a different day that I promise to bring to you.
Because China sells Americans tons of products, US dollars end up in the hands of the Chinese. Because we buy products with dollars, not Renminbi. Dollars can’t be spent in China. So the chinese come to the US and spend the dollars, naturally. Over the past 40 years of China being the largest manufacturing nation, China has accumulated A LOT of dollars by selling us their low cost chinese made goods. Then as they invest in US assets, they gain even MORE dollars. Then they started to buy our debt because they had all these dollars! “Oh you’re in debt, you’re need some dollars? We have tons of them...here you go...just be sure to pay us back”.
Because the Chinese have not been buying up American goods, Americans don’t end up with many Renminbi. And even if we did, what could we do with them? With China’s protectionist China First attitude, we are not able to go and buy up China the way they have bought us up. All we can do with their currency is exchange it for dollars. Because we are putting their currency back into the market, it keeps the value of the Renminbi low. This is where SOME of the currency manipulation claims come in. China has an interest in keeping the Renminbi low and the US dollar high. We are their largest buyer. It’s in their best interest to keep as many dollars as they can OUT of the market in order to keep the dollar value high so we can buy lots of their low cost goods. When Chinese manufacturers accumulate dollars they NEED to exchange them for Renminbi to pay their workers and their bills. What the Chinese government does is rather than allowing Chinese manufacturers to exchange the dollars for Renminbi in the international market, the chinese government prints Renminbi to give to their businesses and buys up the dollars themselves. This keeps their currency low because there’s a lot of it in circulation and it keeps the dollar out of the market keeping the value of it high. And that’s when the Chinese government takes all those dollars and buys up US debts and assets which only makes them MORE money. You can see this is a vicious and dangerous cycle. It means slowly but surely China will own more and more of the US be it in businesses, real estate or debts. And because China has bought up or heavily invested in significant portions of the media business, such as our movie and sports industry, they have also bought the narrative. No athlete or celebrity will say anything negative about China so as long as they want endorsements from companies with manufacturing plants in China, have a shot at sports teams bought or invested in by China, or be in a big box office movie made by Legendary Entertainment or that plays in an AMC theater.
This is where I give Trump a little credit for bringing attention to the fact that we really DO need an America first mentality, but attacking the trade deficit and now things like the virus, the wahhabists, and Hong Kong in an attempt to get them to open their markets is a fool’s errand. China has the upper hand on this. We cannot suddenly stop trade with them. We have a dwindling middle class, growing lower class because of our rich get richer poor get poorer
hyper capitalism that Americans are reliant on low cost goods. China knows this which is why they are largely ignoring our demands. They also know there is no way in hell they are putting their nation up for sale to the hyper capitalist Americans wanting to go in and siphon their resources. Instead they are playing a long game of chess and are making progress. They will not remain a manufacturing nation for too much longer. As they increase their wealth, like all nations before them, they transition away from manufacturing towards more tech. They have been heavily investing in Africa knowing nations on that continent will be replacing them in this regard and when they do they will have huge investments in their success and will have built deep friendships and alliances. At that point, they won’t need us as their big client because they won’t be selling anything. And the African nations who will be selling low cost goods will be much more interested in China’s massive population than our dwindling one. Meanwhile, the US will become the next France or Spain. Once a great conquering nation now just a fun place to visit.
All China needs to do is wait. Over the past 40 years the US has gone from being extremely important to China’s economy to only kind of important and that lessens each and every year. They just need to placate us long enough for them to fully transition out of being a manufacturing nation of low cost goods which is probably only 10 years out. Maybe less, they’re moving fast. And when they are done with their transition and no longer need us as a big buyer, there is a real possibility they take all those dollars they have been accumulating and will suddenly off load them crashing our economy. Suddenly trillions of us dollars not in circulation will be in circulation and we’ll see mass inflation and a sharp increase in poverty because we are so reliant on cheap imports. When our dollar is suddenly worth very little, those cheap imports suddenly become not so cheap.
So what’s the solution? This silly trade war and tit for tat escalation into a cold war certainly isn’t it. We need to remain friendly with China so in 10 years they don’t decide to crush us in an act of economic warfare. What has saved the old guard in Europe is being friends with the rising US world power, not enemies.
But we do need to wake up a bit to this reality and start moving more into an America First mentality. It’s not wise for the Left to scoff at this idea simply because it’s coming from Trump’s mouth. We need to realize this is a real threat. We don’t need to demonize China and we certainly don’t need to pick a fight with them. We need to adopt new rules and this is going to be painful for the left and the right. The left will need to understand that an America First mentality and limiting Chinese and really all foreign investment in our assets is not racist. And the right needs to get comfortable with putting restrictions and regulations on our free market that don’t allow forieign nations or foreign nationals free reign.
As an American citizen you cannot easily buy real estate, businesses or other types of investments in many foreign nations around the world. It’s normal for nations to protect themselves. Latin America has learned this the hard way. Their countries are devastated from the west taking advantage of them and turning them into banana republics and we are only a few steps away from it happening to us. We are getting a dose of our own medicine and turning this ship around is going to require serious paradigm shifts from legislators and voters on both sides of the aisle.
We need to stop allowing foreigners to buy us up even if they are the highest bidder. We need to end Citizens United that allows foreigners to donate endless amounts of money to our politicians through their US subsidies and PACs. We need to start manufacturing essential goods here on our soil, we can start with PPE gear, masks and pharmaceuticals. Basically we need to be America First.
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