President Trump’s Asian tour
North Korea, China, and trade issues will dominate President Trump’s trip to five Asian nations. But the President’s withdrawal from the Trans-Pacific Partnership (TPP) negotiations within days of his inauguration will not make his reception as warm as it might have been.
The President’s trip, which began yesterday, was extended by a day so that the President could attend the East Asian summit on November 14th. This was to address complaints that his original schedule, which called for skipping the summit, indicated a lack of U.S. interest and commitment to the region.
Trump concerns on trip
On the security side, President Xi Jinping has noticeably increased his bellicosity toward the U.S. and its allies since emerging from the recent Chinese Communist Party Congress with dictatorial powers. The US and UN Security Council passed economic sanctions on North Korea to halt or slow Kim Jongun’s thermonuclear and ICBM programs. China’s Xi had initially said he would support the boycott, but following his consolidation of power he and North Korea’s Kim exchanged public love letters. China has been flying strategic bombers and deploying advanced spy ships near U.S. bases on Guam. This places Xi’s China in lockstep with Kim’s threats to annihilate Guam with nuclear ICBMs.
Hong Kong meanwhile has become a center where Chinese and North Korean traders meet and arrange the shipment to North Korea of arms and war materiel.
China’s nonnegotiable demand vs reality
WTO headquarters Geneva
China claims to be the world leader in the promotion of free trade, rule of law, and support for reducing CO2 emissions in support of the Paris Climate Accords. Therefore, it argues, it should be promoted in the World Trade Organization (WTO) to ‘market economy’ status — which “would make it considerably harder for other nations to block imports they believe are improperly aided by Chinese government distortions….China has sued both the U.S. and European Union demanding the change, calling it ‘nonnegotiable,’ and Chinese officials are likely to reiterate that demand when they talk trade next week with President Trump during his Beijing visit.”
The U.S. has so far refused this demand — as well it should. China’s economy and trade are heavily government-controlled, and this is becoming even more pronounced since Xi Jinpiang was invested with dictatorial powers. China is also the leading world polluter, and its promises of climate leadership are just promises for later fulfillment.
WTO rules need updating
The WTO rules were drawn up before China came on the scene with its unprecedented mercantilism. The WTO rules do need to be changed. But the point of such reforms should be to expand trade and open markets among members, not make it too easy for member countries to erect tariffs and quotas to restrict it.
One possible exception to this general rule might be for nations to collectively counter-boycott Chinese goods when the Chinese use boycotts to force another country to kowtow to China’s policy wishes. South Korea comes to mind.
Is individualism necessary for innovation?
The Reformation helped make both individualism and education central to the culture in which capitalism developed in northern Europe. The Chinese hope to become the world’s new great power through a capitalism based on education but no individual freedom. It will be a natural experiment of sorts as to how far they can get with this model. The view of skeptics in the West is that innovation is dependent on individual freedoms and that without innovation, China will eventually stagnate and fall behind.
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