In remarks last week, China’s government on Thursday warned, “There is no winner in a trade war.” The threat came after President Trump’s former chief strategist, Stephen K. Bannon, indicated that the administration was going take a tougher stance toward Beijing’s rapacious trade practices.
In an interview with Robert Kuttner of The American Prospect, Bannon said, “We’re at economic war with China. It’s in all their literature. They’re not shy about what they’re doing. One of us is going to be a hegemon in 25 or 30 years and it’s gonna be them if we go down this path.”
Some commentators, afraid of poking the dragon, have been quick to criticize Bannon. But he is just pointing out what has been obvious to myself and Peter Navarro — and to President Trump – for some time: China is at war with us.
Following the collapse of the Soviet Union in 1991, China once again turned its wrath on America. There is no doubt on this score. Paramount Leader Deng Xiaoping actually said so. “A new cold war is underway between China and America,” he declared to his Communist Party comrades.
That certainly sounds like a declaration of war to me. If your enemy says that you are at war, then you are probably at war, whether you want to be or not.
Beijing is determined to be the undisputed hegemon of the 21st century.
China’s strategic literature is full with “back-to-the-future” analyses in which China reassumes its traditional role as the hegemon. Only this time around, the Middle Kingdom will dominate not only Asia, but also the world.
Many Chinese analysts are now employing, as a model both for domestic politics and international affairs the same “Sinic Civilization vs. Barbarism Distinction” (huayizhibian) used in imperial times. America is seen as the leader of the “Barbarians” and must be defeated.
Virtually all of China’s top thinkers see the end of history arriving in a stark “China wins, Barbarians lose” scenario. This belief colors everything from industrial policy to trade deals and creates sharply differing expectations.
American trade negotiators, operating under a “win-win” paradigm, see their role as negotiating equitable deals that are advantageous to both sides. Chinese negotiators nod sagely in apparent agreement, but their goal is something entirely different. To them, “win-win” means that China wins twice.
The first “win” comes in the terms of the trade deal, which they humbly insist should favor China “as a less-developed country.” The second “win” for China comes when it arrogantly and deceitfully goes on to cheat on those same terms.
This is so well understood in China that the phrase “win-win” has become a national joke—at America’s expense.
Over the years, China’s trade negotiators have had many good laughs at the expense of their clueless, naïve American counterparts—and at the expense of the American worker.
Americans need to understand that Xi Jinping and his comrades believe that it is their manifest destiny to usher in a Sinocentric global order. They are utterly ruthless — the human rights situation in China is deteriorating by the day — and are willing to do anything to achieve Chinese hegemony.
This is why China has been engaged in a long-running, covert cyberwar against the United States. Beijing has literally stolen billions a year in intellectual property, especially dual-use technology, from U.S. companies. It is feverishly trying to discover cyber-vulnerabilities that could be covertly exploited, or used in the event of open conflict.
Its drive for hegemony also explains why it is seeking to build up its “soft power” both in the U.S. and other countries, setting up radio networks and Confucian Institutes. And it is why the PRC aggressively engaged in an undeclared trade war with the United States for the past two and a half decades.
By crippling American industry and beggaring its more powerful competitor, China advances towards its own goal of world hegemony.
Bannon’s recommendation to pursue a trade investigation of Beijing’s technology policies is in line with President Trump’s campaign promise to stop China’s “outrageous theft of intellectual property.”
Last week, Trump instructed U.S. trade officials to look into whether to launch a formal investigation into whether Beijing improperly requires foreign companies to hand over technology as a condition of market access.
It is an open secret that Beijing cleverly skews its market against foreign companies through technology theft, unwritten rules, and other machinations. As The Economist noted several years ago, “The meddling state [China] lets multinationals in, only to squeeze them dry of their valuable technologies and then push them out.”
The anti-dumping action over Chinese exports of steel and aluminum that Bannon also recommends should be only the beginning. The problem runs much deeper.
When Bill Clinton allowed China to join the World Trade Organization, he effectively handed China the keys to the kingdom. What the New York Times at the time called a “Clinton Triumph” has turned out to be a “Clinton disaster” for American workers. China gained unfettered access to America’s markets while never intending, as the passage of time has demonstrated, to open its own.
Another “win-win” for China.
So when China’s foreign ministry spokeswoman, Hua Chunying, says in response to Bannon’s interview, “There is no winner in a trade war,” she is basically making another joke at America’s expense.
She is counting on the fact that Americans are too naïve, or too stupid, to understand that China has been waging a trade war against America, and winning big, for a long, long time.
When she pleads for America “to refrain from dealing with a problem in the 21st century with a zero-sum mentality from the 19th or the 20th century,” she is simply parroting the American ideal of free trade back at us.
All the while laughing under her breath.
She, along with every other high-ranking Communist official, understands that her country is practicing a no-holds-barred, beggar-thy-neighbor kind of mercantilism that is far worse than anything the world has ever seen. China is engaging in all-out economic warfare against its democratic rival.
Hua concluded—predictably—by appealing for “dialogue.” Endless rounds of inconclusive trade “negotiations” would, of course, suit China just fine. In the meantime, it would continue, in Trump’s phrase, “eating America’s lunch.”
President Trump has clearly rattled China’s leaders with his insistence on a quick end to the huge trade surpluses that their unfair trading practices have racked up with America.
There is, in truth, little time to waste. As Bannon noted in his interview with The American Prospect, “If we continue to lose [the economic war with China], we’re five years away, I think, ten years at the most, of hitting an inflection point from which we’ll never be able to recover.”
Freedom has always been a relatively rare commodity in human history. If the Chinese Party-State wins its economic war with the United States, it will become even rarer.
Steven W. Mosher is the President of the Population Research Institute and a former Commissioner of the Commission on Broadcasting to the People’s Republic of China.