Spengler: Western Elites’ Contempt for China Turns to Panic

SHANGHAI, CHINA - AUGUST 09: Shanghai's symbolic Oriental Pearl TV Tower lights up in colors of Chinese national flag to cheer for Chinese athletes and congratulate them on their gold medals in Rio de Janeiro Olympic Games on August 9, 2016 in Shanghai, China. The light will be illuminated until …
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David P. Goldman, who writes for Asia Times under the pen name Spengler, explains in his latest column that “[a] sense of resignation, if not outright defeatism, pervades the Trump White House where China is concerned.” Western elites who once dismissed or downplayed China’s ascendancy as the world’s dominant superpower are now suddenly confronted with its reality.

From Asia Times:

Not since the British garrison at Singapore surrendered to Gen. Tomoyuki Yamashita in 1942 has Western opinion of an Asian power changed so fast. When China’s 2015 stock market bubble popped, prevailing Western opinion held that China’s economic boom would flame out in a debt crisis comparable to America’s subprime disaster of 2008 or the near collapse of Europe’s southern tier in 2013.

Now that China’s tradeable stock market has risen by 43% during 2017 in US dollar terms (with the MSCI-based ETF as a benchmark), Western opinion is melting up. Bridgewater, the world’s largest hedge fund, is raising money for a China investment vehicle. Bank of America now predicts Asian stocks will double in the present bull run. “Hedge Funds Used to Love Shorting China. Now, Not So Much,” declared a Bloomberg headline Sept. 12.

America produced every important invention in the digital age, from integrated circuits to semiconductor lasers, solar cells, flat panel displays, sensors and light-emitting diodes. Except for integrate circuits, Asia now produces virtually all the world’s output of these building-blocks of the electronics industry, and China has a crash program underway to become the world’s major producer of semiconductors.

To my knowledge, the only senior adviser to President Trump who proposed to stop this practice was Steve Bannon, who left the White House in August. Interfering with US companies’ tech transfer to China would hurt revenues in the short- and medium-term. US companies are making a good living on the rise of China, and CEO’s worry about their stock price during the next five years, not about America’s competitive position in 10 years.

Suddenly, from the South China Sea to the Bosporus, the United States cannot move without brushing up against Chinese influence, if not outright Chinese power. It’s not quite the same as Yamashita’s march across the Malaysian jungle. But if anything, the fecklessness, complacency and incompetence of America’s leaders exceeds the fabled stupidity of the British at Singapore.

Read the rest here.