The China Trade, by David Archibald.
His graphs are useful but not as he intended — they show how little the US has to lose by ceasing trade with China. …
Aircraft is a big [export], but not permanent. Boeing has built a plant in China which will make one hundred 737s a year. Airbus has built a plant which will make six A320s a month. The jobs are going to China, as a condition no doubt of maintaining access to the Chinese market. Japan attempted to enter the passenger aircraft market back in the 1970s and failed. In the end, China is likely to do a Maersk on Boeing and Airbus and refuse to renew visas on the Americans and Europeans running their plants, effectively nationalising them without having to pay for them. Anyway, there are only a couple of years left of selling American-made aircraft to China. …
From Spengler’s charts of exports and imports, if the US were completely closed out of access to the Chinese market the effect would be a rounding error on the US economy. If China were completely closed out of the US market, the effect would be at least a 4% shrinkage of the Chinese economy. Just as importantly, that industrial activity would be transferred to countries that are aligned with the US or at least not setting out to kill us. That is a win-win outcome. …
Another effect that China-worshippers like Kissinger and Spengler neglect is that the Chinese economy is being recentralised under President Xi. Just as President Erdogan of Turkey said that democracy is like a tram you get off when you get to the stop you want, China’s brief experience of capitalism is being abandoned now that their economy is about as large as it can be. But workers in state-run factories have only one third the productivity of workers in private industry, so this will hobble Chinese competitiveness.
The biggest benefit of Trump’s opening to North Korea is that he can no longer be painted as a warmonger. That has given him considerable freedom of action on China. Bring on the 200% tariffs. Chuck China out of the World Trade Organization. Make China the pariah state it needs to be seen as. That won’t stop China from going to war with the civilized world but there will be fewer deaths, destruction, maiming and disfigurement on our side.
