Platt Perspective on Business and Technology

Donald Trump, Xi Jinping, and the contrasts of leadership in the 21st century – 7

Posted in macroeconomics, social networking and business by Timothy Platt on December 2, 2018

I have written on numerous occasions now, about Donald Trump and his rise to power in the United States and about Xi Jinping and his rise to power in China. This is also my seventh installment to a compare-and-contrast subseries that fits into both of those ongoing narratives, that I offer in follow-up to a similarly dual-narrative: Part 6 installment, that first went live here on May 6, 2018, roughly half a year ago as of this writing.

I have added one other specifically Trump-oriented posting to this blog since then with Donald Trump and the Challenges Facing Us from the Unraveling of an American Presidency, with that going live on September 7, 2018, but have refrained from adding further to that narrative since then and until now.

That said, this is a posting that I have been thinking through and preparing to write for almost three months now and certainly since Donald Trump discovered trade wars and concluded that they are easy to win. And a lot has happened during that period that would merit an update to this still all too-unfolding of a news story. First of all, Trump did in fact discover what has become one of his favorite “break-things toys”: the trade war. And he has used it with a vengeance and both against America’s allies and against nations that might arguably take a more confrontational approach to the United States (while sparing Russia from that as much as he has been able to.)

Let’s consider something of the timeline of this still actively unfolding news story, and certainly for how the Trump administration’s trade war efforts have been directed towards China and for how that nation has responded.

• Donald Trump learned about trade wars and immediately declared that they were easy to win and a great way to deal with both adversaries and allies alike. And he began making noises in the direction of starting one (or more) of them and right away.
• And he effectively launched this, and not just on the China front with: Trump Blasts Fed, China and Europe for Putting U.S. Economy at a Disadvantage.
• But contrary to Trump’s presumptions, trade wars and in fact international trade in general cannot be understood or addressed in simple and even simplistic transactional terms. See, for example, How China’s Currency Could Help It Weather a Trade War, at a Cost. China managed (manipulated the value of its currency: the Renminbi so as to cause it to fall in value in international markets by over 7 percent between April and July, 2018 in order to position their manufactured goods more effectively in international trade in global markets. And they have continued to develop and pursue a monetary policy that is geared towards improving their trade position and their economy, and globally, in response to this threat.
• And in the beginning of August, 2018, China and their government directly retaliated against this American-led threat with trade restriction measures of their own: see China Threatens New Tariffs on $60 Billion of U.S. Goods.
• Trump fired back with: Chinese Goods May Face 25% Tariffs, Not 10%, as Trump’s Anger Grows. It should be noted that as a part of this, the Trump administration said it would consider raising proposed tariffs on $200 billion worth of Chinese products, to a 25 percent rate from 10 percent as previously threatened, in response to China’s currency devaluation measures and in an attempt to counter them, and from its tariff threats against the United States.
• And I note in this context that while China’s government has been actively seeking to protect and support its own industries and its own consumer markets, president Trump has not even broached the topic of similarly systematically reaching out to protect American businesses or business interests or American consumers. See, for example: How China Wins the Trade War. As a result, American companies and I add American consumers are paying the price for these tariffs and this tariff war, while China protects its factories and investors and its consumers from trade war fallout.
• I am not attempting to argue a case for these trade wars only negatively impacting on the United States and its businesses and consumers: Trump’s Trade War Is Rattling China’s Leaders.
• I am, however, acknowledging that As Trade War Intensifies, China Moves to Bolster Its Economy while president Trump has taken what is essentially a diametrically opposed approach to addressing the impact of all of this in and upon the United States, and particularly in how he has challenged the automotive industry and other business sectors: high-tech definitely included, that rely on international trade for their success and even for their very survival.
Trump Hits China With Tariffs on $200 Billion in Goods, Escalating Trade War. He carried out the above-threatened ratcheting up of this avoidable conflict.
White House Tries to Tamp Down Trade War Fears as China Retaliates again.
U.S. Consumers Will Increasingly Feel Pain From Trump’s Trade War. Here’s Why.
Trump’s China Fight Puts U.S. Tech in the Cross Hairs as already noted above.
China Wants to Strike Back on Trade. Big U.S. Deals Could Suffer.
China to Pump $175 Billion Into Its Economy as Slowdown and Trade War Loom.
In New Slap at China, U.S. Expands Power to Block Foreign Investments.
Trump Opens New Front in His Battle With China: International Shipping.

And that brings this tit for tat, retaliation and counter-retaliation story at least close to up to date as of this writing, but I have intentionally left what might be the most important single piece of this particular puzzle, for last in this news update progression. And it is one that president Trump himself has ominously made more possible and certainly with his above-cited decision to attack China for its foreign investments, with that particularly including its investments in the United States:

• See The Unknowable Fallout of China’s Trade War Nuclear Option. The United States does not have any particular extreme step available that might in principle resolve this conflict in its favor and either through use or through coercive threat of use. China, on the other hand has a very definitive such option, or rather the cumulative weight of over one trillion smaller ones. China holds the paper on over one trillion dollars of US debt and has the option to demand payment on much or even all of this, and effectively right away if it were to chose to go nuclear in response to Trump administration led US challenge. And I add to that, that the wealthy of China have moved vast portions of their collective liquid wealth out of China and into the West, and with the United States a primary beneficiary of that cash influx. What would happen if Trump created a situation where these risk aversive investors decided in large numbers, that their investment funds would be safer and more productive for them elsewhere, taking on the order of a trillion and more US dollars worth of funding out of the country too?

I have up to here in this posting, mostly just focused on China as a target in Trump’s “easy to win” trade wars, even if the first news story link in the above list cited Europe, and our allies there as targets in all of this too. I complete this portion of this posting by adding Canada to that target list, noting that Canada is one of the United States’ longest standing and most faithfully reliable allies, and a nation that has never threatened the United States economically or through unfair trade practices. But Donald Trump has actively gone after that country and on numerous occasions now. See:

Trump’s Tariffs on Canadian Newsprint Are Overturned.

Reason, logic and evidence play no role in any of this, and certainly as Donald Trump has created this “easily winnable” trade war, or rather this collection of them. And yes, these wars have caused harm and distress to the nations that they have targeted. And yes they have created problems and distress in the United States too, and for American businesses and consumers, and for harming the capacity of the United States to maintain a leadership position in the community of nations. But to focus on China in all of that, again, I also have to add that their trade relationship with the United States can only be considered as one puzzle piece in Xi Jinping’s empire building considerations. Setting the trade wars themselves aside, at least as direct matters of consideration here, and focusing on the global uncertainties that Trump has created where they undercut America’s apparent reliability in other nations’ capitals, president Trump has opened an incredible range of doors of opportunity for China and for Xi Jinping in particular.

Let’s begin considering that assertion with an update to a long-standing news story that I have touched upon and updated here in this blog, on numerous times, and not just in my specifically China-oriented writings. See, for example, my series: Vietnam, Đổi Mới and the Search for Business and Economic Strength and Global Relevance, for a case in point discussion of how China offers infrastructure improvement and other economic development opportunities as a tool for gaining control over other, smaller weaker nations (in my directory: United Nations Global Alliance for ICT and Development (UN-GAID) as postings 34 and following for Parts 1-10 of that.)

• China has been emboldened by the power vacuum that president Trump has created, and globally, from how he has abnegated what had been the global leadership responsibilities of the United States in creating and maintaining at least as much global order as we used to see.

China still uses infrastructure and related development enabling offers, with all of the trade and other politically shaped compliance requirements that they attach to them, as tools for achieving greater global reach. But they have vastly increased their range of ambition for where they would deploy these opportunity creating offers:

For China, a Bridge Over the Adriatic Is a Road Into Europe

China has been increasing active, and in Africa and Latin America, and all across Asia and the Western Pacific in entering into these deals, where their goal is to develop a system of international obligations and international treaties that express them, that all bring benefits back to their government and their Communist Party and their leadership. They have now begun actively moving in on Europe as a part of this globally reaching campaign too, and certainly as the Trump administration has made the United States an unreliable and even untrustworthy partner there. And also see:

How China Has Defied Expectations, in Canada and Around the Globe. Yes, Xi Jinping feels Canada’s pain from how the US president Donald Trump has created discord and uncertainty within North America.

As another update from a long succession of earlier China-related postings, and going closer to home for that country and their leadership here, China has made continued strides in its effort to establish true hegemony over the East China Sea and the South China Sea and their neighbors there (including but definitely not limited to Vietnam as discussed in the above-cited series.) See:

China’s Sea Control Is a Done Deal, ‘Short of War With the U.S.’

And to add one more troubling piece to that puzzle, and with the reluctance bordering on full-fledged resistance in mind that the Trump administration has shown as far as challenging Russian hacking of foreign elections, I add:

Specter of Meddling by Beijing Looms Over Taiwan’s Elections.
• And China Lauds Voters After Defeat of Taiwan’s Ruling Party.

China has now begun to actively and even overtly deploy the same cyber-attack strategies and approaches in their effort to manage other governments, that Russia has come to use when for example seeking to suborn the 2016 US presidential election.

Donald Trump has now decided to challenge China’s growing economic and geopolitical reach, as an at least marketing message response for the benefit of his at-home supporters:

Trump Embraces Foreign Aid to Counter China’s Global Influence.

But realistically, what can he or his administration do, when they are all in such disarray and when the only real criterion that president Trump insists on when selecting the people he works with is that they show absolute loyalty to him as a person? What can he do to win hearts and minds through foreign aid when he has set up the United States as more a source of problems and uncertainty, than of solutions to problems and trust, from all that he has been doing these past two years and more now? President Trump’s track record up to here does not engender a great deal of hope as far as his possible future successes are concerned.

I conclude this second part to this posting by repeating here essentially verbatim, a summary list of a select set of the metrics of China’s expansionist activities as sourced from the New York Times:

The world is it is being rebuilt by China:
China has created a modern-day counterpart to the Marshall Plan, the U.S. reconstruction program after World War II that laid the foundation for America’s enduring military and diplomatic alliances: except China’s strategy – building a vast global network of trade, investment and infrastructure – is far bolder, more expensive and riskier. Looking at some of its scope, by the numbers:
• 112: The number of countries where China has financed infrastructure projects.
• 203: The number of bridges, roads and railways China has built around the world, giving it new ways to move its goods.
• $94 million: The amount China gave to Zambia to build a new 50,000-seat soccer stadium.
• 99: The number of years that China will control a port in Sri Lanka that it built – and then took over after Sri Lanka couldn’t pay its debt.
• 63: The minimum number of coal-fired power plants that China has financed around the world. Collectively, they pollute more than Spain.
• These projects bring real benefits, but they also come at a cost. To staff them, China sends in its own workers, drawing complaints that they create few local jobs. Safety and environmental standards are inconsistent. And countries that turn to China for loans often plunge into a debt trap.
• At home, China is building more complex products – like computers, TVs and cars – as part of the next phase of its economic evolution.

And this leads me to a final news story link for this portion of this posting that offers many of the above quoted details and more:

How China is becoming a superpower.

I will simply note here that while much of this has happened while Xi Jinping has been leader of the government, Communist Party and military in China and with him firmly in control there, Donald Trump has in fact made much of his success in all of this possible.

And this leads me to the real conundrum that I see underlying all of this evolving news chaos, and particularly as the chaos in it is self-inflicted and coming out of the United States and its government. I have been writing repeatedly of Donald Trump’s unshakable 40% approval ratings, in the face of all that has happened and all that has been reported about him, and from when he first ran for office on, nonstop. Similarly, I have written about Xi’s cult of personality in China and about how he has advanced and developed that in order to advance his causes and himself in the process.

I have now written here of the What side of a complex news narrative. That still leaves the troubling questions of How and Why, where Trump’s and Xi’s followers and their political bases become crucial explanatory factors underpinning this posting’s What, and in fact crucial for understanding much of the context that all of this is taking place in too. I am going to follow this posting with a next installment in this subseries, where I will address the cult of personality sides to both Trump’s and Xi’s leadership.

Meanwhile, you can find my China writings as appear in this blog at Macroeconomics and Business and its Page 2 continuation, and at Ubiquitous Computing and Communications – everywhere all the time and Social Networking and Business 2. And you can find my Trump-related postings at Social Networking and Business 2.

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