Tag: trump

Introduction

Today we see China expanding in all areas technological, cultural and militarily, Making China Great Again (MCGA), which is seen by many around the world especially the USA and Europe as somewhat threatening in terms of social, financial and its increasing military power. Since Trump took over the USA Presidency he is using financial activities such as Tariffs against hundreds of countries, especially China. In the main he sees China as those who are to blame for the in-balance of China manufactured goods swamping goods made elsewhere in the world especially the USA. I hate to say this’ but he is not wrong, however, let us see how this happened over many years and who really is to blame.

Start of the Modern China Transition

My own view on the ‘Modern China Transition’ was as a result of the Korean war from 1950 to 1953 between North Korea and South Korea. At that time International Forces, in particular the USA and the UK on behalf of the United Nations (UN) was supporting South Korea in a significant way against the North Koreans who invaded South Korea across the 38th parallel, separating the two Korea’s. The North Koreans were backed by the Soviet Union and later China. (08 1950).

However, the original aim of the War from the UN’s mandate was was to push back the North Koreans over the 38th parallel which they did. However, they continued to advanced North towards the Yalu River which was near the Border of China, decided by the USA Commanding General MacArthur (11 1950) which was unauthorised by the USA President and the UN. Of course China’s Leader Mao Zedong could not accept this and provided a significant amount of Chinese troops technologically inferior to the USA to push back the Americans to the 38th Parallel. From the experience of the Korean War the Chinese recognised it needed to increase its technological expertise in all areas, for its future existence in the world especially as a defence from the USA military might.

China Changes to Market Economy & Reforms

After Mao Zedong’s death the new leader Deng Xiaoping known as the architect of today’s modern China introduced a Socialist Market Economy and Opening Up and Reform of China. This included China’s infrastructure and political reforms. This had a major impact on the way China interacted with the rest of the world especially regarding Trade Transactions. It also opened the door for Investments and the introduction of new Technologies, increasing China’s Manufacturing Capabilities. A new leader Jiang Zemin took over in 1989 who continued Deng Xiaoping’s policies and created new Special Economic Zones which allowed China to expand its Manufacturing Capability significantly. These combined with a huge Labour Force on comparatively very Low Wages and Long Working Hours, meant very Low Costs and Fast Deliveries for World Customers.

A Magnet for Major World Manufacturing Companies

Most of China’s expansion was in the Western Regions of China, which attracted significant Foreign Investment mainly from the USA around US$1,800 million in 1999 to US$1,900 million in 2001. This also opened the door for many world Manufacturing Companies especially from the USA to take advantage of Special Tax Breaks and Low Cost Manufacturing. This resulted in Manufacturing being moved from the USA and other World Countries to China. Of course this also benefited the Populations of the USA, Europe and the World having Low Cost Goods and Increased Profits for the Manufacturing Companies.

Trade In-balance Problem

As a result of so many Goods being manufactured in China, such as Apple ‘I Phones’, China’s Exports to the World including the USA is far Greater than it’s Imports from the world especially the USA. This creates an In-balance problem and also a reduction of Manufacturing Levels in the other Countries especially the USA.

The USA Tariffs and Blames China

The USA and the Trump Administration wants to reverse Many Years of having Cheap Goods from China and bring back Manufacturing to the USA and are blaming China for the Trade In-balance. Their solution is very high Tariffs on Chinese Goods imported to the USA. The USA has no one but themselves to blame for the Trade In-balance that they themselves created the conditions in China over the previous years.

Who helped to ‘Make China Great Again’

The USA and many other World Investments and Manufacturing Companies due to their desire for Cheap Manufacturing and High Profit Margins have assisted China and its own Expansion Plans to be come the Second Largest Economy and a formidable Military Country. What ever the USA may do in the future they will not be able to match the Manufacturing Low Cost and Speedy Delivery that China is currently providing to the world today.

Footnote:

I wonder if Trump knows full well he cannot restore the level of Manufacturing to the USA or Reduce the USA / China In-balance. He is making the USA Population pay for the Tariffs (which is an Import Tax) that he is applying, by increased Retail Prices charged by the Importers , which raises the Governments Income. This will of course raise USA Inflation and is reducing the value of the USA Dollar and the confidence in the USA throughout the world.