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Maybe The Days Of So-Called Easy Money In China Are Gone

A weekend topic from the Wall Street Journal. “When Donald Trump won the presidential election in 2016, Chinese leaders were stunned. They had focused on the prospect of a Hillary Clinton victory. They immediately put out feelers to their oldest and most reliable allies in Washington—big business CEOs and their trade associations. What they heard back was disquieting.”

“Mr. Trump was hard to figure out. Populism was on the rise. America was changing, and China had to change too to remain on the right side of the new American leadership. Behind the scenes, many of Beijing’s erstwhile corporate friends would go on to support the administration’s hard line toward China even though they disagreed sharply with the tactic of piling tariffs upon tariffs.”

“‘The Chinese figure that the bankers and big business own the American government. That’s why they go to them,’ says James McGregor, who has worked for years in China as a business consultant and a leader of the American Chamber of Commerce in China.”

“For decades that was a winning strategy. Now it no longer was—not just because of the changes in the White House but because of the fraying of relations between Beijing and American business. It was a long slog downward.”

“For many U.S. firms, China wasn’t the land of riches they figured it would be. Furniture, bicycle and other low-tech manufacturers soured first, when they realized in the early 2000s that their Chinese suppliers were turning into rivals by selling directly to American retailers. After China ramped up stimulus spending in 2008 at Washington’s urging to combat the global financial crisis, China was awash in tires, steel, glass and other commodities. Exports to America rose, wrecking factory towns across the Midwest and Southeast, which became centers of populist backlash.”

“A more assertive China pressed higher-tech foreign companies to hand over intellectual property and provided heavy subsidies for their Chinese state-owned competitors. Many American companies identified with the complaints by Japan’s Kawasaki Heavy Industries Ltd. that China’s Railways Ministry and state-owned companies poached its technology to become powerful competitors in high-speed rail.”

“By 2014, just one-third of members of the American Chamber of Commerce in China said they were optimistic about their two-year prospects in China, about half the percentage in 2008. A 2015 Chinese development plan called ‘Made in China 2025’ galvanized concern. The report laid out strategies to gain dominant shares in 10 important technology sectors, which foreign firms figured could only occur through massive subsidies and technology theft.”

“When Mr. Trump took office, Chinese leaders turned to American business for political help, as they had before, but the response was different than during the Clinton years. Wang Qishan, then China’s anti-graft czar and a trusted ally of President Xi Jinping, called in CEOs for what he called informal ‘old friend’ sessions.”

“In late 2017, one of his visitors was David Rubenstein, cofounder of Carlyle Group, a U.S. private equity firm with vast investments in China. ‘Is Trump a rare phenomenon or a trend?’ Mr. Wang asked Mr. Rubenstein, as officials from China’s Foreign Ministry took notes. ‘Trump is an indicator of the changing attitudes in the U.S.,’ Mr. Rubenstein told him.”

“Initially, Chinese leaders dismissed U.S. complaints as whining. American businesses still invested in China and made lots of money, they believed. Americans needed to learn how to compete in a rapidly developing China. ‘There is more competition on the Chinese market,’ says China’s ambassador to the U.S., Cui Tiankai. ‘Maybe the days of so-called easy money in China are gone. Maybe they are gone forever.'”

“When President Trump resorted to tariffs on a scale unseen since the 1930s, Chinese leaders sought to make common cause with U.S. CEOs who opposed tariffs. Beijing mixed blandishments with threats. In May 2018, Mr. Wang, now promoted to vice president, again invited CEOs to meet him. This time, the session was less friendly.”

“He lectured them about Chinese military strategist Sun Tzu. ‘If you know the enemy and yourself, you need not fear the result of a hundred battles,’ he told them. China understood the U.S. better than the other way around and would endure far more pain rather than concede, he told them, according to participants. The message: Get your government to back off.”

“A month later, a group of 20 mostly American and European multinational CEOs, including those from Goldman Sachs Group and Hyatt Hotels Corp., met with President Xi, who pressed them to help him get American politicians to ease up on China. He warned them they could be wounded in a trade war if they failed.”

“By September 2018, the message from American business to China—that things had to change—couldn’t be mistaken. During the U.N. General Assembly meeting, China’s Foreign Minister Wang Yi met with a Who’s Who of corporate America in a midtown Manhattan conference room. The Chinese diplomat put the blame for souring relations solely on the Trump administration. Not so, said one CEO after another, frustrated at China’s unfulfilled promises, according to meeting participants.”

“Three leading U.S. corporate trade groups—the U.S. Chamber, the Business Roundtable and the National Association of Manufacturers—which had worked tirelessly and spent heavily to get China into the WTO, now publicly proposed agendas for the administration to pressure China to change.”

“Beijing is no longer counting on American companies to get Washington to retreat. Instead, it is putting a bigger emphasis on going it alone. Beijing’s ‘AnKe Project’ is designed to purge Chinese government agencies, telecommunications companies and power grids of foreign hardware and software. The AnKe project and others like it are set to go forward, no matter who wins the U.S. presidential election this year. It marks a long-time shift in priorities and a recognition that Beijing no longer counts on its American corporate allies to chalk up victories in Washington.”

This Post Has 38 Comments
  1. I wanted to post this for awhile because it’s seems important to see the big picture more accurately. From the bottom of the link:

    ‘—Mr. Davis and Ms. Wei are reporters for The Wall Street Journal. This essay is adapted from their new book, “Superpower Showdown: How the Battle Between Trump and Xi Threatens a New Cold War,” to be published on June 9 by Harper Business (which, like the Wall Street Journal, is owned by News Corp).’

    1. No matter what happens in the election, the entire world should carry on a cold war with China over this COVID virus. China crashed the world economy more effectively than any netted factory at Foxconn.

  2. Also from the link:

    ‘When Secretary of State Warren Christopher flew to Beijing in 1994 to confer about human rights, Chinese Premier Li Peng was dismissive. “Gold Sacks”—a reference to Goldman Sachs —and other big U.S. firms had already told him that they were lobbying the Clinton administration to back off, Mr. Li informed the American official. Mr. Li counted on them to prevail. “He basically dared us, ‘Go ahead and deny us [trading rights] and then we’ll see who they say lost China,’” Mr. Christopher said years later.’

    ‘When Congress was voting on a bill that would ease China’s entry into the World Trade Organization in 2000, big firms spent $100 million to lobby for approval, says Myron Brilliant, executive vice president of the U.S. Chamber of Commerce. That is more than the companies spent for all the congressional trade fights since then, he calculates. So many companies wanted credit from Beijing for the lobbying campaign that 25 of them joined together to form an unwieldy management committee.’

    ‘But that buddy-buddy relationship soured over the years. For many U.S. firms, China wasn’t the land of riches they figured it would be.’

  3. I read, somewhere, that when that first batch of businessmen followed Nixon to China, they were so sure the Chinese would never, ever become serious competition for the US.

    Talk about yer racism…

  4. It’s easy to forget that everyone got a short term pay raise in the form of Walmart, flat panel TVs and other plastic shit. The Chinese ate our inflation, took our garbage and befouled their own ecology to sell us cheap shit. You had to know they had a goal higher than to continue to do that or you’re a fool, not them.

    I’m not defending the Chinese so much as pointing out that everyone got something out of the deal until they didn’t. Trump’s election was just the first real shot across the Chinese bow, it won’t be the last.

    Hopefully going forward we can learn to negotiate in good faith with what will inevitably either become a partner or a true rival, sadly probably the latter.

    1. Hopefully going forward we can learn to negotiate in good faith with what will inevitably either become a partner or a true rival, sadly probably the latter.

      You act like the interests of the people are somehow important.

    2. There’s a third way: get rid of the communist party. There’s nothing that guarantees this cabal of a few hundred guys gets to rule China forever. The globalist river of money has run dry. We’ll see how long they last.

      ‘everyone got something out of the deal’

      The workers didn’t, here or there. I read a US article on China probably over 10 years ago: the writer visited a factory. On the wall was a big sign that said if you don’t like the conditions here we can find 100 people to replace you tomorrow. Now they’ve ruined the environment too. Globalism was the biggest mistake in modern history.

      1. I remember reading back in 1999 that China was building a city the size of Philadelphia every month. The amount of environmental destruction they’ve done since then is incalculable.

  5. ‘Trump is an indicator of the changing attitudes in the U.S.,’ Mr. Rubenstein told him.”

    The sheeple were bound to wake up, eventually, as the oligarchy became more and more rapacious and the globalists escalated their assaults on what remained of heritage America.

  6. Beijing’s ‘AnKe Project’ is designed to purge Chinese government agencies, telecommunications companies and power grids of foreign hardware and software.

    Two can play that game.

  7. “When Donald Trump won the presidential election in 2016, Chinese leaders were stunned. They had focused on the prospect of a Hillary Clinton victory.

    I’d hate to think of all the lamps Crooked Hillary has hurled at her most chaste husband as she blames everyone but herself for losing the 2016 election and missing out on the vast payola her and Bill’s CCP masters were poised to deliver.

  8. Is the Fed back in a “no atheists in foxholes” situation?

    What will they do at points of desperation?

      1. There were a lot of great country duets….Waylon and Jessie, George and Tammy, Loretta Lynn and Conway Twitty….jimmy Reeves and Patsy Cline were a great combination for a bit. But for me there is nothing that goes straight to the heart like Gram Parsons and Emmylou. Such a tragic loss to die so young.

      2. Filed under things I didn’t know yesterday, Grams Parsons died at the Joshua Tree Inn, Room 8.

    1. Fed says ‘full range of tools’ in play to counter pandemic
      FILE – In this July 31, 2019 file photo, The Federal Reserve logo is shown before the start of a scheduled news conference by Chairman Jerome Powell when it ends its latest policy meeting in Washington. The Federal Reserve on Friday, June 12, 2020, promised to use its “full range of tools” to pull the country out of a deep recession caused by a global pandemic, signaling that it would keep interest rates low through 2022. (AP Photo/Manuel Balce Ceneta, File)

      WASHINGTON (AP) — The Federal Reserve is promising to use its “full range of tools” to pull the country out of a recession brought on by a global pandemic, signaling that it would keep interest rates low through 2022.

      In its semi-annual monetary policy report to Congress, the central bank said Friday that the COVID-19 outbreak was causing “tremendous human and economic hardship across the United States and around the world.”

      In response, the Fed said it’s “committed to using its full range of tools to support the U.S. economy in this challenging time.”

      1. The full range of Fed tools:
        Print more money PMP
        Fabricate more money FMP
        Create more money CMP
        Conjure more money CMP2
        Invent more money iMP
        Clever Misleading Acronyms CMA

      2. Full range of tools? I can’t even get an N-95 mask from Home Depot. Or maybe they mean tools like Powell and Fauci?

      3. By the way, these a$$hats aren’t concerned with the economy, they’re trying to prop up asset prices so their rich buddies don’t lose most of their fortunes. The try to spin it as helping the economy, but they’re really destroying it, and the future of the young. This sh!t should be illegal.

    2. What will they do at points of desperation?

      I don’t know. They already fired off the big “no limits” fireworks finale. What else is there to promise?

  9. Largest Globally Synchronized Recession In History

    ‘A global synchronized slowdown began last year, but the pandemic turned it into a recession. World Bank is forecasting 92.9% of economies are on track to report recessions this year. This is higher than the Great Depression’s record, which saw 83.8% of economies enter recession at peak. Analysts from the organization note this is the fastest downturn in history.’

  10. Housing prices were cratering long before CoronaScam.

    Highland, UT Housing Prices Crater 10% YOY As Double Digit Price Declines Stun Deeply In Debt Homeowners

    *Select price from dropdown menu on first chart

    As one Salt Lake City broker put it, “Burning people is our stock in trade. It’s what we do best.”

  11. If you remember , the fact that Walmart was buying the cheap stuff from China it created a monopoly that cremed USA competition.

    Than add that manufacturing and jobs were outsourced , it just was treasonous.
    Remember when you would call a Company and you would get people on the phone that you couldn’t understand from foreign Countries.

    What Country would allow this sort of attack on survival which was also a threat to National Security.

    Cheap toxic crap that ends up in the land fields early is what we got.

    Further we enriched a Communist Country who buys up Movie Studios to take over the Hollywood traitors to this Country.

    It all about taking over from within . Now you have the Commie brainwashed peaceful protestors burning and looting and taking over Cities..
    All these activities are out of the Communist playbook.

    I have no doubt that the Commies highjacked the Dems party, along with the Globalist Greedhead looters.

    How do you get people to hate their Country and burn it down –by false narratives.

    China showed how self serving they are, along with being thieved and unleachers of killer virus.

    You have the Universities that sold out and they should be defunded if anything.

    China was smart in bribing the Greed heads, which included Joe Biden and his Son. This corrupt traitor to this Country Joe Biden meets the approval of the CCP. Get that Trump out of there because he’s putting a wrench in the next laid plans of Commie takeover. He actually loves America.

    All the true colors of all these power groups are there, and get the useful mod of brainwashed youth to test down social order.
    And all you White people better kneel is from the playbook of Mao, Stalin and the way to take over.

    So, this is not the 60s but rather a highjacking of the Civil Rights Movement by false narratives.

  12. If you think about it a One World Order concept is no different than Hilter, Stalin or Mao. It’s the idea that one train of thought should dominate the World.

    George Washington didn’t like political parties or foreign entanglements. If you ask me George Washington was perceiving what could corrupt or bring down the Nation.

    When Woodrow Wilson advanced the United Nations concept as well as the Federal Income tax, it set the stage for all evil that has evolved including the DC swamp and the Deep State.
    So Washington DC becomes this entity that collect a lot of money to screw up free markets by the bribes of X, Y or Z.
    Rather than just having a Standing Army to protect the USA borders ,we are the watch dogs of the World, yet we can’t even protect our own borders.
    We outsource jobs and manufacturing as well as insource jobs, than a great deal of the budget goes to the welfare state to make up for the looting by the Globàlist and Money Changers.
    How about defunding the welfare State that has just become the bribe of a political party . All it did was create a bunch of gang infected areas where they are killing each other.

    The Mob demands more Social Services, and defund the Police. You don’t see them demanding jobs, it’s just more free shit.
    Everything is just so corrupted and rigged that it requires a major purging of the Political Reps that have sold out America, regardless of Party.

    1. “You don’t see them demanding jobs, it’s just more free shit.”

      Almost like corporate America that buys their own shares with easy access to cheap money in order to inflate executive compensation and shareholder dividends.

      1. rms,

        Agree with your post.. This constant looting of America in one way or another. Than hard working people are drained by all the parasites and they are punished and can’t buy shelter because the gamblers got to make easy money.

  13. It looks like you have about half of the USA supporting their own demise.

    China must laugh at how stupid America is that they could say that naming their
    virus a China Virus is racist. China has got to be one of the most racist Countries in the World ,with little tolerance for diversity.

    Again I say , the corrupt, senile Joe Biden is the CCPs choice, they already know he sold out on the China deal to Bidens Son. In fact Biden might be vunerable to extortion by China on the China deal to Bidens Son they refuse to investigate.

    Seriously, taxes to finance expensive health care and food stamps to ilegals is treason to USA citizens.

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