04 Dec Trump vs. China. Click to keep reading…
Here’s an interesting take on the Trump vs. China trade war that is starting to impact business in the U.S. The New York Times Thomas Friedman contends that the trouble with China is the market access barriers that China implemented over the past forty years.
Friedman attributes China’s economic success to three pillars. First, China rewarded hard work using a Darwinian system of capitalism. Companies compete in the same market to become the industry leader and win the government’s backing. China also cheated World Trade Organization rules by forcing technology transfers, establishing nonreciprocal trade rules and massive government support for competition winners. China has also benefited immensely by relying on a stable global trading system built and maintained by the U.S. Navy. The Navy presence assured trading partners that trade with China would not result in geopolitical domination.
On the other side of the world, America found success educating children to take advantage of available technologies, investing in infrastructure, open immigration policies, and backing government research. The U.S. also relied on the universal values of freedom and human rights which gave us gravitas when dealing with our allies.
Both nations need to be honest about the pillars that made them successful, and make concessions that are based on those pillars, otherwise neither one will enjoy sustainable growth.
Read Friedman’s essay in the Times, and see what you think about his opinion.