These might be the good old days. Go outside, feel the grass, say wassup to your neighbors,… whatever you do that means community, because sh*t might get bad for a while.
These might be the good old days. Go outside, feel the grass, say wassup to your neighbors,… whatever you do that means community, because sh*t might get bad for a while.
While this is true, I suggest reading “All trade war are class wars” by Michael Pettis and Michael C. Klein.
Basically, both China and America have been persuing trade policies (which result in persistent trade imbalances) which are unsustainable.
China through subsiding it’s export sector through preferential interest rates (transfer income from savers to borrowers like industrial enterprises), managed currencies (transfers income from importers to exporters), weak labor laws (workers to companies), etc. which results in smaller household sector which cannot consume what it produces.
These policies primarily benefit industrial exporters at the expense of everyone else.
Note: This is not unique to China. Germany, Japan, Taiwan, America (up to the great depression), etc. have persued such policies.
American subsidies consumption via policies which encourage a higher dollar (being attractive for foreign capital), higher debt, etc. which results in an household sector than consumes more than it produces.
Note: This is not unique to America. The Anglo-Saxon economies all have this issue (noting that at times of high commodity prices Canada and Australia sometimes run trade surpluses).
These policies primarily benefit importers and financial sector at the expense of everyone else, particularly the industrial sector.
Although in America’s case, being the reserve currency provides great geopolitical advantages.
These policies are unsustainable. One cannot import more than you export forever.
America cannot to grow such vast sums of private and public debt. Eventually, there is a limit.
Every other country that has persued such policies in the past have had difficult corrections. These can be quick and brutal (the great depression for the USA, where the economy shrunk 1/3 but the household sector only shrunk ~17% and thus the economy was rebalanced) or a slow adjustment like Japan (where household consumption grows marginally faster than overall GDP growth for 1-2 decades).
This issue was seen and written about during the great depression (“beggar thy neighbour” policies). After WW2, John Keynes suggested a mechanism to rebalance trade so there were not persistent trade imbalances (the USA opposed this mechanism because it was running surpluses).
Why does this matter in this instance? China is having great difficulty raising consumption and moving away from it’s export driven model. So it is looking for new partners to export to (given the West and even other devleoping economies like Brazil and India are unwilling to accept more of China’s subsided exports), like Kenya.
It is running into the trouble Western counties had in the 1980s with developing countries being unable to service their loans for infrastructure, etc.
China may not be popular soon because it (like the West during the 1980s) is unwilling to write off loans which cannot be paid.