China locked in hybrid war with US — Pepe Escobar

Not new news. The hybrid war between the US and China as been on for some time. Now it is heating up.

The Vineyard of the Saker
China locked in hybrid war with US
Pepe Escobar

Your Arrow Can Pierce the Sky, But Ours Has Gone into Orbit: The Third Newsletter (2020). — Vijay Prashad

Excellent analysis of Sino-American geostrategic rivalry, which is both economic and military. Geostrategy is concerned with the means to effect geopolicy, and the overall geopolicy is the US is global hegemony — preventing rivals from rising. China's is again to become the central realm as the hub of global commerce, with a projected date of 2049, the hundredth anniversary of the Chinese Revolution. These objectives are obviously incompatible.

The US views China as the greatest threat to longterm US dominance and hybrid warfare is being engaged both economically and militarily. The economic war has gone "hot" with the trade war, while the military phase is still preparatory. But it is still a war even if a "cold war" using hybrid warfare, and the US is actively seeking to "contain" China behind the wall of the first island chain, from which the US navy and military bases can pick off China's military assets. China's strategy is denial of access and deterrence.

Donald Trump's preferred strategy is to carry a big stick militarily but not use it unless necessary, e.g., to respond to aggression. He prefers to use economic warfare and propaganda, whereas neocons and liberal interventionists are more apt to see military solutions as the more effective options for a superpower.

Tricontinental
Your Arrow Can Pierce the Sky, But Ours Has Gone into Orbit: The Third Newsletter (2020).

Vijay Prashad, Globetrotter

There Was No Housing Bubble and Everyone Agrees We Have to Crack Down On China's Practices on Intellectual Property — Dean Baker

Okay, at the risk of not getting included in the happy consensus, I will make a few points here.

My thoughts exactly. Tackling China is just plain crazy, especially when the US was benefitting in real terms of trade and China was still willing to save in USD. Those days are nearly over for the US and hopefully the newly rising China will overlook a century or so of humiliation, including the latest episode.

As Dean Baker points out, intellectual property has become a bug rather than a feature, and technology sharing is a a good idea for everyone — in a sane world.

Moreover, practically speaking, the Chinese economy is already larger the US figured on the basis of PPP, which is what counts economically rather than the absolute size of nominal GDP without deconstruction, as Dean Baker also observes. 

For example, the US spends a huge amount on military and FIRE accounts for a sizable portion of GDP, while R&D and infrastructure lag. Conversely, China is hugely investing in infrastructure and R&D, gets more bang for the buck in military spending, and doesn't have an outsized FIRE sector in comparison with the US.

Beat the Press
There Was No Housing Bubble and Everyone Agrees We Have to Crack Down On China's Practices on Intellectual Property

Dean Baker | Co-director of the Center for Economic and Policy Research in Washington, D.C

See also

My view is that far from "winning" this round, DJT blinked. With the election coming he decided to postpone the real negotiation until after the election, on the assumption he will win owing to a good economy.

Angry Bear
The US-China Nothing Burger Trade Deal
J. Barkley Rosser | Professor of Economics and Business Administration James Madison University

Econbrowser
The “Deal”: Much Ado about Nothing
Menzie Chinn

China’s Industrial Policies Work — Gabriel Wildau

Until recently, mainstream economists and policymakers largely dismissed state-led industrial policy – a form of government intervention in the free market – as wasteful and ineffective. Government bureaucrats, the argument went, lack the ability to effectively pick winners among companies or industry sectors. The task is better left to venture capitalists and stock market investors. Moreover, a politicized process of distributing public money is inherently susceptible to rent-seeking and corruption.

If this view is correct, then the US has little to fear from Chinese industrial policy. Let Beijing waste public resources and distort capital allocation, while Washington sticks to its free-market principles, confident that this approach will produce a more competitive economy in the long run.

Today, however, appraisals of China’s trade and commercial practices implicitly grant that its industrial policies are effective. And many economists now agree that this approach can succeed in promoting national leadership in strategic industries. If so, then it’s unreasonable to demand that China abandon policies to promote indigenous development – especially when the US government is actively blocking key Chinese companies like Huawei Technologies Compamy from accessing American-made technology.

The US is becoming anti-competitive.

Bill Totten's Weblog
China’s Industrial Policies Work — So Copy Them

Gabriel Wildau, Bloomberg (November 17 2019)

The US needs to copy China’s tech strategy to remain the top economy in the world — Robert D Atkinson

Many US economists and policymakers cling to the faith that free markets are enough to effectively drive innovation and believe that any national IT strategy would be inappropriate government meddling. Most Chinese government officials are engineers who don't get hung up on such philosophical debates: they do what works.…

So it's not surprising that the World Values Survey finds 78% of Chinese residents agree that "more emphasis on the development of technology" is a good thing, compared to just 49% of US residents....

Business Insider
The US needs to copy China’s tech strategy to remain the top economy in the world
Robert D Atkinson | president of the Information Technology and Innovation Foundation

Is China Actually Stealing American Jobs and Wealth? John L. Graham and Benjamin Leffel

To be sure, China and the United States are not without their troubles. Both countries are showing stubborn growth in their carbon footprints and military spending, to name just two disturbing trends. But the data of the last 25 years portray U.S.-China commerce as the most synergistic bi-lateral relationship in world history, bringing peace along with mutual prosperity.

Putting another myth to rest – other than for the zombies – and there are lots of them.

Harvard Business Review
Is China Actually Stealing American Jobs and Wealth?
John L. Graham, Professor Emeritus at the Paul Merage School of Business, University of California, Irvine, and a former Director of the Long US-China Institute; and Benjamin Leffel, Ph.D. candidate in the Department of Sociology and Kugelman Citizen Peacebuilding Research Fellow at the University of California, Irvine.

America’s War on Chinese Technology — Jeffrey D. Sachs

In the run up to the Iraq War, then-US Vice President Richard Cheney declared that even if the risk of weapons of mass destruction falling into terrorist hands was tiny, say 1%, we should act as if it were certain by invading. The US is at it again, creating a panic over Chinese technologies by exaggerating tiny risks....

With all respect due, Professor Sachs is simply wrong about the logic here. The logic for attacking Iraq had to do chiefly with control of the Middle East, the center of global energy. The logic for "containing" China the ultimate goal of which is to force China into the same fate as the USSR, is the Wolfowitz doctrine of permanent global domination.

The rationale put forward by then Vice-President Cheney to justify the invasion of Iraq on false pretenses was part of the larger rationale put forward at the time. This was only the national security reason. There were others, such as justifying liberal interventionism.

However, I will grant that the rationale for containing (and eventually defeating) China follows a similar pattern. It is apparently put forward as a proven strategy.

Project Syndicate
America’s War on Chinese Technology

Jeffrey D. Sachs | Professor of Sustainable Development and Professor of Health Policy and Management at Columbia University, ands Director of Columbia’s Center for Sustainable Development and of the UN Sustainable Development Solutions Network

China Adjusts to the New World Order — Andrew Sheng and Xiao Geng

Recognizing that global engagement is in its interests, China's leaders have been working to counter the backlash against globalization and have reconfirmed their commitment to continued reform and opening up. But China does not need the world nearly as desperately as US President Donald Trump and his advisers seem to believe.

Project Syndicate
China Adjusts to the New World Order

Andrew Sheng, Distinguished Fellow of the Asia Global Institute at the University of Hong Kong and a member of the UNEP Advisory Council on Sustainable Finance, former chairman of the Hong Kong Securities and Futures Commission, and currently adjunct professor at Tsinghua University in Beijing; and Xiao Geng, President of the Hong Kong Institution for International Finance, and professor and Director of the Research Institute of Maritime Silk-Road at Peking University HSBC Business School

The Gloves Are Off: The U.S.-China Trade War Is Coming for Big Business — Scott B. MacDonald

A fair assessment from the American point of view, basically assuming American exceptionalism. Interestingly, the worst part of the article is the monetary analysis, considering the author is an economist working in the financial sector. Not surprising, though, since apparently so few have a correct understanding.

The National Interest
The Gloves Are Off: The U.S.-China Trade War Is Coming for Big Business

Scott B. MacDonald | Chief Economist, Smith’s Research and Gradings

Also at The National Interest

Of course, nuclear war is extremely unlikely. Although the Bulletin of the Atomic Scientists has placed the hands of its famous clock at five minutes to midnight, that doesn’t mean very much and never has. The fact of the matter is that world nuclear inventories, led by reductions in the United States and Russia, have never been lower, and none of the major powers expects a nuclear conflict in the way they did during the Cold War. To crib a line from Captain Jack Sparrow, however, nuclear war is not impossible, it’s improbable, and a nuclear war could take place in more ways than you might think, sparked by any number of occurrences from a pure accident to an intentional strike.

I’m going to focus here on a war that could involve the United States and its allies on one side, and Russia or China on the other. Nuclear conflict between India and Pakistan, or between a future nuclear-armed Iran and Israel, is unlikely but far easier to imagine than a global nuclear conflict. Indeed, this is one reason Americans don’t think about nuclear war very much anymore: they think it will happen somewhere else. (If a regional limited war takes place, however, you’ll know it: even a small exchange of nuclear weapons will create a global environmental catastrophe that will dwarf Chernobyl or Fukushima.)...

A Top Expert Just Told Us 5 Ways a Nuclear War Could Start (Think Billions Dead)
Tom Nichols

Steve Bannon’s Gift — Chris Faure

Get ready for it!

If you thought that the demonization of Russia and incessant Russophobia over the past years from the West, with hardly a highly likely shred of evidence, was unconscionable and the absolute pinnacle of all demonization campaigns ever, get ready for the demonization of China. In true Hollywood Blockbuster style, the China Fearcampaign promises to be bigger and better theater than the complete demonization of Russia. The campaign is focused, has a highly skilled leader, is sophisticated and has a clear set of objectives and operating objectives and plans. It even has its own very special movie, called “Claws of the Red Dragon”. https://www.youtube.com/watch?v=RvIKUIbKc6w

And like all such campaigns, it seamlessly rolls Russia in and now, Russia/China just rolls off the tongues of the imperial Hegemon.

We have grown accustomed to the Russia Bad campaign and understand and recognize how and when it is waged. This article will focus on what I call ‘the China Fear’ campaign through the eyes of Steve Bannon.

The Vineyard of the Saker
Steve Bannon’s Gift
Chris Faure

Flailing at China — Stephen S. Roach

Despite years of denial, there can no longer be any doubt that the US is pursuing a bipartisan containment strategy vis-à-vis China. Whether justified or not, the real problem with this strategy is less the merits of the allegations leveled by US politicians than the incoherence of the Trump administration’s policies to address them....

It's still "Red China," after all.

Stephen Roach understand Chinese political economy. This is a good summary of his course at Yale on "The Next China."

Project Syndicate
Flailing at China

Stephen S. Roach, faculty member at Yale University and former Chairman of Morgan Stanley Asia

The Real Reason for China’s Rise — Zhang Jun

The standard account of China’s economic rise focuses on its state capitalism, whereby the government, endowed with huge assets, can pursue a wide-ranging industrial policy and intervene to mitigate risks. This explanation is wrong.…

Project Syndicate
The Real Reason for China’s Rise

Zhang Jun | Dean of the School of Economics at Fudan University and Director of the China Center for Economic Studies, a Shanghai-based think-tank

Even He Can’t Get Away With It — Greg Wilpert interviews Michael Hudson

Basically, what he’s trying to do is blame China and blame foreigners for the fact that a lot of Americans are really hurting. They’re not doing better. They’re not earning enough to break even. They’re going further into debt. But Trump is really saying that it’s not our fault. It’s China’s fault. Don’t blame the financial mismanagement. Don’t blame the corporations. Blame China.

He pretends that they’ll pay instead of Americans. But when you levy a tariff, import prices are going to go up. Americans will pay more. The demands he’s making on China are nonsensical. No country is going to give away their autonomy and abolish their socialist economy and say, all right, we’re going to become an American satellite. We’re going to follow Thatcher and Reagan policies and let America buy our companies out and push us back into the 19th century Opium Wars.

The Opium Wars are over and so it’s now Trump’s trade war. So this is nonsense.

What's going on now is that each side is playing a charade to convince that it is not to blame for the fallout from the faux trade war that is really a piece in the hybrid war that the US has directed at China, ultimately in the interest of regime change there.

Michael Hudson — On Finance, Real Estate And The Powers Of Neoliberalism
Even He Can’t Get Away With It
Greg Wilpert interviews Michael Hudson, President of The Institute for the Study of Long-Term Economic Trends (ISLET), a Wall Street Financial Analyst, Distinguished Research Professor of Economics at the University of Missouri, Kansas City, and Guest Professor at Peking University

See also

On the weekend of July 19-21st, 2019, the University of Manitoba became the venue for the 14th Forum of the World Association for Political Economy (WAPE). This annual event represents a gathering of Marxist economists from around the globe, and aims to utilize current understandings on the subject to analyze and study the world economy, reveal its laws of development, and offer policies to promote economic and social progress on national and global levels.

One of the keynote speakers at this event was Michael Hudson. He had presented on his most recent paper, detailing how the world could defend itself from U.S. economic warfare.

The Instrument of Empire

The Next Phase of Trump’s Trade War with China — Yu Yongding

China remains committed to its 40-year-old process of reform and opening up. But following through on this commitment will require China's leaders to find ways to manage escalating tensions with the US and avoid a costly – and potentially devastating – reconfiguration of the global economy....

Project Syndicate
The Next Phase of Trump’s Trade War with China
Yu Yongding | former president of the China Society of World Economics and director of the Institute of World Economics and Politics at the Chinese Academy of Social Sciences, and member of the Monetary Policy Committee of the People’s Bank of China from 2004 to 2006

Long and winding road for US-China trade talks — M. K. Bhadrakumar

The trade imbalance part is relatively easy to tackle if China adopts an ‘open wallet’ approach to buy more from the US and resort to the ‘soybean strategy’ (commitment to purchase US agricultural products.) But then, how far this helps the US to tackle its multilateral trade problem is a different matter. (The US ran trade deficit with 102 countries in 2018.) Fundamentally, the problem lies in the US economy’s widening federal deficit over the next decade. In sum, tariff war with China can only backfire by shifting US imports to higher-cost foreign producers.

On the other hand, the structural issues — causing tensions in agriculture, services, technology, intellectual property, technology transfer, non-tariff barriers — are much for formidable and no solution is in sight. To be fair, Trump acknowledged it saying the US ‘does not feel rushed to do a deal’. In order to get a sense of the multiplicity and complexity of structural issues that divide these two very different systems — the US and China — it is useful to dip into the pre-Osaka Chinese white paper released in Beijing on June 2 titled China’s Position of the China-US Economic and Trade Consultations.
The salience of the document lies in Beijing’s determination not to give in on its commitment to indigenous innovation, the important role played by State-owned enterprises, and the country’s strategic focus on emerging industries such as artificial intelligence, fintech, e-commerce, and health science technologies.

The above are non-negotiable principles for China, whereas, the US regards them to be existential threat to American prosperity and the US’ dominance of the world economy. Trump’s China advisor Peter Navarro starkly posed the existential challenge: “China has targeted America’s industries of the future… If China successfully captures these emerging industries, America will have no economic future.”

India Punchline
Long and winding road for US-China trade talks
M. K. Bhadrakumar | retired diplomat with the Indian Foreign Service

EU Commissioner on the U.S.-China Trade War: 'Our List of Countermeasures Is Ready' — Peter Müller and Christian Reiermann interview Cecilia Malmström

In an interview, European Trade Commissioner Cecilia Malmström discusses what the tariff dispute between the United States and China means for European companies and consumers and why President Trump's strategy could end with the "law of the jungle."...

Spiegel Online
EU Commissioner on the U.S.-China Trade War: 'Our List of Countermeasures Is Ready'

Peter Müller and Christian Reiermann interview European Trade Commissioner Cecilia Malmström

See also

TASS
German companies plan to invest around 395 mln euro per year in Russia, says survey

Also

Sputnik International
Trump: My Plan B With China on Trade is to Reduce Business With China

Also

Sputnik International
China Stops All Meat Imports From Canada Amid Strained Bilateral Ties

Rabobank: Trump-Xi Meeting Is Not About Tariffs Or Trade, But Who Wins The Great Chess Game And How — Michael Every

More geopolitics and geostrategy, and how it impacts finance and economics.

The danger here is that POTUS and US hardliners see this as a zero-sum game. This greatly increases the chance that it will lead to kinetic warfare on a grander scale. The US is already deep into deploying economic, information, and cyberwarfare against a number of countries, and positioning for kinetic warfare.

The situation now is increasingly hair-trigger.

Zero Hedge
Rabobank: Trump-Xi Meeting Is Not About Tariffs Or Trade, But Who Wins The Great Chess Game And How
Michael Every | Head of Financial Markets Research Asia-Pacific, Rabobank

Zero Hedge — Trump's Feud With China Is A Carbon Copy Of Reagan's Trade War With Japan: Is A New Plaza Accord Imminent?

No way this is comparable to Japan. It amounts to adding apples and oranges. The differences outweigh the similarities. 

China is not Japan, just as Iran is not Afghanistan, Iraq, Syria, or Libya. There's a big difference in opening a can of worms and opening Pandora's box.

The result so far has been to drive China and Russia closer together, which is a strategic nightmare for the US since this is the only existential military threat the US faces. That was a strategic blunder that Henry Kissinger had warned Trump against.

Zero Hedge
Trump's Feud With China Is A Carbon Copy Of Reagan's Trade War With Japan: Is A New Plaza Accord Imminent?
Tyler Durden

Brad DeLong — What to Do About China?

By attempting to "get tough" with China, US President Donald Trump's administration is highlighting the extent to which America's star has fallen this century. If the US ever wants to reclaim the standing it once had in the world, it must become the country it would have been if Al Gore had won the 2000 presidential election....

GOP smackdown.

Project Syndicate
What to Do About China?
Brad DeLong | Professor of Economics, UCAL Berkeley

David P. Goldman — Washington is wrong about China’s economy

David P. Goldman puts some numbers on it.

Asia Times
Washington is wrong about China’s economy

David P. Goldman puts some numbers on it.

See also

Gold, Goats 'n Guns
What’s the Plan Mr. Tariff Man?

Tom Luongo

See also

Tom Dispatch
Tomgram: Michael Klare, Fighting the Next War, Not the Last

See also

NEO
New US Ambassador to Uzbekistan – You Just don’t Wanna Know

Martin Berger

See also

The Vineyard of the Saker
Special China SITREP & Analysis

Larchmonter445

See also

Fortune
China Is Creating A “Greater Bay Area” To Rival Silicon Valley. What Will It Mean for Hong Kong?

Eamon Barrett