The ongoing trade battle with China is inflicting real pain – and more is on the way. And, as we know, Americans don’t suffer well.
But this is an issue so important that President Trump is right in finally drawing a line and seeking to force the Chinese to negotiate an end to their country’s unfair trade practices – the long-term equivalent of attacks on the American economy. Short-term pain is a fair trade-off if it avoids what could be a catastrophic economic outcome for the U.S. down the road.
The Chinese are long-term thinkers. They have a goal of economic domination with their brand of government-directed capitalism. We shouldn’t make the mistake of thinking we are dealing with a nation that reacts to market forces or has a political system where angst and anxiety of voters translates into public policy. Rather it is ruled by the Chinese Community Party, with Xi Jinping in effect declared president for life.
Faced with Chinese intransigence, Trump has imposed tariffs on billions of dollars of Chinese goods, and the Chinese have responded in kind. Some of those hurt. In New Mexico the solar industry is concerned. Pecan farmers – like a number of agricultural producers around the U.S. – have been hit. But it’s not just about the dollars and cents that go along with international commerce, although the overall trade numbers are stunning. The U.S. maintained a $375 billion trade deficit with China in 2017 – three times as high as it was when China entered the World Trade Organization in 2002.
There’s more at stake than trade
This fight is really about unfair practices that include Chinese currency manipulation, government subsidy of key economic sectors that give them competitive advantage and the alarming theft and conversion of our intellectual property. In short, the Chinese are capitalizing on American innovation through subterfuge and coercion to build an economy that would dominate us.
In their DNA many Republicans are reluctant trade warriors at best, and Trump has found support from none other than Senate Minority Leader Chuck Schumer, D-N.Y., who in May said Trump was right to place tariffs on Chinese goods. “China takes total advantage of the United States,” he said. “They steal our intellectual property using cyber theft.”
Recent headlines in New Mexico have the echoes of the 1999 spy scandal of Los Alamos scientist “Uncle Wen (Ho Lee) says hello.” One of the current Chinese programs designed to access intellectual property, “Thousand Talents,” has embedded itself in U.S. research facilities and universities. Turab Lookman of Santa Fe, a 20-year award-winning physicist at Los Alamos National Laboratory, was arrested by the FBI last month on charges of lying about his contacts with Thousand Talents – which tries to cultivate and recruit scientists and seeks to have some do their research in China.
Intellectual property at risk
Van Romero, vice president of research at New Mexico Tech, describes it this way: “My understanding is that one of the requirements in the Thousand Talents program is that when you are induced to do research in China … part of that agreement is that China owns all the intellectual property.” He stresses that while the program itself is legal, “I have a problem with that” because it’s not about the “free exchange of ideas and work.” He describes it as a “black cloud” over the program.
Thousand Talents is just one example. There have been myriad complaints about American companies that partner with Chinese firms being forced to agree to completely share their technology and intellectual property with their Chinese partners. On another front, Chinese tech giant Huawei is facing allegations from the U.S. that its infrastructure equipment may enable surveillance by the Chinese government. A frightening thought for a company pushing the 5G envelope.
We should all hope U.S. and China can resolve this dispute, in addition to diplomacy that addresses the growing Chinese military threat in Asia. China is the world’s second-biggest economy after the U.S. and is projected to overtake the U.S. in GDP, as opposed to per capita GDP, in coming years.
But the desire for economic peace doesn’t mean we should continue the ineffective old policies of complaining loudly but doing nothing about Chinese trade practices.
This editorial first appeared in the Albuquerque Journal. It was written by members of the editorial board and is unsigned as it represents the opinion of the newspaper rather than the writers.