21 Mar 2020

Hard Decoupling

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Antique un-PC ad showing Uncle Sam, holding a proclamation and a domestically-made product, kicking the Chinese out of the United States.

Andrew A. Michta also thinks that China’s behavior has been bad enough and her responsibility for the current international pandemic so great that all this should result in a complete reordering of our economic relationship with China.

It won’t be easy or painless, but the role China has played in exacerbating the fallout from the coronavirus crisis ought to force Americans to fundamentally reconsider the relationship.

I flew back from Washington DC to Munich just a day before the travel embargo from the Schengen zone to the United States came into effect. As I watched anxious gate agents, tense flight attendants, and passengers eyeing each other with suspicion, I could not help but think that what I was witnessing was the beginning of a radical recompilation of the mistaken notions that for the past three decades have shaped U.S. and European economic policy, and indirectly, international security. The idea that the People’s Republic of China can become a responsible stakeholder in the international community—that it can “be like us”—is being laid to rest behind the masked faces of petrified Westerners scurrying through airports to get home.

Amidst the 24/7 breathless media coverage and calls for politicians to “do something,” one fundamental question still needs to be addressed forthrightly and in the open: Who did this to us and what to do to prevent it from happening again?

The question about assigning agency and blame is pretty straightforward to answer: The communist Chinese state, which for more than three decades has been draining capital and knowledge from the West, benefiting from our greed and myopia, has just let loose a virus that in the coming months is about to effectively paralyze Europe and the United States and bring severe pain, both human and economic on the world. The “eruption at a wet market” explanation for the virus has to be questioned until we know the full story, if for no other reason than the fact that Beijing suppressed data for two months when the coronavirus first appeared, and even to this day refuses to come clean as to exactly what happened. Indeed, the Chinese Communist Party (CCP) is now spinning propaganda stories that both seek to somehow pin the blame on the United States, and that try to frame their bungling, denial-ridden, heavy-handed reaction as some kind of model for the world.

As a result of all this, the West is now shutting down, at least for a while. The ultimate cost to the world, in terms of new government debt, failed businesses, and human lives and suffering, is difficult to quantify at this point. But there are indications that the fallout from the Wuhan Virus could be transformative.

We must acknowledge our own complicity in what is now unfolding. The belief that globalization, through the radical centralization of market networks, was the unavoidable path forward has been exposed as a grave, near-delusional miscalculation. The offshoring by corporations of supply chains to China has not only eviscerated communities that were previously reliant on manufacturing jobs, but has also brought with it an unprecedented level of vulnerability and fragility to our economies. The populist revolts that have wracked Western democracies for the past several years are in part rooted in the pain that these dislocations have caused. Worse yet, for the past three decades, this offshoring process has favored an adversary that is determined to replace us as the hub of global economic and military power and place itself at the new normative center of the world.

Should the fallout from the Wuhan Virus prove to be as damaging as it looks like it might be, the first casualty should be China’s quest to become the premier manufacturing center for the world.Should the fallout from the Wuhan Virus prove to be as damaging as it looks like it might be, the first casualty should be China’s quest to become the premier manufacturing center for the world. Few corporations will want to again risk being caught in a situation where their entire supply chain has been locked into one country—much less a palpably hostile dictatorship. The subsequent era will, I hope, be one of strategic reconsolidation, with a special focus on onshoring critical supply chains that have been moved to China. Even the siren song of potentially-vast consumer markets in China may end up being more than offset by the trauma we are about to face.

As the dust settles, the United States should be taking a hard look at streamlining our federal and state regulatory framework, tax structure, and all other outstanding obstacles in order to encourage U.S. businesses to come back home.

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5 Feedbacks on "Hard Decoupling"

Anon

How many Chinese in this country are spies? For that matter in every country they have moved to and purchased businesses and investments in. How many are sleepers (sleeper cells)? China intends to take over the world their people and their government organizations are inserting themselves into everything all over the globe.

Isn’t it odd that this virus occurred/escaped in Wuhan were China’s biological warfare labs are. Isn’t it interesting how they pivoted to try to blame this on the U.S. as though they are desperate to hide/cover up something. Also of interest is how many in the MSM and governments all over the world are helping them in this great diversion.



BobF

Interesting. According to the LoC catalog listing that is from 1886.



Mike-SMO

The details of this viral outbreak are, in some respects, irrelevant. It did show us how far down the road we had traveled to become a dependent third-world colony of China, supplying them with raw materials and a market while we are unable to produce anything on our own.

When there is a world-wide problem, and there will be because of air-travel and shipping, we will not be able to do a thing about it, except hope that our “owners” soon recover and begin sending us the things we need to survive.



Steverino

I don’t see the connection between coronavirus and American outsourcing to China. Even if there were no such outsourcing, there would still be air traffic between China and the USA that would could the virus to us. You have a point with vital manufacturing like medicine. We should retain a manufacturing base for that at home. However, if the Chinese intend to defeat us by integrating their economy with ours by trade, it’s far more likely to undermine and upend their Communist Party. After all, opening the US to Chinese college students led to the Tiannamen revolt, which has not ended, but gone underground. Life, liberty, and the pursuit of happiness is a more powerful and compelling set of ideas than Communism. We will win.

Stealing our technology delivers only Pyrrhic victories to the Chinese. The Soviets did the same but found that we developed new mainframe computers faster than they could reverse engineer them. Technology theft condemns your nation to perpetual lag in technology because you do not develop your human capital to innovate. It stagnates and fails.



Steverino

I don’t see the connection between coronavirus and American outsourcing to China. Even if there were no such outsourcing, there would still be air traffic between China and the USA that would carry the virus to us.

You have a point with vital manufacturing like medicine. We should retain a manufacturing base for that at home. However, if the Chinese intend to defeat us by integrating their economy with ours by trade, it’s far more likely to undermine and upend their Communist Party.

Trade carries ideas with it. Opening the US to Chinese college students led to the Tiannamen revolt, which has not ended, but gone underground. Life, liberty, and the pursuit of happiness is a more powerful and compelling set of ideas than anything Communism offers. We will win.

Stealing our technology delivers only Pyrrhic victories to the Chinese. The Soviets did the same but found that we developed new mainframe computers faster than they could reverse engineer them. Technology theft condemns your nation to perpetual lag in technology because you do not develop your human capital to innovate. It stagnates and fails.



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