15 Apr 2020

Separating From China Comes Next

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Andrew A. Michta contends that the principles of Liberalism and Free Trade are philosophically fine, but have unacceptable drawbacks in a real world in which your trading partner is also your adversary and has no respect for human life.

By striving to “flatten” the world (in Thomas Friedman’s memorable phrase) into a single, borderless entity in pursuit of nothing but profit and prosperity, this worldview has created huge blind spots. For example, it was powerless to predict that China would build on its early advantage in sheer numbers of low-skilled workers to lock in a dominant and increasingly powerful position for itself in global supply chains. Economies of scale played their part, as did the complementarity of the various manufacturing sectors the country strategically developed, not to mention China’s bullying and corrupting practices. The end result was that the costs of shifting to poorer countries would be unappetizing to corporate supply chain managers. Worse still, such thinking could not account for the fact that behind the scores of successful companies lay a monolithic, totalitarian, nationalist entity with a vision for restoring China’s role in the world: the Chinese Communist Party (CCP).

When bereft of redundancies, networks devolve to hierarchies, which in turn create winners and losers. Hierarchies do not diminish the key importance of state power in international relations. On the contrary, they enable it. As China has grown to become the seemingly irreplaceable core of a globalized economy, the CCP has pursued predatory mercantilism in its commercial relations with the West, in the process tilting the hard power balance in its favor. In an economic system that allows for the flow of technology and capital across national borders, redundancies in the supply chain are essential to the preservation of state sovereignty and government capacity to act in a crisis. The Wuhan Virus pandemic is proving so devastating because the radical centralization of market networks has allowed for failure at a single point in our supply chain to leave the system with no capacity to off-load demand onto redundant networks.

In short, globalization, as preached and practiced over the past four decades, has been shown for what it has always been: profiteering off of a vast pool of centrally controlled labor. While many vast fortunes have been made in the West as a result, and as American consumers binged on low-cost goods, the biggest winner has naturally been the Chinese Communist Party elite. And though even before the 2016 U.S. election there was a growing realization among Western captains of industry that something was not quite right with China’s role in the system, few were willing to ask big enough questions about the system as a whole.

The fundamental question is one of values: Is this kind of globalization compatible with liberty and democratic governance? My simple answer is no. By ignoring the role of nations in the international system—or, if not ignoring, indeed prophesying the nation’s demise—globalization’s boosters have implicitly, if perhaps unwittingly, lessened the accountability of elites and downgraded the voice of voters in these matters. No citizenry, if asked, would vote for the status quo—their working-class communities gutted, their security endangered, and their country made dependent on an adversarial foreign power.


In the end, cheaper running shoes and smart phones are just not worth it.

2 Feedbacks on "Separating From China Comes Next"

bob sykes

Disengaging from China is necessary, but merely moving the factories to another country is not. The factories must come home to the US. That is the only way to save the American Heartland and worker.


We need to get our businesses out of China but just as importantly we need to get China out of the U.S. They should not be able to immigrate here, not own any property or business or part of a business here.


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