陈凯博客： www.kaichenblog.blogspot.com

US China Policies - A Discussion with a Friend
与朋友讨论美对中政策

Please note that some of this material is Copyright (c) 2010 by Howard Hyde, All Rights Reserved. -- Kai Chen

Howard:

Indeed, China and US are not in a open cold-war as USSR and US. Yet the need of the US officials, from Bush to Clinton, to cower China's favor for political purposes with the way they conveyed this sick/pathetic need from an illegitimate communist regime is beyond moral comprehension, beyond what a free country like US - the leader of the free world is supposed to have behaved.

I bet FDR never denounced Japan (in a moral sense) openly before Pearl Harbor. US only quietly sanctioned Japan over the issues such as Manchuria occupation. Such behavior from US will always be seen as weakness in the eyes of tyranny. Morally denouncing despotisms/tyrannies in the world is an unshakable responsibility, even duty, for the US to manifest the purpose of this great country. Yet, such manifestation is entirely missing in recent decades. Economic interest in the US somehow overwhelms her moral responsibility. How many times have you heard Presidential candidates openly espouse the value of Freedom and human dignity in the last couple of elections, since Ronald Reagan?

This is what my message to America:

America's wealth has never come from her pursuit of wealth. America's wealth only comes when she focuses on Freedom for individuals in the world. Bill Gates becomes wealthy not because he single-mindedly pursuits money, but because he pursues his own interest and passion (Freedom). More than anything today in America, Freedom needs to be espoused and the values America stands for needs to be loudly spread around the world. The US Presidents' first and foremost responsibility is not some economic schemes to put more money in people's pockets. Their first and foremost responsibility is to be moral giants in the world to advance human freedom. Material wealth is only the result of such a manifestation of great moral purpose, never the goal of any US government under any president. (ie, Limited government is never an economic scheme to expand US economy. Limited government is a moral responsibility of a free country.)

Since Ronald Reagan, Bush 41, Clinton, Bush 43 and Obama have all failed miserably in their disregard of their foremost moral responsibility as leaders of the free world. This is exactly why we are facing such unprecedented crisis - a moral crisis to the core, today.

I hope I have made myself abundantly clear on my points. Best wishes to you and your family. Kai Chen

(Hope you don't mind my forwarding this message to everyone, for this point must be understood in today's America.)

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In a message dated 9/5/2010 10:56:49 A.M. Pacific Daylight Time,

Howard writes:

Kai,

I believe you are mostly correct. In formulating, garnering electoral support for and executing policy, leaders must not only be correct; they must be effective.

If a US President of any party (Republican, Democrat or Bull Moose) came out today and denounced China as the ‘Evil Empire’ the way Ronald Reagan did the Soviet Union in the 80’s, he would be jeered off the stage by members of his own party. Democrats tried to do that to Reagan and failed, but even Republicans are not currently ready to go with such a hard-line condemnation today.

What might be effective, while being adequately offensive to the chinese regime, would be such actions as declaring (and backing up with action) our unwavering support for our friends in such places as Tibet and Taiwan, and to give full diplomatic relations to the same.
Remember Theodore Roovelt’s (leader of the Bull Moose Party) dictum: ‘walk softly and carry a big stick’. The ‘walk softly part’ is barrier-free and open trade to the extent that that is possible. The ‘big stick’ part is the will and ability to confront China on any geo-political expansionist ambitions, and to hold the line on our own interests and principles.

I do not believe that the ‘walk softly’ weakens us or compromises our position at all. To the extent China is co-dependent with us in the peaceful ways of commerce, the less likely a major conflict is to explode. It’s not a guarantee, but a significant influence in a positive direction.

While China is one threat from outside, the greater immediate threat to America today comes from politicians like Obama, Reid and Pelosi who are hell-bent on converting us into an emasculated bunch of nanny-state wards, while spending every printed dollar in sight. We won’t have the wealth, strength or will to stand up to evil in any context if we destroy ourselves from within. That can’t be blamed directly on China.

Below are some facts and stats I’m am drafting for inclusion in my chapter on free trade and globalization, as it pertains specifically to China. Please let me know which points you disagree with.

20% of humanity lives in China, and trade with China constitutes 15% of all US foreign trade. The USA spends about 2% of its GDP on goods imported from China; $260 billion in consumer goods and $60 billion in industrial goods. Two-thirds of that are products designed in the US, manufactured in Japan, Gernany, South Korea, Taiwan, Singapore, Malaysia and/or the US, and finally assembled, at the end of the chain, in China. Think Apple iPod.

The percentage of the world’s population living in ‘absolute’ poverty ($1.25/day or less) has decreased from over 50% in 1981 to 25% in 2005. Before the modern capitalist era started 260 years ago, that percentage was 90% or more. In China, 600 million people have climbed out of absolute poverty in the last 30 years.

American companies employ 10 million workers outside of the United States. Fewer than 5% are in China; an equal number are in Germany, a country with 1/17th the population of China.
Meanwhile, manufacturing output – productivity – increased by about 60%. We’re making more stuff, producing more value, with fewer people, just as we did in agriculture in past generations.

America (or put another way, 250 thousand American companies aggregated) is the world’s #1 exporter. We make stuff. The Top 10 by value are high-end products like semiconductors, civilian aircraft, vehicle parts and accessories, passenger cars, industrial machines, pharmaceutical preparations, telecommunications equipment, organic chemicals, electric apparatus and computer accessories. That’s about $380 billion’s worth there; even more stuff accounts for twice again as much. Not too shabby for a country that ‘doesn’t make anything anymore’.

When imports go up, so do exports. When imports go down, so do exports. Anti-trade / pro-protective tariff theory predicts the opposite.

Price discrimination, like charging different prices for tickets to occupy the same movie theatre seats to adults, seniors, children and students, is a perfectly economically rational and legal practice. Yet when a foreign company sells in the US market below average cost, we call it ‘dumping’, call the international police and slap fines on the ‘criminals’. Someone please tell BMW I would like a 2011 740iL ‘dumped’ in front of my garage with the key in the ignition and a blue bow on top. In return I promise: 1) I’ll send a check for $100 to satsify the ‘below average cost’ requirement (including shipping, handling and gift-wrapping), and 2) I won’t sue or lobby my congressman for a redress of grievance.

The US Congress approved permanent normal trade relations with China in 2000. Trade has grown 23% anually since then, twice as fast as before, and four times faster than trade with other countries.

The US, with 5% of the world’s population, produces 21% of the world’s output, 2.5 times as much as China, a country 4 times as populous.

Trade with China increased 5-fold in 11 years, from $60 billion in 1996 to $300 billion in 2007. China is definitely America’s fastest-growing trading partner, by a factor of more than two and a half; it is the fourth largest customer (they BUY stuff from us) behind the EU, Canada and Mexico (a.k.a. the NAFTA villains).

China tends to provide lower-tech, labor-intensive services; that is its comparative advantage to the high-tech, capital-intensive mode of the US and other more advanced countries.
90+ percent of products imported from China are consumer electronics: personal computers, CD/DVD/media players, cell phones etc.

Reducing our trade with China by slapping protective or ‘national security/sovreignty’ tariffs on imports from China will not make us richer, safer, more secure or less likely to enter into conflict with China or any other rival.

There have been cases of defective or dangerous products being imported, in particular from China, like lead in toys. But this is not a trade problem, and it is not unique to China or any other country. There have been samonella, E. coli bacteria and other contaminants found in American products in recent years. Health and safety regulators have to be vigilant regardless of where products come from.

American de-industrialization does not threaten our national security, because it does not exist.

China’s central bank is the single largest foreign owner of US Treasury Bonds; $600 billion in 2008. That’s about 15% of the US debt, and six one-hundredths of one percent of the value of all US assets. The dependency created by this investment position is a two-way street; the more invested China is in the US economy, the less incentive it has to cause it harm. Still unacceptable? OK, then let’s buy the bonds back (a forced transaction which by definition makes us poorer) so that they can’t dump the bonds on the market, forcing us to buy them back. Let’s pre-empt the situation by doing with certainty to ourselves what we fear (with low real probability) them doing to us. Then explain how that makes us more prosperous and secure.

Best regards,

Howard

P.S. Happy Labor Day!

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On Sun, Aug 22, 2010 at 10:18 AM,

Kai Chen wrote:

Howard:

Moral clarity with moral courage to confront evil is a must. If we want to deal effectively with China, we must be clear about the illegitimacy and the criminal nature of the Chinese communist regime. Reagan once put USSR in its place by defining the nature of the regime - Evil Empire.

China is the current Evil Empire. But I find very few Americans have the courage and clarity to define such a regime. The US is selling China the rope to hang herself. Only by knowing this fact and reality, effective policies can be designed to counter the increasing menacing China threat. Someone must come out to define China as the "Sworn Enemy of Freedom". The cold war has never ended as some US intellectuals believe. The war from Islam and from the Chinese has always been going on. Only the US does not want to recognize it, with fear that such recognition will be a self-fulfilled prophecy. But the reality will not change, regardless what US is doing or not doing.

I can give you some suggestions about economic policies toward China. But they will be futile without such a definition of the regime's nature. That is why I am doing everything in my power to wake up American public to the nature of the Chinese regime - a criminal party-state aimed to enslave humanity.

Free market capitalism is not working if your trading partner is never free to begin with. You end up with a perverted market that only benefits the powerful party elite in China. And their first task is to use the newly gained economic power to diminish US influence in the world, in order to maintain their own power. Defining China as what it is, by facts and by reality, is crucial. Everything is only secondary. I can design a million strategies to deal with China, but with out political will to confront reality I am only wasting my breath.

Thanks for your questions though. It is always appreciated. Best. Kai Chen

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In a message dated 8/20/2010 8:20:56 A.M. Pacific Daylight Time, howard.a.1c writes:

Thanks Kai,

This is all very good information. If I could trouble you for a few more bullets, please give me 5-10 each specific economic/trade policy points as well as geo-political/military/foreign policy points you would give if you were advising Congress, the president and/or the citizens of the US. Or put another way, what are your practical recommendations for the State, Commerce and Defense departments as to how we should deal with China?

By the way have you seen this movie?

http://www.maoslastdancer-movie.com/flash.html

-Howard

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On Thu, Aug 19, 2010 at 8:25 AM,

Kai Chen wrote:

Thanks Howard for the question.

China has not changed whatsoever in term of its oppressive and despotic nature. Chinese lives are better today not because the regime is really for human beings. Human lives are better today because of technological progress such as internet and the instinct of the regime to protect and preserve its own power and privileges.

The Chinese way of preserving despotism is a little different from others. It aims to castrate human beings of their will, courage and ability to think and act on their own, using not just guns but narcotics and hallucinogens, much like voodoo witches. It is partly due to its cultural remnants which are not based on logic and rationality but on rituals from an imperial order. Confucianism is based on such an order and an illogical Chinese character-based syllabic language. Communism survives longer in China, because of such a language and such an illogical and irrational culture. China basically has no history, for the history is written by the power elite and for the power elite. The culture of China is such that people tend not to learn anything at all from their own history. Endless, vicious dynastic cycles are the only result.

Today's China is only another dynasty under the title of communism. Tomorrow's China may yet be the same under a different name. Without individual freedom and a strong Christian faith, China may never pull itself out of the vertex of dynastic despotism. To use a temporary material gain to measure progress in China is a huge mistake. Things can come and go, but eternal ideals represented by America for the world and humanity will remain. I do have the belief that world history is directional, not cyclic - from the collective to the individual, from irrational to the rational, from voodoo tricks to true faith, from slavery to freedom....

About distribution: China is not a capitalistic economy, not as many here in America believe. China is a bureaucratic mercantilism. Material betterment in society is not for human beings, but for the government's power gain/grab. Wealth distribution through a capitalistic system is the only just system, for it is through God's invisible hands. Any other way through human agencies to distribute wealth is unjust and will never sustain itself, as in the case Obama administration perpetrates on American people. Playing God is the worst way for one to destroy human freedom.

The points I sent you earlier are just some from the top of my head. Some may be redundant. If you will we can meet sometimes to discuss all the issues, American and the world. Best to you and your family. Give a big hug for me to Nonie. America needs people like her and Wafa now, in light that they want to build a mosque at ground zero. All despotisms are the same: Islamists want to use "religious freedom" to gain a foothold to destroy such a freedom in the world/America. Chinese communists want to use "cultural diversity" to implement "Confucius Institutes/classrooms" in the world/America to legitimize despotism/tyranny. They all have a political agenda - to gain power by guns, violence, deceptions, perversions and castration of humanity.

Best. Kai Chen

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In a message dated 8/18/2010 10:21:40 P.M. Pacific Daylight Time, howard.a.1c writes:

Thank you so much Kai,

I will consider all of these points carefully.

Can you comment specifically on Most Favored Nation trading status and what it means for China and for the US? Do you think that China is really no better, no more humane today than it was 20 or 30 years ago? Is the distribution of wealth as unjust now as it was then?

-Howard

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On Sun, Aug 15, 2010 at 4:31 PM,

Kai Chen wrote:

Howard:

I just sent you a good article, "Living without Freedom in China". Now I will answer your question to the best of my ability. I may not list 20 threats. But I will list most serious ones.

Threats from China:

1. Ideological threat to Western concept of freedom/democracy with a free market capitalism:

Because most people in the world don't have a faintest notion about living under a Confucian despotism coupled with a communist bureaucratic infrastructure, China now corrupts most of the countries in the world with its own version of development - a total control of the population's mindset with information distortion, brainwash, nationalism and a fast growing economy under a despotic mercantilism. Dehumanization of the population into zombies who depend on devouring each other is a necessary result.

2. The threat of internal instability due to accumulation of moral debt from the Chinese government to its own people:

No one has ever answered to 80 million Chinese being murdered and Tiananmen Square Massacre. History is fake in China and the communist regime depends on lies at every corner of changing tide to hold power. With no moral fibers that is necessary in any society to hold people together, guns and coercion become the only means to retain and stabilize power by the communist regime. No one can depend on adrenaline rush to live a life. Sooner or later it will wear out and the fissure and unrest will come. In China such an unrest will be unprecedented in the world history and the entire world should brace for its arrival.

3. Military threat: China spends un-proportionate among on it military spending:

Its aim is not so much to dominate the world, but to stabilize its own population. People and the government have always been enemies since the ancient time, for no Chinese governments have ever had any legitimacy. Resorting to nationalism against US and the West has always been used by the communist regime in times of uncertainty and instability. Korean, Taiwan, India and South Chine Sea are all potential flash spots.

4. Poisonous products, defected products due to counterfeiting, contagious diseases due to pollution of water and land pose another serious threat to the world:

Fast growth to stabilize the population that is simmering with discontent and anger is a top priority for the Chinese authority. As a result, extreme environmental damage is deepening with each day passed. Humans are not humans in China but tools for the government. Such a wicked culture will spread with the Chinese products around the world.

5. As China accumulates more and more foreign currency, it will use the leverage to seek more influence in the world, with the poor countries seeing China as an alternative model of development to the West:

China has already effectively defeated Human Rights argument, using UN's many poor countries votes. Many poor countries with their own despotic government will use China as a pacifier to their own restless population. Freedom for individuals is thus serious threatened. Human dignity is inevitably put on hold.

6. Infiltration of the Chinese despotism into the West and US poses another serious threat:

Confucius institutes and classrooms popped up everywhere in the world. China boasts 1,000 such establishments in the world by 2020. Dangling money to the West public schools what lack funds proves to be irresistible to many. These establishments have effectively become the breeding ground for the Chinese government to identify corruptible foreign officials and potential China supporters in the infiltrated governments. Spying is only a natural outgrowth of such a development.

7. Economic, military, political espionage has already inundated most of the world by China:

Piracy and counterfeiting have already become China's cultural traits. Most Chinese overseas live in isolated social environment and Chinese government knows how to use such an isolation to control these overseas Chinese, ie. Most Chinese student associations in the US college campuses are funded and controlled by the Chinese Consulate General. After they graduate, they are easy prey for the Chinese government for recruitment to spy.

8. China is the biggest source of moral corruption in the world:

After the Chinese government determine certain foreign businessmen or government officials as beneficial to the communist regime, it will find a way to invite them to China. Dinging and wining and women will be offered and red carpet will be rolled out. Most Western government officials have never seen such ego-booster. They will come home emulating what the Chinese government is doing and yearn for the same power over its own people. Most leftists in the West and US secretly struggle to attain the same kind despotic power over the people, having been lavished over by the Chinese.

9. Energy grab and natural resources control pose another serious threat to the world by the Chinese government:

China has no moral constrain (not like the US) in doing business with the most brutal regimes in the world. Therefore China has a leg up to beat the US and the West in its energy grab and natural resources control. Darfur is only one such example.

10. Assimilation with moral corruption (using human weaknesses) has always been the Chinese' most potent weapon:

Quite a few dynasties in China were from foreign land. But they all end up assimilated and corrupted by the Chinese culture. I wonder now with a lot of money in the Chinese regime's hands, that assimilation and corruption will be brought to the entire world.

OK Howard. I think 10 threats are already quite handful for the world to deal with. Without a strong Christian faith (weakened by the leftists in recent years in the West and America), I can see the Chinese may well succeed in Zombifying the entire planet. Not a pleasant scenario. Best. Kai Chen (I didn't proof-read my message, forgive me.)

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In a message dated 8/15/2010 9:54:28 A.M. Pacific Daylight Time,

Howard writes:

Kai,

I am drafting my chapter on international trade, and I need some insight re: China. I've received a lot of emails from you and we have spoken on a few occasions about this. But I wonder if you could summarize the top 10 to 20 challenges or threats that you believe China poses to the West in general and the US in particular. What are the implications of 'most favored nation' trading status for China?

Here are a few economic statistics I dug up (maybe you can add to this list):

20% of humanity lives in China, and trade with China constitutes 15% of all US foreign trade.

· The USA spends about 2% of its GDP on goods imported from China; $260 billion in consumer goods and $60 billion in industrial goods. Two-thirds of that are products designed in the US, manufactured in Japan, Gernany, South Korea, Taiwan, Singapore, Malaysia and/or the US, and finally assembled in China. Think Apple iPod.

· American companies employ 10 million workers outside of the United States. Fewer than 5% are in China; an equal number are in Germany, a country 17 times smaller.

Thanks,

Howard