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What’s the consequence of the US trade war and tech war against China?

Xiaoming Guo 郭晓明


Q: What’s the consequence of the US trade war and tech war against China?


There are many consequences of the US tech war.

The first casualty is the academic freedom. All the Chinese researchers in the US and researchers who have academic cooperation with China are de-funded, under FBI investigation, research teams dismissed, etc.

The second casualty is the rising racist discrimination against Chinese scientists. This overspills into society and poisons democratic culture. Many scientists of Chinese ethnicity lost basic civil rights protection, being harassed and being presumed spy suspects.

The above consequences damage the society and morals of the US. The effect will last long. Do we observe rising violent crimes since Trump launched the trade war against China? Do we observe the rising gun crimes? The government policy of the trade war is based on defaming China, not on evidence. It breaches the spirit of the rule of law. It is the president, the government, the politicians, and the media all betray the spirit of the law to create unfair trade practices, so it legitimizes the criminal mindset: I can do it, then I can make up excuses.

The third casualty is also academic freedom but in the economic and political academic. Suddenly, all the economists who have been promoting the free market now make up all the excuses for the trade war and tech war. The economists, especially those voiced from the think thanks, are not sincere and not objective. For example, the Fraser Institute had ranked Hong Kong at the top of the freedom index in a roll for more than ten years before 2019. To support the 2019 Hong Kong riot, it downgraded the Hong Kong ranking.

The US has the most talented economists in the world. Yet the US debt is skyrocketing, and now inflation. Some economists are not telling the truth, or the voice of truth cannot be heard. When the US politicalized the economy and technology, the two activities that should not be politicalized, it screws the morale of the whole society, from professors to criminals.

Fourth, the trade war and tech war sabotaged the world market economy, making the world economy a rent-seeking economy. The US is using its legal weapons to turn the world economy from a market economy to a geopolitical economy. The US government picks who should be the winner and who should be the loser in the world economy. This, of course, adds to the moral deterioration of the US society.

Consequently, fifth, the moral hazard spread into business. Businesses lost the incentive for market competition. They are now lobbying Congress to sanction Chinese businesses and get subsidies from the government. They are rent seekers. The trade war and tech war are putting the world economy under US regulations.

Sixth, the US loses the trade war. The US is strong in finance. China is strong in manufacturing. Imagine a world that has only manufacturing but not finance, the world can still survive. But if every economic activity is finance and not manufacturing, can the world economy be sustained? The fundamental pillar of an economy is manufacturing. Finance has no meaning if it loses the manufacturing bases. The US knows it. From Obama to Trump and Biden, they all want manufacturing back in the US. But the US is a financial monopoly superpower. Finance is cool, fund, and get rich by just sitting in the offices. If you can get rich by living in a post-industrial society, who wants this labor in manufacturing? One cannot eat the pie and get the pie. Monopoly finance is eating manufacturing. How can the US eat manufacturing and get manufacturing? The loss of the US in the trade war is obvious. Regardless of the abnormally high tariffs put on Made-in-China, the trade deficit of the US keeps growing. Now how can the US support the Ukraine and Israel of wars at the same time? Print money. What the money printed can buy if the US and China decoupled? Nothing. That’s why Biden wants to meet Xi in San Francisco.

Seventh, the US loses the tech war. The US loses the tech war because they live in the propaganda world. They think China cannot innovate. China can only “steal“ IP”. They just ignore that Huawei holds the most IPs in 5G. Yet, the MSM is such a magnificent propaganda machine that the US lawmakers believe the US can win the tech war. They lose, faster than anyone can comprehend. The US has the first-entry advantage in the high-tech market. Chinese technology was difficult to squeeze into the tech market because supply chain and learning curve. When the US waged the tech war, it singled out the tech market in China for Chinese technology. The difficulty of China’s technology was suddenly removed.

The US is playing a lose-lose game. Because the US has a larger economic size than China, by playing the lose-lose game, the US can hopefully crash China. Yet, it turn out the trade war and tech war backfired. The lose-lose game turns out to become the US-lose-China-win game. The US is playing dirty, not playing fair.

The US is the superpower. It has long been ignoring rules and moral obligations to impose its will in the world. The US used to make policy regardless of the truth and reality. The actions of the superpower create the reality of the world. So the US could make its policy based on its lies and propaganda. The US believes in its power. It could make the lies and propaganda come true. It can make the lies and propaganda self-fulfilling prophecy. Yet, China is too large for it to digest. It wants to swallow China and get choked.