Michael Ramirez Essay: Bad Fortune
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BAD FORTUNE
By Michael P. Ramirez, November 19, 2023
What a crazy week.
President Biden attended the Asia-Pacific Economic Cooperation summit in San Francisco this last week. The world anxiously awaited this momentous and consequential meeting between President Biden and President Xi of China.
U.S.-Sino relations are at the lowest point since President Nixon breached the Great Wall in1972 with a historic visit to Beijing (they actually called it Peking back then) and began the process of normalization between the two countries, two countries that had no official communication or diplomatic ties for the prior 25 years.
Some might say it would have been better if we left it that way… Perhaps…
Nixon and Kissinger’s Policy of Engagement was designed to open up China’s society, give the Chinese a peek over the Great Wall, and expose them to the benefits of Democracy. This would initiate a slow transition to capitalism and liberty. Critics say it instead financed the way for China to challenge America, both economically and militarily in the 21st Century, creating an economic superpower that is a global threat to democracy.
The critics are partially correct. Their assessment only offers the narrowest view, a slice of revisionism taken out of the context of history.
Remember, America was still deeply immersed in a Cold War in 1972.
Nixon’s Policy of Engagement diminished China’s threat to American vital interests abroad while offering a foil to Soviet expansionism and Russian villainy. It initiated an economic relationship that would aid America’s escape from inflation and fuel our economic expansion, which ultimately played a significant role in contributing to the fall of the Soviet Union, and the end of the Cold War. It was a huge blow to communism.
The plan was to lead China away from a centrally planned economy and open up its markets to foreign investments and technology, thereby exposing a billion potential Chinese consumers to the free enterprise system, the prosperity of capitalism, freedom, and the end of Communism.
The Death of Mao in 1976 brought the era of Deng Xiaoping, who instituted many of these reforms… and it almost worked. They got everything but the last part. The reforms ended in the Tiananmen Square Massacre.
It turns out that with an oppressive authoritarian regime that controls all areas of communication, and enough force, you can have a mutated version of capitalism AND Communism compelled through sheer intimidation and deception.
So here we are in 2023. China is rapidly growing its military capabilities, threatening its neighbors, and deceiving and oppressing its citizens.
With the world’s second-largest population (India is number 1), you could easily predict the eventual rapid growth of the Chinese. China is the fourth largest country in the world, with abundant natural resources. It may have the second largest economy in the world, with an $18 trillion GDP, but its GDP per capita is only $12,720.
Xi has proclaimed the inexorable rise of China… but the dirty little secret is China’s economy is sinking. 20% of its GDP rests with a debt-fueled property sector that has gone bust. Their national GDP is heavily reliant on an export economy. Because of its shady economic practices, which coerce foreign companies to sacrifice intellectual property and relinquish patents, businesses are very leery of investing in China. Add Xi’s impulsive regulatory crackdowns to exert governmental control on businesses, and the result is foreign investors leaving in droves.
China’s withholding of key materials and components has led businesses to find alternative producers for their supply chain. While China routinely uses trade as a weapon by retaliating against countries who refuse to do their bidding, an article in the Wall Street Journal reports, “China has at least a 70% dependence on the U.S. and its allies for more than 400 items, ranging from luxury goods to raw materials needed for Chinese industries.”
Youth unemployment in China has hit a record high of 21.3%, and it was the youth that drove the calls for democracy in Tiananmen Square.
According to a recent article in the Financial Times on China, “the past two years has seen the largest drop in the nation’s share of global GDP since the Mao era.”
This explains why the government-controlled Chinese media has suddenly changed its tune and touted a fresh outlook on U.S.-Sino relations.
They need us.
The U.S. is the third largest country in the world. We have less than a quarter of China’s population but the largest economy in the world. Our GDP is $25.5 trillion, and our GDP per capita is $76,398.
Biden may have touted a new beginning of U.S.–China relations, but what China wants is the return of foreign investments to give their economy a shot in the arm. The US should stand firm and force China to live up to global business practices and open up its markets. Instead of a trade war that only hurts U.S. businesses and is a tax on U.S. consumers, we should hold them accountable, continue limiting multiuse high-tech exports, and encourage diversifying our supply chain.
Biden once again called President XI a dictator. That may not be wise diplomatically, but it certainly is the truth.
Yielding to China’s overtures without demanding reform of their bad business practices, political interference, hacking, military threats, support of nefarious global actors, international mischief, and expansionism would make the world more dangerous.
Preparing to meet China’s acceleration of military development in kind and consolidating Western interests to counter Chinese aggression militarily and economically would be the right path to take.
These things would have been a good start in Biden’s meeting with Xi at the APEC summit. Taking a strong stand might have produced tangible results. Instead, with Xi in a precarious and weakened state, the best Biden could manage was an agreement to talk about talking in the future…. And once again, he managed to make a summit out of a molehill.
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Newsprint edition:
Loved this post and the historical synopsis. My post link below elaborates on the war of ideas in which we are now engaged. We need more confidence in ourselves!
https://open.substack.com/pub/joelelorentzen/p/enemies-of-freedom-beware?r=1p5p1m&utm_campaign=post&utm_medium=web