I came of age in the 20th century, a time when Russian Communism was a military and ideological threat to western interests. Some now want to compare the current U.S. – China disagreements with the Russian-American “Cold War” that lasted from the end of World War II to the fall of Soviet Union on December 26, 1991. I, and many of you, Americans and Russians, remember it well.
Although the Soviet Union and the United States engaged each other militarily and ideologically, they never engaged each other economically. The Soviet Union was not part of the global economy. As a result, the U.S. had no economic interests in Russia, and Russia had no commerical interests in the United States.
China, on the other hand, does not just compete with the U.S. economically, but it challenges the U.S. for world economic leadership. That is something the Soviet Union never did. Although the U.S. and Chinese economies compete, they are also powerfully intertwined.
Consider this quote from Investopedia:
China is the world’s largest emerging market economy, both in terms of population and total economic product. The country is arguably the world’s most important manufacturer and industrial producer, and those two sectors alone account for more than 40% of China’s gross domestic product or GDP. China is also the world’s largest exporter and the second-largest importer, and it contains the fastest-growing consumer market…China makes and sells more manufacturing goods than any other country on the planet.
Who consumes most of those Chinese goods, American citizens? The United States is the largest consumer market in the world. According to Global Trade Specialists Inc., The largest categories of U.S. imports from China in 2018 “…included electrical machinery ($152 billion), machinery ($117 billion), furniture ($35 billion), toys and outdoor equipment ($27 billion), and plastics and plastic parts ($19 billion).”
And if you think it’s easy to move manufacturing from China to another country think again.
Each nation has a unique business culture that demands a very long learning curve.
Each country has an infrastructure that may or may not have reliable port facilities, roads and electrical power.
Each nation has a different form of government, different bureaucratic rules, language, work ethic, sense of time, and timing.
When the world’s biggest consumer and the world’s biggest manufacturer compete, it’s in their mutual best interests to find a solution. And I think they will. Yes, both sides are going to argue, and threats will be made, but there is simply too much to lose by attempting to unravel mutual interests that have taken decades to weave.