Making the
click-through worthwhile: Some signs that China is starting to feel the pain
from Trump’s trade war; a special House election in North Carolina and what it
could tell us about 2020; and Beto O’Rourke declares that living close to work
is “a right for everyone.”
Is China
Starting to Feel the Pain from the Trade War?
Yesterday’s Wall Street Journal had
a fascinating front-page article that could have deep political ramifications.
Right now,
Trump’s trade war with China looks like slamming our collective foreheads
against a brick wall, hoping we do more damage to the wall than the wall does
to our skulls. We institute tariffs, China gets mad and responds with their own
tariffs, Trump gets mad and responds with more tariffs, and the cycle goes on
and on. The escalating battle hurts our farmers and exporters, while the
leaders of Beijing just sit and wait for either a new president with a
different attitude or for political pressures to convince Trump to change course.
There’s an
argument to be made that extensive trade ties with China
have empowered them, while making us more dependent upon a country
that is hostile to our national security interests, values, and human rights.
The president would be wise to go beyond the familiar complaints about
intellectual property — a fairly abstract issue — and discuss China’s inhumane
working conditions, military aggressiveness, artificial island construction,
and persecution of religious minorities on a massive scale. A lot of people
groaned or rolled their eyes when Senator Lindsey Graham said that Americans
needed to “accept the pain” that
comes from a trade war with China, but I thought he deserved an “attaboy” for
his honesty. When’s the last time an American political leader admitted his
preferred policy was going to mean pain for some people?
The trade
war is a giant bet that we can get China to do what we want through economic
pressure and that they need access to our markets more than we need access to
theirs. They’re betting that they can endure more economic pain than we can.
As you may
have noticed, the Chinese government lies a lot. When the government in Beijing
puts out economic numbers, investors, businesses, and people who need to know
are left wondering whether those are accurate numbers, or whether they’ve been
airbrushed to assure the world that the Chinese economic engine is humming
along as it should.
Beneath
China’s stable headline economic numbers, there is a growing belief among
economists, companies, and investors around the world that the real picture is
worse than the official data. That has analysts and researchers crunching an
array of alternative data — from energy consumption to photos taken from space
— for a more accurate reading.
Their
conclusion: China’s economy isn’t tanking, but it is almost certainly weaker
than advertised. Some economists who have dissected China’s GDP numbers say
more accurate figures could be up to 3 percentage points lower, based on their
analysis of corporate profits, tax revenue, rail freight, property sales and
other measures of activity that they believe are harder for the government to
fudge.
Meanwhile,
China’s central bank decided to add another $126 billion into the
economy, and the country is facing a crisis in its pork supply:
The price
of pork has been rising for months and is now nearly 50 percent higher than a
year ago, data published on Tuesday showed. Consumers are frustrated,
and officials are quietly expressing alarm as they fight the outbreak of a
disease that is devastating the country’s pork supply.
And in the
middle of all this are the Hong Kong protests, which are effectively shutting
down one of the cities most important to China’s economy.
The
Chinese government is authoritarian and can force its people to endure economic
pain for the sake of national competitiveness for quite a while — right up to
the point where it can’t. No one knows exactly where that point is and when
enough important people in China look at the price of pork and other imported
goods and decide it’s time to say “uncle” and offer a deal with better terms to
the United States. But perhaps that moment isn’t quite as far away as the
Chinese government wants the world to think.
