Don’t Let China Scare You

Don’t let them scare you about China. You have to consider dear reader that much of the American media has been bought up by the Chinese or has been influenced greatly by it. Previous administrations had put all their chips on the table that China would overtake the American economy as a communist country and that they would be running us all, so the bootlicking started decades ago. But in truth, China depends almost entirely on the United States for their economic sustenance, and President Trump knows it. The current tariff war as many are calling it is simply a one-sided affair and Trump is calling the Chinese bluff. China is projecting a GDP growth in 2019 of 6.6% roughly. With Trump’s tariffs that growth will be much lower and that leverage means everything in this conflict. And the Chinese literally don’t have a leg to stand on.

The Chinese are not ones to bolster about what they will do or brag about their positions so you can tell they are rattled by Trump’s strategy by the way that Wei Jianguo expressed the view of the Chinese government to the South China Morning Post this past Monday when he said, “China will not only act as a kung fu master in response to U.S. tricks, but also as an experienced boxer and can deliver a deadly punch at the end.” He went on to express that China would target parts of the American economy that would hurt the Trump voter base, namely the wheat markets, and corn production along with pork. But the result of all this banter will be that China will be the first to blink because they need what they import from America, especially by way of food. The communist country like all governments who have adopted that position can’t do for themselves, so they are heavily leveraged on imports, which was their weakness all along. However, until Trump came along, nobody had the nerve to call them on it.

It’s a number’s game ultimately. China imports from the United States only about $120 billion which consists of mainly commercial aircraft, soybeans and automobiles. Well, China has made it clear that they are going to build their own planes so that number will go down leaving them to scamper about on how to feed their massive population without the help of American farming, which they won’t be able to do. And they really don’t care about American auto markets, they can get their cars elsewhere so all that they buy from America has already been on the chopping block for a number of years. Meanwhile in American exports of new energy markets that measly $100 billion in goods can easily be found in the growing American markets. Meanwhile in America we have been importing from China $540 billion. Take that a way and there is no way China reaches 6.6% GDP growth this year which is excessively important to them. That is part of the Trump plan of course and why the White House has all the leverage on this matter.

A lot of that $540 billion that is imported could easily be made in America again, items like apparel and footwear, cell phones and computers. $77 billion alone of that figure is just in computer manufacture so if you are looking to create more American jobs, as Trump is, what we aren’t getting from China is going to net American jobs because the necessity for the products are certainly there. With the United States emerging as the global leader in energy exports, we can suddenly command our position in the world which has not yet caught up to the idea. For many decades internal policies that essentially gave away America’s wealth to other countries are being reversed and the miracles of Adam Smith’s capitalism are now being unleashed once again, and more spectacularly than ever before. Does anybody think that Trump doesn’t know what he’s doing with this essentially being election year politics? The Chinese have no leg to stand on and this whole thing will be over well before the election. The American economy probably won’t even notice.

It happened far faster than anybody imagined as the mechanisms were already in place. You could hear that in Bill DeBlasio’s speech the other day in Trump Tower essentially attempting to hang the Green New Deal of repackaged communism around the American economy’s neck, as they have in the past while the communist country of China continues on polluting the world with those same idiots cheerleading them on. In America we have a freedom of expression that allows for dissidents to act that way, but they don’t have a right to destroy America for the rest of us. In China they don’t have such public voices. If someone speaks against the state, they are simply imprisoned or killed. China in the state they are in presently are not the friends of the world. They have been given power through regulation and policy, and they have been attempting to use that power to destroy us all into a kind of Bill DeBlasio world and thankfully Trump has put a stop to it.

The stock market had a sell-off, big deal. It probably will continue throughout the week. As I’ve said before, when other people are panicking, this is the time to buy, so go buy up the losses. The strength of the present American economy has shown that it wants to be at a Dow measure above 26,000 and will return there the moment China capitulates, which they’ll have to. Nobody expects them to like to be being beaten in this way but they simply have no other cards to play. Trump holds them all. They don’t buy much from us, but we buy a lot from them. They need us. We don’t need them. That is the bottom line. Once panicky investors realize that China has no teeth, they won’t be afraid of the bark which is all they have at this point.

Ultimately it will be the limits of an overly managed society in communism that will stop the economic growth of China. Their people are overall poor per capita, and they lack intellectual aptitude. That’s not to say that they aren’t smart, but as we know in all socialist and communist societies people don’t do things for the state, they do things to enrich themselves. When you take away the profit motive, creative thought toward industry stops and over reliance on other cultures permeate the politics. That was fine with China so long as the world was steering all countries in their direction through crippling environmental policies and taxation. But Trump has called that bluff and he has two aces and there is a third in the “river.” The American economy is now an exporter of energy, the best in the world. That replaces the lost revenue that China would have given us in trade. The Chinese care more about the statistics of their economic growth than they do of the realities of feeding their own people, so they can’t last long in a trade dispute. And we knew China was cutting what they were going to buy from America anyway, especially in commercial plane manufacture, so why not pull the trigger on it now as opposed to when they were actually on their feet? Why give them time to cut their orders from Boeing? The answer is, there is no reason to wait. Let the trade war begin now, so that Trump can end it before the next election, and the world sees who really knows what’s going on and who has the greatest economy. And it won’t be China.

Rich Hoffman

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