Coronavirus Exposes the “Chimerica” Catch-22

Since 2006, the term “Chimerica” has been used in scholarly circles to describe the increasingly symbiotic relationship between the U.S. and China — and its effect on the world economic and geopolitical stages.

Many believe this relationship has been mutually beneficial and has spurred the economies of both nations to heights they wouldn’t have achieved independently of one another over the same time period.

Chimerican flagWhile that may be true, others wonder whether this co-dependency has come overwhelmingly at America’s expense in many other ways…

Ways that are now becoming glaringly evident in this time of incredible national strain at the hands of a deadly pandemic that originated in China.

I’m firmly in this camp of belief — both because the hard facts and numbers prove it, as I’ll touch on shortly…

But even without any hard data in hand, I’d still find ample self-evident proof in this one undeniable fact…

Communist China does NOTHING that is not to its own political, economic, or military advantage

Like the villain in a James Bond film, China is bent on world domination. There can be no mistake about that among intelligent, objective westerners.

Forget Russia — the People’s Republic of China is the most Machiavellian state in the world, perhaps even that the world has ever seen. Everything they do is carefully calculated to increase their own strength and weaken or subjugate their rivals and enemies. Their “friends,” too, for that matter. Just ask Hong Kong and Taiwan.

For China, there is no such thing as fair trade. Their protectionist policies, outsized tariffs, artificially cheap labor under the fearful yoke of Communism, lack of legal protection for foreign companies (not to mention forced technology sharing), and prodigious subsidization of domestic businesses makes it nearly impossible for any outside companies to set up shop and compete in the PRC.

These factors, plus China’s constant currency manipulation to give its exports a leg up in the global marketplace, also ensure that imported Chinese goods can undercut fairly produced U.S.-made products here at home. That’s why the bulk of the merchandise in most every big-box store in America wears the “made in China” label.

For China, there is no such thing as détente. Although our countries are not engaged in any kind of “shooting war,” the U.S. is absolutely and undeniably under constant, sustained and escalating attack by the PRC on the cyber-front, despite their many promises and assurances to the contrary.

Remember the Equifax data breach? We now know that state-sponsored Chinese hackers were behind that. We also know that our country and its businesses have endured countless other Chinese attacks aimed at stealing technology, financial information, personal data, and intellectual property of all types — even taking control of our public utilities, phone systems and other infrastructure.

For China, there is no such thing as environmental protection. They talk a good game about green initiatives and pollution controls, but the PRC belches twice as much greenhouse gas (GHG) as the U.S., despite having less than two-thirds the GDP. So in terms of GHG per unit of wealth created, that makes them roughly three times as polluting as we are. “But China’s making all the stuff we buy,” you say? Fair point…

The problem is they’re doing it in ways that are far more destructive to their land, their people, and their planet than comparable manufacturing in America or other accountable democracies. For instance, despite making 60% of the world’s solar panels, only about 2.5% of the PRC’s electricity comes from the sun. Nearly two-thirds of it still comes from coal.

For China, there is no such thing as human rights, at least not in the sense that you and I think of them. Aside from using censorship, blacklists, a Social Credit System, and extensive, high-tech surveillance (over 600 million cameras!) to dominate their people and suppress dissent, the PRC has also been known to imprison or murder those who dare to challenge their Orwellian order.

Beyond this, China’s shamefully irresponsible manufacturing sector has created hundreds of “cancer villages” that dot their countryside in close proximity to factories and industrial complexes. These towns have shockingly high mortality rates from industrial pollution and manufacturing waste, some of it radioactive. Doctors who sound the alarm about these conditions live in fear for their lives.

I could go on, too. But the point is made…

China is NOT a benevolent nation that’s helping to make this world a better place in the face of aggression from evil western capitalist countries like the United States.

That’s only what the PRC tells its people as they’re being exploited, terrorized, and ultimately discarded when they can no longer chew the Communist leather and help further the national quest for world domination.

And while President Xi is graciously and humbly smile-fornicating us at every turn diplomatically, the hard facts show that his nation is deceiving, robbing, sabotaging, and double-crossing us effectively — not to mention flat-out lying.

New twist on an old Washington joke: How can you tell when China is lying? Its lips are moving…

Just one example: Do you really think jam-packed China has only lost 3,300 or so people from the Coronavirus so far?

Give me a break. Some credible reports are saying the death toll could be 20 times higher than the official state numbers in some areas.

And that bring me around to the underlying point of this piece — not simply that China is evil and lies through its teeth about everything, all the time…

But that we’re in a toxic, loveless, broken marriage with them that can’t be annulled without a massive upheaval to life as we know it.

That’s the Catch-22. And it’s entirely of our own creation over the last 41 years, since the first major bilateral US/China trade agreement was signed in 1979.

Very rapidly thereafter, China became America’s #1 trade partner, catapulted into that position initially on low-tech, labor-intensive goods — and steadily evolving into more and more high-technology, capital-intensive goods.

Graduating from Most Favored Nation status in the 80s and 90s to Permanent Normal Trade Relations (PNTR) status in 2000, China is now not only one of our largest volume trading partners, but also one of our biggest suppliers of advanced technology products and systems (see also: Smartphone malware, computer ransom-ware, digital spying, 5G, Huawei, etc).

Basically, our strategy with all this trade bounty — including intentionally allowing the trade imbalance to become absurdly lopsided in China’s favor — has been to bribe the PRC with the spoils of capitalism toward a more democratic and less hegemonic system that treats its people and workers like the dignified human beings they are…

It has achieved exactly the opposite, however.

The conference of PNTR status quadrupled Chinese imports to the U.S., kicked American corporate investment in the PRC into high gear, and paved the way for China to join the World Trade Organization, the final step toward global economic legitimization (read: dominance) for the corrupt state.

The net result has been to intertwine our two nations’ economies to the point where extrication for the United States would be impossible without changing our country drastically, even fundamentally.

That’s because — as my colleague, Byron King, touched on a few issues ago — for 41 years, we’ve outsourced so much manufacturing to China that lots of things we need can’t even be made in the U.S. anymore, at least not practically.

The necessary domestic factory infrastructure is either withered and gone (along with the will to make things in the first place), or punitive government regulations make those goods virtually impossible to produce domestically, at any cost.

Rubbing salt in this wound is the simple fact that even if we could ramp back up toward industrial self-sufficiency…

Chinese production has spoiled us with low prices borne of abused labor, abused trust, and an abused planet

As a culture, we’ve become accustomed to artificially cheap made-in-China stuff to such an extent that we’re all living beyond our means to one degree or another because of it, at least from a material standpoint.

If most Americans were suddenly required to pay real market prices for things made responsibly and humanely by people paid a proper wage — either in the U.S. or in other civilized, democratic nations — they’d be forced to adopt household austerity measures on a level they’d find difficult to endure.

In fact, just to put this in a little bit more perspective, the Alliance for American Manufacturing estimates that for the ten-year period ending in 2023, less than 6% of WalMart’s sales will have come from goods made in the USA. And this percentage is declining, not increasing, with that company’s growth.

With this in mind, how much do you think day-to-day life would change for the vast majority of Americans if that other 94% of stuff suddenly cost two, three, or four times as much money?

That’s why most of our supply chains are hopelessly tied to China — a fact that’s disturbingly apparent now, during this viral pandemic they’ve loosed on the world. As Byron mentioned before, we’re dangerously dependent on the PRC for masks and other PPE, sanitation supplies, ventilator parts, even many of our drugs, including some of the medicines we’re desperately employing to help mitigate this crisis.

As usual, there’s a lot more I could say about all this…

But again, my point is that after four decades of being utterly outplayed on the trade and diplomatic fronts, the U.S. is now between a rock and a hard place with regard to China — and the Coronavirus crisis is bringing this Catch-22 into sharp focus.

After this, we’ll no longer be able to dwell in denial of the fact that we’re at a fork in the road in our relationship with the PRC, with neither path desirable…

Either we remain the ever-more-kicked-around spouse in an abusive and deceitful economic marriage, or we endure a messy, painful, and extremely expensive divorce.

In other words, we can either continue to blend our two nations’ economies (and ultimately our political systems, if they achieve their aim) together so completely that it’s no longer in China’s interest to subvert or destabilize us as a nation…

Or we can wake up to their 41 years of deception — plus our strategic mistake in attempting to erode their oppressive Communism with free-market liberty — and swallow some bitter and expensive protectionist/isolationist medicine.

To do the one thing would be to formally cement “Chimerica” in the annals of history forever.

To do the other would incur the wrath of the most ruthlessly dominant state the modern world has ever known — liberated from all illusions of goodwill and mutual interest to wreak havoc on an America that’s no longer buying their mercy with trillions of dollars in trade profits and investment.

The bottom line: We ARE fighting a multi-front war against China already, just not a military one. And the PRC is winning decisively.

If you think this is overstating things, consider…

Which way is the river of money flowing, on the balance — east or west?

Who’s holding over a trillion dollars worth of the other’s sovereign debt?

And which nation’s political leanings and system of government is becoming more like the other with every passing year?

That last point, put another way…

Is China becoming more free, more tolerant of dissent and controversial expression, and more protective of individual rights with every passing year?

Or is America becoming less of these things with every passing year?

By these metrics, it’s obvious who’s winning — and who’s wearing the pants in the relationship.

Divorce-ingly Yours,

Jim Amrhein

Jim Amrhein
Freedoms Editor, Whiskey & Gunpowder
WhiskeyAndGunpowderFeedback@StPaulResearch.com

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Jim Amrhein

Just like he was 15 years ago, when first he sullied the pages of the original Whiskey & Gunpowder e-Letter and various other forums, Jim is still ornery, opinionated, politically incorrect, and shamelessly patriotic. He’s also more convinced than ever before that government can’t do much of anything right — except expand in scope and...

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