Bannon is right to take Chinese competition with China seriously. His plans to address it, however, don’t always make the most sense.
President Trump’s right-hand guy Steve Bannon has been called everything from a ” mastermind ” to a ” racist, anti-Semite.” But regardless of what you think of Bannon, he just made a very good point about China.
“To me, the economic war with China is everything. We have to be maniacally focused on that, ” Bannon told The American Prospect in a jaw-dropping interview that covered everything from urinating on yourself to North Korea. “If we continue to lose it, we’re five years away, I think, 10 years at the most, of hitting an inflection point from which we’ll never be able to recover.”
Many experts across the political spectrum say Bannon is right: China is beating up America economically, and neither the U. S. government nor U. S. businesses have done much about it for years.
“It’s a weird day when I agree with Steve Bannon, but he’s right on this, ” says Jennifer Harris, a China expert at the Council on Foreign Relations and a former top staffer in President Obama’s State Department. “Going back to George W. Bush, America’s policy toward China has been to ask nicely. That has not panned out well.”
Trump often points to the United States’ $310 billion trade deficit with China last year as the ultimate sign of a “bad deal.” But that’s not the real problem. The deficit is happening mainly because Americans are shoppers, not savers. People in U. S. buy too much stuff.
The real issue is the Chinese are pirating American ideas and technologies. In the 1990s and early 2000s, people were worried about China illegally copying movies, music and books. The stakes are a lot higher now as the world’s top economies compete on groundbreaking technologies in cloud computing, robotics, artificial intelligence and gene editing. Whoever controls these technologies will dominate global business — and more.
“When historians look back at this period of history, they are not going to wonder why the Chinese were stealing U. S. intellectual property or business practices, they are going to wonder why the U. S. didn’t defend itself, ” says Gordon Chang, an expert on the Chinese economy and author of “The Coming Collapse of China.” He thinks Bannon is wise to hit China now. The Community Party of China is gathering for its big conference this fall that happens only once every five years. President Xi Jinping has a lot to lose if tensions flare with the United States
Since the 1990s, the mantra in corporate America and the White House has been that America needs to cozy up to China. CEOs were salivating at getting access to the largest market on the planet: 1.4 billion Chinese. But it hasn’t panned out. China has deftly put up barrier after barrier to make it hard for American companies to sell in China. In the meantime, Chinese firms have profited and are now buying up American companies — everything from W Hotels to Silicon Valley startups.
