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China Files Protest Over Trump’s Taiwan Call

China Files Protest Over Trump’s Taiwan Call

China needs us as much as we need it.

Has WWIII started? I thought I’d wake up to a desolate United States after the way the media treated President-elect Donald Trump’s call with Taiwan President Tsai Ing-wen, which is the “first time a president or president-elect has spoken with the leader of Taiwan since Washington established diplomatic ties with Beijing in 1979.” Of course China threw a hissy fit and lodged a protest with Washington:

“It must be pointed out that there is only one China in the world,” the Chinese foreign ministry said in a statement on Saturday, adding that it had lodged “solemn representations with the US”.

But as far as I know the world has not ended or China has not severed ties. The dependence on America (yes, China needs America) has shown that China will not retaliate against America except with a few strong words.

The 10-minute phone call included a discussion on “economic and security ties” while both “congratulated each other on their respective election victories. The Taiwan government brushed off China’s concerns:

“It’s normal for President Tsai to congratulate the U.S. president-elect and emphasize the maintenance of friendly relations in the future,” Taiwan’s Mainland Affairs Council said in a statement sent to reporters Saturday. “The mainland Chinese side should view this in a calm manner.”

Sean King, a specialist on Asia, does not view the phone call as a big deal and believes “Beijing will only attack Taiwan if Taipei declares independence.” Chinese Foreign Minister Wang Yi described the phone call as “a petty trick” by Tsai and believes it will not “affect U.S. support for the ‘One China’ principle.”

Of course, people have forgotten that Trump is only president-elect, not the president yet, which is an important fact to remember:

That Trump is the president-elect and not yet the president leaves Beijing some room to maneuver, said Shen Dingli, deputy dean of the Institute of International Affairs at Shanghai’s Fudan University.

“If he were president of the United States now, this could lead to a breaking-off of diplomatic relations between China and the U.S.”

“Having this mishap occur before he is president is better than having it occur after he is president,” said Glaser of the Center for Strategic and International Studies. “Privately, I expect Beijing to find a way to give him an education on Taiwan.”

Question remains, would China really sever ties over the United States? Would the government bomb us over a phone call? No. Everyone needs to calm down and remember that China needs the United States as much as the United States needs China. The countries have entangled themselves in a messy marriage that could possibly destroy both if one decides to file for divorce.

In February 2010, Zachary Karabell, author of Superfusion: How China and American Became One economy and Why the World’s Prosperity Depends on It, penned an article in Time about why neither country would end the relationship. Everyone has fussed about this phone call, but they forget about about January 2010, which had many situations that raised tensions between the two, including a meeting with the Dalai Lama. China lodged a protest over this phone call, but one senior Communist Party leader said a meeting between President Barack Obama and the Dalai Lama “would ‘seriously undermine the political foundation of Sino-U.S. relations’ and would lead to ‘corresponding action’ — a phrase made more ominous by its utter vagueness.”

Let’s not forget that Obama sold arms to Taiwan, which led the Chinese to threaten “sanctions against U.S. defense companies, which include conglomerates doing substantial nonmilitary business in China such as United Technologies, which has seen booming demand for its Otis elevators in Chinese skyscrapers, and Boeing, which has staked its future growth in part on demand from China’s air carriers.”

But both countries will just exchange angry words and letters because a divorce cannot happen. Karabell wrote:

To begin with, it holds more than $1 trillion in U.S. assets, mainly in U.S. Treasuries. No other country or entity in the world could absorb those assets if China wanted to sell them, and with China’s currency value pegged to the dollar, any massive sale would lead to a steep decline in the Chinese currency and economy. China’s holding of U.S. debt is leverage only in a theoretical world where it could dump its U.S. assets or stop buying more. What’s more, even a hobbled America is the world’s largest economy and the most significant market for Chinese goods. In 2009, a supposedly bad year, Chinese exports to the U.S. were approximately $300 billion, about the same as in 2007. That is a vast source of income for China — and one that no other part of the world can provide.

The U.S., meanwhile, has been a source of billions of dollars in direct investment in China, from thousands of American companies big and small. While it’s true that China doesn’t need any one of these companies as much as each one needs China, China needs all of them and depends on them for everything from brand-name goods to know-how and capital. Beijing can’t just snap its fingers and go it alone; its domestic economy is far too entwined with that of the U.S., its companies, its capital and its consumers.

There’s little question that neither China nor the U.S. wants to be dependent on the other. China’s rhetoric of late is proof, and you could easily demonstrate the same attitude coming from Americans. But each country has tied its economy to the other, and buyer’s remorse notwithstanding, there is no immediate exit from this relationship. It remains a source of stability and prosperity for both countries. Two decades ago, China cast its lot with the United States, and until recently, that has brought it affluence. Now that things have gotten difficult, the Chinese want out. But when the heady intoxication of these weeks wears off, they will find that they have nowhere else to go. One day, perhaps, but not today.

Then in 2012, Gordon Change published an article in Forbes about how China became 175.6% dependent on the United States. He notices that China “increased its dependence on the United States” between 2011 and 2012 (emphasis mine):

China’s overall trade surplus in 2011 was $155.1 billion, according to the Ministry of Commerce.

And how much of that surplus is related to America? Commerce Department figures show that, through the first 11 months of last year, China’s trade surplus against the United States was $272.3 billion. That’s up from $252.4 billion for the same period in 2010, a 7.9% increase.

The Commerce Department has not released the December trade number yet, and some are predicting that China’s surplus against us will top $300 billion when all the figures are in. Yet let’s assume, merely to be conservative, that China’s December surplus is zero. If December’s surplus is zero, then 175.6% of China’s overall trade surplus last year related to sales to the United States. That’s up from full-year figures for the three preceding years: 149.2% for 2010, 115.7% for 2009, and 90.1% for 2008.

Notice a trend? The Chinese economy is becoming even more hooked on selling things to the United States. Why the big jump last year? Because orders from the 27-nation European Union for Chinese goods collapsed. And if Europe falls apart this year—increasingly likely—China will become even more reliant on the American consumer.

Then Chang offered advice to Obama, which the Trump administration could use (emphasis mine):

Perhaps it is, but we don’t need to get fancy on this issue. All we need is for President Obama to tell the Chinese that they need us more than we need them. And all he has to say is “175.6%.” The clever officials in Beijing will not need interpreters to figure out what that means.

In 2014, Stephen Roach, the former chairman of Morgan Stanley Asia, said the marriage between the two needs to end before it is too late:

“China depends on the U.S. for exports … for the dollar to benchmark its currency. We depend on them for cheap goods to make life easy for American consumers, for saving, and buying Treasurys,” he said.

China has been making a big push to try to become a more consumer-led economy.

“They are rebalancing their model to keep the growth and development story going, and that will certainly take them to a larger scale of their economy than ours in the next five to 10 years,” he said.

Roach said the U.S. needs to alter its course to prevent China’s resurgence from becoming a zero-sum game. “We continue to under-save, under-invest in people, infrastructure, and capacity.”

Something tells me it is too late and it would take a lot more than a phone call for China to end any ties with America.

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Comments

Let them file in one hand and crap in the other and see which fills up first.

“Privately, I expect Beijing to find a way to give him an education on Taiwan.”

Funny stuff.

    MattMusson in reply to tom swift. | December 4, 2016 at 8:27 am

    Each time we get a new President the Chinese have engineered a crisis to test the new guy. They snatch a patrol boat or force a plane down. It’s all a maneuver to put the new guy on the defensive and negotiate for some goodies.

    Trump turned the tables on them. He struck first and now they are off balance.

DieJustAsHappy | December 3, 2016 at 8:20 pm

Some of the feathers that are going to get ruffled by the Trump administration are ones long overdue for a bit of riling. The days of them having it their way with America often paying the price are rapidly drawing to a close.

So, note to China: “To be wronged is nothing unless you continue to remember it.” ~ Confucius
Forget it and move on.

Of course, people have forgotten that Trump is only president-elect, not the president yet, which is an important fact to remember

He’s not even that yet. The election isn’t until the 19th, and he won’t be president-elect until January 6th. So I don’t get how they can file an official protest with the state department over a what a private citizen does. What is the state dept supposed to do about it?

    MJN1957 in reply to Milhouse. | December 3, 2016 at 9:42 pm

    What is the State Dept supposed to do about it? Not a damned thing!

    What WILL the State Department do about it? Feed stories to the Democrat Party allies in the Establishment media about how crazy/foolish/dangerous Donald Trump is for simply answering the phone.

Media continues to operate from the same “he’s a dummy” paradigm that served them so well as a predictor of the election.

Since Nixon’s 1972 trip to China, while we dropped “our SOB” in Taiwan, the Reds retained theirs in North Korea, which currently serves as it cat’s paw in dealing with So. Korea , Japan and us. When Trump took that call—an obvious prearrangement—the word went forth to Beijing: new sheriff, old SOB.

The ’72 policy made sense for about twenty years. But that was before the Norks, obviously with China’s blessing, went full nuke and is now far into delivery technology.

China builds new islands. We’re going to recover our old one, the place they used to call Formosa.

Personally I hope he repeats the call once he is president, and let the Chinese know that they don’t get to dictate whom we recognise. In fact go further and recognise the Taipei government as the legitimate government on the island of Taiwan, without necessarily recognising the Republic of China as such.

    topcat69 in reply to Milhouse. | December 3, 2016 at 9:01 pm

    The USA needs to make it clear that we are the strong horse. I am happy to accommodate countries that are our friends. Taiwan is a friend. China, to date, is not.

I would think Trump will have to make plenty of calls to old friends and allies who were sold down the river by the Citizen of the World Prez… The Churchill bust comes back… and anti-colonialist nonsense goes out the window. The “Occupy Washington” crowd needs to be led behind the shed for a proper spanking.

i hope the President Trump tells the Chicom maggots to go pound sand up their 4th points of contact until they can defecate a bottle back out.

I’ve had a lot of fun watching the left hyperventilate about this. Over half of the ROC’s Navy and nearly all of its Air Force consists of US made ships and planes. If China were to move on Taiwan, they would be defending themselves with American made equipment. We’ve already chosen a side, the rest is just silly diplomatic games. Maybe it is time to stop playing let’s pretend.

WTF is happening in our world? Pols and media are going nuts over ‘fake news’ on the internet. That’s right, here in late 2016, those who would be our best and brightest have discovered to their great horror that not everything on the internet is true. Who knew?!?? And now a nice little hello phone call to the new guy on the global block is treated as if we’d pointed all our nuclear missiles at China, one trembling finger hovering a quarter inch from the button.

I’m about to go offline and retreat to my little cabin up on the Linville Gorge, go all Ted Kaczynski without the bombs, and live off the land, sending out only for Cocoa Krispies, root beer, and the occasional pizza, left in an unmarked security lock box at the base of the mountain. Yeah, I’ve thought it through. The world is going nuts, entire peoples reverting to adolescent posturing, constant whining, all living on lies.

All this gloating will lead to China punishing Taiwan.
Everyone happy now?

    How, exactly?

    (((Boogs))) in reply to Lee Jan. | December 4, 2016 at 9:06 am

    Lee Jan: If the PRC Foreign Ministry actually had Legal Insurrection bookmarked, you might have a point. But that’s unlikely.

    The Chinese have a habit of testing incoming administrations. Remember how it forced a USN EP-3 to land and detained its crew back in April, 2001? Or in Obama’s first months, how it harassed USN ships in April-May 2009? Believe me, Trump’s test was coming–only he pre-empted it by taking what was obviously an arranged call, then listing it on his daily log.

    So what’s Trump’s point? Simple, IMHO–the Chinese have leveraged their military and diplomatic arsenals with increasing aggressiveness: Spratly Islands in the South China Sea, using the Norks as its cat’s paw in facing down its neighbors and us; and inching to the edge of act-of-war stuff through computer hacking of out government.

    What to do? Obama’s indifference and appeasement has only abetted Chinese aggression. Something else is needed; you can argue whether or not Trump’s “taking the call” was wise, foolish, or pop-goes-the-weasel (my own view is that it sure beat sending a message by setting up, say, some naval confrontation over the Spratlys.)

    Given Chinese sensitivities, I doubt if there was any single peaceful measure which could have been as effective in letting Beijing know that the rules are about to change.

    Barry in reply to Lee Jan. | December 4, 2016 at 11:13 am

    “Everyone happy now?”

    Oh no. The big bad Chinese are going to punish Taiwan for talking to trump. We must not anger the big bad Chinese. We must do everything they say.

    Screw the chinese and those who think like you.

Word to China buckle up. The Trump Administration has not even
started yet!

Word to the media. For gods sake please stop acting like a spoiled 2 year old that did not get his way.
The ounce of credibility that you had after the election fiasco is all but gone today.

All the same media and pundits didn’t have any problem with Obama having secret talks with Iran to “normalize relations”(ie. give Iran nuclear weapons to threaten Israel)!

At least Trump isn’t lying to citizens like the Obama Administration did for 8 years!

Not only that are we really suppose to care what these morons who predicted Hillary would win in a landslide think? HAHAHA I don’t think so…

Once again, follow the money. This phone call is only significant to the US media because American financial and business interests are happy with the status quo vis a vis China and US. They know that the Chinese government is not above raising tariffs, increasing taxes o their Chinese operations, cutting demand for American products and even seizing assets and personnel; if the Chinese government feels it is in their best short term interest. This would cost the US financial and business interests an incredible amount of money.

Once again, we see that Trump has a very keen sense of leverage. Business, politics and war are all the same. They are competitions between people. That is why businessmen, politicians, warriors and diplomats all study conflict strategy texts such as The Book Of Five Rings, Sun Tzu’s The Art Of War and the writings of Machiavelli.

In the case of Chins, the US holds the long end of the lever. The US actually controls the Chinese economy, not the other way around. A restriction on the importation of Chinese manufactured items would hurt the Chinese economy much more than it would the US economy. Reducing the value of the US dollar, with regard to the Chinese yuan would damage the Chines much more than it would the US. Refusing to honor US government debt assets, which are held by the Chinese government, due to “aggressive or warlike actions” on the part of that government, would harm the Chinese more than it would the US. Beside that, the Chinese government has extremely troubling internal control problems. This is one reason why the Chinese government has been spending enormous amounts of capital on exterior projects that produce no economic benefit for that country and engaging in provocative “military” acts.

The US has the current advantage of being the wealthiest, consumer economy in the world. And it is essentially a luxury goods economy. After all, who needs a new cell phone, computer, car, television set or coat every year? This gives us tremendous leverage when dealing with cheap labor countries which sell to us.

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