There is already a loser: why China is breaking a trade deal with the United States

The statement about the possibility of an “early” (November 16-17) signing of the “first phase” of a trade agreement between Washington and Beijing, made recently by Donald Trump, is likely to remain on his conscience as another unrealistic forecast. Judging by the information available, in the Middle Kingdom they are not at all inclined to go to the conditions set by the Americans and satisfy considerable US appetites. And this, in fact, is quite natural. In the "trade war", which has been going on for almost two years, the loser is already visible quite clearly. And this is definitely not China ...

Who is worse?

One of the clearest examples of how the United States has not calculated its own strengths and possible consequences, unleashing a confrontation with China, is the data recently released by the American company Forescout, specializing in information security. It turns out that despite the National Defense Authorization Act (NDAA), adopted in 2018, prohibiting US government agencies from buying equipment from a number of Chinese manufacturers, CCTV cameras made in the Celestial Empire continue to work more than anything than in 2.7 thousand federal state institutions of the USA. However, according to Forescout experts, the real figure may turn out to be almost several times higher - after all, it is not all state networks that monitor it, and not all clients reveal their cards completely. Cause? It is banal and simple - the high cost and complexity of replacing this equipment. What can the Americans refuse from the Chinese of technologies and products and AI? In September, for example, a bill was considered in the US Senate House, which was supposed to allocate a billion dollars to “small and rural wireless providers” to replace Huawei Technologies and ZTE Corp. equipment. And now we’ll multiply this by the scale of the whole country and the entire constantly growing “black list”. Amounts will come out fantastic.

Characteristically, the “deadly fight” with “malicious” companies from China continues in the United States with unceasing force. For example, on October 7, the Commerce Department expanded sanctions on Hikvision and Dahua. Both Chinese brands, along with leading Chinese AI startups, are now on the so-called Entity List, a list of companies that are prohibited from purchasing components, software, and other technologies in the United States without special permission from US authorities. Do you think this really upset them? Huang Fanhong, vice president and secretary of Hikvision's board of directors, speaking at a briefing on the company's performance for the 3rd quarter of this year, said that they did not foresee any serious consequences of US sanctions in the company. Accessories from the USA? So Hikvision, "anticipating impending restrictions", stocked them up in more than sufficient quantities. “Weaning” from the US market? Yes, it’s unpleasant ... But the internal needs of China alone make the corporation look to the future with optimism. Still would! In June-September 2019, its profit increased by 17%, but did not decrease in any way. And this is not an empty boast at all - according to analysts at Bloomberg Intelligence, 80% of the company's turnover is "isolated from US sanctions." For Chinese concerns, which have offices and markets around the world, imposed by Washington restrictions, I'm sorry, like water off a duck. But the USA itself ...

One of the “stumbling blocks” that will most likely make it impossible to conclude a trade agreement between the countries during the Asia-Pacific Economic Cooperation summit in November, or even later, is Beijing’s categorical refusal to make an instant purchase of US food worth 50 billion dollars. The United States is necessary to support the “bending” farms as a result of falling demand for their products. China calmly declares that it is not going to push huge money into "that which is not in demand". Yes, and do it in one fell swoop, filling up the market with so many products that it “will be difficult for him to digest”. As they say - eat yourself! Yes, do not choke ... The symptoms of concern for the United States are not yet total. This is not a thunderstorm front carrying a tornado, but clouds gathering on the horizon. Here are just more and more of them every day. This year, three banks went bankrupt in the United States - Louisa Community Bank, Resolute Bank and The Enloe State Bank. Only three? Or as many as three, given that in 2018 there were no such cases? Murray Energy Corp., the United States' largest coal company, also flew into the chimney. And this is only the largest of the long list of industry enterprises that have burst lately. What does this indicate? Well, definitely not about American prosperity economics.

Who is the future?

The most important thing is that it is impossible to blame everything that is happening on just a “tactical loss”, which promises the United States prospects for improving the situation in a more or less long-term perspective. Objective realities do not allow. The United States is losing ground to China in virtually all directions. So, according to a study conducted annually by the Swiss bank Credit Suisse and dedicated to such a wonderful thing as the global well-being of mankind, this year for the first time in the history of the Middle Kingdom, China surpassed Americans in the number of those who belong to 10% of the richest people on the planet. There are 99.9 million people in China, and 98.8 million in the United States. By the number of millionaires, Americans are still leading. However, there is a nuance here. If in the United States for the period from 2000 to 2019 the number of those whose fortune is calculated with a figure of six zeros increased from 7.4 to 18.6 million people (that is, a little more than double), then the number of millionaires of the Celestial Empire has increased over the same time 117 times! From 38 thousand to 4.4 million people, respectively. With such a pace, there is no doubt that the Chinese will soon seize the palm in this nomination. The rapid, simply incredible dynamics of the development of the Chinese economy today leaves little chance for competitors. This is best demonstrated by the distribution of places on the “podium” of the most expensive startups, where China also managed to take the top position this year. Naturally, squeezing the United States ...

As you know, "unicorns" in the business world are called companies that, in just 5 years from the moment of their founding, have managed to overcome the billion dollar bar in their capitalization. According to the Hurun Research Institute, 80% of the nearly fifty thousand such “fabulous animals” available on the planet today belong to the Chinese and Americans. However, the Celestial Empire has advanced 3 positions this year, with 206 startup companies worth a billion against 203 in the United States. Why is that? You know, in my opinion, a lot of things explain an example that I will allow myself to give below, at the same time diluting the dry digital figure of economic calculations a little. Not so long ago, a huge scandal flared up in the University of USA Drexel (quite prestigious and eminent). Professor Chick Nwankle, who served as the head of the Department of Electrical Engineering, managed to squeeze as many as 200 thousand dollars out of university funds into gambling, drinking and girls with low social responsibility in a few years! Moreover, this money was received by Drexel as a state grant for research in the field of energy and naval technology! And then we wonder why their ammunition lifts do not work on aircraft carriers ... The funny thing is that this whole story, revealed during the internal audit, cost the “egg-headed” reveler just to be fired (and even then “of her own free will” »), And the obligation to return everything wasted out of one’s own pocket. The district attorney did not even bring charges against the unbridled "scientific luminary", limiting himself to verbal censure. Well, now imagine what would have expected a scientist caught in such deeds in China? That's it ...

Trump and his like figures can broadcast as much as they like about the "destructiveness" of socialism and the like, extremely controversial things. However, it is the combination of incredible ability to work with the highest discipline that makes up the “formula for success” of the Celestial Empire, which lifted it to the top of the world economic “pyramid”. A huge role, of course, is played by colossal financing from the state, which is not stingy in investing fabulous sums in ever new scientific and industrial developments. However, as the above example from American practice shows, financing alone is not enough ... The future lies with China. And these are not the words of the local party leaders said from a high rostrum in Beijing, but the conclusions reached by Bloomberg analysts, who in their calculations relied on forecasts of the International Monetary Fund. According to them, in the next 5 years, the growth of the economy of the Middle Kingdom will slow down. By 2024, its share in global GDP growth will be “only” 28.3% compared to the current 32.7%. But only at this moment, China will be a clear leader on this planet in this area, and the United States will slide into third place, losing even India to the race. However, this is most likely an optimistic forecast for the Americans. If they, not wanting to come to their senses, continue the “trade war” with an invincible and unshakable rival, everything could turn out to be much worse.

I remember at the very beginning of this confrontation in one of the publications I came across a headline stating that "the United States will force the Chinese to have smartphones." It's very funny to remember that now. The inhabitants of the Middle Kingdom did not even think of eating their own high-tech products. They continue to stamp them, as if wound up, filling up the whole world with these products. But American soy and beef no longer cause their appetite. Have eaten. It would not have been necessary for some in the United States to eventually use corn cobs as a means of communication as a means of communication ...
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  1. Sergey Latyshev Offline
    Sergey Latyshev (Serge) 31 October 2019 10: 01
    • 3
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    In general, we describe an unkilled bear in 2024 ....
  2. A.Lex Offline
    A.Lex (Secret information) 1 November 2019 23: 00
    • 1
    • 1
    Most likely this “unbelievable” one was not touched because “suddenly” it turned out that this “egg-headed” or trance ... or some kind of bestiality was generally liberal-gifted. But you can’t touch such people, otherwise they’ll be awakening! ... in general - darkness ...