Americans love flags.
The over-sized flag, the “Star Spangled Banner”, was a strategic tool of Fort McHenry
at the Battle of Baltimore and the US national anthem itself is named after the flag.
If the United States ever truly intended to communicate that it believes Beijing seats
the rightful government over the island of Taiwan, then Washington DC would have demanded
that Taiwan fly the Chinese Communist flag over its own flag, like Hong Kong does.
But, it didn’t and they didn’t ask.
The test of what Donald Trump thinks about China is not a question of how many times
he sees the word “China” on his globe at home, but what flags he accepts flown where.
Is China wise to what’s going on?
Perhaps money is making all the difference.
China’s PLA Navy is headed for an increased budget.
If money was China’s answer, perhaps money tipped-off Beijing in the first place.
According to Obama Treasury rules, China is only 1/3 of a “currency manipulator”,
exceeding a $20B trade deficit with the States.
The other two rules relate inflation to GDP and official currency purchases to GDP—two
things where China plays by a different set of rules than American economics.
China “declares” its own currency value, it is not determined by the markets, making
what the US refers to as “inflation” irrelevant to China.
The second irrelevant Obama rule relates to “official” currency purchases.
If only economics were only affected by “official” purchases, many other economic problems would
be solved.
But, economies are affected by “actual” purchasing, not merely whatever we happen
to label as “official” this decade.
The Chinese, especially, are experts at looking good “officially” while doing the bulk
of their work under the table.
Why else would Asians be so focused on cram schools and testing?
Then, there is the task of calculating “GDP” in a heavy back-and-forth trade economy.
In 2011, the US slapped tariffs on China-made solar panels, which were made with materials
imported from the US, which China also slapped a tariff on.
Not only is actual “domestic” product difficult to measure in a “Venn diagram”
of overlapping markets, there is also the problem that China’s government behaves
like a company itself—benefiting from tariff revenue, thereby triggering another slew of
investing and purchasing opportunities.
If economics were a pair of glasses, China operates in ultraviolet light that no pair
of US lenses can detect.
So, not only were the Obama Treasury “currency manipulator” rules an attempt to measure
the light with a wind sensor, Trump gets what Trump wants.
If China is destined for the “currency manipulator” list, it will get on that list one way or
another, and there is a laundry list of ways that can happen.
But, then, there is North Korea.
While the “experts” lecture the world about how “trade wars” always backfire,
China harbors its own trade war with the government in Northern Korea.
Kim Jong Un isn’t happy with Beijing and Beijing wants to talk about it with the US.