There’s a lot of talk about friend-shoring and bringing industry back to the US and its allies, but the reality is quite different.
China's trade surplus reached US$877.6 billion for 2022, an increase of 30% of the already record high year of 2021. This is the biggest trade surplus ever achieved by one country in human history. Trade surplus with the US accounted for almost half at US$ 404 billion. pic.twitter.com/P37rbLGczI
— America-China Watcher (@PandemicTruther) January 14, 2023
The bottom line, right now, is that if the US went to war with China, the American (and Western) economies would virtually collapse.
The US is making serious preparations for war: they are fortifying allied countries in Asia in a similar fashion to how they did Ukraine after 2014, although obviously with less of an eye to ground invasion. Japan has doubled its military budget and stated that it will no longer obey the “peace” constitution but will participate in offensive operations with America. US bases are popping up around China wherever they are allowed.
But to fight a non-nuclear war with China, the West has to genuinely re-shore its critical industries, and it isn’t doing that beyond a few steps with regards to semiconductors. A vast swathe of basic industrial goods are made by China, and not by the West, or not in sufficient quantities.
However, to seriously repatriate industry requires reducing the cost-structure: and that means reducing housing costs, and in the US, health-care and tuition costs, so that Western industry is cost-competitive. Right now the US is grabbing a swathe of energy price sensitive industry from Europe, and especially Germany, but that doesn’t help much in an general war: they’re taking from their allies, not their enemies.
Genuine oligarchic plutocracies, which is what most of the West is, including the US, are generally very bad at industry and war, though there are exceptions (Venice, at various points. But being merchants concentrated their minds on naval power.)
The steps required for America and the West to rise to the challenge of China require Western elites to make painful choices they so far are avoiding: they simply have to give a better deal to their populations, and not concentrate on keeping wage increases under inflation increases (which is what has happened in the US.)
America’s elites can be absurdly filthy rich or they can just filthy rich and have a chance of retaining their global pre-eminence. It’s unlikely they can do both, though I suppose they could bet on ruling a post-nuclear wasteland, if they’ve gone fully insane.
Bill
It is not just industries that need to be producing in our own countries. It does not really take that long to make the machines, but it takes a long time to be a good machinist. Before that even, we need to teach the various trades in our schools so that students want and desire to work with machinery and ‘get their hands dirty’ as they say. Too many think that going to university and computers are the future. Canada exports raw logs to the USA and all the money, skills, prosperity and expertise has gone with them. We only produce a fraction of the fruit and veg we used to and it takes years to get a fruit tree to produce fruit.
someofparts
Consequences for Western domestic populations being as Emmanuel Todd described –
“Everywhere we see the weakening of the US, but not in Europe and Japan because one of the effects of the retraction of the imperial system is that the United States strengthens its hold on its initial protectorates. (and I include all of Europe here). The first to lose all national autonomy will be (or already are) the English and the Australians. The Internet has produced human interaction with the US in the Anglosphere of such intensity that its academic, media and artistic elites are, so to speak, annexed.”
https://twitter.com/RnaudBertrand/status/1613924570725244928?ref_src=twsrc%5Etfw
I also think the hard economic realities Washington is beginning to face are the reason Russia is proceeding slowly in Ukraine. As long as Washington keeps the Russian shooting gallery in Ukraine open, the continues to strain the economies of the West.
And as Washington grows weaker, this is what Russia does –
“It comes as no surprise, therefore, that the semi-official Iranian news agency Tasnim reported on Sunday quoting an influential member of the Majlis that Tehran expects to take delivery of a number of Sukhoi Su-35 fighter jets in the coming months plus “a series of other military equipment from Russia, including air defence systems, missile systems and helicopters.”
Su-35 is a 4++ generation twin-engine, super-maneuverable fighter jet and a game changer. It is for the first time since the Islamic Revolution in 1979 that Iran will be receiving advanced cutting-edge weaponry to boost its deterrence capability. ”
https://www.indianpunchline.com/syrias-power-dynamic-is-shifting/
marku52
The biggest problem for the US is that every time you look at a problem, you find some industry and lobbyist combo that is making big bucks off that problem Not Being Solved. Or in the case of Pirate Equity, making a new problem where there wasn’t one before.
This is my biggest fear for the war in UKR. Once the neocons realize that they are losing big, and that waving freshly printed USD around doesn’t makes tanks and missiles appear out of thin air, (and you laughed at all the proles while you shipped those jobs to China), what’s the next play?
“Well we do have nukes. What about a little tactical one? Just a little one?”
Willy
The US is hardly going to invade China. To prod them into a proxy war seems far more likely. For the military industrial complex profits. But wait, doesn’t China make a lot of our stuff? So how about Indonesia and Vietnam? They need more stuff like SUVs and big screen TVs which they can build and enjoy and send the profits back to us. And they’re too small to challenge US hegemony. “Excellent.” the board says as they rub their hands together.
Feral Finster
This is how empires come apart, trying to do too many mutually contradictory things and satisfy too many entrenched constituencies.
Eric Anderson
We’re thinking along similar lines my friend.
https://twitter.com/TheRealWebstir/status/1614809033390841858?s=20&t=6gJar11Cg6vBmz3BO9x6Bw
different clue
It took the Free Trade elites several decades of Free Trade to destroy the American economy and society down to where it now is.
It would take a Protectionist anti-Free Trade ruling government several decades to restore the American economy and society back to some smaller and slower level of survivalist stability and self-supportingness.
And of course that could not even begin unless the Free Trade elites and their supporters could somehow be deleted from physical and biological existence in personal detail and without any personal exceptions permitted.
bruce wilder
I think this is another chapter being written in the Book of Economic Cluelessness. At least a couple of generations of the elite political class have grown up “mis-educated” in the doctrine that the economy is a kind of weirdly automatic emergent chaos that runs itself and it does not matter what one does as an individual or collectively and unintentionally — the system goes on down the road after the can kicked in that same general direction.
As Ian implies, it may be that the predatory instincts of the billionaire boys club are a driving factor, but I cannot help but wonder about the critical thinking skills of everyone else. Many, many politically aware folks are fighting battles about things that do not matter. Do Not Matter. They enjoy these “fights” against The Other, but most people are not safe or prosperous in a world run by oligarchs, most of whom are even dumber than Elon Musk — and less principled!
Carborundum
Curious that the original Twitter author juxtaposed those two sets of data. The most recent $404 billion corresponds to an increase of 1.8% year over year – far below the the 8.1% 2017/2018 increase.
Purple Library Guy
We should remember that Venice, despite the tendency for free market apologists to portray Renaissance Italy as this sort of hothouse of laissez faire principles–because there were lots of merchants, so to their intuition of course it HAD to be like that–actually had a quite active public sector. The renowned merchant fleets of Venice, for instance, were built and owned by the government. Private merchants had cargoes on ’em, but they didn’t own the ships. And Venice’s most prestigious export, the prized Venetian glassware, was heavily controlled by the government; its secrets were so heavily guarded that no Venetian glass craftsman was allowed to leave the city.
Renaissance Italy in general (Florence in particular, but Venice too) was just bristling with standards bodies (aka craft guilds) which strongly regulated all production. Sell a loaf of bread that was under weight and you’d have the Bakers’ Guild on your neck.
To be fair, Pisa was much more private-sector-competition-y than Venice. To be snide, it was never as important, either, but they were quite influential for a while.
Ché Pasa
And so it begins…
I think I read today or yesterday that China has noted its first population decline in 60 years. Analysts have been predicting that China’s population will fall by half by the end of the century. Looks like the Politburo has decided to accelerate the process by letting the Covid virus run free.
Well, barring the predicted war with the West, a lowered population does mean more stuff for the survivors, no? And if there is a war with the West there’s not likely to be a winner, is there? Disaster all around, I’d say.
The next few years should be illuminating.
Trinity
Michael Hudson quoted Biden saying that the war in Ukraine et al., will last twenty years. If true and correct, the US is in the early planning stages for China, and what’s being done is the prep work.
“President Biden has said the war with Ukraine is only the opening in a war that will [last] at least 20 years. We are in a permanent war to the death with China and first of all with China supporter, Russia. This is the NATO position: permanent war. If America is losing the war they would rather blow up the world than lose the war. And especially that’s true of the Republicans, the former CIA head [Pompeo], the Christian who said “Well, there’s one good thing about atomic war ending the world, Jesus will finally come and send all the Christians to Heaven and everyone else to Hell.” If you have crazy Christians who believe that, and they’re in charge of the military policy, you’d better break away as quick as you can.”
https://michael-hudson.com/2023/01/systemic-sponsors-of-self-interest/
GrimJim
” I suppose they could bet on ruling a post-nuclear wasteland, if they’ve gone fully insane.”
I’m all in on “fully insane.”
I had a good death bet going there. I figured things wouldn’t get this bad until the 2050s, by which time I’ll probably be dead.
Unfortunately, Obama was the literal Black Swan. The Mule to Selton’s Foundation. His election galvanized the Right Wing White Supremacist Christofascists in ways that have altered the course of history.
Pushed up The Collapse in the US by two decades, maybe more.
If the regroup strongly in 2024, Trump or no, Republican win or no, it all goes to Hell at that point.
If their Dear Leader wins, Democracy fails, as does everything that keeps the Empire running as they purge their hated “Deep State” along with Blacks, Hispanics, Gays, Pagans… Whatever their Hateon of the Month will be.
If they don’t win, the low grade shooting war we’ve been experiencing over the last few years will go super hot, super fast, Yugoslavia/Mesoamerican Death Squad style.
And then everything goes to Hell, just by a different highway.
If these guys are not destroyed by then, or at least, severely checked in power, a war with Russia or China will be the least of our worries.
Hard to defend Ukraine or Taiwan when you’re dodging terrorist forces in your own capital, and can’t check the news because they’ve taken down the power grid after years of practice…
Nope, I’m not worried about China. I’m worried about the Deplorable and how the Oligarchs will decide to end their rebellion after they completely break away from their Republican handlers…
Mel
Possibly the main aim of the China War scare is to tighten the hegemonic grip on USA’s Asia-Pacific allies, same as the Ukraine war is tightening the grip on European allies, so far.
Soredemos
@GrimJim
It’s weird to see this kind of liberal hysteria around here.