US-China Relations in the Age of Trump
Publisher: Insurgent Notes
Date Written: 03/08/2017
Year Published: 2017
Resource Type: Article
Cx Number: CX21679
On the current relationship between the United States and China.
China of course has for years been making noises about finding alternatives to the United States capital markets, and did score a victory several months ago when most European countries, including perennial US ally the United Kingdom, rushed to affiliate with the new Chinese international development bank, openly conceived as an alternative to the declining World Bank. It must above all be kept in mind that much foreign investment in China does not benefit Chinese capital much, but rather leaves China in an intermediary position. US, Japanese, and Taiwanese high tech firms (such as Apple or the Hon Hai Precision Industry Co. that owns FoxConn) do the research and development, the assembly work is done in China, and the marketing is done in the west. The Chinese firms generally receive only a small percentage of the total sale. The recent US-China talks between Trump and Xi, as indicated, were generally interpreted as a "win" for China, since China mainly agreed to terms that it had already accepted months if not years before. Not a week goes by without a Chinese acquisition of some us trophy investment, such as (in 2014) the New York Waldorf-Astoria Hotel, now being converted to luxury apartments. This is of course reminiscent of similar Japanese acquisitions prior to its financial collapse in 1990 and thereafter, and some commentators have pointed to parallels between Japans powerful emergence and then relative decline, and what might happen with China, something too complex to call at the moment.