this post was submitted on 14 Jan 2025
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chapotraphouse
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The question is why would you need to accumulate so much trade surplus in order to achieve what you’re saying?
The surplus means money they cannot use. In fact, it means they have earned so much that they don’t know how to use them. That means Chinese workers are practically working for the West for free. The only party that truly benefits here is Western countries.
You do need some foreign reserves to maintain the stability of exchange rate if your currency is pegged to another currency (like RMB is soft-pegged to USD), but China has $3.3T reserves (!!) and they can easily slash 2 trillion of those and still be fine. China does not need more trade surplus lol, they are already accumulating so much foreign currencies that are just sitting there. They need to start raising the living standards of their workers by actually raising their wages. In fact, it makes their industries dependent on export and thus vulnerable to manipulations from Western countries that control the market.
Imagine telling your employer to pay you only 50% of your salary and switch the other 50% to bottle caps. You’re practically working your ass off for the company to collect bottle caps - collectibles that are practically worthless. The party that benefits here is the company who only have to pay half of your salary.
Imagine your employer can decide to nuke your house at any moment. That might incentivize you to accept a 50% bottle cap salary.
Cheap labor is how China has paid off the West and made itself indispensable to the market. It's unequal exchange.
lol this is why the West was genuinely afraid of Mao but not anymore since China has opened up.
Mao used to casually taunt the US to drop their atomic bombs on China and see who lasts longer. He would constantly talk about China engaging in a “10,000 years” long war (lol!) with the Western imperialists even until the end of the world.
These days the US just crosses red lines after red lines because they know that their opponents have no appetite to truly fight back and risk a nuclear war.
You aren't wrong, but on the other hand we haven't had a nuclear war either. That counts for something.
Although now we're zooming to a climate catastrophe that will make Earth just as uninhabitable so lol
The thing is they can keep crossing whatever red lines they want, it doesn't change the equation that it is the U.S. is fundamentally in a reactionary position to China's economy. While the financial and government elements think they have the tiger by the tail, whatever shenanigans they pull ultimately hurt the U.S. domestically far more.
When we, in American industry, lose access to Chinese inputs, we are the ones who are scrambling to fill those inputs, with suppliers that fundamentally don't exist (a.k.a. are three to four years out in manufacturing at volume, which is an eternity in business), but we still have to compete internationally with companies that do have access to Chinese inputs. Some people are conning a free lunch from China, but most people in this country are not. If anything they are in a tighter spot because China is the one paying for their lunch and if they do not, then they will starve, and everyone in manufacturing that knows anything knows that.
If the U.S. wants to compete with China at all, it will have to fundamentally change it's domestic industrial policies, and actually organize production to combat these inevitable shortages, something that it ideologically will not, and honestly at this point does not have the ability to do. Perhaps China does not want to press the 'socialism' button, but honestly, if I were them, I would wait for the U.S. to drive itself into a wall attempting to compete with something it fundamentally cannot. Let them be the ones to pull the trigger.
I think you're overfocusing on financial instruments relative to real production.
I strongly recommend David Graeber’s Debt: the First 5000 Years (which is based extensively on Michael Hudson’s research) to understand that all human economic activities dating back to the ancient Sumerian civilization are predicated on developing a financial system that works, because money (debt) allows for planning for the long term, without which human societies could not have advanced far into agrarian societies that require planning over seasons/years.
Real production is fundamentally tied to its financing. And how you decide to create money (debt) dictates the economic system itself. If your country has decided that you can only create new money from revenues of exporting goods to other countries, then your economic system will be strongly tied to export. There is no other way around it, because you’d never be able to develop the economy without keep selling more and more stuff to foreigners.
To put it another way, imagine if you constrain yourself to only be able to use one glass of water for every hour of work done, it would fundamentally shape how you live your life. You will alter your lifestyle around how much water you have to preserve every day, how much surplus water you have to keep in reserve (sometimes that means austerity - drink less every meal!), and how much work you have to do each day just to be able to quench your thirst or to wash yourself. What if you get laid off? Do I have to borrow from my friend who has stashed a bottle of water? How am I going to pay them back? What favors do I have to return?
Imagine having to live like that, and imagine (as I assume, like almost everyone, this is how you live) not having to worry about such constraints!