Is Free Speech Compatible with Free Trade in China?

 

American populists already blame free trade for costing their country jobs and industrial might. Now they blame it for curtailing freedom of speech. The argument: If the US and Chinese economies weren’t so intertwined, then China couldn’t “export” its authoritarian values by using its huge market power to strong–arm American companies.

Populists correctly note that the NBA’s rebuke of a Houston Rockets official’s pro-Hong Kong democracy tweet is hardly the first instance of Beijing trying to use its financial influence on foreign companies to shape global opinion — especially regarding Hong Kong, Taiwan, and its Uighur reeducation camps. As one China expert told The Washington Post, the Chinese communists don’t tolerate dissent on these issues inside China, “and increasingly they are not tolerating dissent on these issues outside China.”

But these populist critiques of Chimerica also invite the search for a counterfactual: Should Nixon have never gone to China? Should America have tried to somehow quarantine a nuclear–armed nation of one billion people even as it tried to open up and decentralize its economy? Should Washington have simply ignored the reality — and somehow persuaded our allies to do likewise — that China was undertaking significant policy reforms in the direction of liberalization?

Or maybe America’s elite policymakers in the 1980s, 1990s, and early 2000s should have anticipated the 2007–2009 Global Financial Crisis. A recent essay in Foreign Policy, one critical of America’s dealing with China, argues that the crisis “emboldened” China’s statists, while “reformers who favored additional progress toward liberalizing markets and rolling back party-state control were thrown on the defensive.”

So it’s hard to imagine a realistic scenario where Chimerica doesn’t exist in some form approximating current reality. And the idea of disentangling the two economies remains more a talking point rather than a serious plan. That said, basketball fans here shouldn’t be ejected from arenas for showing support for the Hong Kong demonstrators. And Chinese pressure on US firms should be countered by American pressure in favor of free expression and the right to criticize a human-rights violating, authoritarian surveillance state. Some presidential tweets bucking up the NBA might be useful. It would also help, for instance, if American presidents wouldn’t promise silence on those Hong Kong democracy protests just to facilitate trade agreements. Sets a bad example for Corporate America.

Yet at some point, China’s oppressive actions may force some hard moral choices on American firms and cultural icons. Does Taylor Swift have to play Shanghai? Does Marvel need a red–carpet film premiere there? If Hong Kong really takes a bad turn, for instance, should the US send a team to the 2022 Winter Olympic Games in Beijing? Meanwhile, America must work even harder to globally demonstrate the values of liberal, rules–based democracy and market-driven capitalism.

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  1. DonG Coolidge
    DonG
    @DonG

    Do you remember that time that China hacked the federal Office of Personal Management and stole the personnel records of Americans?  Or that news report about all of Hillary’s emails getting blind copied to an address that looked Chinese.  And yet nobody talks about Chinese interference in the 2016 election. 

    • #1
  2. Jerry Giordano (Arizona Patrio… Member
    Jerry Giordano (Arizona Patrio…
    @ArizonaPatriot

    I think that Nixon properly went to China, to split it from the Soviet Union, which was very important in ending the first Cold War.

    I think that we’re now in a second Cold War period, with China this time.  We have been slow to realize this, and hopeful that economic growth would lead to liberalization and the end of their Communist tyranny.  This is not happening.

    I think that it was reasonable to take this path, through around 2010.  Since then, it has become increasingly clear that China is our principal geopolitical foe.

    • #2
  3. ToryWarWriter Coolidge
    ToryWarWriter
    @ToryWarWriter

    American populists already blame free trade for costing their country jobs and industrial might. Now they blame it for curtailing freedom of speech. The argument: If the US and Chinese economies weren’t so intertwined, then China couldn’t “export” its authoritarian values by using its huge market power to strong–arm American companies.
    –American populists are not blaming. They are stating facts. I really wish you Free Trade Cultists would understand how your policy works. As explained to me in high school, Free Trade is where we willingly sacrifice some of our current jobs in order to get advantages elsewhere via the competitive advantage.
    –Free Trade has its advantages and disadvantages. Protectionism has its advantages and disadvantages. The belief that is all good without penalties is the behaviour of a cult.

    But these populist critiques of Chimerica also invite the search for a counterfactual: Should Nixon have never gone to China? Should America have tried to somehow quarantine a nuclear–armed nation of one billion people even as it tried to open up and decentralize its economy? Should Washington have simply ignored the reality — and somehow persuaded our allies to do likewise — that China was undertaking significant policy reforms in the direction of liberalization?

    –Its not a counterfactual. Its what we call a straw man. And we can see your hear to slay it.
    –But they werent taking steps in the direction of liberalization. Sure they took steps in the directio of economic liberalization, but not one inch on political reform. They moved in the direction of fascism and not democratization. So once it became clear and that was sometime in the early 2000s we should have taken steps to deal with that situation.

    Or maybe America’s elite policymakers in the 1980s, 1990s, and early 2000s should have anticipated the 2007–2009 Global Financial Crisis. A recent essay in Foreign Policy, one critical of America’s dealing with China, argues that the crisis “emboldened” China’s statists, while “reformers who favored additional progress toward liberalizing markets and rolling back party-state control were thrown on the defensive.”

    –My father anticipated the Global Financial Crisis in early 2007. I remember he sat me down and told me that Credit Default Swaps were ‘A giant Ponzi Scheme!’ He sold out all his stocks and put them into 5 year GIC’s. If my father a self taught financial manager could figure it out, the world economics elite policy makers could have. But they were to busy being greedy morons to see what was coming down on them like a barreling freight train.

    So it’s hard to imagine a realistic scenario where Chimerica doesn’t exist in some form approximating current reality. And the idea of disentangling the two economies remains more a talking point rather than a serious plan. That said, basketball fans here shouldn’t be ejected from arenas for showing support for the Hong Kong demonstrators. And Chinese pressure on US firms should be countered by American pressure in favor of free expression and the right to criticize a human-rights violating, authoritarian surveillance state. Some presidential tweets bucking up the NBA might be useful. It would also help, for instance, if American presidents wouldn’t promise silence on those Hong Kong democracy protests just to facilitate trade agreements. Sets a bad example for Corporate America.

    –Its actually to pretty easy to imagine that if people were not idiots that ChiCom would be in a more different state, if the neo-cons hadnt been in control. I could easily see us treating China as we have been treating Russia or any other of the dozens of bad actor who commit greivous crimes against not only us but there neighbourzs, not to mention there citizens.

    –Not at some point in the future. How about NOW! HOW ABOUT RIGHT NOW! We start taking some of those hard choices and start to put China in a headlock and put them on the straight and narrow.

    –Or we can take your advice and sell them the rope they intend to hang us with.

    • #3
  4. Donwatt Inactive
    Donwatt
    @Donwatt

    One doesn’t have to be a populist to agree that China has aimed its might at US manufacturing.  They have.  And China has tried, often successfully, to control speech, whether its Hollywood, corporations, or the NBA.

    Nixon was right to open China, but the opening didn’t happen in a vacuum.  Playing China against Soviet Russia was the motivation then, not decentralizing their economy.  Their economy didn’t begin to decentralize until the premiership of Deng Xiaoping in the eighties.

    Nonetheless, we were right to engage, with the thinking that a robust economy would inevitably lead to greater democratization.  But at some point one should readjust the thinking when, after more than 30 years of engagement, there is less  openness and ever more aggressive behavior from the communist rulers in Beijing.  The experiment hasn’t shown the results we expected.  So what should we do?

    I think it is time to disengage from the Chinese economy and do our best to engage with the other nations in East and South Asia. We should be clear with China about our support of those nations.  If the Chinese want to continue strong-arming the west, they should be called on it regardless of the long term consequences.  To do less would be to dishonor our founding principles.  And while China has a market of 1.3 billions, the entirety of Asia is more populous. Some project India will surpass China sooner rather than later.  So I say start winding down orders from  mainland China and actively look for alternatives.

    Unfortunately for the NBA, the billionaire owners and the millionaire players are going to lose ten percent or more of their future revenue.  That appears to have them petrified.  Sorry about that.  The ESPN reporter Rachel Nichols reported that on a previous trip to China with Lebron James they were mobbed by thousands and now maybe a dozen or so were waiting outside the hotels and those that were there covered their faces when a camera turned their way.

    The NBA’s engagement with China is just a smaller version of the free world’s engagement.  And it needs readjustment too.

    • #4
  5. Jon1979 Inactive
    Jon1979
    @Jon1979

    Jerry Giordano (Arizona Patrio… (View Comment):

    I think that Nixon properly went to China, to split it from the Soviet Union, which was very important in ending the first Cold War.

    I think that we’re now in a second Cold War period, with China this time. We have been slow to realize this, and hopeful that economic growth would lead to liberalization and the end of their Communist tyranny. This is not happening.

    I think that it was reasonable to take this path, through around 2010. Since then, it has become increasingly clear that China is our principal geopolitical foe.

    In the situations you currently see with the NBA kerfuffle, where people are getting thrown out of basketball games in America for showing support of Hong Kong protestors, you now have the situation where China’s market size is allowing it to wield it’s power not just within its own borders, but within the borders of the U.S., where corporations are seeking to silence speech in order to preserve their access to the Chinese market.

    That’s a far more troubling situation than some of the canary in a coal mine earlier examples, such as scripts for big-budget movies being altered so that they’ll pass the censorship test in China. If you’re in the Philadelphia 76ers building, you’re subject to their rules, so it’s not a pure free speech issue, but when you have the Sixers — and by inference, the NBA league office and the team’s ownership, including Comcast — giving the bum’s rush to anyone with a free speech  message, you’re now to a place where Anericans have the right to ask the people running multi-national corporations what rules they want to play by — U.S. First Amendment laws or China’s authoritarianism? (though at least for now Comcast is allowing NBC News to talk about the action, where Disney/ESPN has put the Cone of Silence over mention of the controversy, because the company has so much money invested in their broadcast deal with the NBA).

    • #5
  6. James Lileks Contributor
    James Lileks
    @jameslileks

    James Pethokoukis: Yet at some point, China’s oppressive actions may force some hard moral choices on American firms and cultural icons. Does Taylor Swift have to play Shanghai?

    No. But she will, because there’s money to be made.

    Does Marvel need a red–carpet film premiere there?

    No. But they will, because there’s money to be made.

    If Hong Kong really takes a bad turn, for instance, should the US send a team to the 2022 Winter Olympic Games in Beijing?

    No. But we probably will, because there’s money to be made for the networks.

    Meanwhile, America must work even harder to globally demonstrate the values of liberal, rules–based democracy and market-driven capitalism.

    Demonstrate to whom, though? If the rulers of various countries see that the Chinese model is more lucrative for those who control the state levers, what does our example mean? Rules are impediments to enrichments, and engaged population that wants a say is an unpredictable variable. 

    • #6
  7. Reformed_Yuppie Inactive
    Reformed_Yuppie
    @Reformed_Yuppie

    The amount of IP theft that the Chinese government engages in (and not just from US companies, but anyone who has something of value) is absolutely staggering. Not terribly long ago Bloomberg had a story about how a Chinese spy had gotten ahold of a new chip design that he’d stolen from Micron. Micron is a massive company, employs, what, 10,000 Americans?, and gets half its revenue from China. If they lose their IP because of a sanctioned hit then they go under within 18 months. That’s one company. Now extrapolate that out to hundreds of US companies. Trade with them gave us a lot of cheap stuff, which is nice I suppose, but it may have also doomed a lot of valuable parts of our economy. I don’t know how you unring that bell. 

    • #7
  8. James Lileks Contributor
    James Lileks
    @jameslileks

    Reformed_Yuppie (View Comment):
    The amount of IP theft that the Chinese government engages in (and not just from US companies, but anyone who has something of value) is absolutely staggering.

    Yes, but we shouldn’t do anything about it because the International trade consortium is a wise and measured achievement managed by wise and measured minds. The best we are allowed is a strongly-worded letter of concern. Not complaint! That’s confrontational. Concern.

    A reddit thread on the “Business Hall of Bootlickers” who’ve adjusted their products and/or marketing to conform to Chinese requirements, here

    It’s amusing and satisfying, in a grimly unamusing way: the uberwoke corporations beg forgiveness for quoting the Dalai Lama – we didn’t know he was an unperson! – and the transnational left squirms when forced to apply their Western values to a non-white nation. 

    “THE WEST IS XENOPHOBIC NATIONALISTIC FASCISTIC ISLAMOPHOBIC EXPANSIONIST!”

    And China?

    “Awesome trains”

    • #8
  9. Reformed_Yuppie Inactive
    Reformed_Yuppie
    @Reformed_Yuppie

    James Lileks (View Comment):

    Reformed_Yuppie (View Comment):
    The amount of IP theft that the Chinese government engages in (and not just from US companies, but anyone who has something of value) is absolutely staggering.

    Yes, but we shouldn’t do anything about it because the International trade consortium is a wise and measured achievement managed by wise and measured minds. The best we are allowed is a strongly-worded letter of concern. Not complaint! That’s confrontational. Concern.

    A reddit thread on the “Business Hall of Bootlickers” who’ve adjusted their products and/or marketing to conform to Chinese requirements, here.

    It’s amusing and satisfying, in a grimly unamusing way: the uberwoke corporations beg forgiveness for quoting the Dalai Lama – we didn’t know he was an unperson! – and the transnational left squirms when forced to apply their Western values to a non-white nation.

    “THE WEST IS XENOPHOBIC NATIONALISTIC FASCISTIC ISLAMOPHOBIC EXPANSIONIST!”

    And China?

    “Awesome trains”

    My God, it’s so deeply depressing. But hey, Alibaba has great deals on stuffed animatronic dogs that are THE toy of Christmas 2019, so buy them before they’re gone!

    • #9
  10. Henry Castaigne Member
    Henry Castaigne
    @HenryCastaigne

    Reformed_Yuppie (View Comment):

    James Lileks (View Comment):

    Reformed_Yuppie (View Comment):
    The amount of IP theft that the Chinese government engages in (and not just from US companies, but anyone who has something of value) is absolutely staggering.

    Yes, but we shouldn’t do anything about it because the International trade consortium is a wise and measured achievement managed by wise and measured minds. The best we are allowed is a strongly-worded letter of concern. Not complaint! That’s confrontational. Concern.

    A reddit thread on the “Business Hall of Bootlickers” who’ve adjusted their products and/or marketing to conform to Chinese requirements, here.

    It’s amusing and satisfying, in a grimly unamusing way: the uberwoke corporations beg forgiveness for quoting the Dalai Lama – we didn’t know he was an unperson! – and the transnational left squirms when forced to apply their Western values to a non-white nation.

    “THE WEST IS XENOPHOBIC NATIONALISTIC FASCISTIC ISLAMOPHOBIC EXPANSIONIST!”

    And China?

    “Awesome trains”

    My God, it’s so deeply depressing. But hey, Alibaba has great deals on stuffed animatronic dogs that are THE toy of Christmas 2019, so buy them before they’re gone!

    The NBA won’t go to a Southern state that says that transwomen can’t go into the women’s bathroom but they will bend over backward to a Country that throws religious minorities into literal reeducation camps. I honestly hope it’s because of greed and not the not-so-soft bigotry of low expectations. 

    • #10
  11. cirby Inactive
    cirby
    @cirby

    As noted in other threads, the people who are actually fighting back against Chinese censorship are the same people who are most hated by the wokescolds – white male gamers.

    Co-opting the Chinese-origin character of one of Blizzard’s biggest games as a Hong Kong protester, for example. That will force a “we have to delete this character or China will ban this game” moment.

    A lot of gamers are deleting their Blizzard accounts – to the point where Blizzard is actively blocking people from doing so. Which is also starting to make news (and may be against the law).

    I still think that the most interesting idea is to start requiring media companies with a large Chinese investment to register as foreign agents, especially when they blatantly represent those foreign countries over US interests. Again, some gamers thought this one up, not the political types.

    • #11
  12. Stad Coolidge
    Stad
    @Stad

    James Pethokoukis: Yet at some point, China’s oppressive actions may force some hard moral choices on American firms and cultural icons.

    “At some point”?  “May force”?  It’s been clear from the git-go China is a brutal, oppressive, totalitarian regime bent on world domination.  Big business has already voted in favor of business ties with China.  We should really be looking at how consumers respond.  If they continue to buy Nikes and go to NBA games, we might as well start learning Mandarin . . .

    • #12
  13. DrewInWisconsin, Thought Leader Member
    DrewInWisconsin, Thought Leader
    @DrewInWisconsin

    Is AEI funded by the Chicoms? I swear I read something to that effect this week. It would explain a lot.

    • #13
  14. ctlaw Coolidge
    ctlaw
    @ctlaw

    James Pethokoukis: American populists already blame free trade for costing their country jobs and industrial might.

    Intellectually dishonest strawman.

    It’s unfree trade that has cost our country highly productive jobs. If there had been free trade there would be millions of UAW-made Jeeps and Buicks in China, just to start.

    Now they blame it for curtailing freedom of speech.

    The prior surrender of free trade in favor of China-managed trade has given China the power to do this.

    The argument: If the US and Chinese economies weren’t so intertwined, then China couldn’t “export” its authoritarian values by using its huge market power to strong–arm American companies.

    It’s because: 1) China’s unfree trade has allowed them to skim off the profits of trade; and 2) their unfree trade allows them to pick individual winners and losers among individual foreign companies (more picking losers v. big losers).

    • #14
  15. Reformed_Yuppie Inactive
    Reformed_Yuppie
    @Reformed_Yuppie

    ctlaw (View Comment):

    James Pethokoukis: American populists already blame free trade for costing their country jobs and industrial might.

    Intellectually dishonest strawman.

    It’s unfree trade that has cost our country highly productive jobs. If there had been free trade there would be millions of UAW-made Jeeps and Buicks in China, just to start.

    Now they blame it for curtailing freedom of speech.

    The prior surrender of free trade in favor of China-managed trade has given China the power to do this.

    The argument: If the US and Chinese economies weren’t so intertwined, then China couldn’t “export” its authoritarian values by using its huge market power to strong–arm American companies.

    It’s because: 1) China’s unfree trade has allowed them to skim off the profits of trade; and 2) their unfree trade allows them to pick individual winners and losers among individual foreign companies (more picking losers v. big losers).

    80% of Buick sales are in China. Why would they (China) want those cars made in the US when they can make them there? The Chinese have the same desire to have good-paying factory jobs as we do. They’re just better at getting US companies to roll over and give in to their wishes. That’s the power of an authoritarian system. We don’t have that kind of pull because we aren’t monsters. The thing that makes them able to have such unbalanced trade relations is also the thing that makes them a brutal regime. I don’t know how you fight against that if you’re the US. Your point is entirely valid, I just don’t see how one fights the tide. 

    • #15
  16. Jon1979 Inactive
    Jon1979
    @Jon1979

    cirby (View Comment):

    As noted in other threads, the people who are actually fighting back against Chinese censorship are the same people who are most hated by the wokescolds – white male gamers.

    Co-opting the Chinese-origin character of one of Blizzard’s biggest games as a Hong Kong protester, for example. That will force a “we have to delete this character or China will ban this game” moment.

    A lot of gamers are deleting their Blizzard accounts – to the point where Blizzard is actively blocking people from doing so. Which is also starting to make news (and may be against the law).

    I still think that the most interesting idea is to start requiring media companies with a large Chinese investment to register as foreign agents, especially when they blatantly represent those foreign countries over US interests. Again, some gamers thought this one up, not the political types.

    The dynamic of the Hong Kong support against companies bowing to China is interesting, especially when it comes to young progressives. They see their protest as being against the greedy capitalists at places like Blizzard, the NBA or ESPN/Disney while downplaying the reality that their targets are mostly crony capitalists, who in the U.S. support many of the same politicians they do, because the crony types know the Democrats will use the power of government to help them out, including getting more contracts from the Chinese government.

    • #16
  17. Unsk Member
    Unsk
    @Unsk

    “And the idea of disentangling the two economies remains more a talking point rather than a serious plan.”

    Really James?  It is already happening or perhaps you wouldn’t want to inform your readers that in China there is a huge and government sponsored movement not to buy American products already.   If they don’t buy our products largely because we are asking them to actually abide by previous agreements and cool it with the hell bent on world domination stuff, why in the world should we buy theirs?

    I guess you really don’t understand how these pro-China trade arguments undermine all your other arguments, because this argument is so ridiculous. Those payments from the traitorous Chamber of Commerce must be really big to sell out like that.

     Trading with China is just suicidal for America. Just stop and cut them off at the knees. They need us a lot more than we need them.  Kyle Bass argues that the Chinese can only use the Chinese Yuan in 10% of their world trades because outside China it is not used as a currency. 80% of their trade is done in dollars. They need our currency to trade and they need to bigly trade with us to get those dollars.  Just watch when Trump in 2021 raises those tariffs to the moon. It will be such fun watching their despicable and contemptible predator economy implode like a popped balloon. 

    • #17
  18. Henry Castaigne Member
    Henry Castaigne
    @HenryCastaigne

    cirby (View Comment):
    Again, some gamers thought this one up, not the political types.

    Start by watching the video.

    The video features prominently the goddess of democracy that students erected in Tiananmen. The protest against Blizzard is actually fairly sophisticated.

    The plan, as far as Reddit is concerned, is to make Mei the face of the Hong Kong protests in order to get Overwatch banned in China, delivering a blow to Blizzard’s bottom line and pressuring them to rethink their approach to Blitzchung’s case, and any that may follow.

    • #18
  19. Stad Coolidge
    Stad
    @Stad

    Reformed_Yuppie (View Comment):
    80% of Buick sales are in China. Why would they (China) want those cars made in the US when they can make them there?

    Reverse engineering.  While most consumers are driving the cars out of necessity, Chinese automakers are having their engineers study the cars.  Look for a four-door Mao sedan to show up on the market soon.  It’ll cost $2000 and sell like hotcakes in the US until Trump bars them at the request of US auto manufacturers.

    • #19
  20. cirby Inactive
    cirby
    @cirby

    Stad (View Comment):

    Reformed_Yuppie (View Comment):
    80% of Buick sales are in China. Why would they (China) want those cars made in the US when they can make them there?

    Reverse engineering. While most consumers are driving the cars out of necessity, Chinese automakers are having their engineers study the cars. Look for a four-door Mao sedan to show up on the market soon. It’ll cost $2000 and sell like hotcakes in the US until Trump bars them at the request of US auto manufacturers.

    Chinese cars, by and large, will never be sold in the US.

    For one thing, they are astoundingly bad at crash protection, and can’t be sold here because of that.

    For another, their emissions control systems are basically nonexistent. Again, US law would prohibit selling them.

    They may be able to assemble something that sorta looks like American cars, but that’s just cosmetic.

    On the other hand, the people with money tend to want to buy non-Chinese-made cars because they want something with more prestige. Better construction, less chance of dying in a minor crash as a bonus.

     

     

    • #20
  21. ctlaw Coolidge
    ctlaw
    @ctlaw

    cirby (View Comment):

    Stad (View Comment):

    Reformed_Yuppie (View Comment):
    80% of Buick sales are in China. Why would they (China) want those cars made in the US when they can make them there?

    Reverse engineering. While most consumers are driving the cars out of necessity, Chinese automakers are having their engineers study the cars. Look for a four-door Mao sedan to show up on the market soon. It’ll cost $2000 and sell like hotcakes in the US until Trump bars them at the request of US auto manufacturers.

    Chinese cars, by and large, will never be sold in the US.

    For one thing, they are astoundingly bad at crash protection, and can’t be sold here because of that.

    For another, their emissions control systems are basically nonexistent. Again, US law would prohibit selling them.

    They may be able to assemble something that sorta looks like American cars, but that’s just cosmetic.

    On the other hand, the people with money tend to want to buy non-Chinese-made cars because they want something with more prestige. Better construction, less chance of dying in a minor crash as a bonus.

     

     

    They can just buy (often under coercion) or steal the technology.

    One big issue is that they are setting themselves up to be the international headquarters of lots of industries. Assume cirby and I respectively own the two best widget companies in the world. We can’t sell in China. If cirby sells out to Xi’s cousin, the now Chinese-owned cirbyco can sell in both China and the US and drive ctlawco out of business based on economy of scale.

    For example, by using China’s status as the largest purchaser of industrial robots:

    https://www.technologyreview.com/f/611527/over-one-third-of-industrial-robots-purchased-last-year-were-installed-in-china/

    the Chicoms leverage that into acquiring western robot companies on the cheap:

    https://www.therobotreport.com/another-chinese-acquisition-european-robotics-manufacturer/

    Similarly, Geeley acquired Volvo on the cheap.

    • #21
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