For Washington, Taiwan is not a state. What is it then? That remains "undetermined," thus implying that Washington does not really admit that Taiwan is part of China. Washington maintains relations with a government -- in Taipei -- that is not officially recognized, under an "undetermined" status.
What Trump seems to be aiming at is to rock this -- uneasy -- boat. Well, the late, great Little Helmsman Deng Xiaoping made it very clear that the crowning achievement to erase China's "century of humiliation," after the handover of Hong Kong and Macau in the late 1990s, would be the return of Taiwan, in a sort of "one country, three systems" arrangement, before 2040.
Watch the global supply chainsUS sells weapons, but I can't get a call? # Trump baffled about outrage over his Taiwan phone call http:// on.rt.com/7ws5
"Bargaining chip" Taiwan entered the geopolitical fray linked to Trump's campaign promise to bring US jobs back, an extremely hard act to pull off. The US-based Economic Policy Institute estimates the US lost five million manufacturing jobs between 2000 and 2014. In a nutshell, that's "collateral damage" to agile supply chains performing under turbo-charged globalization.
A report by the Nikkei Asian Review has revealed how the Apple supply chain in Taiwan is worried Trump will insist on more iPhone components are made in the USA. That will inevitably mean more than double the cost. Not to mention the US lacks the necessary infrastructure -- as in clusters of suppliers -- and the necessary skilled workers to make it happen, as Apple CEO Tim Cook told 60 Minutes a year ago. The only way out: Trump ordering the US government to subsidize local companies.
The hard fact is that Trump cannot afford a trade war with China. His campaign promise to slap a 45 percent tariff on made in China products is just rhetorical. And even if that happened, Beijing would not see it as a disaster.
Xi Jinping's drive -- the complex tweaking of the Chinese export model -- is focused on raising Chinese consumer spending levels, as in developing the huge internal market. China's production costs are rising? Chinese factories are delocalizing all across Southeast Asia and further away to Africa? No problem; China is relentlessly moving up in the value-added chain -- see, for instance, the Huawei attack on the luxury mobile phone market. Even if Trump imposed additional US tariffs on Chinese manufactured products, global consumers would not be bothered.
And China will keep growing anyway; Bloomberg has estimated that with a 6.7 percent GDP growth, valued at $730 billion, China added "one Netherlands" to itself in 2016; and with a projected 6.4 percent GDP growth for next year, it will add more than "one Switzerland."
Deutsche Bank Chief Economist Zhiwei Zhang got it essentially right, in value-added terms, China accounts for only 16 percent of the US deficit, slightly ahead of Japan and Germany. So a Trump trade war on China "would be a war against all participants in the global supply chain, including US companies." Trump may throw Taiwan at the table, but Beijing is already playing another game entirely.
(Note: You can view every article as one long page if you sign up as an Advocate Member, or higher).
3
3
2
