Former U.S. Treasury Secretary Hank Paulson spoke about China-US relations at the Bloomberg New Economy Forum, 2018 Nov 06. He had some very sage advice for both the Chinese and US governments. He hit all the key pain points, and warned of an impending “Economic Iron Curtain” and de-integration.
The two Bloomberg videos of the Paulson speech are very revealing. 2
Summary Points:
- After entering the WTO 17 years ago, Chin still has not opened up its economy. The US and the West are tired no change to Chinese behaviour. Causes include:
- CCP controls everything
- private business works for the CCP,
- forced tech and IP transfer to China is unfair
- These divergent policies are pushing a decoupling of the integrated economies, and a possible “Economic Iron Curtain”
- China needs to open up and integrate with the world economy, and stop forced IP transfer and unfiar trade
- US needs to reduce the strong language, rejoin the TPP
Of course there is more, but this summary is the gist of the trade problem. You can easily see how this problem is very large and will not be solved quickly, so we need to settle down for a long haul.
Not mentioned by Paulson are China’s numerous domestic issues. The trade war has acted like a catalyst to China’s domestic financial and social issues. China is under great pressure from within and from outside.
