Sliding into U.S.-China Crisis*

By Sol W. Sanders
Friday, September 29th, 2017 @ 1:03PM

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Despite Pres. Trump’s repeated claims of friendship with China’s Boss Xi Jinping, Washington-Peking relations have been slid by slow motion into crisis. [Trump might be reminded of British 19th century Prime Minister Lord Palmerton’s quip: “Nations have no permanent friends or allies, they only have permanent interests.”.]

The depth of the crisis has been obscured by dramatic domestic news and the war of words between Trump and most of the national media.

The issues exist at every level – political, economic and military

The crisis entered a critical stage when Pyongyang flew a missile over Japan into the Pacific [Sept. 15] with the real threat of North Korea’s accidental strike, given North Korea’s poor navigational history

The United States is committed to automatically respond to any such attack on Japan’s defense by treaty as the keystone of its East Asian security system.
Washington now looks to Beijing to force Pyongyang to discontinue its weapons of mass destruction and threats to attack America territory. China could do that with its control of the North Korean tiny economy. Last year China bought two-thirds of North Korea’s exports, worth $2.6 and provided almost imports $3.9 billion in
Although China voted September 3 with all the other members of the UN Security Council to halt North Korea’s nuclear weapons development, it remains to be seen if Beijing will enforce the UN restrictions. Beijing did follow the UN vote with an announcement it was cutting petroleum shipments immediately.
But there is little doubt that Chinese leadership – perhaps Xi himself – remain conflicted over the North Korean issue. However much Xi’s increasing control in China, the Chinese Establishment – particularly the military with its bloody intervention in the Korean War [1950-53] – maintain the closest ties although Beijing dropped direct financial support in 2014.
Communist China fears pressure on Pyongyang, and its collapse could bring reunification of the Peninsular and a reunited Korea, either neutralized or more likely with a tacit alliance with Washington.
In the crunch, the U.S. probably would have to take severe measures against U.S. China trade if it wants to force Beijing to curb Pyongyang. Even with a total world trade of more than $3.6 trillion, the 2016 estimate of almost $500 billion in American trade accounts for almost half the U.S.’ worldwide $737 trade deficit. That obviously would pose severe disruptions on the American economy.
Beijing has refused Washington’s offer to take a more conciliatory view of other trade issues– the imbalance, intellectual property rights, processed food imports, etc. – if they were linked to sanction North Korea sanctions. Meanwhile, Chinese planners are trying to move away from the heavy dependence on exports by continued forced urbanization of, some 1.4 billion. Half its population, still living in rural areas. They hardly benefited from recent rapid growth but worsening the situation of several hundred thousand “temporary” residents floating in its largest cities without official benefits.
China has, in fact, been exporting capital to the U.S. with below-cost prices for thousands of household and capital products that have wiped out 5 million American manufacturing jobs since 2000, some including important foreign exchange elements. And under attack from some Chinese economists, as an export of capital for a still underdeveloped economy.
Some American observers have wrung their hands over Beijing’s role as the chief government purchaser of U.S. Treasuries. Beijing this spring raised ownership of U.S. government bonds to $1.09 trillion. But China’s American debt do not provide China with undue economic influence over the United States. As the British economist John Maynard Keynes put it, “If you owe your bank a hundred pounds, you have a problem. But if you owe a million, it has.”
While Trump’s $700-billion program to renovate the U.S. military begins, Beijing continues to move aggressively on its perimeters — in the Japan Sea where it has taken over islands returned to Japan at the end of American Occupation, building naval and air bases  military bass on coral strands a thousand miles from Continental China athwart  one of the main commercial naval arteries of the world, and most recently, opening up old sores on the eastern Himalayan border with India, in support of its growing program of base-building in Pakistan at the entrance to the Persian Gulf from which it proposes a pipeline to carry across the country to western China.
*This commentary was published on September 27, 2017, on YeoldCrabb.Wordpress.com
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