Depth report

　　

For many days, the media has called the "China-US trade war" so overwhelming, vigorous, and in full swing, it seems to be a world-shaking war that will drag the world to the end...

    However, the prices of international strategic resources such as gold, silver, crude oil, refined copper, rubber, etc. have not undergone drastic mass changes, but they are still fluctuating as usual. Why?

1. Reasons for the Sino-US trade war

    In the Sino-US trade negotiations, the United States believes that both sides of the trade should conduct fair trade in accordance with uniform rules, while China considers itself a developing country and has the right to use tariffs to protect some industries; the United States believes that market exchange for technology is a forced technology transfer, while China considers it to be a forced technology transfer. It is only natural to think that this is your wish; the United States believes that state-owned enterprises and government subsidies have distorted market competition and put American companies at a disadvantage, while China has recognized state-owned enterprises as the pillars of the national economy and established the basics for making state-owned enterprises bigger and stronger. Strategic approach...

    On March 22, 2018, the US government issued a 301 investigation report on China's policies, behaviors, and practices in technology transfer, intellectual property protection, and technological innovation. The main body of the report is 182 pages, with 1,138 reference notes. The report has data, charts, facts, cases, rigorous discussion, and clear logic.

    On June 19, 2018, the U.S. government issued the "Report on How China’s Economic Expansion Is Harming the Technology and Intellectual Property Rights of the U.S. and the World." The full text of the report is 35 pages, and there are 163 notes for reference materials. This report is not a simple statement of position, and the source of all the allegations involved in the article is indicated. It is pointed out on the first page of the report that some reports of Chinese business organizations, think tanks and government agencies are outspoken about the behavior, policies and practices of China's economic expansion. These documents include "China's Medium and Long-term Technology Development Plan 2006", "Made in China 2025", "One Belt One Road Initiative" and other documents.

    The Chinese government issued a white paper "China and the World Trade Organization" on June 28, 2018. This more than 10,000-character white paper lists the trade liberalization reforms that China has and will carry out. It does not provide any excuses or refutes to the accusations made by the United States against China in this series of reports.

    Both China and the United States are seizing the "moral commanding heights" in the debate on the trade war. On the surface, it seems that the public is justified and the mother-in-law is right. The Americans are seizing the "moral commanding heights" according to the logic of nomadic culture. The thinking logic of farming culture is seizing the “moral commanding heights”, and the essence behind it is the dispute between “the moral commanding heights of nomadic culture” and “the moral commanding heights of farming culture”! It's a dispute between the "Law of the Jungle" and the "Law of the Pastoral"!

    The mainstream public opinion in the United States is that the United States has suffered a big loss in Sino-US trade and wants to punish the Chinese government.

    The consensus of mainstream Chinese media is that the essence of the Sino-US trade war is that the United States wants to contain China's development.

    The US government’s report has been widely recognized by mainstream countries such as Britain, France, Germany, Italy, and Japan. These countries have not shown sympathy for China, which is on the weaker side, in the Sino-US trade war.

    In the Sino-U.S. military war, the most famous is the battle of Shangganling in the Korean War. The height of Shangganling is 1061.7 meters above sea level and the area is 3.7 square kilometers, which can be measured. The victory or defeat of China and the United States can be judged by military standards such as the number of soldiers killed and wounded, and the number of people left behind in the position.

    In the Sino-US trade war, which is or will be the most famous one? Where is the moral commanding height? What is the height? How big is the area? What are the criteria for judging the outcome of China and the United States? If there is no common standard, it will naturally be inconsistent. Since the "can't agree", of course, we must "actually".

Second, see through the Sino-U.S. trade war

    Throughout the history of fluctuations in the US dollar index, each wave of crises seems to have occurred in some kind of "junctions". One of the characteristics of these junctions is that they appear in a certain order in different regions; the second feature is that most of them appear in certain parts of the US dollar index. These downside phases.

    Chinese mainstream public opinion believes that the essence of the Sino-US trade war is that the United States wants to contain China's development. According to this logic of public opinion, the Americans engaged in financial crises and trade wars. In the 1980s, they wanted to contain the development of Japan, in the 1990s they were to contain the development of Russia, and the development of Europe in the 21st century.... In short, the United States is everywhere. To curb the development of other countries and curb the development of the whole world. In this way, it has been contained for a while, and now it is time to contain China.

    According to this logical reasoning, it is concluded that Americans are actually the "villains" and "bad guys" who curb the development of countries in the world.

    Can such a conclusion convince the world?

    There is a famous American presidential saying: "The business of the American people is business." (The business of the American people is to do business; Calvin Coolidge, 1872 ~ 1933). In fact, this is the logic in the bones of Americans! As long as it is good for business, Americans can do everything. The ideology and values seem to be noble, but they are actually serving business. ……. The United States is a country with a pragmatic political tradition and a believer in open markets. When dealing with foreign affairs, Americans are full of pragmatic thinking on the one hand, and on the other hand they have to show noble ideology. They often turn their hands over the clouds and rain, and follow double standards. But tossing around and making trouble, in the end, you still want to do business and make money.

    Americans are neither "bad guys" nor "good guys", but "businessmen" with lust for profit.

    The dualistic thinking paradigm of "either good or bad" pushes the Chinese people's psychology to an extreme state of confrontation, making people emotional and tactics superficial, rather than rational and in-depth.

    The existence of merchants is to make money. Americans seek high profits through dollar hegemony. This is the essence of the problem! So, how exactly did Americans make high profits? First of all, the United States controls the global currency-the US dollar, and takes the quantitative easing (QE) path first. A large amount of currency is poured into other countries. Countries that are highly dependent and open to the US dollar and the US market will quickly push up the economy and soar prices. . Then, the United States suddenly drew salaries through austerity policies, and suddenly withdrew when the bubble was at its peak, causing the country to suddenly lack money, prices fell rapidly, and many assets became cheap. At this time, the Fed began to raise interest rates, prompting the return of international capital, and the United States again bought high-quality assets at low prices, and invaded other countries' assets through shrinking and disguised forms. This is the logic of the US financial war.

    Looking back at history, in every cycle of interest rate hikes in the United States, many emerging countries have suffered bloodbaths.

    The first round of the strong dollar cycle started in the 1980s, when Latin America suffered a debt crisis;

    The second round of the strong dollar cycle started in the 1995s, when Southeast Asia ushered in a financial turmoil.

    The third round of the strong dollar cycle started in the 2010s when the European debt crisis spread to EU countries.

    For example, the "Falconian War" between Britain and Afghanistan in 1982 was behind the "financial war." Let's review it.

    After 1973, the US dollar index has been falling, and the Fed is taking the quantitative easing route, and the US dollar has been printed a lot, which lasted for about 5 years. This has increased the supply of U.S. dollars. Where did these overprinted U.S. dollars go?

    Latin America!

    The U.S. dollar drove investment in Latin America, which led to the economic prosperity of Latin America in the 1970s. In 1979, the U.S. dollar index began to strengthen, and at this time the Fed decided to close the "dollar flood gate." So the booming Latin America suddenly broke the capital chain, and a large amount of dollars returned to the United States. This made Argentina's inflation rate as high as 600% in 1981, and a large-scale campaign against the military government headed by President Galtieri broke out in Argentina.

    At this time, the Argentine government tried to alleviate the domestic crisis by taking military actions on the Falklands issue left over from history, thereby diverting people’s attention. On March 19, 1982, the Argentines forcibly landed on South Georgia Island to the east of the Falkland Islands and raised the national flag. On April 2, Argentine President Galtieri ordered troops to occupy the Falklands, and the Falklands War broke out.

    This is the war the Americans hope for! Because only in this way can we create a more chaotic scene for Argentina, and enable investors around the world to judge that the investment environment in Latin America is going to deteriorate and force them to withdraw their capital from Latin America. Therefore, the United States immediately announced its support for the United Kingdom excitedly!

    The Fed saw the right time at this time and immediately announced a US dollar interest rate hike. After the interest rate hike, the US dollar accelerated the pace of capital withdrawal from Latin America. Almost all of the withdrawn capital went to the United States to pursue the three major U.S. markets (bond market, futures market, and stock market), acting as a "receiver" and bringing the U.S. dollar to the first bull market after the decoupling of gold. . The dollar index rose from a weak 70 points to an absolute strength of 120 points. And American capitalists took the opportunity to go to Latin America, buy those high-quality assets whose prices have fallen to the floor, and cut the wool of the Latin American economy fiercely!

    In 1986, the second round of weakening of the U.S. dollar index started, and after 10 years, the U.S. dollar was dumped into the world like a flood. In other words, the United States is ready to cut the wool of the world again. What is the goal this time?

    It's Asia!

    Beginning in the 1980s, Hong Kong, Singapore, South Korea and Taiwan of China implemented export-oriented strategies and achieved economic take-off in a short period of time, becoming a developed and affluent region in Asia, known as the "Four Little Dragons of Asia."

    The rise of the four Asian tigers adopts an "export-oriented strategy", which means that they can obtain sufficient U.S. dollars through products. Countries with such an export-oriented economy are highly dependent on the external world market.

    In 1996, 10 years after the US dollar opened the floodgate and flowed to Asia, Americans began to reduce the money supply to Asia. As a result, companies and industries in these countries encountered insufficient liquidity, and some simply broke the capital chain, and signs of economic and financial crises appeared in Asia. At this time, American financial crocodile Soros took his Quantum Fund and hundreds of hedge funds around the world, and began to attack the weakest country in Asia-Thailand's currency-the Thai baht.

    Because the Thai baht is not dominated by the government in the international market, and Thailand itself does not have enough foreign exchange reserves, in the face of fierce speculation by financial predators, the Thai economy is vulnerable and the Thai baht crisis broke out. And it immediately produced a transmission effect, all the way south, to Malaysia, Singapore, Indonesia, the Philippines, and then north to Taiwan, Hong Kong, Japan, South Korea, and to Russia, and the East Asian financial crisis broke out. At this time, global investors judged that the investment environment in Asia was deteriorating, and they withdrew their capital from Asia.

    The Fed lost no time in announcing a rate hike. The capital withdrawn from Asia once again went to the United States to pursue the three major U.S. markets (bond market, futures market, and stock market) and act as a keyboard man, bringing the second big bull market to the United States. The Americans returned to Asia with the large amount of banknotes they earned from the Asian financial crisis to purchase high-quality assets that had fallen to the floor. The Asian economy was severely sheared by the financial crisis.

    Why has China's RMB insisted on unregulation for many years and refused to relax? Why does the RMB not insist on devaluation when the currencies of various countries depreciate after the US dollar interest rate hike?

    This is the reason for this seemingly harmful behavior of domestic foreign trade companies. If China completely opened up its exchange rate to American capital in the 1980s and 1990s, like Thailand and the Philippines, under the austerity policy and interest rate hike policies of the United States, it would be cut off by the United States like Thailand and others. Then, American capitalists can, like in Latin America and Southeast Asia, take the large sums of money they have earned from the financial crisis back to buy high-quality assets that have fallen to the floor.

    In 1999, after the birth of the euro, it wanted to cut away the share of the dollar in the global currency settlement cake. As a result, the United States planned two wars-the Kosovo War and the Iraq War-and damaged the euro.

    This is the logic of the American financial war!

    Today, the internationalization of the renminbi has become an international topic. Beginning in 2017, Europe's Germany, France, Spain, etc. have already converted part of their US dollar foreign exchange reserves into RMB. In May 2018, central banks and government officials in 14 African countries discussed using the renminbi as the reserve currency in the region.

    In the second chapter of "Penetrating the Dollar", the author discusses the "basic law of dollar cyclicality" (page 49). Pointed out the irresistible periodic law. Since it is irresistible, pass it on skillfully. In the third round of the dollar cycle, Americans are using their brains to think about China and pass on certain domestic crises. For example, the tariffs imposed are used to repay the "accumulated $21 trillion in debt", while reducing Americans' tax payments and alleviating the debt crisis and the crisis of public sentiment.

Third, the time node of the Sino-US trade war

    As shown in Figure-1, the adjustment of US monetary policy and the outbreak of the financial crisis. Each wave of crises seems to be in some kind of "junctions". The second feature of these cuts is that they appear at a certain stage between the downward and upward movements of the US dollar index. Among them, the probability of occurrence in the downward phase is greater.

    So what exactly is the "critical eye" of the Sino-US trade war? The subtlety is actually here.

    From the historical point of view, the US dollar index reached the third cycle high of 103 soon (January 2017), and the US dollar high dividend period still exists, and the US "heavyweight action" should be delayed by one or two years. However, Trump hastily announced that the United States will impose taxes on China. One of the reasons is that the midterm elections in the United States are approaching, and Trump's vote issue is imminent. He needs to make more "big political achievements" to increase the number of votes. , Especially to lay the foundation for the subsequent re-election of the president.

    On page 81 of "Peep Through the Dollar", the author reveals that for cultural reasons, the "China card" has a broader public opinion base in the United States. Playing the "China card" allows American politicians to spend less money and get more votes. The miraculous effect. Therefore, playing the "China card" has become a common practice among American politicians, and President Trump, a shrewd businessman, is of course no exception.

    In recent years, the internationalization of the renminbi has accelerated. The renminbi will cut away the US dollar’s share of the world’s currency settlement volume. Of course, Americans are not willing. If the Americans want to attack China, the Sino-US trade war is an option. This is the second reason.

    On August 4, 2018, Trump said at a conference outside Columbus, Ohio: “We have really transformed China, and now it’s time for us to rebuild our country.” He believes that the decline in the Chinese stock market has weakened the country’s Ability to bargain in the escalating trade war.

    On August 5, 2018, Trump tweeted that he had the upper hand in the trade war with China. He told his supporters that taking tough measures against trade is "what I am good at." He is pointing out that tariffs have a "great" effect, and imported goods should be taxed, otherwise they should be produced in the United States.

    Trump pointed out in a tweet: "Every country on the planet wants to obtain wealth from the United States, which is always against us,". "I said, their

When things come to the United States, they must be taxed. He also hinted that the tariffs imposed could be used to repay “a large part of the accumulated debt of 21 trillion US dollars” and reduce Americans’ taxes.

    Trump announced that the United States will impose additional taxes on China, which can solve the historical legacy of "debt ailments" that have caused headaches for many former presidents, thereby obtaining extraordinary performance capital; secondly, it can reduce Americans’ tax payments and gain the hearts of voters. It can be said to kill two birds with one stone, adding a big bargaining chip to the re-election of the subsequent president.

Fourth, the new normal of Sino-US trade disputes

    Nearly 40 years since the establishment of diplomatic relations between China and the United States, the United States has been trying to incorporate China into the American-dominated global order system and operate in accordance with the American thinking paradigm. Americans believe that American culture is the best culture on earth, and Americans have the responsibility to promote American culture to all mankind. However, after many years, they discovered that the fast-growing China is becoming the biggest challenge to US global hegemony, and their original desires have been frustrated. Therefore, the mainstream views of American elites, whether it is the ruling and opposition parties or the academic circles, have tended to agree-the strategic game with China has become the new normal: noisy-and harmonious-noisy-and .... If there is advantage, make peace, if there is no advantage, then noisy. The Americans will naturally play the strategy of "shoot when it's time to shoot."

    Are there no trade disputes between the United States, Britain and the United States and Europe? Why doesn't the media clamor about "US-UK trade war" and "US-EU trade war"?

    The main reason should lie in the cultural aspect. The mainstream European countries and the United States have similar or similar cultures, and both belong to the descendants of "nomad culture." China and the United States have completely different cultural backgrounds and are descendants of "agricultural culture." Therefore, the United States and European countries have had an issue with regard to trade, and there is a logical basis for mediated thinking, which is at best a "dispute level". However, the United States and China have had an accident in the trade, lacking a logical foundation of mediated thinking, and will eventually develop to a confrontational "war level."

    As a democratic country in the United States, the "China Brand" has a broader base of American public opinion, that is, there are more "people who eat melons" as the saying goes. Therefore, American politicians will play the "China card" whenever they need it, and they have tried repeatedly.

    On page 123 of "Peep Through the Dollar", the author specifically discusses "culture and civilization", pointing out that "regionality is an important feature of culture"; "the regional difference of culture is a kind of incomprehensible or even incomprehensible societies outside the region." Intolerable logic, this is also one of the main sources of social conflicts."

    Since it is a region, there should be a frontier—territory. Today, the concept of frontier has evolved from "geographical frontier" to "cultural frontier" and "trade frontier". The "Chinatown" in the United States is a case in point. "Chinatown" is geographically "in the United States", but culturally it is "in China."

    In the same way, we can see cases of "trade frontiers". American companies operating companies in China, such as McDonald's and KFC, are located in "China" geographically, and "in the United States" in terms of trade. Chinese companies operating in the United States, such as Fuyao Glass, are located in "the United States" geographically, and "in China" in terms of trade.

    In the preface (page 13) of "Penetrating the Dollar", the author wrote at the beginning: As long as it is good for business, Americans can do everything. The ideology and values seem to be noble, but they are actually doing business. service. In the 1970s, the two heads of state of China and the United States crossed the "ideological gap" due to the needs of actual interests, and they came together without establishing diplomatic relations. This is an excellent example in itself! The fact that the United States can produce "red capitalists" is even more amazing!

    Human beings have entered the Internet age, and the concept of frontier has become more and more blurred, and sometimes people can't tell where it is. If the frontier is blurred, there will be fewer restrictions, and there will be more freedom in doing business. Look at the so-called "China-US trade war" with a three-view approach. On page 148 of "Penetrating the Dollar", the author pointed out that the mainstream of China’s society is now in the transition period between the industrial age and the information age, and the mainstream of society in developed countries and regions such as the United States is in the information age. In the transition period of the knowledge age, the mainstream of the two is not in the same time domain and space domain. Therefore, from a macro perspective, the US financial policy and fiscal policy will not have a subversive impact on China.

    With a history of more than 5,000 years, China has a unique Chinese civilization, and its soft power in the theory and practice of governance is not available in other countries. The ancestors have left a wealth of wisdom in governance to future generations. At the same time, the vast territory and large population objectively give China’s rulers a lot of "room for maneuver" in governance; the complex geographical and social structure objectively have a huge impact on China from the outside world. "Buffer zone" (for example, the Eight-Power Allied Forces captured the capital of Beijing, the Empress Dowager Cixi could move the capital to Xi'an; the Japanese devil captured the capital of Nanjing, Chiang Kai-shek could move the capital to Chongqing, etc.).

    As an actor, China has unique and huge advantages in scale and volume in three aspects: time, space, and energy, so that the impact of external factors on China at the macro and meso levels will be very limited. This is the basic principle on which Mao Zedong's brilliant masterpiece "On the Protracted War" is based. Based on the ruling wisdom left by its ancestors, China can develop.

    Therefore, from a macro perspective, the so-called "China-US trade war" is just a phased event. The "Zhang Sanpu" and "Li Sipu" after Trump have turned the "war" for the sake of their own votes and the interests of the United States. There will be a certain "honeymoon period" between China and the United States; in 1972, the two heads of state of China and the United States were able to come together without the establishment of diplomatic relations. There are no eternal enemies, only eternal interests. Businessmen will always put interests first.

    From a mesoscopic point of view, there will be some impact on China's economy, especially for export-oriented companies. However, cats have cats and mice have mouses, and each has its own way of living. Forty years of ups and downs of reform and opening up, China's private enterprises are already "veteran guerrillas", and China's state-owned enterprises are "royal teams", "backed by big trees to enjoy the cool. From a microscopic point of view, China's economic diversification has taken shape, and the impact is temporary. Losses outside the embankment are compensated for within the embankment. This is not the way to go. The Chinese government has put forward strategies such as "encouraging innovation and increasing domestic demand", which will continue to maintain the sustained development of the Chinese economy.