Despite his shortcomings, the President’s trade war is vital to curb the Chinese economic imperialism which the world is facing, says India’s former Supreme Court justice…
Most people, including most Americans whom I have spoken to, are critical of President Donald Trump for his undoubted negative aspects, including his abrasive style, his comments about the media, etc. What is overlooked, however, is his one great positive point which outweighs all the negatives, that is boldly confronting China. This needs to be explained.
In the 1930s and 1940s Nazi German imperialism was the real danger to the world, not the British or French ones. This was because German imperialism was rising and expanding and, hence, aggressive, while British and French imperialism was only defensive. While the latter only wanted to hold on to their colonies, the Nazis wanted to conquer and enslave other countries. Hence the Nazis were the real danger to the world.
Similarly, today the danger to the world is not from America but from China, because the Chinese are on the road of aggressive expansionism. With their massive industry seeking markets for its goods, and with their huge 3.2 trillion-dollar foreign exchange reserve hungrily seeking avenues for profitable investment, the Chinese are today aggressive imperialists and the greatest danger to the world. It is true they are not expanding militarily like Nazi Germany, but they are aggressively expanding economically by penetrating and undermining the economies of many countries of the world.
In the last decade, Chinese overseas investment has skyrocketed. Today the Chinese are almost everywhere: Asia, Africa, Latin America, and of course the United States and Europe. Their Belt and Road Initiative is a network of roads, railways, oil pipelines, power grids, ports, and other infrastructure projects connecting China with the world. It aims to improve infrastructure and connectivity between China and the rest of Eurasia in order to dominate it. China’s focus is often on vital infrastructure like ports, for example, Gwadar in Pakistan, Piraeus in Greece, and Hambantota in Sri Lanka, the aim being to get a strategic foothold in these countries.
By selling goods at less than half the price of that sought by American or European manufacturers (due to the higher labor costs there), the Chinese have destroyed many American and European industries. Now the Chinese are seeking to corral raw materials and capture markets in underdeveloped countries by dumping goods at very low prices so as to make the local product uncompetitive. Pakistan, for instance, is flooded with cheap Chinese goods.
While capturing foreign markets, the Chinese carefully protected their own interests using high tariffs. To the credit of President Trump, he has called the Chinese bluff and bluntly told them this won’t do. You can’t have 25 percent tariff on the import of automobiles into China when the US imposes a tariff of only 2.5 percent on imported cars.
Trump has imposed tariffs on several Chinese goods and announced more in the future. To this, the Chinese announced retaliatory tariffs, but that will hurt Americans little.
It is well known that the Chinese have no business ethics, and that is why many American and European companies are reluctant to hire Chinese from mainland China as they often commit industrial espionage.
Since I am an Indian, I would like to refer to China’s economic relationship with India.
As is well known, India was a British colony till 1947, and the British policy was broadly to keep India unindustrialized. However, after Independence, a certain degree of industrialization took place in India and we started manufacturing goods which we had to earlier import.
Now the Chinese have penetrated our markets to a certain extent at the expense of our domestic industries. An article entitled ‘How Chinese companies are beating India in its own backyard,’ published on December 12 last year in The Economic Times provides some interesting details. Indo-Chinese trade is heavily skewed in favor of the Chinese. Indian exports to China are worth16 billion dollars, consisting mainly of raw materials. But its imports from China are worth 68 billion dollars, consisting of value-added goods like mobile phones, plastics, electrical goods, machinery and their parts. This is typical of the relation between a colony and an imperialist country.
Chinese companies use aggressive pricing, state subsidies, protectionist policies and cheap financing. In certain sectors Chinese companies dominate the Indian market, such as in telecommunication, where it holds 51 percent of the market. Indian homes are full of Chinese goods, such as fittings, lampshades, tubelights, etc.
To conclude, I appeal to Americans and others to consider seriously what I have said, and to start supporting President Trump. As I said at the beginning, Trump has many defects, but his bold opposition to Chinese imperialism, the greatest danger in the world today, far overshadows those defects. To ignore this danger will be behaving like an ostrich – or like Neville Chamberlain who kept thinking Hitler was no danger until it was almost too late.
[Justice Markandey Katju, is the former Judge of Supreme Court of India and the former Chairman of the Press Council of India. The views expressed in the column are his own]