Imagine an alternate universe where the US built up Mexico and 99% of everything was made there instead of China
The only thing holding back China from more aggressive takeovers like Russia is doing the the US is such a massive consumer.
But China also could destroy the US without launching a single missile, all they have to do is turn off exports for a month and we'd be killing each other over the last item in stock anywhere that is now 100 times the price because of no availability.
Just imagine everything out of stock or 100 times the price, we only have a glimmer of that these days.
Mexico was vastly wealthier than China through the 70's and 80's[1], this wouldn't have worked. Western notions tend to partition the world into "rich" and "poor" countries, but in fact there's a lot of variety even there. Mexico has been growing alongside the US economy for centuries and is only "poor" in comparison. And people tend to wildly misunderstand the depth of poverty seen in post-war China (and thus how radical a change the last two generations have been there, which explains a lot of "why do the Chinese people tolerate the CCP?").
This is starting to happen now. We are shifting manufacturing to onshore and nearshore. I believe Mexico will pick up a lot of where China left off in the future.
Personally, I disagree we would kill each other for goods but I'm an optimist like that.
Lots of factories are moving to Mexico (and even back to the USA) because they're so automated that the employees aren't a major cost; the biggest cost now is shipping - which hits the cheap bulky good the most. Check where trash cans at Walmart are made, for example.
Mexico is much smaller population wise and won't be able to pick up major part. Not talking about tuned manufacturing processes, facilities, toolings etc.
The US is less than 7% of the world's population, they can manage to survive without us. It's wouldn't be easy for them, but it won't cause the same level of disaster in China as what you would see in the US.
A big irony in this situation is that scaling manufacturing in the US super fast to fight that ban would require importing a lot of tools/materials/machines/etc that either come directly from china or have parts made in china.
> all they have to do is turn off exports for a month and we'd be killing each other over the last item in stock anywhere that is now 100 times the price because of no availability.
What do you think happens when you turn off exports to the #1 consumer economy in the world?
Do you think that economy disappears, or takes it's money elsewhere?
The US maintains very close ties with the EU. And while EU citizens would relish in even cheaper goods from China, EU would prefer stronger and preferential economic terms with the US, where businesses face far less meddling from governments than they do in China.
This seems unlikely. Only 18% of our imports come from China. In fact, 14% of our imports come from Mexico and 14% from Canada. Given that China has 11.1x the population of Mexico and 39x the population of Canada, we don't actually get that much from China.
It would certainly hurt. I remember the early days of the pandemic when I had to wait 45 days for my new laptop. However, I don't need a laptop to survive. I need food and shelter.
> all they have to do is turn off exports for a month and we'd be killing each other over the last item in stock anywhere that is now 100 times the price because of no availability
What items would we be fighting over? iPhones? Because I need to eat at least one iPhone a week as part of a balanced diet? We love our phones and other consumer goods and we've certainly seen how interconnected our supply chains are, but the idea that we'd fall into murderous anarchy seems incredibly unlikely.
Let's look at what we import from China: computers ($151B), apparel ($56B), electrical equipment ($36B), misc. manufacturing ($35B), furniture ($18B), machinery ($20B), fabricated metals ($18B), and plastics ($16B). We're actually an exporter in both the food and agriculture categories to China. Yes, some of those are economically important fields, but the idea that I'd be stabbing you over a sweater or laptop within a month is nuts. "I don't care who I have to kill to get my JCrew!"
Yea, China is an important trading partner and it would certainly hurt if China shut off trade. I'm not arguing it wouldn't hurt. At the same time, China is 17-18% of our imports.
And the thing is that it would hurt for China too. Right now, China is appeasing its citizens with an export-driven economy. Imagine the massive unemployment rates if China cut off exports to the US. People who are presently happy or at least neutral toward the regime might end up being really angry.
Plus, the second China cuts off the US, it kinda has to go the (figurative) nuclear route and cut off the whole world. EU leaders aren't going to sit around saying "Wow, it sucks to be an American. I'm glad nothing like that can happen to us!" No, they're going to immediately start moving their economy away from reliance on China in preparation to cut off China. If it happens to America, it'll happen to Europe as well. Even if EU leaders were like, "nah, China would never do that to us," the US would apply a ton of pressure - and EU leaders aren't that stupid.
It's pretty clear that cutting off exports to the US in that manner would bifurcate the world Cold War style. It seems clear that Aus/NZ/EU/UK/Japan/SK/Israel/Canda/Mexico would end up with the US. The US currently has free trade agreements with all of Central America, Colombia, and Peru so I'd guess they'd be with the US and cutting off China. Brazil and Argentina are major non-NATO allies. India would love the opportunity presented by most of the world cutting off China. Apple is already moving manufacturing to India and the Indian government wants the kind of economic growth that China has seen.
It would certainly hurt if China cut off exports to the US. We're not prepared for it. However, it would leave China a lot worse off than us.
> Imagine an alternate universe where the US built up Mexico and 99% of everything was made there instead of China
I do agree US foreign policy toward Mexico hasn't always been great, but we actually have built up a lot of industry in Mexico. As I noted, we import nearly as much from Mexico as we do from China despite China having 11x the population.
And China is going to be declining over the next 50 years. Their population is projected to decline from 1.4B to 700M-1B by 2100 (depending on what estimate you look at) and they're going to have a lot of old people compared to working-age people. Their workforce is already down 2.5% from its 2015 peak. The US, on the other hand, will still be a growing nation thanks to immigration.
I get that it seems like "everything comes from China", but that really isn't the truth. China is a very important trading partner. However, cutting off trade isn't going to bring anarchy to the US. It will make every country reliant on trade with China start working toward isolating China. China would need to start invading its neighbors to build up an isolated trading block against the juggernaut that would likely be the US, EU, India, Canada, Mexico, and so many other countries who would start treating China like the Soviet Union.
"If you come at the king, you best not miss." This would certainly be a miss. It would hurt for sure. In the long run, China would face a world where they were no longer a welcome trading partner, where they'd lost their advantages as the rest of the world recreated what China once offered, and where they'd face huge domestic unrest from such a major economic upheaval.
We're at one of the lowest points of American influence since World War II. That's not even a criticism of the state of politics in the US. It's simply a realistic view of the fact that Europe, Australia, Canada, New Zealand, etc. don't need the US nearly as much as they did when US money was rebuilding Europe or when the US was the bulwark against the Soviet Union. If China cut off trade to the US, they'd catapult the US back into that position of de-facto leadership. Maybe the US would share that position a little with the EU this time around, but we would see a world where countries looked toward the US for their future leaving China really isolated. China doesn't want to hand leadership of the world back to the US. They want to make China look like a reasonable trading partner that countries should look toward so that they can hold some of the leadership.
> but the idea that I'd be stabbing you over a sweater or laptop within a month is nuts. "I don't care who I have to kill to get my JCrew!"
Reminded me of something. My folks moved the summer before my senior year to a large school district, which I found intimidating, so I enrolled in a small private school for my last year of high school. The nearby JCrew Outlet wasn't doing well, and I overheard a few underclassmen talking:
Underclassman 1: I just heard the JCrew Outlet is closing.
Underclassman 2: What are we going to wear!?
I disagree with just about everything in this post, but I find one particular thing very interesting.
>And China is going to be declining over the next 50 years. Their population is projected to decline from 1.4B to 700M-1B by 2100 (depending on what estimate you look at) and they're going to have a lot of old people compared to working-age people. Their workforce is already down 2.5% from its 2015 peak. The US, on the other hand, will still be a growing nation thanks to immigration.
Even if we assume these predictions are correct (They aren't. You don't cite sources, but they generally come from the same people who have predicted China's end for the past 40 years, such as Gordon Chang and Michael Pettis), China also has the option of allowing immigration.
It's interesting that America has tried to transfigure its settler-colonial, genocidal and slaver history into a kind of Thanksgiving-esque "Nation of Immigrants" storytale, but it doesn't make it actually true, and it certainly doesn't mean that other countries cannot avail themselves of immigration as a demographic strategy (in case it's needed).
I think the Christian narrative that America is "the chosen ones" clouds not just moral judgment but geostrategic judgment as well.
Everything I've seen, including from the CCP, projects that Chinese population is already in decline, and will likely halve by the end of the century. Do you have projections that shows otherwise?
Yes, immigration could change this in China, but it is not currently significant.
English is a huge plus for the US thanks to British imperialism. Chinese is just much harder to learn. I’m curious to know what percent of chinas population is immigrants
This is a bit hyperbolic. History is full of examples of countries and economies adapting. If China stopped producing, supply chains would move, people would make do.
The power of the USD was used to sanction Iran and Russia into serious economic harm, but people will find ways to make it work.
I'm sure it's been explored before, but that's not how it works. If China started dumping their Treasuries lead to significant domestic inflation, which they definitely don't want.
Also, minor point, Japan holds more Treasuries than China.
That's not how US debt works. It pays back on a schedule. China could stop buying new US debt, and will continue to receive payments on US debt it owns, but China can't call up the US and demand full repayment immediately.
They could sell the debt that they currently hold, sure. The response would likely be a short term rise in interest rates followed by the Fed simply intervening and purchasing Treasurys.
And we could sanction the PBoC and freeze the accounts into which we repay the debt they hold. The China-owns-our-debt line ignores the realities of sovereign debt.
The only thing holding back China from more aggressive takeovers like Russia is doing the the US is such a massive consumer.
But China also could destroy the US without launching a single missile, all they have to do is turn off exports for a month and we'd be killing each other over the last item in stock anywhere that is now 100 times the price because of no availability.
Just imagine everything out of stock or 100 times the price, we only have a glimmer of that these days.