China Has a Supreme Qualitative Advantage in The Trade War

When it comes to a quantitative analysis of the trade war between China and the US, it is clear that both countries have the capacity to shield themselves from major damage. That being said, various and asymmetric disadvantages to specific sectors of both economies are unavoidable. Likewise, consumers will suffer on both sides in respect of market place options and in respect of price competitiveness among available goods. This will be most apparent in the US where consumers will be deprived of world-leading Huawei 5G technology.

But there is another aspect to the trade war that has hitherto be little discussed. For those who hoped for and even expected a rapid end to the trade war, it is now time to admit that due to the imposition of wide ranging non-tariff barriers to trade against China in addition to the threat of additional tariffs, Washington is clearly looking to the long term when it comes to protectionist economic policies.

Because of this, one must explore the qualitative aspects of the trade war that cannot be easily boiled down to numerical statistics. Confucius said:

“Looking at small advantages prevents great affairs from being accomplished”.

This wise quote clearly defines the difference between the political and social cultures of China and the United States. In the US and the western world moreover, a Faustian drive for instant self-gratification – for immediate redemption after a failure and a zero-sum notion that successes and failures are dogmatically measured in terms of ‘all or nothing’ remain utterly pervasive. As such, leaders in the west are quick to be blamed for failures beyond their control and are inversely happy to take credit for short term successes that are not of their making.

Like ancient Athens but most unlike Christian Europe, post-Christian Europe and the wider west, Chinese philosophy is more allegorical than it is Faustian. It is cyclical rather than liner. Because of this, while many westerners fear life, Chinese are able to approach both life and death with logic and reason. This tends to focus the mind squarely on productive activities rather than wasteful frivolity.

However, unlike both ancient Athenian culture and Christian Europe, Chinese philosophy gives one the tools to cope with challenges, remain calm during times of stress and ultimately, Chinese culture is one that prioritises problem solving over both triumphalism and self-indulgent sentimental despair.

Because of these cultural characteristics, China’s leaders are able to take the long view when it comes to solving specific sets of problems. Likewise, the Chinese people have a higher threshold of tolerance for sustained periods of hard work which will ultimately lead to a materially better future.

In the time it takes western politicians to hold vainglorious and utterly meaningless debates, Chinese leaders have already begun the first stage of addressing new challenges. This is why the Chinese spirit is one that is stable in terms of its goals but supremely flexible in terms of how it addresses specific matters of urgency.

Because of this, even if the US put an embargo on every good and service coming out of China and prohibited Americans from doing any commerce with Beijing, China would survive and adapt. Even forgetting that China has one of the world’s largest and still economically growing domestic markets and even forgetting also that China’s Belt and Road partners are consistently increasing their bilateral trade with China, the Chinese people have withstood a century of pain beginning in the mid 19th century and are more than prepared to withstand the tumult of a totally unnecessary but seemingly semi-permanent trade war.

While all cultures experience suffering, western culture has become a master of self-inflicted wounding whilst China has achieved internal harmony which allows the people to collectively cope with, resist and overcome external pressures. For much of the 20th century, the vast majority of all Chinese lived in poverty whilst today, many in the west cannot go for 5 minutes without requiring some form of sensual gratification.

This is not to say that one culture is better than another. Each culture will ultimately display the characteristics that its people are most comfortable with in the same way that water always finds its level. What this does mean is that when all statistical analyses have been exhausted, one must examine how each culture will be able to withstand the trade war. In this sense, China is well placed to both survive during and thrive after the worst of the trade war.

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