Our shameful silence on Hong Kong
As Hong Kong protestors bravely fight for freedom, America’s president remains silent, having promised Xi Jinping that he would not criticize China’s policies in Hong Kong. Instead he fights a trade war for bigger profits for America’s multi-billionaires and their so-called “intellectual property rights”.
In other news, the trade war that was “good and easy to win” doesn’t seem to be going so well:
Chinese officials are signaling they’re increasingly reluctant to agree to a broad trade deal pursued by President Donald Trump, ahead of negotiations this week that have raised hopes of a potential truce.
In meetings with U.S. visitors to Beijing in recent weeks, senior Chinese officials have indicated the range of topics they’re willing to discuss has narrowed considerably, according to people familiar with the discussions.
Vice Premier Liu He, who will lead the Chinese contingent in high-level talks that begin Thursday, told visiting dignitaries he would bring an offer to Washington that won’t include commitments on reforming Chinese industrial policy or the government subsidies that have been the target of longstanding U.S. complaints, one of the people said.
If we get to choose China’s industrial policy, does China get to choose America’s industrial policy?
Months ago I pushed back against the conventional wisdom that America had the upper hand in the trade war. How’s my skepticism seem today?
And this morning, another example of what happens when you expel all the grownups from your administration:
Donald Trump has given the green light to a contentious Turkish military operation in north-east Syria against the main US allies in the battle with Isis, triggering alarm in Washington and Europe and plunging the campaign against jihadis into uncertainty.
Update: Our Dear Leader is now providing reassurance:
PS. Speaking of Chinese theft of our intellectual property, here’s an example I saw just 100 meters from where I stayed in Beijing:
PPS. Speaking of Hong Kong, this SCMP article caught my eye:
Of the 1,000 sq km (390 sq mi) of land area in Hong Kong, only 7 per cent is zoned for residential use and 40 per cent is designated as public parks and green belts (25 per cent and 15 per cent respectively).
By contrast, although Singapore is 35 per cent smaller than Hong Kong, 14 per cent of the land is zoned for residential use, while only 9 per cent is earmarked for public parks and green belts.
And this:
Hong Kong needs to build a satellite town of 500,000 affordable homes quickly to defuse the present political crisis and alleviate the long-term housing shortage.
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7. October 2019 at 12:21
Sumner, what is there to criticize in Hong Kong? Protestors are damaging the region’s economy, throwing petrol bombs, trashing the whole place, and China doesn’t even do anything about it except some mild anti-mask law. Hong Kong is already free.
Hong Kong is much more mountainous than Singapore, which explains the amount of parks. It’s really not suitable to build housing on under normal circumstances.
Both Trump and the “grown-ups” are very bad. The American occupation of Syria must end, but any Turkish occupation must be strictly opposed.
Also, your links don’t work.
7. October 2019 at 12:46
E.Harding: Agree with Syria and Turkey points, but I do think that Hong Kong could use a little more freedom in its internal affairs.
Scott: Intellectual property theft is far more than what you are describing, as indicated by China’s cyberhacking of our technology companies. Since America is a service economy, and one based on innovation, this isn’t a good thing and you know it. Trade war is not the best idea(our incentive to innovate is more trading with China, not without), but the problems do exist.
7. October 2019 at 12:52
John, Maybe we should put our own house in order before complaining about Chinese violations. Right now, the US IP laws are a disgrace.
7. October 2019 at 13:48
“Instead he fights a trade war for bigger profits for America’s multi-billionaires and their so-called “intellectual property rights”.”
What do you think about Dean Baker’s takes on IP rights?
Also, presumably you’ve noticed Goldman Sachs has come to the unsurprising conclusion that US businesses and households are bearing the entire cost of Trump’s tariffs.
Bailing out US farmers has cost twice as much as bailing out GM during the Great Recession. I wonder what happened to all of those who complained about aiding GM.
7. October 2019 at 14:53
What good would the US president criticizing China over Hong Kong do? China is already spreading propaganda that the protests are funded and orchestrated by the US in an attempt to undermine China. So the President speaking out about Hong Kong probably actually helps further the CCP’s narrative. The only real leverage the US has, outside of economic sanctions, is to change the special status of Hong Kong in terms of international trade. But the president doesn’t need to say anything about that. Everyone knows that is how the US will respond if things go bad in HK, and senators are already preparing bills to that effect.
7. October 2019 at 15:23
I said it a few months ago: If Trump really betrays the Kurds, it’s incredibly disappointing.
This is not about fabricated allegations of alleged electoral interference, obstruction and other constructed nonsense. Here he really would have blood on his hands if the Turks really attacked the Kurds. How characteristic for the current media that this behavior is not supposed to be the biggest scandal, if even a scandal at all.
In the case of Hong Kong, Trump seemed to be the only statesman of the Western world. who was outspoken in the beginning. Now he’s acting like the other statesmen, which is disappointing.
Even if you look at Hong Kong from a cynical Machiavellian perspective, it is difficult to assess Trump’s behavior in a positive way: Hong Kong would have been the ideal negotiating mass and leverage for the trade deals — and also the other way round, back and forth, back and forth.
7. October 2019 at 16:31
Scott, I agree but cyberhacking has nothing to do with US IP laws. Most stuff China steals is newly produced, stuff that still would be protected under a reform of IP laws. I mean China is stealing tech produced last or this year, not stuff from 2000s, much less stuff from 1960s.
Anyways, I dont think the trade war is a good idea regardless, but it is not surprising that people in the US want some kind of action taken.
I disagree that China has the upper hands- no one does. Both are losing big time, which is why China has not accelerated retaliation.
While China is bigger than the US in relative terms(not net wealth though), it is far from its rapidly dwindling potential. Chinas workforce is 5 times bigger than US and is much younger than the US’s. I would think it’s potential is 5-6 times bigger than the US economy. Yet it’s growth is shrinking fast and its net wealth is only 50-60% of US. Its potential is dropping fast as country ages and Xi knows it. I think Trump will concede but China will be a lot more respectful of foreign countries when it comes to trade and IP.
7. October 2019 at 16:38
Also Scott,
I’ve been doing some looking into immigration and have been converted to your point of view on some immigrant groups(Muslims in particular). Still very skeptical of African immigrants though…
I think pushing the immigrants to more of a high skilled mix and cutting the numbers by 300k would be a good equilibrium. Maybe give a pathway for citizenship for the illegal Mexicans and East Asians…
7. October 2019 at 17:18
Well, trying to find a list of actual historical winners from “trade wars” would be a fascinating exercise.
On the matter of Hong Kong, would supporting words from the US President, any US President, really be helpful? Or would it make it easier to paint the Hong Kong protestors as traitors? I do not have a clear view on this, because it strikes me as a genuinely hard question.
President Obama was pretty silent during the mass protests in Iran. That struck me as a clearer case, since it was about mass protest by Iranians over election honesty and so clear words in favour of honesty in elections seems appropriate.
But when it is inhabitants of a former colonial enclave, the judgements get trickier.
7. October 2019 at 17:38
The President of the United States should always speak in favor of freedom, in the form of republican government and generally free markets.
7. October 2019 at 18:16
Also, Sumner, just on the day you wrote this…
https://www.bloomberg.com/news/articles/2019-10-07/u-s-blacklists-eight-chinese-companies-including-hikvision-k1gvpq77
7. October 2019 at 18:52
Scott,
So if you’re the US President, what’s your end game?
So let’s assume your ideal scenario is China grants greater freedom to HK. Well that’s not going to happen so you have to look at other scenarios.
China intervenes militarily and is sanctioned broadly by many countries. Chinese growth slows. Internal dissent increases. The current Chinazi regime is replaced by something more moderate. Is this more likely if the US speaks up or doesn’t speak up?
Alternative scenario, you believe that Chinese military intervention in HK will put you in a stronger bargaining position on trade because increased domestic and international pressure on Xi will force him to put out the trade fire faster. Again. How do you best effect this. Speak up or shut up. It’s not at all clear to me.
It is also not at all clear to me that Trump wants the trade war with China to end. Instead he may to want trade with China to end. His vehement animosity to China long predates his political ambitions.
IMHO, there’s no good outcome for the Chinazis. As Napoleon said, “Never interfere with the enemy when he’s digging a hole for himself.”
In the meantime, I’ve stopped watching the NBA.
8. October 2019 at 01:10
Central Singapore still feels greener than central Hong Kong. I think that’s because our parks and greenery are more dispersed throughout the island. We don’t really have any rural areas like Hong Kong does.
8. October 2019 at 10:34
foosion, Good points. What does Baker say?
Burgos, You said:
“The only real leverage the US has, outside of economic sanctions, is to change the special status of Hong Kong in terms of international trade.”
That would play right into Beijing hands. They already want to punish HK, no point in us doing the dirty work for them. If we punish anyone it should be Beijing, they are the one’s repressing HK. Why punish the people of Hong Kong for the policies of Beijing?
The Hong Kong people are currently fighting for their “special status”. Why should we take it away?
Lorenzo, Trump could say “We oppose Hong Kong independence but favor democracy in Hong Kong.”
dtoh, I plan to watch the NBA this year and enjoy the games. As for the Chinese who are boycotting the NBA because of the political views of one meaningless GM, my response is “get a life”. Why are they so offended? Why do they care? I don’t care at all about the political views of singers, movie stars, sports stars, or anyone else in the entertainment industry. Nor do I care about the political views of business people. I buy from the business that gives me the best deal. Life’s too short to pay attention to those morons.
I agree that Trump speaking out would not do much good, but it would be nice if our political leaders set a positive tone. He moralizes about all sorts of idiotic issues that he should ignore, like football players kneeling for the National Anthem, so why not actually moralize about something appropriate?
Trade wars cause regimes to get worse, not better, as I explained in a recent Econlog post. The current trade war is sidelining the liberals in Beijing and giving the hardliners the upper hand, exactly the opposite of what its proponents claim to want. Of course Trump himself favors authoritarian leaders over democratically elected leaders, but I’m talking about other hardliners in and out of government who pretend to care about human rights. (But not in India or Russia or Saudi Arabia.)
BTW, If China goes into Hong Kong militarily, will you adjust your view that our trade war will cause them to behave better?
8. October 2019 at 15:44
Scott,
Baker take is that IP rights distribute wealth from the population to the very well off without any corresponding societal benefit (or at least any benefit that could not be achieved by other means). They raise prices far above free market prices, with all of the attendant distortions. They are a policy choice, not an automatic function of a free market.
See, for example, http://cepr.net/publications/reports/is-intellectual-property-the-root-of-all-evil-patents-copyrights-and-inequality and http://cepr.net/publications/op-eds-columns/intellectual-property-is-real-money
8. October 2019 at 18:29
Scott,
I agree. As they say, “Shut up and sing.” I don’t care about the political views of entertainers and businesses either. I just find it annoying when they make me listen to their political views.
I read your article in econlog. I agree with that too. Sanctions don’t help to change behavior. They only work to weaken your opponent if you’re fighting (or think you might have to fight) a war with them. The embargo and sanctions against Japan in the summer of ’41 are a great example although they would have been a lot more effective if they had been done earlier.
In general, I don’t think moralizing is particularly effective in foreign policy…. much better to smile in public, while you cut their feet out from under them in private.
One more thing…. I think we should ban movie exports to China. That way the studios would have to spend more effort producing good films.
9. October 2019 at 15:27
While I think the stance against censorship is the right one, I also think it doesn’t matter if studios want to produce something tuned for China. I don’t think on-screen talent and beauty is a constraint on the supply of movies so I don’t care if movies are made for China because I don’t have to see them. If all of today’s crop of movie stars becomes contractually bound to do work meant for China I would not miss seeing their faces. Funding is a constraint but it doesn’t seem that funding is well correlated with whether I enjoy a movie.
10. October 2019 at 11:00
foosion, There’s certainly some truth in that. But I suspect IP might have some benefits, in at least some cases.
dtoh, The films out of China are generally better than what we send there.