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CONLEY COMMENTARY (WSAU) – Over the weekend there was endless talk about the just concluded summit between the United States and China. Who won? Donald Trump or Xi Jing Ping? Did Trump give away too much? Did he mishandle Taiwan? Was it wrong not to get the Chinese involved in ending the war with Iran?
Here is the most important thing to remember about US-China relations. China has built a production economy. They manufacture and sell things. We are a consumer economy. We buy things. And we, the United States, are by far their biggest customer. 35% of everything China makes is sold to us. If that market dries up, their economy will collapse.
There is simply no other nation on earth that can make up for the United States as a customer. Hypothetically, let’s imagine big screen TVs and computers made in China can no longer be sold in the United States. What country could possibly make up the difference? Australia? They don’t watch a lot of television compared to us. They’ve banned social media for their children. Canada? Our economy is 12 times later than theirs. The European Union? Our economy is larger than all 27 EU nations, and they consider big screen TVs to be garish. No, for China, there is no substitute for the United States as a buyer of their stuff.
And compare the U.S. to China. Our military has 11 aircraft carriers, theirs has 3. They have vast swaths of their country that has no electricity. Their economy? Our nations’ gross domestic products will soon be about the same. But in China the same level of economic output is spread over 1.4-billion people. Each Chinaman’s slice of the economic pie is one-fifth the size of yours.
China is better than the United States is two areas: spying and reverse engineering our products.
China is not an oil-rich country. They need to import from Iran. No Iranian oil on the international market is devastating to them. They may even resort to getting oil from us.
As the endless talking over who “won” the summit, remember that the United States holds a winning hand.
Chris Conley
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