Bannon: US in “economic war” with China

Via The Guardian:

White House chief strategist Steve Bannon has given an unusual interview in which he claimed there was no military solution for North Korea, the far right was a “collection of clowns” and the left’s focus on racism would allow him to “crush the Democrats”.

Bannon, who has been called the mastermind behind Donald Trump’s nationalist agenda, made the controversial and unsolicited remarks to Robert Kuttner, co-founder and co-editor of the American Prospect, a leftwing political magazine, in an interview published Wednesday.

The seemingly candid comments – which included the claims that he would oust his rivals in the federal government, who were “wetting themselves” – come at a time when Bannon faces an uncertain future at the White House. There have been increasing calls from the left and the right for the removal of the former editor of Breitbart News. When Trump was asked at a press conference this week if the chief strategist would remain in his position, the president said: “We’ll see.”

It is unclear why Bannon chose to call Kuttner, who wrote that he had not requested the interview and was “stunned” to hear from him. However after publication stories circulated that Bannon was unaware he was providing an interview.

There have been recent reports of internal conflicts and power struggles within the administration, and Bannon made the call amid an intense backlash related to Trump’s links to the far right and the president’s comments that there were “very fine people” at a violent white nationalist protest in Charlottesville.

In the American Prospect story, headlined “Steve Bannon, unrepentant”, Trump’s top aide said: “We’re at economic war with China. It’s in all their literature. They’re not shy about saying what they’re doing. One of us is going to be a hegemon in 25 or 30 years and it’s gonna be them if we go down this path. On Korea, they’re just tapping us along. It’s just a sideshow.”

Contradicting Trump’s threats of “fire and fury” on North Korea, Bannon said: “There’s no military solution [to North Korea’s nuclear threats], forget it. Until somebody solves the part of the equation that shows me that 10 million people in Seoul don’t die in the first 30 minutes from conventional weapons, I don’t know what you’re talking about, there’s no military solution here, they got us.”

Bannon also discussed his “battle inside the administration to take a harder line on China trade”, Kuttner wrote. Asked about his adversaries at the US departments of state and defense, Bannon responded, “Oh, they’re wetting themselves.”

He continued: “I’m changing out people at east Asian defense; I’m getting hawks in. I’m getting Susan Thornton [acting head of east Asian and Pacific affairs] out at state.”

Contrast this today with formerly Chinese funded super-uber-ultra-China bull James Laurenceson at the AFR:

Ask the average Australian whether China or the US is the country’s most important economic partner and you’ll likely get a bewildered look – it’s China, of course. The Lowy Poll shows that by 2013, 76 per cent of Australians were already convinced that China was No.1, compared with just 16 per cent choosing the US.

…In 2016, trade and investment flows with China stood at $178 billion. Those with the US were not only less than with China, they were less than zero, -$27 billion. As usual, trade with China last year towered above that with the US. But US investors also pulled $66 billion more out of Australia than they put in, while Australian investors dialled back their US asset holdings by $25 billion.

…The growing economic weight of China is remaking the strategic balance of our region. Australia’s relationship with the US will be a valuable asset for both countries in navigating these shifts. But pursuing Australia’s national interest means accepting that Australia’s most important economic relationship is now with China.

In short, the US views the Chinese relationship as binary whereas naive Australian China bulls see it as a continuum. I might add that this is the one policy area that both sides of US politics agree on, recalling Obama’s “pivot to Asia”.

There are two interpretations here. One is that China is rising peacefully and will never muscle out as a hegemonic power, holding back its values, hard and soft powers and interests. The other is that like all great powers before it it will seek to assert itself in a wider sphere of influence using every available tool.

If it is the former then Australian economic policy is making a wise choice and we are an asset to the US. If it is the latter then Australia is a treacherous liability as the greedy little penal colony runs full tilt towards China in trade and migration policies while pretending to care about the displacement of the US in the region.

To me, making that choice now, before we know the outcome, is bloody stupid.


    • IP theft in China (and SE Asia) has been endemic for more than 30 years. A blind eye has been turned for all that time, because, presumably:
      1) a grand deal was made between China and the West to bring it out of its dangerous poverty and isolation, post Mao (China’s nukes were an incentive; a lesson not lost on Nth Korea?)
      2) IP owners (Western IT and Mfrg Co.s) welcomed the opportunity for super-profits from setting up mfrg in the SEZs.
      3) Taiwanese expertise/interests did not respect the same IP rights in PRC as in Taiwan
      4) Until the present decade, nobody in govt. considered the impact on Western workers.
      5) IP owners have learned to market profitably their (made-in-China) branded goods as superior to the rip-offs, to newly-affluent Chinese.
      Now, at last, the adverse effects of these policies are being understood by Western voters & consumers.

      • A co-ordination problem of sorts.

        Well played by the Chinese, they saw the crooked overpaid CEOs in the West would take the bait for the chance to sell their wares to a burgeoning Chinese middle class and earn massive bonuses. To hell with the fact the IP was the cumulative effort of a company since inception and shouldn’t really be property one CEO/board can give away. But when company governance is essentially authoritarian this is what happens. Little oversight by shareholders either as they are incentivised in the wrong direction too and majority institutionally owned anyway.

        In reality China just took what Singapore did in terms of learning how to become supplier to the West and put the model on steroids.

    • Transnational IP is a very interesting problem, think about it, who is it that gives anyone (any company) the right to enforce their Intellectual Property rights? Who enforces these agreements on IP?
      If a US based company is issued a US patent surely it is only valid in the US, so what happens in Australia or Germany or Singapore? What happens if a Chinese company willfully or otherwise breaks a US patent? In practical terms it would seem that exclusion from US markets is about the limit of today’s international Patent agreements. That suggests that no US companies breaking US Patents are free to sell their wares anywhere but in the US.
      How can Chinese companies exercising this right to sell items to all these other countries ever be considered IP theft?
      As I said Lots of interesting room for legal discussion especially if the two countries concerned are even close to being economic equals.

  1. China’s wish to be a hegemonic power has already been well-signaled; witness OBOR initiative, Sth China Sea disputes, support for Nth Korea. Australia’s response is framed by the ANZUS treaty, with bipartisan support. Bloody unavoidable, unless we adopt Swiss-like neutrality and self-defence resolve.

    • Did you ever research the meaning of the word “hegemony”?

      Wikipedia has a nice article which is a good starting point.

  2. does this mean US gona squeeze chinese debt markets? yields rising, liquidity crunch? rise of the USD?!?!? china is one debt bomb if you think about it.

    • If Yellen keeps the course and simply mentions “shrinking bondholdings” then debt markets will get very interesting in the fall. Of course it will take many years to shrink it.

  3. Is it just me or does Bannon come across as not being half the boogeyman people have portrayed?

    Seems reasonably rational in his points.

  4. Charles Babbage

    The other is that like all great powers before it it will seek to assert itself in a wider sphere of influence using every available tool.

    The history of China is that of the most powerful country on earth – almost entirely unchallenged for almost 4,500 years. It is called Zhong Guo for a very good reason – middle country.

    The west has been a dominant power globally for only several hundred years. The Romans were not even close to the dominance China exerted over Asia and the known world.

    Its entire history – China has been known as a non-expansionist country, and despite western efforts to portray it otherwise – it is completely and utterly beyond dispute. The only period in its entire history when this was brought in to question was the dispute between the Royal Concubines and the Official Bureaucracy who sought to expand and resulted in the voyages of discovery.

    This rift was settled and the ships recalled and resulted in a further internal expansion and an end, never to be repeated foray into expansion.

    It is an almost entirely western trait to dominate, enslave foreign nations via colonialism. We seek to self project this, our own fears, onto other nations.

    Conversely every nation on earth has great, serious, and civilisation ending fears of the consequences of not resorting to life extinguishing military build up in order to resist the insatiable appetite of western military imperialism.

    China her self has been subjugated to an almost ceaseless onslaught of western military antagonism since the west first gained the ability to navigate the global seas – as did Japans.

    The assertions of nations defending themselves from the unrelenting onslaught of western military violence as being some sort of threat – is risible and absurd beyond all measure. Our position is one, as stated by Cheney, Rumsfeld right back to Kissinger and Albright etc has been one of unquestionable, unassailable and unthinkable global dominion and hegemony.

    The only threat China has ever posed is its mere existence – and that is and of itself the reason for the absurdist risible bluster once again squawking from the war hawks and the chirping chicks clinging to the planet in the Great Southern Ocean.

    • Dear God CG, cut the BS. You have been an imperial power that fell into decadence. Accept it.

    • Ronin8317MEMBER

      It’s call the ‘Middle Kingdom’ not because it’s the center of the world, rather, it’s because it is between Heaven and Earth. As to being non-expansionist : fake-history? While you can argue that Genghis Khan is not really Chinese, the map of China got a lot bigger since the liberation.

      Just like how US become the global hegemony when Europe wiped itself out in 2 world wars, China will arise when the USA destroy itself through the civil war between the ‘Right’ and ‘Left’. That is assuming China doesn’t implode before that.

  5. The other is that like all great powers before it it will seek to assert itself in a wider sphere of influence using every available troll.