My suggestion is to hit China where it hurts. They fund 90% of North Korea’s economy. We do have options that would hurt China’s willingness to pay. If we cause an economic downturn, then they would have to choose who to pay. They wouldn’t likely have much domestic instability because they’re so good at controlling that. However, some miners have refused to work because they weren’t getting paid and some people in there to mid- to late-30’s and 40’s are moving back west from cities like Beijing, Qingdao, Guangzhou and others where jobs were plentiful because some of that has dried up. Additionally, Trump has incentivized companies to come back to the United States, and some companies were already planning on leaving. 25% of U.S. companies operating in China are leaving or already have. However, they aren’t exactly coming home like Trump hoped. They’re moving to Vietnam, India and other burgeoning low-cost countries.

All of this is incredibly good. China has engaged in what I called “entanglement.” Some people break this into two parts and call it “engagement and containment,” which goes both ways, but I believe China is not just trying to interact with the United States in order to gain control but cause the United States to hurt itself if it tries to hurt China. If we were to embargo all Chinese goods right now, we wouldn’t even be able to get basic medicine because so much of it is made in China. Almost everything is Made in China. Therefore, we’ve been interdependent. However, getting our companies out of China and dispersed throughout ASEAN countries supports international trade, makes us less dependent on any one country there, supports our allies there instead of a country that treats us horribly and supports those who treat us worse, and deleverages China’s ability to threaten and bully ASEAN countries. Moreover, it could strength those countries’ military capabilities, which would help them help themselves in the South China Sea disputes that China is causing.

I could go on and on and on about China, but the long and short of all this is that we need to smoothly exit China. They can’t really do much about that, and they’ll spend most of the time thinking that we can’t live without them, which gives us time to get that 25% up to way above 50%. By the time they realize what happened, their economy will have slowed down tremendously. Most importantly, if they can’t survive just on their economics-centered military strategy to control the world, then they’ll have to show their true colors with increased bullying and activity via actual military assets. In the process, they’ll lose billions in support from the international community, including more than dozen countries who have recently flipped to face East instead of facing the United States. All of this will unravel, and the world will have no doubt about what and who the Chinese Communist Party government really is. In doing so, of course, they’ll strongly support any action by North Korea, but they’ll be unable to do very much, which will cause North Korea to almost entirely collapse, stall their nuclear program, and frankly leave it vulnerable to attack, though I don’t think anyone would do that at that time.

So, what should WE do about all this?

Back To Series: Sanctioning China

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