China Xi Jinping Donald Trump
China United States

China isn’t ‘Cheating’: The Difference Between US and Chinese Investment

United States (GPA-Maybe Washington’s problem isn’t that Beijing is “cheating,” but rather that Chinese investment is just more appealing than that offered by the US.

When you think of economic opinions in the US when it comes to China, the first thing you’re likely to think of is the countless accusations of Beijing somehow playing unfairly in the global marketplace. In fact, the latest US regime rode to power partly based on President Donald Trump’s tirades against China during the 2016 campaign.

Yet when you actually dig deeper into the claims made by western media and see the specific accusations being leveled at China, a lot of their practices don’t necessarily seem as “criminal” as the pundits describe them. Instead, when we look at how the Chinese government spends their money and operates their publicly owned businesses in a manner focused on long-term investment rather than short-term profits.

One recent piece in the National Review called out some of the means by which they claim China “cheats” in the open global market.

China Xi Jinping Donald Trump
Chinese President Xi Jingping, his wife, Mrs. Peng Liyuan, and others. Image: Wikimedia Commons

The NR piece complains about a host of Chinese government investment practices then calls these fully legal policies cheating just because the western media can’t comprehend a government actually investing money wisely. Some of the unethical policies listed by NR and other outlets include things like heavily subsidized bank loans that sometimes don’t require repayment by the borrower.

Also listed among China’s ‘offenses’ is the government’s investment and subsidization in certain economic sectors. This included investments in industries that show China is looking forward (again running counter to the US) such as robotics, artificial intelligence, and biomedicine. If it’s unethical for China to invest in their future in this way, it must be an atrocity in the eyes of US pundits that China is teaching their children STEM skills in primary school while the US still can’t end the ‘debates’ around teaching subjects like evolution.

China has, of course, also been declared guilty of “dumping” their cheaper consumer goods and raw materials into the US market. This phrasing always makes this accusation sound as if China is holding a gun to the head of US consumers rather than this being a result of the “consumer-driven market” the US is always insisting is the greatest in the world. Not only that but it’s fully legal for China to invest inside in the US because not only are US consumers not refusing Chinese goods, but US capitalists aren’t refusing Chinese money either.

These claims are about as hypocritical as the US complaints of China “hoarding” raw materials as if no western countries stockpile emergency supplies of things like steel and oil. If the US government isn’t directly “hoarding” resources like these, then usually the case is even worse and the materials are held by privately owned multinational corporations as opposed to China where essential industries like this are wisely controlled by the public.

Perhaps China’s stockpiles are greater than those of the US, but it’s not their fault their population is almost four and a half that of the US. Even some things China does that could appear unethical to the outside observer look different after closer examination of US policies. Let’s compare a few examples of the supposedly awful Chinese policies to the actually awful US policies that aren’t just enacted at home but forced on most of the world.

Subsidies and Domestic Economic Development

Let’s start by addressing the complaints that China somehow “picks winners and losers” by investing wisely and efficiently running State-Owned Enterprises (SOE).

One example cited by the piece in National Review is that of Chinese manufactured solar panels. NR’s (and many US citizens) position is that it’s somehow “unethical” for China to do things like offer solar panels at significantly lower prices than those made by US companies.

Is it really the fault of Beijing that while they’ve been investing in solar panels and other renewable energy technologies the US has still been spending billions of dollars a year subsidizing private fossil fuel corporations? Is it the fault of Beijing that the latest US regime is looking to prop up industries like coal as China is phasing out these outdated methods of power generation?

Related: China Leaps Toward Clean Energy By Scrapping Over 100 Coal Projects

Obviously, the answer is no, yet the US continues to subsidize these industries even when awful people like the snakes at the Council on Foreign Relations state that these types of subsidies aren’t even effective or necessary. Maybe it’s not that China is picking winners and losers that angers the US so much as the fact that the US is constantly picking losers by throwing money at dying industries.

Another common complaint in the US is that of cheap Chinese consumer goods such as clothing and electronics that also happen to dominate the US market due to poor choices in granting subsidies by the US government. The US makes their own decisions to subsidize stores like WalMart and corporations like Apple which are responsible for importing and selling Chinese goods in the US market.

Even when the US government isn’t directly subsidizing corporations, it’s often the case that these companies get a break at the end of their fiscal years when they file taxes and find they owe nothing or even receive a refund from the IRS. There are hundreds of these companies in the US from a range of sectors including military contractors such as General Electric and Boeing, telecommunications corporations such as Verizon, multiple energy providers, and various other companies that seem strange such as Netflix, Priceline, and PepsiCo.

The Trump regime came to power on complaints about both Chinese dominance in the US market and the lack of investment by the US government into “infrastructure.” While many voters in the US apparently believed these claims of Chinese manipulation, perhaps they should actually look at the poor investment strategies of the US, China is investing in forward-looking industries which continues to build their economy, enabling not just their massive domestic investments but their growing role in global investment.

Related: Trump Rolls Back Climate Regulations, China Vows To Uphold Paris Accords

Chinese and US Foreign Investment Policy

Another complaint in the western media is often focused on China’s increasing amount of partnerships in key geostrategic locations such as Africa, the Middle East, and Latin America. This rise in Chinese investment across the globe is often framed as some sort of mysterious sleight of hand by Beijing, with US pundits pretending to be baffled as to why these nations are choosing to business with China rather than the US.

The reason for this feigned confusion in the shallow ends of the US media pool is due to the fact that the truth is hard for them to bear: China is succeeding and the US is failing. These countries are doing business with China for one obvious reason, which is that they prefer it.

When China wants access to resources in the same countries as the US they don’t go placing sanctions on these countries until they comply, or possibly end up invading them should the situation “call for it.” China doesn’t send their intelligence agencies to these countries to create opposition like the US does in every country from Latin America to Eastern Europe. The Chinese Foreign Ministry doesn’t go abroad to pay “opposition politicians” and fund “moderate rebels.”

Related: Trump’s Missteps Cause China And Germany To Forge Stronger Economic Ties

When China wants access to a country they don’t demand that country becomes a client but rather a partner. Unlike the US, China doesn’t just demand to export resources, they offer a fair exchange which includes more balanced agreements with partner states. We know these deals are more balanced because every one of China’s economic allies is always quick to accept Chinese offers.

China doesn’t invest down the barrel of a gun but instead approaches these countries with offers geared toward long-term mutual prosperity. In Africa, for example, Chinese investment doesn’t just mean building up their operations but also investing in the necessary infrastructure for future prosperity such as the brand new $4 billion railway system. These moves aren’t just for China’s fiscal gain either, which is often proven by their support for other oppressed nations such as Palestine, where Beijing would have very little to gain economically.

Related: Trump And Xi Engage In First Conflict Over Jerusalem

The US also participates in some of the actions listed above that China will not. China doesn’t sanction countries for “disobeying” unwritten rules from Beijing. Yet the western powers won’t hesitate to sanction any “threat” anytime for anything including their own allies such as the way the European Union is currently treating Greece or the United Kingdom.

China also doesn’t run global scams disguised as “free trade agreements” like those cooked up by US-based multinationals. Instead of trying to force rotten deals like the TPP against many nations’ wills, China instead offers countries a chance to join massive and ambitious investment initiatives such as Xi Jinping’s Belt and Road. Belt and Road offers a chance for a long list of countries to invest in their future while also offering an immediate boost to their economies, as opposed to the US model of building an oil derrick and a highway to the nearest port.

All of these factors combined point to only one conclusion, which is that the game actually is fair but the US just so happens to be losing for once. The economic system that the US constantly boasts of is clearly the source of this failure, yet Washington continues to cry foul as Xi Jinping creates an economic model for the future. Surely the US will continue to accuse China of “cheating” while they continue to perpetuate a dying system but that is the best thing they can do. Let the pundits cry and the politicians fail because any loss for the US is a victory for the world.