Epoch Times published a commentary article titled, “Is the Trade War a War to Fight for the Fate of China or a War That Will Lead to the Devastation of the Chinese Communist Party?” Below are some highlights from the article.
Since the trade war started, the U.S. economy has shown positive signs: the stock market is stable; the U.S. currency is appreciating; the Republicans and the Democrats have a consensus on U.S. China policy.
Compared to the U.S. which is calm and united, China appears to be more chaotic. So far this year, it has had the worst stock market performance in the world. In the first six months, the market dropped down 17 percent. The Chinese currency exchange rate suffered a major decline, indicating a lower confidence in China’s economy.
The top leaders in China have also been sending inconsistent messages to the media. The latest statement that the central administration made showed a completely different position form that of the official media, which vowed to “strike back firmly” and take a hardline stance of “an eye for an eye, and a tooth for a tooth” in the trade war against the U.S. Chinese premier Li Keqiang stated on July 7 that China will not change its determination to reform and open its market. It was consistent with Xi Jinping’s previous statement of “taking caution when dealing with the trade war to avoid derailment on the path to reform.” However while it promised that, before the end of June, it would open up the market further for multiple industries, China was reported to be making it more difficult for U.S. goods to clear Chinese customs. Meanwhile the tone of the Chinese official media also changed from statements such as “The U.S. is bound to be defeated,” “We will fight back at any cost,” “The Rise of the Great Powers,” to statements such as “Hide one’s talents, and bide one’s time while waiting for the right opportunity,” “The New Cold War,” and “Fight for the fate of the nation.” The shift in the media can also be seen in articles that People’s Daily published calling to stop the boastful writing styles in the media.
No matter how chaotic it appears, one thing is clear: Beijing has come to realize that the U.S. is serious this time. The trade war is escalating into a comprehensive, sustained confrontation.
The U.S. demands fair trade from China but the current Chinese Communist Party ruling system is incapable of meeting the demand. It might appear that the war is between two countries, but what China is really fighting for is to maintain the power of the ruling Communist Party and to keep it from collapsing.
There are three obvious economic crises that China faces: the Chinese Currency Bubble (Over-supply of Money Issued); the Real Estate Bubble; and the Debt Bubble.
The trade war will not only cast a shadow on China’s economy; it will put pressure on China to resolve its currency, real estate, and debt crises. It is pushing Communist China toward a dead end. If it does not reform, pressure from the trade war will burst the economic bubble and China’s economy may collapse. If it undergoes reform, it will touch the interests of the privileged class which may result in an internal collapse of the political system. In either case, the Chinese communist party will face devastation.
Source: Epoch Times, July 10, 2018