Trade Wars with China? BASTA! Dear Mr.President, Do this instead, please. Please demand that all Chinese individuals and firms doing business with USA companies and indviduals pay their obligations with redeemed Treasury Bonds, redeemed by PRC (Mainland China). It will require that an official government clearing house handle all the payments which will satisfy: 1) PRC's interest in monitoring all such foreign activity, 2) USA's interest in re-balancing trade 3) all of Western Nation's interest in leveling a playing field which is so tilted toward China due to the massive 'discounting' of both products and services.
AND...
4) The greatest benefit is the immediate reduction of outbound foreign acquisitions which are entirely built upon China's furiously created, heavily leveraged government, business sector, and individual credit leveraging which is so entirely opaque that even domestic corporations don't really know if any given firm, including their own, is truthfully stating its balance sheet including inventory, or if it is instead double and triple booked. That leveraging cannot be sustained if the underlying credit dwindles.
Now, for all you who are aware this suggestion is contrary to current currency and trading agreements: I don't givadayum.
In fact the middle finger to those agreements is entirely useful in this circumstance. Give Western technical excellence including SEQUANS a level field and the Chinese offerings won't run away with market share.
This policy doesn't stop foreign investment by PRC entities, but it cuts back on the excesses created by excess leveraging - which even PRC Agencies themselves are struggling to contain.
In these days TRUST is a scarce commodity and we have a well-founded reason not to trust the PRC branded products and accounting books. PRC (Mainland China) investment is welcome, but it needs to be an investment of REAL value.
Give'em hell Mr. President ! |
