Many of us have been concerned about the rise of China and how we as America’s respond to it.  China is becoming a great economic and military power, a power that we need to deal with today.  We cannot do what past administrations have done and that is close to nothing and hope it all goes away.

I have been reading quite a bit in the last year concerning China and what one expert believes we should do and then another is completely different.  Well I have finally found one that I think is correct and in fact the strategy he puts forth is one that has already worked in the past.

That expert is David P. Goldman Columnist for the Asia Times.  He spoke to the Hillsdale College National Leadership Seminar in Bonita Springs, on February 21, 2018.  His speech was published in Hillsdale Colleges Imprimis March addition.

The strategy I stated above that I believe might work is an analogy to the strategy we used to defeat the Soviet Union in the 1980’s, a strategy President Reagan lead us in. Although it is not a direct analogy there are similarities that could work.

In the speech Mr. Goldman states that:

China poses a formidable strategic challenge to America, but we should keep in mind that it is in large part motivated by insecurity and fear. America has inherent strengths that China does not. And the greatest danger to America is not a lack of strength, but complacency.

China, is an empire based on the coercion of “unwilling people” Mr. Goldman believes. On the other hand the United States became a great nation populated by people who chose to be part of it, the country of China has conquered peoples of different ethnicities and with different languages and keeps them together by force.

Mr. Goldman stated that:

China is inherently unstable because all that holds it together is an imperial culture and the tax collector in Beijing. It is like a collection of very powerful, oppositely charged magnets held together by super glue—it looks stable, but it isn’t.

China greatly subsidizes capital investment in heavy industry. The Chinese government believes that steel mill’s and semiconductor fabrication plants are public goods.  The Chinese government sees these industries the same way we in American sees our highways and airports. Because of this the government of China subsides these heavy industries greatly.

As Mr. Goldman stated and believes “the Chinese play very dirty”.  If a company wants to do business in China and sell their products to their approximately 1.4 billion citizens these companies must disclose everything they know, including their technology secrets.

These brings us to the answer of how we defeat China.  We will not be able to defeat them by out-manufacturing them or attempting to defeat them on cost.  We must defeat them by doing it the good old American way and that is doing what we are best at and that is innovation.

As Mr. Goldman said in his speech:

In the 1970s, all the smart people thought Russia was going to win the Cold War. Economists at the CIA and in the universities believed that Russia had a great economy. But by 1989, we realized that the Russian economy was a piece of junk. It actually had a negative worth, because the cost of environmental cleanup exceeded the value of whatever Russia was producing.

How do we do that, well we make their strategy obsolete.

They way that Mr. Goldman believes we can do that is by:

If the Chinese are spending tens of billions of dollars to build chip fabrication plants and we come up with a better way of doing it, suddenly they’ll have a hundred billion dollars’ worth of worthless chip manufacturing plants on their hands. But you can’t predict the outcome in advance…We can meet the strategic challenge of China, but we have to meet it as Americans in the American way.

So let us do it the American way and innovate their strategy out of business.

Sounds like a winning strategy to me and I believe that President Trump is the person to lead us in that strategy.

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