What do you think about the trade war between China and America? What is your nationality?

Almost everyone gets the trade war wrong. One of the most important pillars of American supremacy is the US Dollar hegemony. The hegemony is gained by virtue of America’s unparalleled military power, and the rule that oil must be purchased with the US dollar—the Petro-Dollar. It basically allows America to play the game at a great advantage.

We should remember that crude oil has been the single largest imported item in terms of USD payments for many countries. These countries do not have sufficient oil to fuel its economy, and therefore must earn or borrow the printed paper notes from America. Many essential technologies and equipment are also owned and denominated in American dollars. Most projects of global supply chain and infrastructure for trade are not possible without capital in the form of US paper notes, and since America prints it while others have to earn it, the game of international trade cannot be fair to begin with. By the way, the trade rules are also by and large written by America.

The abundance of easy capital for America doesn’t just create favorable conditions for American corporations in the global arena, it also attracts more brains to America, feeds an ever expanding military industrial complex, provides the means to punish anyone who does not say uncle, while enjoying impunity for the misuse of its power. The military industrial complex in turn supports technology development, owns the media as well as the narrative, and controls global resources and trade routes, sometimes inciting limited conflicts in foreign countries, creating more lopsided competition in favor of corporate America, which is owned by the elite at the top of the food chain. Such is the world and no one says life has to be fair. “Nature is merciless,” Lao Tzu said it, and you can take that to the bank.

Dollar Hegemony allows America to enjoy financial supremacy, trade supremacy, and military supremacy. Since America can create paper ‘wealth’ out of thin air and buy the world’s natural resources and manufactured goods with it, while the rest of the world must accept it, the country can basically go into unlimited debt with impunity. After all, it’s the people of America who are in debt, but the elite who owns the wealth. To service the ballooning national debt, the government can simply saddle the people with more debt, and create the money to pay the interest. Since the US dollar is the world’s reserve currency, and it is also the most traded because of American trade supremacy, whatever amount of paper dollars created will actually help the local economy in America, whereas the rest of the world has to deal with the inflation.

America is blessed to enjoy such power for a long period. The benefits however flow mostly to the corporate and the elite. Pundits complain about inequality, but the people of America support this. They elect their political representatives, who always approve saddling the people with unsustainable debt to finance the unlimited military budgets, endless wars, and unilateral sanctions, making enemies where there are none, while refusing to finance education, healthcare, and social benefits. The American people elect the representatives who implement globalization based on the cherished American capitalist ideals, filling the coffers of American corporations, while the American people most needing help are ignored. The elected officials, corporate elites, and military leaders are granted impunity, honor, and wealth by the people for their service. America is a great democracy. It is the government of the people. Why blame its government and politicians? Why blame corporations? Why blame other countries? The American people are ultimately responsible.

To summarize, America’s power is based on its military supremacy which enforces the use of the US dollar for the purchase of essential resources and technologies, which allows America to create as much of the US dollars as it likes, which makes it even stronger in technology and trade, which makes its military even more powerful, which allows the creation of more US dollars to build more awesome weapons, which increases economic activities and GDP in America while creating inflation for the world, which causes those countries and peoples who cannot defend themselves to meekly say uncle, while the poor and jobless Americans swallow the lie that other countries are to be blamed.

Why the trade war? China after forty years of hard work, paying with sweat and tears in a generation of sacrifice for American paper, selling its environment and its health, keeping its head down and biding its time in silence [韬光养晦] according to the advice of the venerable Deng Xiaoping, has arrived at a point where it has built up its ability to survive and thrive in the world. It has enough American debt that cannot be ignored. It has enough production capabilities and brains that will allow it to stand on its own two feet. It has the ability to build its own advanced weaponry that will repel any threat. It has built its own infrastructure essential for economic development and will now do so for other less developed countries, mostly without getting involved in other country’s politics. China applies Confucianism in its foreign policy: “Do NOT unto others, what you do not wish others to do unto you.” On the other hand, because of its economic success, China has become the first independent country (one with no American military base or soldiers stationed within its borders) with the strength, the wherewithal, and the will to present a serious challenge to the Dollar Hegemony.

Politicians in Washington who are hostile to China know that this challenge of the Dollar Hegemony is extremely dangerous to the American elite’s wealth and privileges. Unfortunately, a hot war with China is impossible. It will not happen because these Washington politicians are not that stupid; they don’t want to lose everything, which would be the result of a hot war. There is always the danger that the American public might wake up one day and reckon that their elites are to blame, and their party will be over.

The only war these Washington hawks can start against China is a trade war, while the American public is still swallowing the lie that China is to blame, while America can still create more dollars by saddling the people with more debt, while the dollars can still feed the military industrial complex, and while the dollars can inflate the American GDP and boost stock prices. What else can they do? America has lost a lot of its competitiveness playing for so many years in a system rigged in its favor. Printing ‘wealth’ in the form of dollars has been America’s greatest strength, but now China’s development threatens to take that away.

The trade war however will further damage America’s economy and cause more political turmoil in America. It will give China the impetus to speed up the usage of RMB for international trade. Others affected by the trade war will make similar efforts to speed up decoupling from the US dollar. The trade war will accelerate China’s development of essential technologies and products that require RMB or SDR payments, or a currency based on a common commodity such as gold. China will take the opportunity to encourage the development and usage of alternative banking systems not under American control, and wean the world from complete dependence on the US financial system. The US dollar will continue to be significant, but it will not be a hegemon. People will have true alternatives.

Most people do not understand the survival skills of both the Chinese government and the Chinese people (my book talks about it). China will likely view this trade war as an opportunity to speed up necessary reforms. I’m guessing that is maybe why they are not so eager to settle. Trade talks are not moving forward. Besides, it is pointless negotiating with the current administration, which is doing a great job destroying America’s credibility. This loss of trust is most damaging and it is long-lasting. China has an old saying: “It takes ten years to grow a tree, but it takes a hundred years to build trust for a person.” Trust is hard to establish but easy to lose. All business and trade depend on trust. Every independent country that trades with America will actively work towards decoupling, preparing for a day when America decides to unilaterally start another trade war. We can assume that all of America’s ‘allies’ are thinking in that direction as well.

Hopefully, in the not too distant future, America will not be able to print money with impunity or fund its military industrial complex with unlimited money. Unilateral American sanctions will not be effective. Its foreign policy will necessarily become less intrusive and more inclusive. The American people will learn to elect responsible politicians who will not enjoy impunity. Lying demagogues will be thrown from the Tarpeian Rock. Mass media will be broken up and editors made accountable for disseminating lies and half-truths on behalf of some hidden agenda. A benign and enlightened America may emerge, and perhaps we will have peace and harmony in the world again.

It will then be up to the great nations and their responsible leaders to get together to work out a way for all humanity to share in the fruits of human development which has been built on the backs of all humanity. Sorry to offend Ayn Rand lovers; capital didn’t build civilization, people did, and they did that while consuming the food produced by the original wealth producers, the peasants. Taking care of each other, helping each other, and sharing with each other is the only way for humanity to survive and succeed on earth and beyond.

It’s always a good idea to know a little about the author: Ethnic Chinese, born in Hong Kong, parents staunchly anti-communist, brought up in elite English school, Roman Catholic, once having ambitions to become a priest; went to university in Canada, became Canadian; worked in mainstream media in Hong Kong and Canada; worked in China for 20 years in broadcast and network technologies; speaks Cantonese, Mandarin, and English; reads and writes Simplified and Traditional Chinese. Both my brothers-in-law are Caucasian, one of my nephews is a converted Jew with a Jewish family, and my grandson is half Irish-Canadian. I have no political affiliation, and I have become an atheist who is not godless, just god-free—free of the gods. I have recently published a book. It is written for those who seek the truth.