Part One of this paper noted that China’s growth plans have likely been placed in jeopardy by President Trump, who demands that it adopt a fair, equal and transactional relationship with the US. The current trade war is predicated on his demand that bilateral agreements regarding intellectual property and the right of US companies to have access to Chinese markets be entered into China’s laws, a demand to which China cannot acquiesce. China’s growth is predicated on the acquisition of technological knowledge, be that through its purchase, creating joint ventures or even outright theft. (See this reportfor an assessment of the cost of China’s intellectual property theft. Chinese industrial espionage is even more wide-spread and is documented in this book. For an example of how even major Chinese companies work to illegally bypass the laws of other countries, see this article on Huawei’s alleged plan to circumvent a US ban.) Providing the US with such an enforceable guarantee would, therefore, protect US intellectual property and give it more even opportunity to compete with Chinese companies.

Key points:

  • China’s Chairman Xi faces enormous domestic economic challenges.
  • He also faces a re-invigorated US, which is rapidly expanding its military capability.
  • He simultaneously faces the expanded military capabilities of Japan, Taiwan and the Philippines, which is showing signs of inviting the US back onto its territory.
  • Given that situation, Chairman Xi has few alternatives to turning to Russia and President Putin for military and political support.
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