August 17, 2020
The stakes are extremely high.
Let’s step back and gain some perspective on just how high the stakes are/must be…
It’s now seven months since the first virus case was diagnosed in the U.S. And in the days and weeks that followed, through social media, we saw imagery from China, of hazmat officials disinfecting streets. We saw videos of Chinese officials welding Wuhan residents into their homes. We saw videos of residents dropping dead in the middle of the street.
Now that we have data, and seven months of history with the virus on the ground in the U.S., the world looks far less scary.
China has spent the past 40 years executing on a plan to rise to a global power.
The Chinese currency was its primary tool. By massively devaluing the yuan in the 1980s through the early 1990s, and then keeping it artificially cheap through a variety of managed peg strategies for the past 25+ years, China became the exporter to the world. The Chinese economy exploded in size, growing 37-fold since the early 80s, while the U.S. economy has grown just 3-fold. This has put China on the footsteps of its goal of global leadership.
And Trump’s economic plan (demanding that China play by the same rules as its trading partners) has derailed it all. If Trump wins, and they abide by a trade deal, the Chinese economy falls out of the race for global power. If Trump wins, and they don’t play ball, but get put into the penalty box by global trading partners (allies Pompeo is building as I write), they also fall out of the race for global power. The stakes are extremely, extremely high for China (and the world).