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RMA Presents: Accidental Conflict: America, China, and the Clash of False Narratives

RMA Presents: Accidental Conflict: America, China, and the Clash of False Narratives

China’s weak consumption of goods and high savings rate force economic dependence on exports.

By John Reese

At the January 25 meeting of the Retired Men’s Association, Hollister Sturges introduced the speaker, Stephen Roach, former chairman of Morgan Stanley Asia and currently with the Yale Law School Paul Tsai China Center. Roach is a PhD economist who knows China inside and out. His most recent book is titled “Accidental Conflict: America, China and the Clash of False Narratives.”

Roach analyzed the potential collision of the two superpowers, which he believes would be a dangerous, misguided conflict amplified by social media and other means. In his earlier book, “Unbalanced,” Dr. Roach asserted that the US-China relationship has been mutually beneficial. The US provided a huge market for the rapidly growing Chinese manufacturing sector, while Chinese imports were welcomed by US consumers. China eagerly purchased US Treasury bills, effectively financing US government deficits.

As this relationship developed, its downsides became more apparent. For the US, the ever increasing trade deficit has become more worrisome; for China, its dependence on foreign export markets has made its economy vulnerable to trade restrictions. Both nations have blamed each other for these problems rather than acknowledge the failures of their own domestic policies.

According to Prof. Roach, the US narrative gives the impression that were it not for China, the US trade deficit would disappear. But although the deficit with China is largest, in fact the US runs a trade deficit with 106 countries. The truth, he said, is that the bigger problem in our economy is that our national savings rate is incredibly low, and at a near record low at the current time. This forces us to import funds from abroad; if the funds did not come from China, we would borrow from someone else. Thus it is not a reason for conflict with China. The danger is that our leaders in Washington believe the false narrative and are not open to a different view. They also find it politically expedient to blame China. This is why President Trump initiated a trade war with China in 2018, and why President Biden has declined to remove the tariffs or sanctions against Chinese companies. While the rhetoric is different under Biden, the policies are actually tougher and more of a threat to China than they were under Trump.

The Chinese narrative blames their inability to rebalance their economy on the US and our stated objectives “to contain them” in multiple areas. China had hoped that its growing middle class would increase its extremely low domestic consumption and reduce its reliance on foreign exports. However, Chinese citizens know that their social safety net is weak, and feel compelled to save their earnings for the future. In addition, China’s population has a small and declining percentage of youth, who typically are the drivers of consumption. These factors have nothing to do with the steps the US has taken to preclude Chinese dominance in areas such as artificial intelligence, advanced semiconductor manufacturing, or influence over the South China Sea, yet President Xi blames the United States for its economic problems.

Dr. Roach called the current accidental conflict – the “false narratives” – the equivalent of high octane fuel for cars. Sparks could ignite the fuel, sparks like Taiwan, Ukraine (China says it is an unlimited partner of Russia), and possible global recession. These could all trigger a worrisome accident.

To reduce the danger of US-China conflict, Dr. Roach proposes a three-step solution. First, build trust between the two governments. This should start small, with simple actions such as reopening consulates, relaxing visa requirements, and resuming foreign education exchanges. It can progress to collaboration on topics of mutual interest, such as climate change, global health, and cyber security. Second, both nations should reframe the relationship away from a zero-sum game, in which the US can benefit only by causing harm to China, and vice versa. The tariffs imposed by Trump have caused economic harm without improving the trade deficit situation. We should realize that reopening markets with structural arbitrage protocols can benefit both countries. Examples of such protocols include fair labor practices and strict environmental standards. Structural arbitrage can also eliminate foreign ownership caps to increase investment in each other’s economy. Finally, we should establish a permanent US-China Secretariat, with a charter to work on all aspects of the relationship. This office would be in a neutral venue, have full-time co-equal staffing, and jointly author policy papers. It would have oversight responsibility to monitor and implement existing and new US-China agreements. It would convene a network of existing relationship expertise. and would be the first stop for conflict resolution. This final step would greatly ease tensions and lead to a more productive and harmonious relationship between the governments of the world’s two largest economies.

In the lively and pointed Q&A session, Dr. Roach admitted that the Chinese leadership is not facing up to many serious internal problems, and believes we need to engage with them to change that attitude. His once optimistic outlook has changed since Xi Jinping has consolidated power and established one-man rule in China. It will be tough to restore a relationship while he is in power. Rather than respond to Xi’s tough talk with our own hard-line policies, the US should address its internal problems to change China’s perception that the US is a nation in decline. Once we take care of our own issues, we become stronger and a greater threat to China than any tariffs or sanctions could ever be. And it is in China’s best interest to focus on resolving its own economic issues at home. We should both get our facts right and not succumb to the false narratives. In response to a claim about China’s massive industrial espionage and intellectual property theft, Dr. Roach respectfully disagreed completely, saying that based on his research the evidence for it is very weak.

To see the full presentation, go to https://greenwichrma.org/, cursor to “Speakers” and click on “Speaker Videos.”

The RMA’s upcoming presentation, “What to do in the Event of an Active Shooter?” by Keith Hirsch and Daniel Paladino is scheduled for 11 AM on Wednesday, February 8. What do you do when a six-year old child comes into a kindergarten with a loaded gun and shoots his teacher? While the thought makes us gasp, the reality is that our children from grammar school to high school live with this reality and go through drills to prepare them for just such an eventuality. But we as adults are less likely to know what to do.

Officers Keith E. Hirsch and Daniel Paladino, two highly trained police officers of the Greenwich Police Department, will address the question: what to do in an active shooter situation? Both officers are assigned to the Community Impact Section within the Detective Division of the Greenwich Police Department and are passionate about educating the public about this critical social and safety issue. Both have been educated in specialty classes, becoming certified in Threat Assessment, Crime Prevention, and Crime Analysis, and both are certified as instructors for Civilian Response to an Active Shooter. Their presentation will help inform adults on how to react.

Officers Hirsch and Paladino have provided these presentations to hundreds of adults. Attendees learn what is the first action to take, how to anticipate a shooter, what defense mechanisms ordinary people have, how to case out a room to be prepared, and other proven actions to deflect and even overcome a shooter. Both officers pride themselves on their attention to detail and helping empower Greenwich citizens to make the community one of the safest places to reside and raise a family anywhere in the nation.

Both officers are highly decorated members of the Police Department. Officer Hirsch has been named Office of the Month several times, was the recipient of the Dr. John A. Clarke award for Officer of the Year, 2016 Police Person of the Year by CASIA, and was the recipient of the Community Policing Award for 2017 from the U. S. Attorney’s Office. Officer Paladino has served for 20 years and has received accolades that include Officer of the Month and the Community Policing Award in 2017.

Both officers are lifelong Greenwich residents and graduates of Greenwich High School.

To stream the presentation by Mr. Hirsch and Mr. Paladino at 11 AM on Wednesday, February 8, click on https://bit.ly/30IBj21. This presentation will also be available on local public access TV Channels, Verizon FIOS channel 24 and Optimum (Cablevision) channel 79.

Note: The views expressed in these presentations are those of the speakers. They are not intended to represent the views of the RMA or its members.

RMA speaker presentations are presented as a community service at no cost to in-person or Zoom attendees, regardless of gender. The RMA urges all eligible individuals to consider becoming a member of our great organization, and thereby enjoy all the available fellowship, volunteer, and community service opportunities which the RMA offers to its members. For further information, go to https://greenwichrma.org/, or contact our membership chairman (mailto:members@greenwichrma.org).

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