Tag Archives: Trump

We’re Not in Kansas Anymore

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Author Gary Moreau, aka Avam Hale in fiction

Exactly one year ago, President Xi Jinping delivered a speech to the United Nations office in Geneva, entitled, Work Together to Build a Community with a Shared Future for Mankind. It was collective in its vision: “China is ready to work with all the other UN member states as well as international organizations and agencies to advance the great cause of building a community with a shared future for mankind.” And it was long term in its perspective: “Building a community with a shared future is an exciting goal, and it requires efforts from generation after generation.” The sentiment would later be enshrined in a formal resolution at the 55th UN Commission for Social Development, as “a human community with shared destiny”

Jump ahead one year to January 26, 2018, and United States President Donald Trump spoke to the World Economic Forum in Davos, Switzerland, at its annual conference of the heaviest of the heavy hitters in global politics and business. The man elected on the simple platform of “Make America Great Again” (MAGA), like Xi Jinping before him, delivered his vision for the future of the world.

Trump opened with the warning that “I’m here to represent the interests of the American people…” And, as expected, most of the speech was devoted to his personal contribution to “helping every American find their path to the American dream.” Specifically he spoke to the surging stock market, job creation, small business confidence, deregulation, and, of course, “…the most significant tax cuts and reform in American history.” (Which, on a side note, is not true.) As you would expect from the MAGA president, it was all about America, and, not surprisingly, him. After all, MAGA has everything to do with individuals, he being the biggest and most powerful “I” among them, and almost nothing to do with “human community,” as President Xi described it.

Trump’s would have been the perfect speech had it been delivered by President Dwight D. Eisenhower, a fellow Republican, in the 1950s. It would have been even more appropriate, in fact, given Eisenhower’s military fame, and the fact that the only references Trump made to the US’ role in the world had to do with our self-appointed role as the world’s policeman, and “making historic investments in the American military”, already the world’s largest, costing $1,900 per year for every man, woman, and child in America, at a time when 80 million Americans have little or no health insurance.

Other accomplishments noted by Trump were “eliminating 22 burdensome regulations for every new one,” “…no longer turning a blind eye to unfair economic practices overseas,” and “lifting self-imposed restrictions on energy production,” even though all restrictions are self-imposed and according to the laws of the universe energy is not produced, but merely transformed (and thus fixed in quantity). And, of course, insuring that all nations “contribute their fair share” to the cost of the American agenda.

All told, Trump’s individualist agenda was summed up by this simple claim: “When the United States grows, so does the world.” Perhaps unconsciously, it was the exact same sentiment that Charles Wilson (1890-1961), the CEO of General Motors, made during his confirmation hearings as Secretary of Defense under Eisenhower. When asked about a potential conflict of interest between the interests of the US and GM, he is rumored to have said, “What is good for GM is good for the country.”

The world of today, however, is not the world of the 1950s. The world’s population has expanded three fold, from 2.5 billion people at the end of World War II to 7.5 billion people today, even thought the world’s land mass and its inherent ability to sustain life have not changed at all. As a result, the earth’s climate is changing, in less than desirable ways, and clean air and clean water are among the world’s most precious resources, and disappearing fast.

Technology has made the world smaller and virtually eliminated the concept of local communication and debate. Information flows to a far wider audience but is transmitted by global super-monopolies like Facebook and Google, who rule the world by algorithms that are developed with their own inevitable bias but remain virtually unregulated.

In short, this is not the 1950s. And any desire to turn back the world clock in search of that era is sure to fail. People and technology cannot simply be put back in the bottle. That would require the type of totalitarian dystopia that Orwell wrote about and the Great Generation had just sacrificed countless lives to vanquish.


The author’s new book will be released on February 15, 2018. Reserve your copy now.

The U.S. Constitution, one of the most famous documents in global political history, begins with the words, “We the people.” Yet it is “Me the individual,” that Donald Trump embodies and best represents the America of 2018. My identity, my rights, my tax cut, my income, my freedom—whether it’s my freedom to own assault weapons or my freedom to marry who I like—are at the heart of both the conservative and liberal political agendas.

The conservatives want to pull the rest of us along through individual exceptionalism. The progressives want to push us along through the acceptance and inclusion of all micro-group identity. Neither, however, will work, because both are built on the notion of an individualized world that simply doesn’t exist any more. Both would have been legitimate competing worldviews in the 1950s. Both are obsolete today.

Whether we want it or not, we will face the “shared future” that President Xi Jinping referenced more than one year ago. We will not have the option to choose who will be a part of that community. We all will. Whether you are a Dreamer, a Tea Party supporter, a member of the Rainbow Coalition, a misogynist or a feminist, a white supremacist or a believer that Black Lives Matter, will not matter in the end. We will be forced to live as a single, global community, consuming resources that are fixed by the laws of the universe.

We really only have two choices: 1. We can kill each other. (Or die trying.) 2. We can turn “Me” into “We.”

We have, of course, been here before. Eisenhower and the Great Generation faced the very same dilemma. And, unfortunately, following the great tragedy of World War I and the even greater human tragedy that followed, as the victors sought revenge on the losers, the “we” side of the option ultimately morphed into brutal forms of fascism and communism. They, in turn, gave us the Nazis, the Holocaust, the gulags of the Soviet Union, and the killing fields of the Khmer Rouge.

As a result, many of today’s most ardent individualists believe that any form of collectivism is, as the 20th Century seemed to show, inherently flawed and will only lead to brutal totalitarianism. That, however, is simply not true.

More importantly, however, it doesn’t matter if it is or not. Whatever form of individualism we pursue, the elite, however that is defined, will be forced to squash the many in the fight for limited resources. One percent of the world’s population already controls more than half of the world’s wealth. What will happen when it controls 90%? (And it will, if nothing changes.)

What will happen, in contrast, if the coalition of oppressed micro-identities overthrows the oppressors? All will be well, of course, if the former oppressors all accept a new micro-identity. But what if they don’t? And what about human psychology suggests that they will?

We may not agree with Presdient Xi Jinping’s politics. We can’t, however, plausibly deny his vision of a shared future. An economically and militarily elite America will not and can not pull the world along. A progressively elite America, even if elected, and even if it is truly inclusive, cannot push the world along.

We’re not in Kansas anymore. And the sooner we realize that the less pain we will be forced to endure.

Note: Author Gary Moreau was recognized by the World Economic Forum as a Global Leader for Tomorrow in its inaugural class of 1993.

You may contact the author at gary@gmoreau.com
Visit my personal blog at www.gmoreau.com

Follow on Twitter @gmoreaubooks

Summary for We, Ourselves, and Us:

In this new guide to American politics and economics, Gary Moreau wants to turn the “I” into “We.” As he argues in We, Ourselves, and Us, Americans’ cultural sense of individualism is hindering rather than helping the country. Moreau instead argues for a change to political, economic, and social systems to refocus them on the collective good. As he proposes this important change, Moreau argues that

  • both major political parties are offering ineffective solutions to the problem,
  • the model America was based on is no longer realistic for a modern society,
  • both communism and socialism fail because they are still based on the idea of individuality,
  • the unequal flow of power is responsible for a prejudiced and unbalanced society,
  • the concepts of obligation and self-interest are intrinsically connected,
  • individual advancement means nothing without collective advancement, and
  • all of society is interconnected in nuanced and important ways.

Moreau does not equate collectivism with communism or other political movements. He isn’t arguing for the elimination of private property or other drastic changes. Instead, he simply gives you a new way of viewing systems of power and important suggestions that could lead to satisfactory results for the entire nation.

 

What Would Sun Tzu Do?


Author Gary Moreau, aka Avam Hale in fiction

With North Korea’s recent successful test of a Hwasong-15 missile that reached an altitude of 2,800 miles, more than ten times the altitude of the International Space Station, Kim Jong-un is back on the front page. This, experts suggest, gives the hermit nation the established ability to strike Washington, D.C. with a pre-emptive nuclear strike launched from within its own borders.

When confronted with the issue by reporters, Trump, characteristically, was dismissive: “We will take care of it.” How, exactly, no one knows. Sanctions clearly haven’t worked and whatever diplomacy Secretary Tillerson has been pursuing behind the scenes apparently hasn’t either. (Adding even more urgency to the issue, Tillerson, the one politician even broaching diplomacy, is rumored to be on the way out.)

According to The Washington Post, “A growing chorus of voices in Washington is calling for serious consideration of military action against North Korea,” although it is inconceivable that such options have not already been considered and ruled out as impractical. The loss of life, particularly in South Korea, would easily rival the 20 million Russians who perished during World War II, redefining the geopolitical landscape for decades to come.

China has clearly noted that it would consider any pre-emptive strike by the US to be an intolerable violation of sovereignty. Such military aggression, moreover, would be senseless unless the US was willing to follow its ordnance into the country to pick up the pieces and reshape the nation, and there is virtually no way the Chinese would allow this to happen without their strongest possible resistance.

Depending on whether Trump or China is higher on their derisory priority list on any given day, many Western media outlets have attempted to position the latest missile test as either indicative of China’s failure to follow through on the perceived commitment to resolve the Korean Peninsula issue, or Trump’s foolhardiness for believing he had that kind of personal pull in Beijing.

Personally, I think there is little incentive for China to do anything except sit back and watch. If it believes that Kim’s regime will ultimately collapse, it has little to gain by getting its hands dirty now, short of preventing the US from establishing a US military presence on the 880-mile border China shares with North Korea. Let it collapse and then step in to either push for a unification of the Korean Peninsula, with security and political assurances from the current South Korean government, or turn North Korea into an autonomous Chinese political zone not unlike Hong Kong, Macau, or Tibet. (The latter, I believe, is the more likely scenario, all things considered.)

Two things, I believe, we can say with certainty:

1. Given any say in the matter, the people of North Korea will choose a Chinese protectorate over a US protectorate. Unless South Korea takes significant steps to distance itself from the US they will not, in all likelihood, even choose unification over China. Dennis Rodman’s diplomacy aside, the North Koreans do not see the US as Donald Trump sees us.

2. China will do nothing to give Trump face. In other words, he will accomplish nothing with China’s help if they believe he stands ready to take credit for it. He is quite literally shooting himself in the foot by touting his relationship with Xi Jinping in the context of his great self-acclaimed negotiating skills. To give Trump credit would be to compromise the Chinese Dream that is at the heart of Xi’s political agenda and legacy. He won’t do it; he has no incentive to.

To this latter point, I am quite confident that China did not release LiAngelo Ball and his UCLA basketball teammates after being arrested for shoplifting in Hangzhou because Trump asked them to. They did so because they concluded that it was in their best interest. It may, in fact, have been a simple test to see how Trump would respond.


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Trump’s reaction, in fact, could not have been worse in terms of his future ability to influence Chinese behavior. In his willingness to start a Twitter feud with LaVar Ball, Trump demonstrated beyond a doubt that he has no understanding of Chinese culture and the importance of face, particularly in the political arena. Certainly someone in Washington understands this.

I believe the most effective option for the US and the world remains the same. The US must withdraw its military presence from the Korean Peninsula unilaterally, while maintaining its commitment to protect South Korea from aggression using all of its resources, including nuclear weapons, if necessary.

Given the unlikelihood that a contained exchange of cannon fire along the 38th parallel will be sufficient to convince Kim Jong-un to dismantle his nuclear capabilities, it is hard to see how a military withdrawal from the Korean Peninsula would materially compromise the US’ treaty obligations to South Korea or Japan.

Nor would it, in fact, cause a US loss of face in the region. As famous Chinese military general Sun Tzu is often quoted to have said, “The supreme art of war is to subdue the enemy without fighting.” In the eyes of Asia, it would take a strong and courageous America to unilaterally to pursue such a strategy, putting the clear burden for resolution of the North Korean problem at the doorstep of Beijing’s leadership.


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The proof is in the rhetoric. Why has China not seen fit to rattle its sword to the extent President Trump has? Why are there no anonymous quotes coming out of the Great Hall of the People? Is it because China is afraid? Or is it because China is clever and understands the importance of face in true diplomacy?

China can resolve the North Korean problem. And it will, if we allow them to solve it at their own pace and in their own way. In the meantime, North Korea is contained. There is no way that China will allow Kim Jong-un to unleash a single nuclear device on Guam, Japan, or the US. And there is no way that China would not know of such an attack long before the missile leaves the ground.

What is it that American diplomats are so afraid of? Does the Munich Pact still haunt the souls of our diplomatic core? The times and the circumstances could not be more different.

This would not be peace through appeasement. This would be peace through strength and confidence and a willingness to put humanity above any one individual’s standing in the polls. This is not an issue for Twitter. This is an issue for men and women of greatness to take the lead in the name of peace and stability.

If they fail to do so, history will not remember them kindly.

You may contact the author at gary@gmoreau.com
Visit my personal blog at www.gmoreau.com

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Follow on Twitter @gmoreaubooks


Here’s what legendary Kirkus Reviews has to say about the author’s new book: “More than a guidebook for managers, this is a manifesto for an intellectually deeper – and happier – world of business.” Kirkus Reviews (starred review)
click here

The latest in the Understanding Series is now available.
click here

Sen. Rubio and Rep. Smith Chide China?


Author Gary Moreau, aka Avam Hale in fiction

Senator Marco Rubio (R-FL) and Representative Chris Smith (R-NJ), (not shown above), released a very predictable opinion piece to CNN over the weekend. It comes on the cusp of an upcoming triple news play on Sino-US relations. On Wednesday, October 18, the 19th Communist Party of China National Congress will convene in Beijing. (See my previous post for the significance and my predictions.) On Thursday, the US Congressional-Executive Commission on China (CECC), of which Rubio and Smith are chair and co-chair, respectively, will issue its annual report delineating China’s alleged human rights violations and unfulfilled commitments to reform. And next month, of course, President Trump himself will travel to China for his first official visit to the Middle Kingdom. (I can’t fathom what a media circus that will be.)

Also predictably, China is sure to release its annual answer to the CECC report, detailing, in lengthy detail, America’s poor treatment of women, minorities, and children. Income inequality, climate change denial, and military aggression abroad are also likely to receive prominent treatment in the Chinese rebuttal.

Alas, you don’t have to be a Chinese apologist to accept that the Chinese do have a point in slinging right back at their American critics. The fact that American politicians still feel entitled, indeed obliged, to point out the faults, perceived or real, of the rest of the world, is perhaps the strongest evidence yet of just how out of touch America is with reality and itself at the moment.

After a week filled with salacious revelations about the exploits of Harvey Weinstein, who is most certainly not the exception to the rule in Hollywood, Trump’s threats to incinerate the people of North Korea, and Trump’s slap to the face of a country whose culture turns on face (i.e., Iran, if you have been away), Rubio and Smith apparently believe that China’s refusal to bend to US arrogance is worthy of America’s limited and painfully stretched supply of attention.


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Prominent in the Rubio/Smith piece is the accusation that “It [China] is increasingly dismissive of international norms and ‘Western’ ideas…” Say it ain’t so. How could China fail to yield to “principled American leadership,” as they call it? That we have to ask the question, once again, is ultimately both ruefully recursive and, quite frankly, beyond comprehension.

As is typical of the CECC report every year, this report will, if the Rubio/Smith letter is representative of the final product, focus on the alleged suppression of the freedom of expression in China. The Hong Kong “umbrella movement,” Tibet, religious expression, and, of course, the alleged repression of activists of all stripes, in areas from the environment, where it was the US which backed out of the Paris Climate Agreement and ceded environmental global leadership to China, to, of course, the Internet and the media, where our digital gatekeepers are being openly criticized for not censoring Russian propaganda during the 2016 election, but censoring at least one Twitter account and a domestic political ad.

Taken in total, these accusations against China calibrate just how far America’s media myopia has progressed. If hateful social media platforms, fake news, and infantile political name-calling are the standard of a free and noble media, then the Chinese should consider themselves lucky to be ruled by such alleged oppression.

Finding bogeymen in the same old places, the letter also accuses China of “Coercive enforcement of population control policies continued in violation of international standards.” It is an unfounded and logically inconceivable accusation given that China already accounts for 20% of the world’s population (China’s population has tripled in size since it’s founding in 1949.), but where the government not only guarantees, but funds, a woman’s right to control her own body. The US, on the other hand, is one of only two countries in the world (Papua New Guinea is the other) that does not provide for paid maternity leave and even now operates the most expensive, and selectively available, health care system on the planet.

This kind of moral grandstanding is what our politicians discern to be worthy of their time? This, despite the reality that our prisons, part of the largest institution of incarceration in the world, are disproportionately filled with young men of color, an entire race of Americans feels compelled to call out selective use of force by the police, a single man can buy enough military-style weaponry to mow down more people than there are US governors, all because we nonetheless guarantee multi-millionaire professional athletes the right to kneel on the job during the playing of the national anthem.

I have nothing against kneeling, mind you, but I am deeply offended by hypocrisy. And that is why, no doubt, I felt so welcome during the nine years I lived in China. I was a foreigner, for sure. But the Chinese I met never pretended to be anything that they weren’t and that courtesy to be who we are was universally extended to my family and me as well.

The closing line in the Rubio/Smith letter actually made some sense to me. “President Trump would do well to remember, even in the midst of heightened diplomacy on North Korea (author: I’m really not sure where that comment is coming from. What diplomacy?), that governments which trample on the basic rights of their own citizens are unreliable international partners.”

Well said, Senator Rubio and Representative Smith. But who, exactly, are you referring to there? Us or them? As you and your colleagues have repeatedly taught us, the choices are digital. If we’re not with them we must be against them.

I only hope that the Chairman Xi Jinping and the leaders in Beijing don’t share that perspective.

header photo credit: iStock.com/quavondo

You may contact the author at gary@gmoreau.com
Visit my personal blog at www.gmoreau.com


Here’s what legendary Kirkus Reviews has to say about the author’s new book: “More than a guidebook for managers, this is a manifesto for an intellectually deeper – and happier – world of business.” Kirkus Reviews (starred review)
click here

The latest in the Understanding Series is now available.
click here

Face Trumps Diplomacy, Again

Author Gary Moreau

With North Korea’s recent launch of an unarmed intercontinental ballistic missile that experts believe is capable of reaching the US mainland, President Trump took to Twitter to publicly reprimand China. “China has been taking out massive amounts of money & wealth from the U.S. in totally one-sided trade, but won’t help with North Korea. Nice!” Trump tweeted.

That’s the President’s opinion, of course, and everyone expects the President of the United States to have one. Both here and abroad American politicians are known both for having opinions and for sharing them.

The bigger issue for me, however, is not whether the President is right or wrong, but whether or not his is the best strategy for influencing Chinese behavior. Diplomacy is not a real estate transaction, and even if it were, the Chinese negotiate employing a very different model than Westerners do.

All Chinese culture revolves around personal relationships and the obligations that flow from them. Both are governed by universally accepted norms established over centuries that include elements of Confucianism, Taoism, and Chinese folk religion. The public expression of those norms, and whether or not they are being adhered to, is generally referred to as “face.”

There is good face and bad face. You can give face or lose face. You can save face and you can fritter it away.

Here’s what legendary Kirkus Reviews has to say about the author’s new book: “More than a guidebook for managers, this is a manifesto for an intellectually deeper – and happier – world of business.” Kirkus Reviews (starred review)

Face is a lot like respect, but broader and more nuanced in meaning. It is both subtle and fragile. Volume and vulgarity, or even gestures involving the lone digit, have little to do with it. Content is everything. What you say and what you do is all that matters when it comes to face.

The other big difference between respect and face is that respect is essentially one-directional. If my enemy disrespects me I may show disrespect in return. Each incident of disrespect, however, stands on its own. When face is lost, on the other hand, it is bi-directional from the start. He who causes a loss of face generally loses face at the same time.

President Trump’s tweets regarding China’s alleged non-intervention—I say alleged because the Chinese government is criticized by the West for nothing more vehemently than it is criticized for a lack of transparency, so how do we know what China has done or not done diplomatically—may or may not be a loss of face for President Xi Jinping. The norms of obligation are complex and delicate. North Korea shares both a border and a history with China and the North’s current intransigence with the West keeps American troops on the far side of the 38th parallel.

Trump’s behavior is, nonetheless, clearly a loss of face for Trump and the United States. I am merely observing, but for right or wrong, the President will not change the opinion of a single Chinese with his public rant. And, admittedly, that’s probably not his intent. He is talking to the American public, not the Chinese. (Perhaps, anyway. I don’t pretend to know the man’s thinking.)

I do wonder if he will change many American minds either, however. Since returning to the US in 2016 it has been my impression that most Americans have pretty set opinions on China and Chinese intentions. And they certainly have rigid opinions about Trump himself. It’s hard to imagine anything that he or his critics could say that is going to change many minds.

Having traveled the world for much of the four decades of my working career I have come to accept face as a more effective model of behavior than respect or the lack thereof. Our choices do have consequences for all involved, after all. They might as well be acknowledged. Most of life’s worst pain is self-inflicted in the end.

Because it is an individualistic standard, moreover, a social contract built around respect naturally encourages the marauder and the bully. Face, in contrast, is a collectivist perspective. It tempers the excesses of the wolf that defies the pack.

The other benefit of the standard of face is that it really eliminates the gambit as an effective strategy of influence. A barrage of insults may impair the insulter more than the insulted since, in the world of face, the intent of the blow is more meaningful than the landing of the blow itself.

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It does seem that Trump’s pre-emptive negotiating ploy is to start every negotiation with, “Screw you, just in case.” That will work some of the time, particular where victory and domination are both measured in the moment. It’s seldom a good long-term strategy, however, which is why mobsters make sure to kill the son along with the father. Revenge doesn’t expire.

North Korea will be a nuclear power. That much seems certain. China will not stop it because it is not in its best interests to do so. And Trump, of all people, should understand that. He got to Pennsylvania Avenue on the “me first” bus, after all.

President Trump claims he has a solution. “If China is not going to solve North Korea, we will,” Trump told the Financial Times. Trump is quick to bluff, however. And bluffing is a bit like taking hostages. Once you kill the hostage, or show your willingness to bluff, you lose all leverage.

One of the keys to face is knowing when to hold your tongue. Silence can speak volumes, but empty threats are more than just unproductive. In a world governed by face, they are counter-productive.

The thing about face is that it trumps all other considerations (pun intended). Even what China wants will be subordinated to what China must do to save face. “Just in case” is now a sure thing. Trump should face it. He’s on his own, now more than ever.

Contact: Reach the author directly at gary@gmoreau.com

Guo for President in 2020

Author Gary Moreau

Taiwanese electronics giant Hon Hai Precision Industry Co., Ltd., commonly known as Foxconn, the manufacturer of all things Apple, recently announced that it would invest $10 billion to build a new manufacturing plant in Wisconsin. And, of course, President Trump, who at least saw fit to campaign in the state during his run for the presidency, immediately took credit. (In case you’re wondering, the plant will be built in Paul Ryan’s district. Imagine that.)

Wage costs in the US have long been blamed for the loss of manufacturing jobs here but that’s been a bit of a ruse all along. Corporations, with strong support from their friends in Washington, have long used that argument to cripple union organizing, push average wages down, and transfer retirement and health care costs back onto their employees.

As a former corporate executive and board member I assure you that companies don’t invest on the basis of labor costs. They invest on the basis of total cost. Those may be heavily influenced by labor costs, depending on the product or service, but not always. The cost of energy, capital, and transportation are often significant, particularly if the company is servicing the US market with a big, bulky product of modest value, and thus expensive to ship.

I, of course, was not privy to any of the discussions involved in Foxconn’s ultimate decision. I can say with the utmost confidence, however, that the company and its founder and chairman, Terry Guo, known as Guo Tai-ming in China, did not make it to please President Trump. At best, Mr. Guo knew that Trump would bring the company a lot of free publicity and that he would, without much prompting, twist the arms of American politicians in a position to offer lucrative tax incentives.

Here’s what legendary Kirkus Reviews has to say about the author’s new book: “More than a guidebook for managers, this is a manifesto for an intellectually deeper – and happier – world of business.” Kirkus Reviews (starred review)

And that they did. According to Wisconsin Governor Scott Walker the company was offered $3 billion in tax relief and other subsidies to seal the deal. That works out to about $1,000,000 for each of the 3,000 people that the factory will eventually employ, by its own estimates. (President Trump and Governor Walker will be quick to point out the investment will create 22,000 jobs indirectly through the multiplier effect, as economists refer to it. Fair enough. That’s still $136,000 per job.)

The relevant question, moreover, is not how much the politicians are spending per job, but how many good jobs could be created with a comparable investment in something else? And even if government spending is not a zero-sum game, as supply siders will argue, the pool of public incentives is not unlimited and is severely constrained in the short term. As a practical matter, that $3 billion is gone for now. It’s not available for things, dare I say it, like health care.

The idea that Foxconn is investing $10 billion, moreover, is more than a little misleading. Neither Terry Guo nor Foxconn is going to write a check for that much money. Most of that money will likely come from the US credit and equity markets. Foxconn will have to agree to pay back the money in some way, of course, but it’s a largely meaningless obligation, as we learned when Lehman Bros and AIG walked away from their role in the 2008 mortgage crisis thanks to the largess of US politicians spending taxpayer money.

Ten billion bucks is a lot of money. If amortized over twenty-five years, just paying it back works out to more than $3,000,000 per employee, or more than $130,000 per year per employee. Much of that investment, moreover, will likely go into robotics and other production and processing equipment. Some of those machines may be produced in the US but I suspect that Germany, Japan, and China itself will be the biggest beneficiaries. I have seen no media report that there was any domestic content restriction built into the deal by Trump or Walker.

If this were China, of course, the government investment would be considered in light of security, environmental, and other social considerations. Glass screens, I suspect President Xi Jinping would argue, don’t really serve any real military or environmental purpose. And while I enjoy my flat-screen tv as much as the next American, televisions aren’t quite as central to our way of life as, say, education is.

Even if you supported Trump’s decision to withdraw from the Paris Climate Agreement, moreover, this can’t be a particularly good deal for the American environment. Glass takes a lot of energy, most of which will undoubtedly come from fossil fuel. And the impact on the air, water, and soil, while it might be less in Wisconsin than many developing countries, won’t be zero.

One of the big attractions of manufacturing in the US is the low cost of energy. Natural gas is cheaper in the US that it is in any country on the planet, other than Kuwait, and, according to Boston Consulting Group, electricity costs in the US are 30% to 50% lower than elsewhere. That’s a good thing, of course, but if the utilities run out of sufficient capacity to provide electricity or the grids to support its transmission, we all know who will foot the bill for expansion. (Consumers in the US generally, by the way, pay a higher rate for electricity than companies do. In China it’s the other way around—industrial users pay more.)

The real irony of all of this, however, is the simple fact that of all the major industrialized nations in the world, the US is the only one that does not have a definitive national industrial policy. It has none. Nada. Zip. We have a lot of regulations, for sure, but they are a grab bag of onerous rules designed, more than anything else, to benefit the very industries they are intended to regulate.

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The proponents of US industrial non-policy argue that government policy conflicts with the invisible hand of free market capitalism that they attribute American greatness to. It’s a weak argument, however. Innovation and a remarkable work ethic put the US economy on the map, and both were driven, in large part, by immigration and education, the latter of which we can thank the Puritans for, truth be known.

The real cost of the industrial policy vacuum in the US, however, is that it allows politicians like Trump to make deals that serve their personal agenda but don’t serve the collective good on a planned and consistent, long-term basis. He gets the applause, but it is the people of Wisconsin who will be living with the plant, and the investment they made to get it there, a decade from now.

In fairness, the US does, in the end, actually have a national industrial policy of sorts. The US Tax Code is the single most powerful government force for social and economic engineering on the planet. The problem with it, and with the powerful permanent Washington bureaucracy that really runs the country, is that it is not democratic, not transparent, and makes no attempt to promote the common good. It is both designed and managed by the moneyed and political elite (a descriptive redundancy if ever there was one) for their own benefit.

My overriding disappointment in this whole affair, however, is not that Foxconn is investing here, that Wisconsin got the nod, or that Trump took a bow he really didn’t deserve. It is that Terry Guo is constitutionally ineligible to run for the US presidency in 2020. He is clearly the best dealmaker of the bunch.

Contact: You may reach the author at gary@gmoreau.com

Header Photo Credit: csfotoimages

 

Paris, Beijing & Global Leadership

Author Gary Moreau

In the aftermath of President Trump’s announcement that the US would withdraw from the Paris Climate Agreement, The New York Times ran an article entitled, “Trump Hands the Chinese a Gift: The Chance for Global Leadership.” The article stated, in part, “In pulling out of the Paris climate accord, Mr. Trump has created a vacuum of global leadership that presents ripe opportunities to allies and adversaries alike to reorder the world’s power structure.”

A recent US Defense Department annual report, moreover, noted that China was likely to develop foreign military bases in the future. It already has an outpost in the small African nation of Djibouti (The US also has a base there.), but there is rumor of a major Chinese military presence in Pakistan to support the Belt and Road regional infrastructure initiative that is a cornerstone of President Xi Jinping’s development agenda.

Beijing dismissed the Defense Department report as “irresponsible”, reinforcing the general perception that both stories are essentially negative in perspective. The narrative seems to be that President Trump is both crippling the US and enabling an enemy.

Why? Not why did President Trump do it, but why is China as an emerging power a threatening narrative?

Many people are deeply critical of Trump’s perceived attempts to redefine and constrict the doctrine of globalism that has defined US foreign policy since World War II. The opening line of the Times article noted above reads, “President Trump has managed to turn America First into America Isolated.”

But what is globalism? Does globalism require the US to be the world’s sole superpower? And what about Adam Smith’s “invisible hand”? Isn’t competition supposed to be a good thing to free market advocates?

The irony, of course, is plentiful. The US currently has approximately 800 foreign military bases, or base sites, in approximately 80 different countries. According to The Nation, “The United States probably has more foreign military bases than any other people, nation, or empire in history.”

Many people believe that’s okay because, the argument goes, the US will use its military power responsibly. Wherever you come down on that belief as an American, however, I can tell you from firsthand experience that few outside of the United States share that conviction. And if the objective is global leadership rather than global arm-twisting, shouldn’t we care about what the rest of the world thinks?

If we put the issue in its larger context, I do think that the US, with exceptions, uses its military might with discretion. And our political system and our culture are part of that restraining context.

China, however, offers a similarly restraining context. This is not the Soviet Union, which attempted to put missiles 90 miles from our shores. And it’s not the Third Reich. Virtually all of their disputed territorial claims, including the South China Sea, have arguably been in the interest of defense of China’s sovereignty or to reinstate some perceived historical reality.

Part of that context, of course, is the simple fact that China has been repeatedly invaded by foreign powers. The Century of Humiliation I have talked about before is vivid in the collective Chinese consciousness. Even the youngest Chinese have heard of the Nanking Massacre.

China is attempting to assert global leadership in the arena of climate change. And I believe it is sincere. Having said that, it is also clearly in China’s best interests to do so. They have a huge environmental problem that must be corrected if the Communist Party is to remain in power. And there is a lot of money to be made.

Understanding China is available at Amazon in paper and electronic formats.

Climate change will ultimately be conquered with technology. That’s not to say we shouldn’t do everything we can in the meantime. But climate technology will be the next big technological revolution. That seems almost certain.

And climate technology will provide a much more sustainable and robust economic opportunity than sneakers and toys. I believe that the Chinese are absolutely correct in pursuing it.

Without supporting the decision, I do think President Trump, in a way, is attempting to take a page from the Chinese handbook of promoting their self-interests. The United Nations Green Climate Fund, set up by the Paris agreement to help poor and developing nations deal with the consequences of climate change, has been, to date, funded solely by the United States. The US has given $1 billion to the fund as of May of this year. Russia, China, and India, for their part, have collectively given nothing.

The argument in support of that disparity is that the US also has the largest GDP in the world. And that’s true. But when you consider that much of our government spending is supported by debt that will have to be paid off by future generations, and the fact that income and wealth have become indefensibly polarized in America, that argument doesn’t carry the same weight that it did thirty years ago. In total, we can clearly afford it. That’s not to say, however, that the average American can.

But I think it’s a specious argument anyway. As is the question of whether or not humankind is causing global warming. The more legitimate question, in my mind, is whether or not we are living as environmentally responsibly as we can without materially sacrificing our quality of life? And the answer, I believe, is a resounding “no.”

And in this regard, I think, China offers some valuable lessons. Whether it’s public transportation, high-speed rail, powering buses and taxis with natural gas, recycling, or simply using cloth bags when you go to the grocery store, China does many environmentally responsible things quite well. And while all of these things came to be within a larger context of poverty, development, culture, and the Chinese political system, they are what they are. We can still learn from their example.

I am thrilled to be back in the American Midwest where I can go for a walk without a breath mask and I can drink the water straight from the tap. I know from experience what that is worth in terms of the quality of life. Too many people, I think, take it for granted.

I am not in any way afraid of China’s emergence as a global leader, however. I think it’s a good thing. I may change my mind in the future, but it has demonstrated no intent to expand its influence militarily beyond its own geographic theater to date.

And, yes, “socialism with Chinese characteristics” is built on a one-party political system. The Communists fully recognize, however, that if they are ever driven from power that will be it for them. In the US, by contrast, a losing political party has only to wait until the next election cycle. And that’s even if you accept that we still have a legitimate two party system.

History is not a post card. It is a motion picture. Look at a political map of Europe in time-lapse over the last one thousand years and it will surely make you dizzy.

That observation is not meant in any way to endorse territorial aggression. It is to say, however, that change is inevitable and everything has to be viewed in context. I believe in globalism. It is the reality of the world we live in. But I also believe that if we can convince more responsible governments to assert their leadership and share in the responsibility of moving the world forward, the better off we’ll all be.

Contact: You may reach the author at gary@glassmakerinchina.com

What’s the Point?

Author Gary Moreau

When it comes to this blog I admit to being in my worst funk since I launched it in 2013. It’s not that I have anything less to say or any less passion to say it. It’s more like, what’s the point?

They say that globalism is dead in the US. What’s really died, however, is any form of civil public dialogue. It’s engagement that’s dead. And it’s not the people who voted Trump into office that killed it. It’s the people who should know better. It’s exactly the people with the skills and the experience to facilitate an informed and open public discourse that have apparently abandoned any responsibility to do so.

If you are like me you paid scant attention to Trump’s first overseas trip this past week. There was nothing to pay attention to. All of the coverage had to do with Trump feeling at home in the golden palaces of the Middle East; the “I don’t want to hold your hand” incident; Melania’s wardrobe; the “shove”; the handshake; the turned back; the whatever. Who cares? Or, more to the point, why should anyone care?

And the Russians?

I grew up at the height of the Cold War within twenty miles of a US Air Force Strategic Air Command base that kept B-52s laden with nuclear weapons in the air 24/7. They flew over our house every day on approach and take off.

My grade school held frequent drills in which we were required to practice huddling under our desks with our hands cupped behind our heads. Except for the kindergarteners. They weren’t disciplined enough for that so they huddled together under a large blanket in the middle of the room and made a game of it.

Our next-door neighbor built an elaborate underground bomb shelter stocked with a warehouse worth of provisions and a dry chemical toilet. The neighborhood kids used to play hide and seek there. But even to the children – perhaps only the children – it was a bleak place indeed. It felt more like a haunted house than a monument to American grit and perseverance.

And as a boy of eight I remember observing my parents watching the Cuban Missile Crisis unfold on television. They were both veterans of WW II and, as was their custom when it came to such matters, didn’t say much about it. Even a young boy, however, knew the stakes were high.

I don’t believe, in other words, I need to be told much of anything about the Russians. I certainly don’t need to watch the endless political posturing about who talked to whom (I certainly hope someone is talking out of public view.) and whether or not anyone tried to influence the election. (Of course they did. The US has been doing it for decades.)

Understanding China is available at Amazon in paper and electronic formats.

And what about China? As I had hoped, Trump did back down on Taiwan. And he hasn’t started a trade war. Nor has he done much to dissuade China out of its ambitions in the South China Sea. (And he won’t.)

Trump does take some credit for getting China to take a firmer hand with North Korea although there are few visible signs of that and, in the end, to the extent China has done anything it has done exactly what it believes is in its best interests. That’s okay. That’s the way the world works. The US doesn’t have a monopoly on self-interest. As Freud said, all of life is personal.

Diplomacy, in the end, is not a matter of negotiation. It is a matter of engagement. As an American businessman working in China I learned that firsthand. I dealt with government officials nearly every day. And, yes, there may come a time for negotiation. But you can’t negotiate with someone who is not engaged with you or your issues.

I am not a Chinese apologist any more than I am a Russian apologist. I am, however, someone who has seen and experienced much of the world and who believes that, like it or not, we are all in this together. Hiding in our shell and closing our borders is like grade school children hiding under their desks.

There is no first or second in this race. There is only win or lose – for all of us. We have to start thinking less about bending others to our will and focus more of our efforts on defining and implementing our collective global will.

To be honest, I don’t care, as is pointed out to us daily, how much the US government is spending on protection for the Trump family. It’s chump change and it goes with the job. How much are we spending on Congressional pensions and healthcare?

And I could not care less what coat Melania Trump wore outside the Chierici Palace in the town of Catania, Italy, when posing with the G7 entourage. (Have you seen the pictures coming out of Cannes?) There is not a US politician who can throw a ‘tone deaf’ rock at that glass house. (A twenty-minute speech at a big investment bank could easily pay for a coat like that.)

I don’t, in fact, care so much about the debate over ‘globalism.’ It’s a debate of little meaning in today’s world. That horse is long out of the barn.

I do, however, care about the polarization of wealth in America today. It will bring the country down. It always has.

Mostly, though, I care about engagement. I want to engage with my children. I want to engage with my wife. I want to engage my neighbors of every background and ethnicity. And I want to see our leaders engage with China, Russia, Mexico, and the rest of the world. There may come a time for blame. There may come a time for negotiation. There may even come a time to be forceful. How on God’s green earth, however, will we know when that is if we don’t engage first?

Contact: You may reach the author at understandingchina@yahoo.com. Mr. Moreau is also available for public speaking and the provision of third-party written content on a wide variety of topics for your website or other communications material.

Immigration: The Wall No One is Talking About

The author giving a recent lecture to international business and Chinese culture students at North Central College.

If the insightful Chinese have taught me anything it is that nothing exists in isolation. For every yin there is a yang, and vice versa. Yin and yang are not opposing forces. They are complementary. One cannot exist without the other.

And so it is with immigration. With legal immigration, there is illegal immigration. Without illegal immigration, all immigration is legal. It’s pretty simple, really.

Viewing the world through our deductive lens, as we do, Americans like simple solutions. Too much illegal immigration? Build a wall. Too much violence? Promote law and order. Too many guns in the streets? Arm everyone.

It’s the kind of solution that would have warmed the hearts of the Christian Temperance Union, which gave us Prohibition. Or the parents of many a teenager growing up in the 1960’s, when marijuana first started crossing the southern border in bales.

Prohibition, of course, gave us bootleggers and speakeasies. More to the point, it gave us violence and tax evasion. The War on Drugs, while costing the US taxpayer millions, if not billions, gave us cartels, drug lords, and an obscene plethora of shallow graves.

I have no quarrel with the desire to manage immigration. The right to live within US borders is not an inalienable right of humanity. Yes, that is unfair. I was lucky enough to be born here. But I’ve come to accept that life isn’t always fair. As the Taoists might say, that’s just the way it is. Don’t waste your time trying to explain it.

No one can say with certainty what impact a wall along our Mexican border might have on illegal immigration. Walls can be scaled. You can tunnel under them. Or you can just go around them. Boats aren’t all that hard to come by. Besides, walls already exist in the most densely populated urban border areas. (The picture above is an actual wall on the Mexican border erected by the Department of Homeland Security in 2008.) Erecting a wall in the middle of the desert is a bit like building a moat around your house. A bit of overkill, if you ask me.

The Berlin Wall is a false analogy. The Berlin Wall was built to keep people in, not out. And what made it effective was not the wall itself, but the soldiers with guns that were stationed all along it.

Understanding China is available at Amazon in paper and electronic formats.

A wall along our Mexican border certainly won’t build goodwill with our neighbors. And it will further isolate us in the court of world opinion. We may not care. As a businessman myself, however, I’m not sure President Trump has thought this through from a return on investment perspective.

It is undoubtedly true that some immigrants take advantage of government benefits funded with taxpayer money. It’s also true, however, that many undocumented immigrants actually pay taxes. And many immigrants, most likely documented, contribute vital knowledge and expertise to the companies in Silicon Valley and elsewhere that fuel the world’s largest modern economy.

Many an American university, moreover, would undoubtedly face financial hardship if the foreign students all stayed home. University pricing, as you may know, is highly variable, and the foreign students typically pay top dollar. Those dollars, in the end, help to fund university programs that benefit all students, including those on scholarship or those enjoying the material discounts of instate residence.

What I find most perplexing about this whole discussion on immigration, however, is that no one is talking about just how difficult it is to obtain legal immigration status. It is, to put it simply, infinitely more difficult than trying to decipher the US tax code.

I lived in China for nine years as an American ex-patriate working for a US multi-national. Our Chinese plant existed to serve the Asian market and exported almost nothing to the US. And my company and I paid a whole lot in federal and state taxes, even though I didn’t reside here, I didn’t have kids in the US school system, and I didn’t own any property here. And that was okay with me.

During my time abroad, however, I married a Chinese woman. She is my wife. So when I returned to the US I wanted her to accompany me. I, of course, as a US citizen, was clearly entitled to that. (If you think that shouldn’t be the case; well, I have nothing to say.) But for that she needed a green card. Fair enough. As I said in the beginning, I’m all for managing immigration.

What never gets discussed, however, is just how difficult and expensive it is to get a green card, even when you are lawfully entitled to one. There are forms, forms, and more forms. Most of them are unintelligible. Redundancy is rampant. The supporting documentation required is not lying around your house. And the process takes months, if not years.

I consider myself a fairly bright fellow. I have a college education. I actually graduated cum laude, with honors. But I finally hired an immigration attorney to help. Not because we were attempting to do something outside the law; not because we had any intent to rob or rape anyone; but because it was all so damn confusing and burdensome.

There are multiple government agencies involved. There is the Department of Immigration and Naturalization, of course. And the Department of Homeland Security. There was the US Embassy in Beijing. And the US Consulate in Guangzhou. And to a person the individuals handling our case were professional and polite. I can’t imagine a more thankless job, but they were all efficient and courteous. I dip my hat to them all.

But they have to work within the same processes and regulations the applicant does. They don’t have the autonomy you might expect and that would make a whole lot of sense. Their hands are as tied by the bureaucracy as are those simply trying to find their way, for whatever reason, to our shores.

I have to admit that there were many times in the process when I thought to myself that if I were a poor Latino with relatively little education, and I had the choice of navigating the bureaucratic no man’s land of legal immigration and hiking across a swath of desert, I might lace up my boots. (Before you go reporting me to Immigration, I am speaking figuratively. I am just making a point.)

Which, in the inductive fashion of the circular Chinese worldview, brings me back to where I began. It may be that Americans collectively decide that we want to make immigration as difficult as possible. I think that’s a bad bet financially. And I think it betrays who we are as a nation. And, of course, it’s a barbaric way to treat our fellow humans. But it is nonetheless our prerogative.

Should we choose that route, however, we will have illegal immigrants. In fact, as long as there is hunger in the world, and it’s a fair bet it will be with us for the foreseeable future, we will have a lot of illegal immigrants. As Abraham Maslow (1908-1970), the American psychologist who gave us the Human Hierarchy of Needs would surely remind us, as long as people fear for their safety and yearn to fill their stomachs, they will find a way. A wall will not stop them.

On the other hand, should we open our borders to any and all that wish to come, even if it is to hurt us, as some seem to advocate, we will eliminate illegal immigration, but we will pay a steep price as a society.

Like everything in life, I believe, the optimal solution will be a balanced solution. That, however, will be a holistic solution that doesn’t isolate the components of the issue into individual components – like walls and law and order – that appear to offer simple solutions.

Yin and yang. Nothing exists in isolation.

Contact: You may reach the author at understandingchina@yahoo.com. Mr. Moreau is also available for public speaking and the provision of third-party written content on a wide variety of topics for your website or other communications material.

Will China Help Trump in North Korea?

Author Gary Moreau

One of life’s preeminent lessons is that we can’t always get what we want, even if we have truth and virtue on our side. And such appears to be the case with North Korea’s continued attempts to arm itself with nuclear weapons capable of firing on the US.

On New Years Day North Korea’s Kim Jung Un proclaimed that his country was on the verge of developing an intercontinental ballistic missile that could propel a nuclear warhead to America’s west coast. President-elect Trump, to no one’s surprise, immediately took to Twitter and pronounced, “It won’t happen.”

Clearly no one wants to see it happen. The Chinese don’t; South Korea doesn’t; Japan is fearful; and, of course, it’s the last thing Americans want to experience. But desire, even conviction, are not always the stuff of reality. Life just isn’t that fair much of the time.

Economic sanctions have apparently had little impact on North Korea’s nuclear intentions. As much as we’d all like to believe that North Korea will – must – crumble under the weight of its own tyranny, that hasn’t happened to date.

In recognition of that fact, the US and South Korea appear ready to install Lockheed Martin’s Terminal High Altitude Area Defense (THAAD) anti-missile defense system designed to shoot down short, medium, and intermediate range missiles before they strike. China, of course, has protested loudly because the advanced radar system on which THAAD depends would be capable of reaching beyond China’s border. (Would President Kennedy have allowed THAAD, if it had been available, to be installed by the Soviets in Cuba?)

Trump, like most people, appears to recognize that China stands the best chance of bringing Kim in line. China is North Korea’s only real link to the greater world. Ninety percent of its foreign trade goes through China and even its sparse links to the Internet originate in Shenyang, the capital city of Liaoning Province.

Trump, as a result, has expressed indignant frustration that China has not done more to stop the nuclear proliferation although no Western diplomat can truly know what conversations have taken place behind closed doors. And, Trump vows, he will make Beijing do more through artful negotiation and sheer will.

China, however, is in a difficult position. It shares an 880-mile (1,420 km) border with North Korea. (The border between North and South Korea, by comparison, is only 160 miles in length and the distance between New York City and Chicago is less than 800 miles.) And while China is clearly the superior military power it is a border that would nonetheless be difficult to close, particularly given the number of government sanctioned North Koreans already living in China’s Dong Bei region. (North Korea also shares a small border with Russia.)

Understanding China is available at Amazon in paper and electronic formats.

China, as a result, is reluctant to see the North Korean regime simply collapse. North Korean refugees, no doubt, would pour into China, creating the kind of humanitarian nightmare we have witnessed all too often elsewhere in the world.

And it certainly does not want South Korea, a staunch US ally, to fill in any power vacuum that might be created by a collapse of the North. There is no doubt that the 30,000 US military personnel currently stationed in South Korea would tag along, creating an enormous security risk to the Western-wary Chinese. (The Chinese have not fared well at the hands of the West in the past.)

In the meantime, Trump continues to tweak the nose of Beijing on issues ranging from trade to the South China Sea to the decades-entrenched one China policy. This is certainly not the way to earn Chinese trust or support.

And this, in the end, is the biggest risk to the relationship of the US and China and stability in the region going forward in the Trump era. Trump is a businessman and, having been one myself, I have no quarrel with that. He, however, sees everything through a transactional lens. Everything, including foreign diplomacy, is negotiable. All policy positions are mere chess pieces to be manipulated as part of the overall negotiation. He will, he believes, get China to do more, just as he will get Mexico to pay for his wall.

There is a fundamental flaw in his logic, however. The Chinese are not transactional. Their culture, political and otherwise, is built on the Confucian foundation of obligation that flows from relationships. They will not isolate the pieces of that relationship and will, instead, take a much more holistic approach to diplomacy.

President-elect Trump must, therefore, set clear priorities for his foreign policy team, a practice that he has yet to display any real interest in.

China can help with North Korea. And I’m sure they have no more interest in a nuclearized Korean peninsula than anyone else. It’s clearly not to their advantage.

But China won’t be bullied either. The world has changed. The US cannot always get what it wants. Our foreign policy must be prioritized and pursued through diplomacy and the strengthening of relationships, not through the art of the deal.

Contact: You may reach the author at understandingchina@yahoo.com. Mr. Moreau is also available for public speaking and the provision of third-party written content on a wide variety of topics for your website or other communications material.

Taiwan: Issues of Economics, Not Politics

Author Gary Moreau

On December 2 Tsai Ing-wen, the political leader of Taiwan, spoke by phone to President-elect Trump, igniting a firestorm of conjecture and no small amount of indignation. China lodged a formal complaint, as would be expected, but the incident seems to have gained far more media attention than it deserves. Nothing, in the end, is likely to come of it.

Taiwan, historically known as Formosa, is an island that lies approximately 140 miles to the east of the Chinese province of Fujian, with which it shares a common native dialect. It is home to 25 million people, roughly the population of Shanghai or Guangzhou, two of China’s larger urban centers.

The original inhabitants of Taiwan are thought to have journeyed from southern China and after a brief stint as a Dutch colony, the island fell under the rule of the Qing Dynasty until 1895, at which time the island was forcibly ceded to Japan as a result of the First Sino-Japanese War.

At the conclusion of World War II, most of China was still under the control of Chiang Kai-shek and the Kuomintang (KMT) government, to which the Allies gave control of the island. Mao Zedong and the Communists, however, ousted the KMT and created the People’s Republic of China in 1949.

At the time, Chiang Kai-shek and his followers fled to Taiwan and created the Republic of China (ROC). It is estimated that roughly 15% of Taiwan’s current population has ancestral ties to that one mass migration.

Understanding China is now available at Amazon in paper and electronic formats.

To further muddy the waters of history, the KMT, after fleeing to Taiwan, initially claimed sovereignty over all of China, which it claimed it would ultimately re-occupy. The KMT was, in fact, given China’s seat on the United Nations Security Council and was recognized by many Western governments as the only legitimate government in China.

Mao Zedong, however, and virtually all subsequent Chinese leaders, never saw Taiwan as anything more than a renegade province that would eventually be reunited with the mainland, by force if necessary. And that remains China’s official policy.

In 1971 the UN finally concurred and China’s seat on the Security Council was granted to Beijing. In 1979, moreover, the US and then-President Jimmy Carter formally severed diplomatic ties with Taiwan, leaving the ROC in the political no-man’s-land in which it currently finds itself. No US president since has communicated directly with the leader of Taiwan.

And hence the flap. As far as China is concerned the move was akin to having the governor-elect of Missouri communicating directly with German Chancellor Angela Merkel on matters of state.

But here’s where context becomes so important. Hong Kong, Taiwan, and Macau are all governed on the principle of “One China.” They are officially part of China but have been given great latitude to operate independently, within limits, as long as that principle is not violated. Mainland Chinese can travel easily to both places but require some special documentation.

The problem in the West is that many people, including a good swath of the media, wants to see the One China policy done away with. To these folks, the overriding issues are political and individual freedoms. Many, as a result, are cheering Tsai Ing-wen on, just as they cheered on the Umbrella Movement in Hong Kong in 2014.

What’s happening in Taiwan and Hong Kong, however, is not that different than what happened in the US during the 2016 presidential election, or during the Brexit vote, or even during the Italian vote this past weekend that led to the resignation of Italy’s PM. These are all economic movements driven by populist sentiment reacting to increasing income disparity, slow economic growth, and the growing sense by many that the country is leaving them behind. They are losing hope.

Contrary to a lot of the Western media innuendo, in fact, Tsai Ing-wen was not elected in May, 2016 on a platform of political independence from Beijing. She was elected on a platform of greater economic independence. Many young Taiwanese feel, as many feel elsewhere, that China’s burgeoning economy and financial strength might well squeeze them out of the career opportunities their parents enjoyed.

The simple reality is that no poll has demonstrated that anything beyond a small minority of Taiwanese want anything to do with political independence from China. They want an economic future, plain and simple.

I have done business in both Hong Kong and Taiwan and can tell you from firsthand experience that the idea of separating either territory from China is akin to wishing for the cessation of Texas. It’s not going to happen. And no one really wants it to. (There are always outliers, of course.)

Both Taiwan and Hong Kong are among the biggest investors in Mainland China. The financial districts of Beijing, Shanghai, and Guangzhou are awash with Taiwanese and Hong Kong businessmen who have never had it so good. (Your Apple device was probably assembled in Mainland China by a Taiwanese company.)

The real lesson here, as well as in the US, is that people need to have hope. When they lose that, all is lost and they will ultimately do what they feel they must do to get it back.

No one – perhaps even the man himself – knows what Trump will actually do as President. And he unnecessarily added fuel to the Taiwan fire by tweeting about currency manipulation and the South China Sea. To date, however, I don’t believe he has done anything to sour the relationship between the US and China longer term. There is just too much at stake for both sides.

As in all of life, however, there are limits to everything.

Contact: You may reach the author at understandingchina@yahoo.com