Donald Trump and China – An interesting paradigm

By January 27, 2017World Affairs

President Donald Trump has been making headlines ever since he won the US Presidential elections back in November. His stance on China has been tough ever since his campaigning days. President Trump has even accused China of stealing American jobs and vows to bring them back o USA. This was even reflected in his swearing in ceremony where ‘America will be great again’ just wasn’t said enough times. So how will this relation pan out?

China is the undisputed leader in world trade and manufacturing right now. Anyone who thinks otherwise should consider looking around their house and try finding things not build/assembled in India. Almost every day-to-day product is manufactured in China today. Why I am talking about this is because I am worried how President Trump plans to bring these so called ‘jobs’ back to America. Western companies have massive investments in China which include manufacturing, assembly, export and so on. A typical American company pays 10 Chinese employees at the cost of 1 American employee. And this wave of outsourcing is not even a recent phenomenon. President Trump is a businessman himself and he understand the complexities he’s dealing with.

Secondly, China is also proving to be a formidable defense competitor and ready to challenge any nation which doubts its supremacy in the South China Sea. The artificial islands with their huge military installations are an example of this. We are all optimistic that there won’t be a Nuclear War, because if it does happen, then not many of us will be there to remain optimistic. Do you know that China holds one of the biggest foreign reserves in US Dollars. On top of this, the amount of revenue generated by Western companies in China for the Chinese government is mind boggling.

What do private companies want?

Though President Donald Trump promises to bring back these jobs, has he ever considered that why private companies would compromise on their profits and pay a substantial amount of money to bring those jobs back. It is no surprise that 4 out of world’s 5 biggest companies are Chinese. And threatening as a tactic simply does not work with China.

So, it will be interesting to watch how President Trump deals with the China situation in the coming future. It will also be fun to watch how he plans to deliver on his promise to ‘make America great again’ by bringing jobs back to the homeland. In my view, there is absolutely no way that business leaders would want to spoil their relations with China – after all a business is not business unless it is profitable!!

 

Author Amanish Lohan

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