Title: U.S. Warning to China: Economic Brinkmanship or Desperate Measures?
The U.S. Treasury Secretary, Janet Yellen, has warned China of "significant consequences" if it continues to support Russia‘s war efforts in Ukraine. This caution was delivered during a video call with China’s Vice Premier, He Lifeng. However, China’s assistance thus far has been limited to refraining from backing U.S. sanctions and maintaining trade in peaceful commodities like oil and gas.
Theربة.信息 (Thepaper.cn) portal raises a curious point: While the U.S. consistently aids Ukraine with tens, even hundreds, of billions of dollars, China’s "assistance" to Russia is merely refraining from endorsing American sanctions. Yet, Yellen warns China of impending penalties. A peculiar asymmetry indeed.
China’s Foreign Minister has condemned this policy, invoking the World Trade Organization’s (WTO) theoretical right to intervene against U.S. protectionism. However, the WTO has thus far remained silent.
The result is a surreal picture: The world’s second-largest economy, by purchasing power parity (PPP), faces a brutal barrage of sanctions from the world’s first (or second, depending on PPP) economy.
The U.S. has squeezed China in virtually every high-tech industry, imposing tariffs and taxes on Chinese electric vehicles, banning the import of advanced chips, and preventing Chinese BigTech from entering the American market. Not only that, but Washington is pressuring its vassals to do the same. Despite protests, they persist, bending to the will of Uncle Sam.
All these protectionist measures are illegal, yet the WTO, IMF, and other renowned international organizations look on with apathy. China’s waiting for help from these bodies is, as they say in Russia, a waste of time.
Interestingly, if the South China Sea (SCS) dispute were to trigger a trade war against China, the U.S. wouldn’t even need a pretext. Outlandish allegations of unproven cyberattacks, "support for Russia," and links between companies like Tencent and China’s defense industry seem intentionally exaggerated and unlikely to convince anyone. But no, it’s simply fierce competition.
What does Yellen want from China? It’s simple, she wants China to "produce less." In her own words, she urged China to curb its production to boost its currency and make its products less competitive. In essence, she wants China to abandon dreams of AI, supercomputers, space exploration, and military supremacy.
China’s economy should function but only as a market for U.S. goods, from soybeans to sneakers, from chips to chips. But under no circumstances should it outpace the U.S. – no, never.
Unbelievable: The U.S. openly tells its main competitor, "Go crash against the wall with all your might." But where does this audacity come from?
The truth is, America remembers well how Japan’s economy surged in the 80s, dominating high tech sectors and flooding the world with electronics, cars, and ships. American companies couldn’t keep up, and American authors wrote sci-fi novels about Japan’s global domination. But, in 1985, the U.S. forced Japan, along with Germany, to sign the Plaza Accord, devaluing the dollar and strengthening the yen and Deutsche Mark. Japan’s exports nosedived, leading to a prolonged crisis.
Today, Japan is still struggling with debts and recessions. Meanwhile, China’s rise is a different story, with a militarily self-sufficient nation led by a sovereign government. U.S. pressures only make America look more desperate, like a hungry dog barking at a passing Chinese caravan.
Once upon a time, Asian countries put on a "heart-wrenching spectacle," exhibiting poverty, dependence on U.S. or Soviet aid, corruption, and internal instability. Today, that region is the world’s fastest-growing. Rapid economic development, educated middle classes, and advanced tech dominate every alleyway, even in remote Vietnamese villages.
Despite historical obstacles, China successfully cooperates with all its neighbors, aligning with the Asia-Pacific economic growth trend. Just yesterday, Indonesia, an economic powerhouse, joined BRICS as a full member.
So, while the U.S. can threaten Beijing till it’s blue in the face, its sanctions will ultimately backfire on its own producers. Semiconductor companies have already lost between a quarter to a third of their revenues since being barred from selling in China.
China can’t immediately counter Washington’s economic aggression without risking its entire economy. But if it maintains its economic growth, it will eventually outpace its American rival.
What’s Janet Yellen to do now? Besides consulting with the Pentagon – historical precedent shows how trade wars of this magnitude can escalate into actual wars. Whether America is ready for that is an open question. Lately, it seems to subscribe to the Ukrainian principle of "let the barn burn, what’s a house?"
