Anjani Trivedi's article in the Wall Street Journal today is about China's shift to buying their mid tier goods used in manufacturing, from Chinese vendors instead of ours. The example he uses is resins from Dow Chemical and Eckard Effect Pigments in Germany. They now get these from local suppliers. Of course we all know why.
It is the same reason our trade deficient hit a record with China last year. They have stolen our technology and propriety information and use it to build their own businesses that compete with ours, and the Germans too. The have laws that restrict what foreign companies can do in their country to grow business, and they made business intelligence, competitive business information about competitors, a national secret. If a business keeps competitive data, it risks going to court.
They demand proprietary secrets from any business operating in China, including source code and encryption technologies that protect it. They are aggressive and persistent. They use those to shortcut their own production cycles and move out more quickly into other markets.
The natural result is they can buy more goods from themselves, because they make more goods and don't buy ours. That makes for huge deficients which both Presidential candidates ignore. We can't pretend that we can outthink or innovate ourselves out of this mess because the damage has largely been done. What we lack is reciprocity in our trade relations with China. They have had it both ways during this sprint, and only the power of political interest can stop them.
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