To win the trade war, the CCP just needs one thing.
Welcome to China Uncensored. I’m Chris Chappell.
The US-China trade war has been going on for three weeks now,
and you know what that means.
It’s time to panic!
If you go on X, you’ll see posts with millions of views claiming that US ports are empty.
That there are zero cargo ships.
That you should panic buy rice and toilet paper.
Yes! Finally! My time has come!
I’ve been hoarding toilet paper since 2020.
It’s made living in New York City slightly challenging.
But it’s all worth it now.
Time to sell it all for profit!
Wait, what’s that, Shelley?
None of that is true?
Ports are not empty, and there are definitely cargo ships heading to the US.
And people should not panic buy rice,
which is grown in America,
or toilet paper, which is made in America.
Fine, fine.
I guess if you start seeing toilet paper shortages,
that’s not because of the trade war,
that’s because people got freaked out by stupid social media posts.
The vast majority of food shouldn’t be affected, either.
If you panic buy anything, it should probably be things
like back-to-school supplies and Christmas decorations.
I’m not saying there won’t be shortages of made in China stuff.
There probably will be,
but we won’t see that in stores for weeks,
or even months down the line.
Chinese products will also get more expensive.
But we don’t know how expensive.
There’s a lot of uncertainty right now, and a lot of fearmongering.
Which is great for the Chinese Communist Party.
Because they need the Trump administration to back down on tariffs.
And if the CCP can convince Americans they should hate the tariffs,
they might have a shot.
I’ll tell you why the CCP wants this so badly in a minute.
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Ok, so the CCP wants the US to lower their tariffs.
Because if the tariffs continue at this level,
China is going to be much worse off than the US.
Yes, US consumers will feel some pain.
But like I explained in a previous episode,
China now more than ever depends on exports
to keep its economy going and people employed.
That’s because the Chinese real estate market has already collapsed.
And that’s the other major driver of the Chinese economy.
So they NEED to export stuff. That’s all they have.
Now, Goldman Sachs estimates that US tariffs
could endanger 16 million export jobs in China.
And that’s probably on the low end.
In a trade war, the country that’s the bigger exporter
will generally be hit harder.
And that’s China.
Chinese workers are in even more trouble
because China’s been fighting deflation for years.
China’s economy is in a deflationary spiral.
That’s when prices fall, which means companies can’t afford to pay people as much,
so wages fall.
And that means people don’t want to buy stuff,
so consumer demand falls, which means prices fall even further.
And it keeps on going.
China’s been fighting deflation ever since their disastrous Zero Covid policy.
Turns out it's hard for businesses to survive when everyone is locked inside their apartments.
The real estate crisis also made deflation worse,
because people’s savings were wiped out.
And a bunch of people lost their jobs, too.
The New York Times talked to a guy who was a construction worker and a plumber.
“When times were good, Mr. Wang said,
he could make as much as $13,600 a year.
Now he’s lucky if he can make half that.”
Think about that for a second.
Even during the good times, his income was several thousand dollars
below the poverty line in the US.
Now he’s not even making half of that.
So China’s economy is on shaky ground.
And tariffs are making things worse,
by endangering more Chinese jobs.
But the Chinese Communist Party is digging in.
And they’re really good at narrative warfare.
I’ve shown you why China is going to be hit harder by tariffs than the US.
So the trick is, the CCP needs to make Americans THINK
they’re the ones who will be hit harder instead.
And to do that, the CCP is relying on the perception
that Chinese people can eat bitterness,
but Americans can’t.
Eating bitterness is the Chinese term for enduring hardships.
Basically, suffering.
Chinese leader Xi Jinping has repeatedly told
the Chinese people that they need to eat bitterness for the good of the nation.
I talked in a previous episode about how young Chinese people
don’t seem quite as willing to eat bitterness as previous generations.
But in narrative warfare, that doesn’t matter,
as long as Americans THINK
Chinese people are willing to suffer more.
Which is why China’s Foreign Ministry
is releasing propaganda videos like this.
“History has proven compromise won’t earn you mercy
. Kneeling only invites more bullying. China won’t kneel down.”)
The rest of the video calls America an arrogant imperialist,
and shows China leading the world in solidarity
against America over some heroic music.
The message is clearly that America is the bad guy
and it better give up, because China never will.
That same message is being repeated in the CCP’s domestic propaganda.
Earlier this week, Beijing Daily published an article called “
Today, it is necessary to revisit On Protracted War.”
On Protracted War was a series of speeches made by Chairman Mao
during the Sino-Japanese War in 1938.
This Beijing Daily article is very Marxist.
It blames America’s problems
on the capitalist system
, it talks a lot about dialectal materialism,
and it repeatedly refers to the “US-China struggle.”
I’ve talked before about how “struggle” or “douzheng”
is the communist concept of
designating an enemy and mobilizing the entire society to “struggle” against it.
In this case, the enemy is obviously the US.
According to the article, “The Party Central Committee
had already anticipated the long-term nature of the China-U.S. rivalry
and proactively laid out plans for future major power competition.”
In other words, the CCP is in it for the long haul.
The gist of the article is
warning that the US-China struggle will not be over quickly,
but that the CCP,
sorry, “the people” will ultimately win over the imperialist Americans.
So that’s what the CCP is saying.
But what’s actually happening in China right now?
Well, since it’s an authoritarian state with total control
over its domestic media
and a huge online censorship apparatus,
we’re not going to get a totally clear picture.
But we do know some things
. And it looks like the CCP is saying one thing,
and doing another. What a surprise!
First, you know that earlier this month,
the CCP put additional tariffs on US imports,
in retaliation for US tariffs.
But now, it looks like the CCP is going to exempt
some US products from those tariffs,
because they really really need them.
“Those products include certain semiconductors and
chipmaking equipment, medical products and aviation parts.”
They could also exempt chemicals like ethane,
which China uses to make a ton of plastics.
Does that sound like a compromise,
even though the CCP swore they would never do that?
Yeah, they’re going to be flexible with their tariffs on US goods when they need to be
—but they don’t want people to know about it.
In fact, Caijing Magazine, which was the first to report that China was
going to exempt semiconductors,
seems to have been censored.
Meanwhile, Chinese export companies
are trying to survive the US tariffs.
Some smaller factories are temporarily pausing operations
or even completely shutting down.
(Others are trying to get around tariffs by using transshipment—
for example sending products to be assembled in countries like Cambodia
and Vietnam, which then get re-routed to the US.
There are even reports of Chinese companies asking
Indian exporters to fill their orders for their US customers.
The idea is the Indian companies would fulfill the orders,
and pay the Chinese companies a commission.
And foreign companies are trying to move their manufacturing out of China, too.
For example, Apple is trying to source all of its US iPhones
from India instead of China.
And they’re looking to do it as soon as next year.
The CCP isn’t a fan of that idea though.
CCP officials are trying to stop Apple from moving their iPhone manufacturing equipment
out of China. Yeah, they’re kind of taking machines hostage.
Well, that’s awkward.
Foreign clothing manufacturers are also trying to get out of China.
Or even sending Chinese workers to factories
in the Philippines or Vietnam.
And factory owners from Hong Kong and Taiwan
are trying to avoid physically being at their own factories in China
, because they’re worried about being kidnapped by Chinese authorities.
Ok, so forget taking machines hostage.
People are worried China will take people hostage.
Wouldn’t be the first time.
So doing business in China is like staying at the Hotel California.
You can check out anytime you like, but you can never leave.
Side note: I don’t know if it still is, but in the early 2000s,
Hotel California was one of the most popular Western songs in China
. You could not get away from it.
And I have no idea why.
Anyway, the point is,
Chinese factories are trying to get their products out of China,
and foreign companies are trying to get their factories out of China.
Which means, the US tariffs are…actually working.
At least in terms of decoupling US manufacturing from China.
And that’s good news for Americans.
Because we don’t want our economy to be held hostage
by a regime that will…literally hold people hostage to get what they want.
Especially since the CCP also sees America
as a threat to its survival.
And it’s not just me saying that.
Here’s Cold War historian Professor Stephen Kotkin.
“The existence of the American system ipso facto threatens
the survival of the Communist Party
because it's a freer—it's an open, successful alternative.”)
Kotkin goes on to say that it doesn’t matter what US policy is toward China,
the CCP will always see the US as standing in its way.
That’s pretty clear from their latest propaganda narrative.
“China won’t kneel down”)
So what happens now?
The CCP refuses to back down, at least publicly.
But companies are actually leaving China
and China’s economy is getting wrecked.
Can the CCP actually force people to eat bitterness and ride out the trade war?
Yes they can, because they’re an authoritarian state
. But that doesn’t mean there won’t eventually be consequences.
Look at what happened during the Zero Covid lockdowns.
Eventually Chinese people reached a breaking point
and started to protest.
Which is the Communist Party’s worst nightmare.
The best case scenario for the CCP
is that the US simply backs down from all the tariffs,
under pressure from various interest groups.
To do that, the CCP needs to convince Americans that China
is too strong to get hurt,
and America is the one getting screwed.
In other words, China needs to win the narrative war.
Which means these posts are exactly what it needs.
And unfortunately the Trump administration
doesn’t seem to be doing a good job of telling Americans
why tariffs on China are important.
Maybe it’s just me, but
I don’t think we should have a country that sees America
as its enemy making everything from our children’s toys to our medicines.
But you know what they don’t make?
Our toilet paper. USA number…2!!!
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Thanks for watching. I’m Chris Chappell. See you next time.