Are You Not Alarmed?

Last week, Trump’s secretary of state nominee, Rex Tillerson, said during his confirmation hearing that the United States had to “send China a clear signal that, first, the island-building stops, and second, your access to those islands also is not going to be allowed.”

The only way to do this is with some sort of naval blockade, which China would undoubtedly interpret as an act of war.

.. Trump’s talk on trade alone could escalate into an armed conflict with China. Trump has said he will make continued adherence to the “one China” policy — which recognizes Beijing as the sole government of China — conditional on negotiations over what he sees as currency manipulation and other unfair trade practices by China.

.. during the campaign Trump suggested that the way to contain North Korea was for nuclear proliferation in the region. In March, Trump said of nuclear weapons: “You have so many countries already — China, Pakistan, you have so many countries, Russia — you have so many countries right now that have them.” He continued: “Now, wouldn’t you rather, in a certain sense, have Japan have nuclear weapons when North Korea has nuclear weapons?”

Then there is the destabilizing and downright frightening random rhetoric. Trump has suggested that he equally trusts America’s friend-in-arms Angela Merkel and his friend-in-spirit Vladimir Putin.

Trump told The Washington Post this week that he may start having military parades in major American cities à la North Korea: “Being a great president has to do with a lot of things, but one of them is being a great cheerleader for the country.” He continued: “And we’re going to show the people as we build up our military, we’re going to display our military. That military may come marching down Pennsylvania Avenue. That military may be flying over New York City and Washington, D.C., for parades. I mean, we’re going to be showing our military.”

Debate: Can China Survive Trump?

a fiscal stimulus that puts more money into American shoppers’ pockets could actually boost demand for China’s exports. In Europe, anger is focused more on immigrants than trade.

.. the global economy continues to be distorted by huge trade imbalances. The worst offender is Germany, whose record-breaking surpluses just keep growing.

..  These and other large surpluses are driven not by rising productivity but rather by structurally weak domestic demand, and in most cases this weak demand isn’t being addressed except by being exported.

.. Nearly half the responsibility for absorbing foreign surpluses now falls onto U.S. consumers. That’s why, even if Trump is bluffing, this problem isn’t going away.

.. China probably has little more than two to four years in which to reverse its dependence on debt. Another credit-fueled stimulus would just give Beijing even less time.

.. Yet with household income at just over 50 percent of GDP, among the lowest in history, Beijing must raise household income even as it cuts back investment

Russian Hacking Report Complicates Donald Trump’s View of World Order

Intelligence findings make it harder to warm to Moscow as a way to challenge Beijing

 .. while it’s hard to read the enigmatic Mr. Trump, it also appears his vision of how to prosper in that world is to develop friendly ties with Russia on the one hand, thereby improving the American strategic position to challenge China on the other.

.. the report also said this about the intentions of Russian President Vladimir Putin: “We assess Russian intelligence services will continue to develop capabilities to provide Putin with options to use against the United States, judging from past practice and current efforts. Immediately after Election Day, we assess Russian intelligence began a spearphishing campaign targeting U.S. Government employees” and others, referring to a type of cyberattack. “This campaign could provide material for future influence efforts as well as foreign intelligence collection on the incoming administration’s goals and plans.”

In other words, the intelligence community has just warned the incoming president that his team is the next target.

.. Playing the Russians off against the Chinese was long a standard move in the American strategic handbook. The two Communist giants despised each other and worried about the balance of power tilting the wrong way if the other moved too close to the U.S. In that environment, former Secretary of State Henry Kissinger once said that the American goal was to maintain closer ties with both Moscow and Beijing than the two did with each other.

.. Mr. Trump will take office clearly intending to challenge China more directly on trade and military activity in the South China Sea, but with less freedom to pursue an offsetting warming of relations with the Russians than seemed likely just a few weeks ago.

.. The best way to deal with that strategic reality, Mr. Sestanovich argues, is to use strong ties with America’s networks of allies, in Europe and Asia, to temper any Russian or Chinese efforts to misbehave.

.. The Chinese seek to challenge the U.S., on both economic and security fronts. At the same time, Mr. Carter said, there is in Beijing “a recognition that, in order for them to have the prosperity that they need for their people and for political stability, they can’t be picking fights and they can’t be ruining the system that is working for them.”