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Is the US Becoming a Vassal State to China? - Part IIPrevious Article
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The US Is Losing Jobs and Secrets to China

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chinese worker

Not only have they stolen our secrets and jobs, but are attacking our economy and competitive position as well. Job loss is bad as it leads to an increase in social programs and underemployment. Aside from this, however, it negatively impacts cash available in our economy as well.

For the sake of argument, let’s consider that half of the people who lost jobs to China are unable to find something else. With an average income of $50,000 per person (1) , this equates to $50 billion in lost wages. In all reality, however, the loss to our economy is much more.

To add misery upon misery, we are also being torpedoed in terms of our ability to compete. (2) After all, the Chinese are not stealing secrets like how to wash cars or cut hair, they are targeting strategic resources in key industries. They are stealing our know-how in the world of finance, (3) nuclear tech, (4) energy, battery technology and so much more.

Taking Away Our Edge

Our ability to create value due to such discoveries is what makes us different. Take away that edge and China will leave us in the dust. By stealing America’s best ideas, the Chinese do not have to waste money on research and development, product testing and the like. They essentially target the best and crucial components of the US economy and then steal them.

Once they possess those secrets they then incorporate them into homegrown knockoffs. Think I am exaggerating? Then consider the Chinese high speed rail. The core technology for that is little more than pirated German, Japanese and Canadian tech. (5)

Washington is aware of this theft and is only now reacting. By reacting I do not mean to imply that Washington is calling China to the carpet and demanding change, as that sort of thing may cause China to lose face. What our government is doing is to tell Beijing that we are upset with the theft and that China should tone it down, harsh words indeed. (6)

china/us trade infographic

Should the US Take a Tough Stance With China?

China and the Chinese respect strength; it’s a Confucian thing. Act tough and get results, wilt and you get trampled on. Unfortunately for the common American, we are being trampled on.

By not taking a tougher stance on theft of US tech, America is behaving in much the same way as the world did in Qian Long’s time. We see this “problem” as little more than a tax we must pay in order to engage the Chinese. Should we call them on it then they might get angry, we reason. But how illogical is this?

Our logic is that if we anger Beijing then it might cause problems for the US economy, but my question is how. In the worst case scenario, the value of ideas that China steals from us is greater than the value of all goods we sell to Asia.

What this means is that even if China were to get upset and cancel all trade with America then we would still be better off (China would never do this as they have more to lose). (7)

The reason is that what we are losing is greater than what we gain in trade. For instance, we would save the U$300 billion per year that China steals from us, plus we would create 2 million jobs. Aside from this we would also save $300 billion that we lose to China via our trade deficit with them.

References & Image Credits:
(1) My Budget 360
(2) Foreign Policy
(3) American Banker
(4) Popular Mechanics
(5) Wall Street Journal
(6) Breitbart
(7) Tech Dirt
(8) Robert S. Donovan via photopin cc
(9) Visually

Originally published on

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