Sharyl: In simple terms, what is the U.S. beef with China?
Peter Morici: China doesn't play by the rules, whether it's trades, security
issues, what have you. It's violating its neighbor's sovereignty in the South China Sea, militarizing the area, uh, it's making territorial claims that, that are unreasonable. And on trade, it cheats on its WTO commitments and as a consequence, we have a huge trade deficit with China that probably costs Americans about 2 to 3 million jobs.
Sharyl: WTO is the World Trade Organization.
Peter Morici: Correct. China cheats on its commitments to the World Trade
Organization in a manner that costs America about 2 million to 3 million jobs.
Sharyl: In short order, what do you think President Obama has done right and what has he done wrong if anything related to China?
Peter Morici: He has enabled China and that's the problem. He stood by while China built the islands in the South China Sea and what are supposed to be neutral waters, militarized them, intimidated their neighbors, and we've lost face with allies like uh the Philippines. In addition, uh he has tried to make China back down on currency and trade issues, but when the Chinese stand firm, he's flinched. So, by and large, it's been a policy appeasement, and this hasn't served American interests well
Sharyl: you see as President Trump's biggest challenge coming in?
Peter Morici: Well, you can't do anything about China without offending
somebody in America. If you clamp down on Chinese investment coming in the
United States to free up access for Americans, there'll be American businesses that will lose out because they, they hope to sell out to China. If you clamp down on trade with China, you have American companies invested, like General Electric, IBM, Ford, General Motors. Uh, if you challenge China uh in, in the Pacific, uh there is the potential for real conflict, but if you don't challenge China in the Pacific, it will grow to be the dominant power in the region and push out the United States. Forty percent of the world's shipping goes through the South China sea. The South China Sea has huge oil resources and has considerable mineral resources. Those belong to all the nations in the region, and China is taking them for their own.
Sharyl: China has militarized the China Sea.
Peter Morici: Correct. China has basically created artificial islands and an air strip, and is putting military assets on those islands. In addition, it's using the money that it gains in trade from the United States and its huge trade surplus to build a string of 20 ports from basically the Eastern Pacific, all the way to the Persian Gulf in the Mediterranean, uh in addition, it's using those moneys to build a real Navy, one that can challenge the American Navy, not defeat it, but make our day. So, overall, uh we are enabling the creation of a regional power uh with disruptive intentions, uh that offers an alternative view of how our society should be organized that is not particularly sympathetic to American values of democracy and individual freedom.
Sharyl: If, as you describe, nearly every course of action carries with it criticism and perils, what is it you advice President Trump to do?
Peter Morici: Bite the bullet, and put up with the criticism and perils, and put China back in its box.