Should the US accept globalization with 'Chinese characteristics'?

Just as Bill Clinton reset trade policy with Japan, a quarter of a century ago, so Donald Trump is beginning to reset trade policy with China, writes V Anantha Nageswaran. In 1973, one dollar equaled 360 yen, by April 1995, the yen had strengthened to 79 to the dollar. "Japan was battling a recession, an enfeebled banking system stuck with a mountain of bad debt from collapsed real-estate and stock-market bubbles and several other economic woes. To offset the domestic economic stress, the country needed a weak currency. The US worked hard to ensure a different outcome for Japan. I do not recall 'Liberal' commentators despairing at the American treatment of democratic Japan," he writes. Japan's woes started with the Plaza Accord in 1985, by Ronald Reagan, when Japan was forced to accept a devaluation of the dollar relative to the yen. Liberals are enraged that Trump is accusing China of 'currency manipulation'. "Now, suddenly, China is the champion of global integration, President Xi Jinping is the only adult in the room and he is the darling of the Davos crowd," writes Nageswaran. Doing business in China is very difficult as its laws are vague and vary between local governments. Counterfeiting is very big business in China and western companies lose billions of dollars every year. Why then do they want to protect China? Probably because 1.36 billion people with a $10 trillion dollar economy gives it a lot of buying power. Goldman Sachs estimates that overall credit growth in China was 20% in 2016 and effective fiscal deficit was in excess of 6%. The government is battling to stop flight of currency abroad as citizens try to protect their wealth against a falling currency. The central bank apparently spent near $1 trillion last year in trying to protect the renminbi, which devalued 8% last year. Just a few months back the renminbi was included in the basket of currencies that constitute the Special Drawing Rights of the IMF, which means that the currency should be freely tradable. If that happened currency flight could become a torrent, leading to a precipitous fall in the value of the renminbi. That would give Trump a reason to declare China a currency manipulator and impose punitive taxes on its products. That is why Xi Jinping landed up at the World Economic Forum jamboree in Davos, the first time a Chinese president has attended a Davos conference. Capital controls mean that foreign companies find it difficult to repatriate their profits back home and China protects its industries with opaque laws so that foreign companies, like Google and Uber, cannot do business there. Globalization with 'Chinese characteristics' is a fake. It is time someone called their bluff.