The Nixon administration opened the gate for China to venture out and engage more with the world with a focus on our shared interests for peace rather than our differences. The Nixon administration was successful in helping China join the world after decades of poor living and death during several of Mao’s communist economic and cultural failures such as “The Great Leap Forward” and “The Cultural Revolution”. The Nixon administration lifted our trade embargo against them in 1971 thereby creating and setting in motion “The China Miracle”.
As a result, the Chinese went to work and took great advantage of the new opportunities given them. By 1992 things went bad. It was the real acceleration point of China’s campaign of pirating and intellectual property (IP) theft. In that year the Business Software Alliance testified to Congress that we lost $25 million to China that year in software alone, the following year it jumped to $100 million. The world entering the computer age allowed them more tools to steal and pirate with. At first it happened and we made nothing of it. Then the numbers started to materialize in the real and harsh ways of lost U.S. dollars and jobs to China’s illegal activity.
In an effort to correct China’s illegal behavior America then set to “talking” with China and making “agreements” or getting “assurances”. At one point in President Clinton’s tenure he threatened severe tariffs, ultimately to back down and announce another agreement. The piracy continued relatively unchecked through the Bush 41, Bush 43, and Obama Presidencies. By 2015 the IP Commission had estimated China stealing from us around $500 billion as stated in their 2017 report.
In my last blog entry “Beyond China” I stated my belief that it will end and my hope is that it ends well for everyone. The Trump Administration is something of a problem for China as it will not back down from a fair-trade agreement. President Trump is not a politician, he’s a business man. I believe he and his economic team have recognized the gaping hole that China had left in America not only in lost revenue, but in the lives of those that were told China had taken their jobs and they weren’t coming back. That is no longer true. For the first time since President Nixon opened the gate to China you have an America that is no longer willing to accept getting taken advantage of going forward. This is truly a good thing.
If you’d like to make an appointment to go over your options or answer questions, we’re happy to help.
The views and opinions expressed herein are those of the author(s) noted and may or may not represent the views of the Lincoln Investment Companies.