How do you like your spending cuts conservatives?

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Korea is a sideshow, Bannon added in the American Prospect interview:

“We’re at economic war with China,” he added. “It’s in all their literature. They’re not shy about saying what they’re doing. One of us is going to be a hegemon in 25 or 30 years and it’s gonna be them if we go down this path. On Korea, they’re just tapping us along. It’s just a sideshow.”

The economic war is not a matter of dumping steel or aluminum, or even pirating American technology: China is establishing a dominant position in high-tech manufacturing, including a new US$50 billion plan to build a domestic semiconductor industry.

China and, to a lesser extent, other Asian competitors employ the full resources of state finances to fund capital-intensive manufacturing investment in the way that the West subsidizes basic infrastructure. In addition, China will commit $1 trillion to building infrastructure overseas to support its foreign trade, including exports as well as raw material supplies. The problem is not merely the dumping of artificially cheap goods into American markets, but a state-supported capital investment program that erodes returns for American investors. As a result, investment in the United States seeks capital-light venues such as software and avoids capital-intensive sectors such as chip production. We are being shut out of the global market for high-tech.

That portends not only economic decline, but critical strategic vulnerabilities. In a world of high-tech war, losing our production capacity in these industries is like losing our steel production in the age of cannon.

To restore America’s strategic position would require a visionary president and a powerful Secretary of Defense with a single-minded determination to undo a generation of damage.