Any Thoughts on China and Trade Wars

My cousin pointed out a satirical post over at Cafe Hayek asking what real wars would look like if they were conducted the same way we do trade wars: each side of the conflict shoots its own people and declares victory. He then asked if I had "any thoughts" about what we ought to do about China and our trade deficit. I thought two of my any thoughts might be worth repeating, though I'm not sure either is right:

A3) Given that this trade benefit to us is at the cost of their own people through the instigation of government, I wonder that I don't see more Libertarians saying we ought to encourage China to repeal their policies for the benefits of the Chinese people. We/They do a good job reminding people that the Chinese worker is a regular person when talking about what our government wants to do (if I want to buy from Xing instead of Sam, why should that be any concern of the US government?) but do a poor job remembering it when talking about what China wants to do (go ahead, please shoot Xing so I can get some plastic junk cheaper). A more cosmopolitan, utilitarian Libertarian could line up with Krugman happily.

A4) There's some good evidence suggesting that a healthy portion of China's phenomenal growth is due to these policies so that they aren't shooting anyone but rather giving them some nasty tasting medicine to make them stronger. Wouldn't work everywhere, but East Asia's growth is heavily based on a growing capitalist market spurred on by heavy government intervention.

A4 contradiction) Easterly recently pointed out that China's growth looks fantastic because it started from such misery. Step 1 - Shoot most of your people. Step 2 - Stop being tyrannically oppressive and add some policies that are merely stupid. Step 3 - Take credit and even worship when the cessation of evil generates enormous growth and fools people into thinking that stupid policies cause growth. "Presto, the change from EXTREME NEGATIVE to LESS NEGATIVE is called a “growth rate,” and it will be high."

Again, I'm not sure which if any of those positions is most accurate, but they are "any thoughts."