A very interesting move by Google. Looks like Google risks being kicked out of China. As Zelenky jokes in a similar situation,
Google wants not only to take his paperwork, but slippers, coffee and caps from the bar.
The key question is: What if Google wake up tomorrow and discover that Huawei built a parallel infrastructure with its own store,
updates and the search engine ?
Balkanization of Android is not a good thing although I do not like much Google with its cult of surveillance and his operating
system (which always was a second rate). It is a kludge designed got a different hardware then we have today. Google has no clue
about how to design consistent interface. Even Microsoft is better. So there is big space for improvement of Google kludge
(aka Android). I actually do not use Google store much, so I still can get a rooted Huawei phone and be OK :-). Although I
prefer Samsung ...
And I prefer Android 4 to the later versions. It is adequate for my limited needs and I resent overcomplexity of later versions.
Android 7 that I have now is too heavy and it shows. Although the ability to create security zones (essentially virtual machines)
is nice and really opens BYOD possibilities for companies. But this is the only feature that I like.
IMHO Huawei might have enough people to accomplish this trick. And they might work with Samsung, who also wants to kick Google out
of their phones, at least for non-USA markets as Google produces phones with its name as well, which is big no-no for an OS
designer.
I suspect that Putin is laughing hysterically at Trump administration moves in Chinan trade war. Of course Trump is uneducated and
rely mostly on "intuition", but still this is really dangeruous game even at this low level of understanding of international
situation. Trump essentially is forging an alliance of China and Russia despite all huge differences and Russians fears about
Chinese immigration to the country, including I think a military alliance (which would be a good thing as the USA spending one
trillion dollars, if we count from all sources, on military reminds be Brezhnev's USSR; this level of military spendings is crazy
and should be stopped.)
Trump is actually one move from being kicked out of the office with such national security advisers as Bolton.
Chinese language Overseas Minister Wang Yi on referred to as the authorized conflict between Chinese language firm Huawei and the
U.S. authorities “deliberate political suppression,” and he vowed to guard the rights of Chinese language corporations and residents
overseas.
“It is fairly apparent to any honest and unbiased person who the current motion towards a specific firm and Chinese language
particular person is not only a pure judicial case however deliberate political suppression,” Wang mentioned on the sidelines of
China’s annual parliament session.
In December, Canadian authorities arrested Meng Wanzhou, Huawei’s chief monetary officer, on U.S. claim that she violated
sanctions towards Iran. Since Meng’s arrest, two Canadians have been arrested in China, and a 3rd who was already in Chinese
language jail for a drug crime has seen his sentence switched from 15 years to capital sentence.
On Thursday, Huawei announced that it had filed a lawsuit within the U.S., arguing that laws Congress handed final yr proscribing
Huawei enterprise in America was “unconstitutional” as a result of it singling out only Huawei for penalties.
The US has additionally warned several Western allies that Huawei know-how might enable Chinese language intelligence to
infiltrate their networks.
This "security trap" will additionally harms Huawei market share.
No alternative
Guo mentioned that Huawei was left with no alternative however to take legal actions, noting that neither lawmakers nor the
federal government had provided any proof of supposed backdoors in Huawei products.
China and U.S relation can be seen in the lieu of
redistribution of power in world geopolitics. China is rising and U.S is a bit stagnant or rising slowly. The world
is moving towards balance of power. The trend in U.S-Sino relation has been a bit of animosity. Some of the recent
event have put strain in the relationship:
Air Defence zone declaration by China, has infuriated U.S and its allies in Pacific.
U.S apparent support against China with respect to disputed Island in South China Sea.
U.S Asian pivot strategy, which China fears as a strategy to encircle it.
Opposition of U.S in global forum, regarding issues like Sri Lanka, Syria etc.
However despite of a sort of cold war, U.S China trade has been growing leaps and bounds. Both of them are
getting more and more interdependent each day. Thus, China-US relation may have certain flip flops, but it is not a
threat to world peace as was the case during cold war.
That's wishful thinking. While Chinese are making progress, the USA still is the only
technological superpower and can cut oxygen to China companies in one minute.
Increasingly America does not compete with China, but strongarms it because it cannot
compete. For example, in Five G China is ahead in technology, manufacturing capacity, and
turnkey systems. Unable to produce an equivalent product, Washington banned Huawei Five G in
the US and has twisted arms to keep countries that it controls from using Huawei. Seeing that
Huawei had very attractive smartphones that would have competed with Apple, it banned these
also. What America can't do, it seeks to keep anybody else from doing.
WSJ:
"US vs. China in Five G: The Battle Isn't Even Close
HONG KONG -- By most measures, China is no longer just leading the U.S. when it comes to
5G. It is running away with the game. China has more 5G subscribers than the U.S., not just
in total but per capita. It has more 5G smartphones for sale, and at lower prices, and it has
more-widespread 5G coverage. Connections in China are, on average, faster than in the U.S.,
too By year's end, China will have an estimated 690,000 5G base stations -- boxes that blast
5G signals to consumers -- up and running across the country ."
Techies can argue C band versus millimeter waves but I will bet that the Chinese, nothing if
not commercially agile, will have Five G up and running in factories and the IoT and everywhere
else while American pols rattle on about how China is an Existential Threat and the Pentagon
needs more money for Space Command and diversity is more important than schooling anyway.
The shifting balance may already be visible. For example, America used to make superb
aircraft such as the SR-71 and the F-16. Now it has the F-35, an engineering horror. The Boeing
737 MAX, its flagship product, has been grounded internationally because of poor engineering,
second-rate software, and corporate lying about both.
America invented the microcircuit, and once dominated its manufacture. Today, American
companies cannot make the seven nanometer chips now used in high-end telephones, and certainly
not the five nanometer chips now coming online. Neither can China. Both countries buy them from
Taiwan Semiconductor Manufacturing Company, TSMC, Interestingly, the Taiwanese are genetically
and culturally Chinese. Washington has strongarmed TSMC into ceasing to sell to Huawei -- the
US still can't make high end chips. Recently it strongarmed TSMC into agreeing to build a
semiconductor fab in Arizona. Because America can't.
Then there is TikTok, a hugely popular Chinese video app that threatened to break America's
lock on social media. Unable to compete, Washington decided simply to confiscate it on grounds
that it might be used to spy on Americans. (Chinese intelligence is deeply interested in your
daughter's video of her cat.)
Parenthetically, technology seems to be shifting toward East Asia, with America being less
ahead in things in which it is ahead and behind in others. Did I mention demographics?
You can't argue with the real engineering going on over there, especially the Civil
Engineering. When you don't have a thousand tax-payer-supported bureaucrats from a hundred
different agencies and even "Non-Governmental Organizations" blocking every thought you have,
it's hard to get things done. There's no doubt that the huge military spending on "democracy
for the world" and the squandering of the huge amount of goodwill and power accumulated at
the end of the Cold War is part of America's problem (thanks NotSoFast). Mr. Reed never
mentioned the increase in regulation and taxation by the Feral Beast that has turned America
into a Can't-Do country.
It's a great photo essay on the amazing engineering advances out of China, but, as usual,
Fred gets major things wrong.
I don't know what the deal is with Mr. Reed's repetitive harping on Americans' concern for
intellectual property rights. The Chinese will do fine without our help now, but it's the
theft of the IP of American engineering that has gotten them this far so fast. Why would you
not be concerned with your ideas being stolen? Not giving your stuff away for free is not the
same as trying to "cripple development. That's water under the bridge now but stupidity by
Mr. Reed nonetheless.
Home / Articles / Economy
/ All About The Chips: Taiwan Is Next Battleground For Trade Fight ECONOMY , WORLDAll
About The Chips: Taiwan Is Next Battleground For Trade Fight
The media likes to dabble in war-game fantasies between the 21st-century great powers China
and the U.S., but it's a distraction from the hybrid economic warfare that is underway -- from
Trump's tariff hikes to the shores of the advanced economy.
Here in a nutshell is the problem facing the United States. The country that used to be a
world leader in all forms of high tech, especially semiconductor chips, now spends its time
redesigning chocolate chips. By contrast, Taiwan, officially a "rogue province of China,"
but in reality operating as an independent nation of 23 million people, ranked 20th as a
world economy (right behind Switzerland), is now a leading global player in the production of
semiconductor chips. As such it has emerged as the key supply link to a multiplicity of
American and Chinese high-tech companies at a time when the Trump administration is working
hard to cut China's access to Taiwan's semiconductors.
For all of China's significant technological advancements, the country still lags in the
production of semiconductor chips.
Memory chips are principally made by Samsung, SK Hynix (South Korea), and Micron (USA).
Intel also makes some memory chips for its own use. Memory chips are a big issue for China.
Beijing has deployed considerable fiscal resources into producing them and last year set a goal
of producing 5 percent
of the world's total production by the end of 2020.
That's ambitious. It's one thing to produce memory chips, another to get a usable "yield,"
i.e., the percentage of output that actually works. It is a singularly challenging industry in
which to attain industrial self-sufficiency.
Taiwan Semiconductor Manufacturing Company (TSMC) is a "
fabless chip maker " that produces customized semiconductor chips for use in various types
of electronics, such as digital cameras, smartphones, and the new technologically sophisticated
"smart" cars. They also produce chips for the military, and for 5G base stations. China's
leading telecom equipment manufacturer, Huawei, was a large customer, but the Trump
administration has now
mandated that all semiconductor chip manufacturers using U.S. equipment, IP, or design
software will require a license before shipping to Huawei, which has forced TSMC to stop taking
fresh orders from Huawei, as it uses U.S. equipment in its own manufacturing processes,
such as LAM research and Applied Materials.
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The wisdom of so many companies relying on manufacturing facilities located in Taiwan is
debatable. Intel and Micron locate fabs around the world, in part to diversify risk
(earthquake, weather, politics) and to access skilled labor pools. Intel has long had
production facilities in Ireland, Israel, and China itself; it has also purchased Israeli
companies for their research and development. But it also has retained significant production
facilities still in the United States. Similarly, Micron has fabs in Boise Idaho, Utah, and
Manassas, Virginia (right near the CIA and Pentagon.)
TSMC is important because it is pretty much the only place to get processor chips
fabricated, unless you're Intel. In that regard, Intel's recent 2nd quarter
earnings announcement that its planned launch of the company's next generation of chips
will be delayed by six months is most concerning. News of the production delay (which now
pushes the production of the company's latest central processing unit (CPU) -- aka the "brains"
of the laptop -- out to early 2023) generated considerable market anxiety, as evidenced by the
17 percent fall in the share price in the wake of the disclosure. From a long-term perspective,
however, the more alarming aspect is Intel's decision to consider
outsourcing its manufacturing capacity, a sharp break from the company's historic practice.
Intel has been one of the few leading American high-tech companies that has hitherto largely
resisted the panacea of offshoring its production. Much of this is a product of the corporate
culture established by former CEO Andy Grove, who had warned that Silicon Valley risked
"squandering its competitive edge in innovation by failing to propel strong job growth in the
United States," according to a New York Times op-ed by Teresa Tritch written shortly after his
death. Tritch explains
that:
in [Grove's] view, those lower Asian costs masked the high price of offshoring as measured
by lost jobs and lost expertise
Mr. Grove contrasted the start-up phase of a business, when uses for new technologies are
identified, with the scale-up phase, when technology goes from prototype to mass production.
Both are important. But only scale-up is an engine for job growth -- and scale-up, in
general, no longer occurs in the United States. "Without scaling," he wrote, "we don't just
lose jobs -- we lose our hold on new technologies" and "ultimately damage our capacity to
innovate."
Intel's decision comes at a time when American policymakers are finally beginning to
appreciate the adverse economic and strategic consequences of such moves. Were Intel to
follow through on its outsourcing threat, it too would further exacerbate America's strategic
reliance on Taiwan for customized semiconductor manufacturing, as well as undermining the
impact of recent legislative attempts to
rebuild the country's semiconductor manufacturing capacity.
By contrast, economic competition that degenerates into out-and-out war would be a disaster
for all sides. As David Arase, resident professor of International Politics at the
Hopkins-Nanjing Center of the Johns Hopkins University School of Advanced International
Studies, recently contended in
the Asia Times, "Even an unsuccessful invasion of Taiwan would cause a supply chain
disruption." By the same token, actively upgrading
diplomatic relations with Taiwan to something akin to the old
mutual defense treaty that existed prior to Washington's recognition of Beijing in 1979 as
the one sovereign government representing China, would almost certainly provoke a more
aggressive response from Beijing.
U.S. goals should be far more modest: not to underwrite the freedom aspirations of another
country (even a vibrant multi-party democracy such as Taiwan) but, rather, to fix a key
vulnerability in the global supply chain that currently renders the U.S. so reliant on Taiwan.
Even TSMC has implicitly acknowledged its own geographical shortcomings, as it has recently
announced plans to build a new $12 billion chip manufacturing facility in Arizona. Consider
this a form of political risk insurance.
A full-scale defense of Taiwan would cost thousands of lives, and potentially entrench the
U.S. military in a long-term quagmire; it would also represent a logistical nightmare in terms
of supplying such a force over so many thousands of miles (versus an opposing Chinese army a
mere
100 miles away .) To say nothing of the risks posed to numerous substantial American
multinationals already operating in China.
A key conceptual problem that our policymakers and business leaders have today is an
addiction to 19th-century concepts that are anomalous in the context of a 21st-century economy.
David Ricardo's " comparative advantage " --
that "refers to an economy's ability to produce goods and services at a lower opportunity cost
than that of trade partners" -- has less relevance at a time when such advantage can be largely
created as a byproduct of state policy. Countries such as Taiwan, South Korea, and now China
itself, can dominate targeted industries by subsidizing them aggressively. Because of
increasing returns to scale, there is a winner-take-all pattern in which, at any given time,
one nation tends to dominate a huge global market share of the underlying product -- since the
1970s, Japan, South Korea and China in that order. It also creates huge employment
opportunities in high-quality jobs for the countries as they scale up production. This was also
a key insight of Andy Grove .
None of these countries had a natural "comparative advantage" in semiconductor production;
they just followed the
classic pattern of subsidizing their growth via substantial government support,
relentlessly driving down cost inputs to push other marginal manufacturers out of the
industry.
The incessant focus on market share usually comes at a cost of short-term profitability (a
no-no for Wall Street, which focuses on quarterly earnings as intently as an audience waiting
for the white smoke to emerge from a papal election). However, businesses usually recoup these
costs later once they've established dominant market share.
Semiconductors are a high value-added manufacturing platform industry that has a significant
multiplier effect on the domestic economy. It represents an area that should be prioritized by
the U.S., not de-emphasized (as Intel's proposed move threatens to do). The road back to
manufacturing relevance is a long one, but the perpetuation of the current policy risks
exacerbating longstanding pathologies in the U.S. economy, while simultaneously creating new
national security vulnerabilities.
Taiwan is a vibrant multiparty democracy that constitutes a model of economic development.
But those virtues could be threatened if we try, shortsightedly, to turn it into a U.S.
protectorate to address problems that should be resolved much closer to home.
Marshall Auerback is a market analyst and contributor to the Independent Media
Institute .
TSMC's Arizona fab is tiny compared to its 12 Taiwan ones, and more of a sop to the Trump
administration than a serious effort to diversify. The jugular vein of the semiconductor
industry is within easy reach of China's missile arsenal, and indeed the Chinese military can
be said to have been designed specifically for the task of retaking Taiwan.
China might not even need to invade. If they blockade Taiwan--air and sea--and threaten to
destroy ships and aircraft trying to enter or leave Taiwan, they can stop chip export.
It's similar to Iran saying, "Either everybody can export oil from the Gulf or no one
can." China would say, "Either everyone can import chips from Taiwan or no one can. And China
is in a much better position to enforce its will than Iran.
The reaction to Auberback's refutation of comparative advantage would be extreme depending
on who was reacting. The field of economics is like a cult, with a lot of groupthink and
academic homogeneity. In this way failed consensuses are continued and alternatives, even if
they have a good historical track record, are railed against as heterodox and fringe.
Its amazing how in just two or three decades we forgot about basically all of US economic
history and policy history up to that point.
I completely agree that a supply chains including those for memory chips in Taiwan must be
diversified but it is of paramount importance that Taiwan not be left weakened and vulnerable
to mainland China by these shifting supply chains because any weakness in Taiwan will be an
invitation for Beijing to exploit...and if Beijing exploits that invitation then they could
take that invitation all the way to an invasion which will be a detriment of all other
nations in the Pacific. Right now China is focused on Hong Kong, Taiwan and India....with
Hong Kong and Taiwan gone the China will push its aggressive hegemony to Indonesia, Malaysia,
Philippines, etc.
I also complete agree that we (the US, Japan and any other asian nation that will join)
need a treaty protecting Taiwan's independence from mainland China but the very first thing
the US should do prior to such a new treaty is to get other nations to start using the name
Taiwan again on their maps, plane flights, UN, etc because as you know Beijing has been doing
everything possible to not just get nations and businesses to stop recognizing Taiwan and to
even stop using its name in an attempt to erase both the existence of Taiwan and any
distinction that Taiwan is separate from mainland China. The recognition of Taiwan and the
use of its name must be reinforced everywhere in the world as part of the first step in
negotiating a security treaty for Taiwan.
The USA has a one China policy and recognises the Chinese Government as the Government of
China. It's true that it once recognised the Government of Taiwan as the Government of China.
It's a completely new policy you're proposing of splitting China into 2 (or more?) states.
That needs war, as it would if China was proposing to break up the USA, and the USA would
lose a non-nuclear war.
The USA could win a nuclear war but would lose a lot of its population. I don't know how
seriously we should take the US estimate of 90% within a year by starvation and disease with
just an EMP attack. Mexico, Canada and Cuba might accept many US refugees even though they
would also suffer damage. Not all of the area of those countries would suffer EMP damage.
Other countries might also provide some charity.
Mexico, Canada and Cuba could be rewarded for their charity by dividing the USA between
them. That would be a powerful incentive and remove a country fond of wars of aggression. A
USA that poses no threat to anybody could continue to exist and be called Hawaii.
[email protected]
TSMC's Arizona fab is tiny compared to its 12 Taiwan ones, and more of a sop to the Trump
administration than a serious effort to diversify. The jugular vein of the semiconductor
industry is within easy reach of China's missile arsenal, and indeed the Chinese military can
be said to have been designed specifically for the task of retaking Taiwan.
China might not even need to invade. If they blockade Taiwan--air and sea--and threaten to
destroy ships and aircraft trying to enter or leave Taiwan, they can stop chip export.
It's similar to Iran saying, "Either everybody can export oil from the Gulf or no one
can." China would say, "Either everyone can import chips from Taiwan or no one can. And China
is in a much better position to enforce its will than Iran.
The reaction to Auberback's refutation of comparative advantage would be extreme depending
on who was reacting. The field of economics is like a cult, with a lot of groupthink and
academic homogeneity. In this way failed consensuses are continued and alternatives, even if
they have a good historical track record, are railed against as heterodox and fringe.
Its amazing how in just two or three decades we forgot about basically all of US economic
history and policy history up to that point.
I completely agree that a supply chains including those for memory chips in Taiwan must be
diversified but it is of paramount importance that Taiwan not be left weakened and vulnerable
to mainland China by these shifting supply chains because any weakness in Taiwan will be an
invitation for Beijing to exploit...and if Beijing exploits that invitation then they could
take that invitation all the way to an invasion which will be a detriment of all other
nations in the Pacific. Right now China is focused on Hong Kong, Taiwan and India....with
Hong Kong and Taiwan gone the China will push its aggressive hegemony to Indonesia, Malaysia,
Philippines, etc.
I also complete agree that we (the US, Japan and any other asian nation that will join)
need a treaty protecting Taiwan's independence from mainland China but the very first thing
the US should do prior to such a new treaty is to get other nations to start using the name
Taiwan again on their maps, plane flights, UN, etc because as you know Beijing has been doing
everything possible to not just get nations and businesses to stop recognizing Taiwan and to
even stop using its name in an attempt to erase both the existence of Taiwan and any
distinction that Taiwan is separate from mainland China. The recognition of Taiwan and the
use of its name must be reinforced everywhere in the world as part of the first step in
negotiating a security treaty for Taiwan.
The USA has a one China policy and recognises the Chinese Government as the Government of
China. It's true that it once recognised the Government of Taiwan as the Government of China.
It's a completely new policy you're proposing of splitting China into 2 (or more?) states.
That needs war, as it would if China was proposing to break up the USA, and the USA would
lose a non-nuclear war.
The USA could win a nuclear war but would lose a lot of its population. I don't know how
seriously we should take the US estimate of 90% within a year by starvation and disease with
just an EMP attack. Mexico, Canada and Cuba might accept many US refugees even though they
would also suffer damage. Not all of the area of those countries would suffer EMP damage.
Other countries might also provide some charity.
Mexico, Canada and Cuba could be rewarded for their charity by dividing the USA between
them. That would be a powerful incentive and remove a country fond of wars of aggression. A
USA that poses no threat to anybody could continue to exist and be called Hawaii.
[email protected]
French authorities have told telecoms operators planning to buy Huawei 5G equipment that
they won't be able to renew licences for the gear once they expire, effectively phasing the
Chinese firm out of mobile networks, three sources close to the matter said.
####
Quelle surprise that they fall in to line too. No doubt €µ will say something
different to Beijing that France values 'friendly ties' with China, but the die is cast. It
must be tempting for Beijing to kill two birds with one stone by pulling the plug on UK NPPs
as France's EDF is also the project lead. The anti-China crowd want it out of any European
NPPs likewise. We'll see
What a triumph for the global bully. Well, as I have said before – marry in haste,
repent at leisure. European countries which commit to an inferior network just for the
privilege of having Uncle Sam spy on their every move instead of the Chinese will have many
years to ponder their gutlessness. The USA knows now that is in a fight to the finish, and
will want to consolidate as much of the globe as possible under its solid control. But those
who are in thrall will regularly be reminded who is the boss, with forced concessions to
American objectives, so let's have no more of this 'sovereignty' pap. If you're in, you're
ALL in.
It will mess up Huawei's plans and give the iPhone a new lease on life, but it will also
sharpen the division between East and West in terms of networks and smartphones. iPhones will
be bigger in the west as Huawei fades from competition, but iPhones should all but vanish
from the shelves in Asia, which was the growth market, especially China. Loyal American ally
Japan might become a bit of an outlier in its own region. Washington will have a much harder
time spying on China as the demand for American electronics dries up. What goes around comes
around, and the search will be on for neutral companies from whom you can buy a cheap
smartphone to use while you're going from one side to the other, which can draw on the
networks of both. America has been successful to a significant degree in excluding a
competitor who makes a superior product – which, by the bye, goes completely against
the blabber America spouts about a level playing field and trade based on merit – but I
am confident it will not go unanswered by China and American products in China will suffer as
a consequence.
"Much of the focus of the Trump administration's trade dispute with China has centered on
the size of the U.S. bilateral trade deficit. Most economists agree that this focus is
misdirected, and that the existence or size of bilateral trade deficits should not generally
be a matter of concern or a target of public policy. Instead, there is bipartisan agreement
regarding a different problem at the core of trade issues with China: China's persistent
misappropriation of foreign technology. Forced technology transfer occurs when foreign
multinational companies have to provide strategically significant technology to an indigenous
entity they do not control in order to gain access to the massive Chinese market." https://econofact.org/what-is-the-problem-of-forced-technology-transfer-in-china
The western oligarchs want the Chinese oligarchs to be more fair, in particular Huawei to
transfer their tech the other way in order to play in western markets.
"The global business community would generally prefer that business with Huawei could just go
on as usual. Huawei and its affiliates are the acclaimed leaders in 5G technology, and the
rest of the commercial world wants to have access to that technology, and also to be able to
interoperate with it. In other words, to the extent that western companies agree with the US
administration the risks, they have decided that the rewards outweigh those risks and are
willing to accept them -- as most recently evidenced by the news yesterday relating to how
many US components are finding their way into Chinese handsets." https://www.zdnet.com/article/huawei-changes-its-patent-story/
Furthermore, Houston is one the main cities where total 5g tech is being implemented first
along with L.A and Chicago.
Forced Tech Transfers Are on the Rise in China, European Firms Say
The practice has become more widespread despite official assurances from Beijing it would be
stopped
Is the US right to cry foul about forced technology transfer to do business in China
– and what is Beijing's position?
Foreign companies' concerns about having to share their tech secrets are among the matters
being discussed in ongoing US-China trade talks
Beijing's draft foreign investment law could legislate against the practice, but businesses
are sceptical about enforcement
That is correct. Backdoors were baked into every piece of equipment and random number
generator the US and friends are able to influence. Hardware and software.
Read up on how cisco networking equipments were/are intercepted enroute for 'extra'
attention by US Intel depending on where they're going to. With full assistance from cisco.
Other manufacturer also play the same game.
This was the genesis of Huawei, to cut reliance on US network gear and it is also why
China is doing its own silicon. Huawei with the Kirin which is an ARM based processor and
also x86 via the AMD JV and VIA/Cyrix.
Fabs aside the Kirin can cut it with the best and the x86 are about 2-6 years behind but
rapidly improving depending on who you ask.
Their achilles heel is the Fabs where China is about 2-3 generations behind. Today Huawei
is relying on Taiwanese Fabs to produce its cutting edge chips to Huawei's design.
However, these are just a function of investment in research and time, China is well past
the tipping point for self reliance and they'll get to parity and beyond soon enough. So the
west's game is already lost.
Reading between the lines, when China is cut out of the west's networks who then could the
5 peeping Tom's look at? Yup, the serfs, and that's the game plan all along.
China's economic shutdown at the onset of the coronavirus pandemic disrupted many global supply
chains, prompting a number of countries and corporations to accelerate their strategy of
reducing their dependency on China for components.
...the trade war between Washington and Beijing had contributed to the
U.S. fashion industry and tech firms
like Apple rethinking their own supply chains. Japan, heavily dependent on Chinese trade,
is
using $2 billion in economic stimulus funds to subsidize the move of Japanese firms out of
China.
The Trump administration is thus swimming with the current in its effort to isolate China.
It has imposed sanctions because of China's violations of Uyghur human rights. It has levied
penalties against China for its cooperation with Iranian firms. And it has threatened to add
another set of tariffs on top of the existing ones for China's handling of the coronavirus.
Its latest initiative has been to tighten the screws on the Chinese technology firm, Huawei.
Last week, the administration announced sanctions against any firms using U.S.-made equipment
that supply the Chinese tech giant. The chief victim of these new restrictions will be the
Taiwanese firm TSMC, which supplies 90 percent of Huawei's smartphone chips.
In other words, the Trump administration is committed not only to severing U.S. economic
connections with China. It wants to put as much pressure on other countries as well to
disentangle themselves from Chinese manufacturing. Taiwan, of course, has no particular love
for Mainland China. It battles Beijing on a daily basis to get international recognition --
from other countries and from global organizations like the World Health Organization.
But the Taiwanese economy is also heavily dependent on its cross-strait neighbor. As Eleanor
Albert points
out :
China is Taiwan's largest trading partner, accounting for nearly 30 percent of the
island's total trade, and trade between the two reached $150.5 billion in 2018 (up from $35
billion in 1999). China and Taiwan have also agreed to allow banks, insurers, and other
financial service providers to work in both markets.
And it probably won't be Huawei but Taiwan that suffers from the U.S. move. As Michael
Reilly notes
, "Huawei's size in the global market means its Taiwanese suppliers cannot easily find an
alternative customer of comparable standing to replace it." China, meanwhile, will either find
another source of chips outside the U.S. sphere, or it will do what the United States has been
threatening to do: bring production of critical components back closer to home.
Another key player in the containment of China is India. Trump's friendship with Indian
Prime Minister Narendra Modi, a right-wing Hindu nationalist, is more than simply an
ideological affection. Trump sealed
a $3 billion in military sales deal with India in February, with a trade deal still on the
horizon.
Modi, in turn, is hoping to be the biggest beneficiary of the falling out between Washington
and Beijing. "The government in April reached out to more than 1,000 companies in the U.S. and
through overseas missions to offer incentives for manufacturers seeking to move out of China,"
reports Bloomberg . "India is prioritizing medical equipment suppliers, food processing
units, textiles, leather, and auto part makers among more than 550 products covered in the
discussions."
Vietnam is another regional competitor that the United States is supporting in its
containment strategy. With only a couple hundred reported coronavirus cases and zero deaths,
Vietnam is
poised to emerge from the current crisis virtually unscathed. With low labor costs and an
authoritarian government that can enforce deals, it is already a favored alternative for
corporations looking for alternatives to China. But wildcat strikes have been happening in
greater numbers in the country, and the Vietnamese government recently
approved the country's first independent trade union.
Yet with a more technologically sophisticated infrastructure, China will continue to look
more attractive to investors than India or Vietnam.
... ... ...
Trump administration is, frankly, at a huge disadvantage when it tries to
pressure companies to relocate their operations. Writes
Manisha Mirchandani:
The global technology and consumer electronics sectors are especially reliant on China's
infrastructure and specialized labor pool, neither of which will be easy to replicate. The
Chinese government is already mobilizing resources to convince producers of China's unique
merits as a manufacturing location. Zhengzhou, within Henan Province, has appointed officials
to support Apple's partner Foxconn in mitigating the disruptions caused by the coronavirus,
while the Ministry of Finance is increasing credit support to the manufacturing sector.
Further, the Chinese government is likely to channel stimulus efforts to develop the
country's high-tech manufacturing infrastructure, moving away from its low-value
manufacturing base and accelerating its vision for a technology-driven services economy.
The Trump administration is playing the short game, trying to use tariffs and anti-Chinese
sentiment to hobble a rising power. China, on the other hand, is playing the long game,
translating its trade surpluses into structural advantages in a fast-evolving global
economy.
Will the Conflict Turn Hot?
Despite the economic ravages of the pandemic, the Pentagon continues to demand the lion's
share of the U.S. budget. It wants another $705 billion for 2021, after increasing its budget
by 20 percent between 2016 and 2020.
This appalling waste of government resources has already caused long-term damage to the
economic competitiveness of the United States. But it's all the money the Pentagon is spending
on "deterring China" that might prove more devastating in the short term.
John Feffer is the director of Foreign
Policy In Focus , where this article originally appeared.
The administration also took off the gloves with China over U.S. listings by mainland
companies that fail to follow U.S. securities laws. This came after the Commerce Department
finally moved to limit access by Huawei Technologies to high-end silicon chips made with U.S.
lithography machines. The trade war with China is heating up, but a conflict was inevitable and
particularly when it comes to technology.
At the bleeding edge of 7 and 5 nanometer feature size, American tech still rules the world
of semiconductors. In 2018, Qualcomm confirmed its next-generation Snapdragon SoC would be
built at 7 nm. Huawei has already officially announced its first 7nm chip -- the Kirin 980. But
now Huawei is effectively shut out of the best in class of custom-made chips, giving Samsung
and Apple a built-in advantage in handsets and network equipment.
It was no secret that Washington allowed Huawei to use loopholes in last year's blacklist
rules to continue to buy U.S. sourced chips. Now the door is closed, however, as the major
Taiwan foundries led by TSMC will be forced to stop custom production for Huawei, which is
basically out of business in about 90 days when its inventory of chips runs out. But even as
Huawei spirals down, the White House is declaring financial war on dozens of other listed
Chinese firms.
President Donald Trump said
in an interview with Fox Business News that forcing Chinese companies to follow U.S.
accounting norms would likely push them to list in non-U.S. exchanges. Chinese companies that
list their shares in the U.S. have long refused to allow American regulators to inspect their
accounting audits, citing direction from their government -- a practice that market authorities
here have been unwilling or unable to stop.
The attack by the Trump Administration on shoddy financial disclosure at Chinese firms is
long overdue, but comes at a time when the political evolution in China is turning decidedly
authoritarian in nature and against any pretense of market-oriented development. The rising
power of state companies in China parallels the accumulation of power in the hands of Xi
Jinping, who is increasingly seen as a threat to western-oriented business leaders. The trade
tensions with Washington provide a perfect foil to crack down on popular unrest in Hong Kong
and discipline wayward oligarchs.
The latest moves by Beijing to take full control in Hong Kong are part of the more general
retrenchment visible in China. "[P]rivate entrepreneurs are increasingly nervous about their
future," writes Henny Sender in the Financial Times . "In many cases, these
entrepreneurs have U.S. passports or green cards and both children and property in America. To
be paid in U.S. dollars outside China for their companies must look more tempting by the day."
A torrent of western oriented Chinese business leaders is exiting before the door is shut
completely.
The fact is that China's position in U.S. trade has retreated as nations like Mexico and
Vietnam have gained. Mexico is now America's largest trading partner and Vietnam has risen to
11th, reports Qian Wang of Bloomberg News . Meanwhile, China has dropped from 21 percent
of U.S. trade in 2018 to just 18 percent last year. A big part of the shift is due to the
U.S.-Mexico-Canada trade pact, which is expected to accelerate a return of production to North
America. Sourcing for everything from autos to semiconductors is expected to rotate away from
China in coming years.
China abandoned its decades-old practice of
setting a target for annual economic growth , claiming that it was prioritizing goals such
as stabilizing employment, alleviating poverty and preventing risks in 2020. Many observers
accept the official communist party line that the impact of the Covid-19 pandemic made it
almost impossible to fix an expansion rate this year, but in fact the lasting effects of the
2008 financial crisis and the aggressive policies of President Trump have rocked China back on
its heels.
As China becomes increasingly focused inward and with an eye on public security, the
economic situation is likely to deteriorate further. While many observers viewed China's "Belt
& Road" initiative as a sign of confidence and strength, in fact it was Beijing's attempt
to deal with an economic realignment that followed the 2008 crisis. The arrival of President
Trump on the scene further weakened China's already unstable mercantilist economic model, where
non-existent internal demand was supposed to make up for falling global trade flows. Or at
least this was the plan until COVID-19.
"Before the Covid-19 outbreak, many economists were expecting China to set a GDP growth
target of 6% to 6.5% to reflect the gradual slowdown in the pace of expansion over the past few
years," reports Caixin Global . "Growth slid to 6.1% in 2019 from 6.7% in 2018. But the
devastation caused by the coronavirus epidemic -- which saw the economy contract 6.8%
year-on-year in the first quarter -- has thrown those forecasts out of the window."
Out of the window indeed. Instead of presiding over a glorious expansion of the Chinese
sphere of influence in Asia, Xi Jinping is instead left to fight a defensive action
economically and financially. The prospective end of the special status of Hong Kong is
unlikely to have any economic benefits and may actually cause China's problems with massive
internal debt and economic malaise to intensify. Beijing's proposed security law would reduce
Hong Kong's separate legal status and likely bring an end to the separate currency and business
environment.
I honestly don't know if this article is or is not correct... But I wonder...
AmConMag publishes a major anti-China article on most days now. What is happening? What is
the mechanics of this... "phenomenon"?
A place where where Americans opposed to U.S. hegemony because it's harm on everyone
without being overwhelmed by the Neocon acolytes where can we go, anyone ever try to get a
word in on foxnews ?
If you try to reach out to twitter on Tom Cotton or Mike Waltz dismisses you as a
'Chinese govt / Iranian / Russian bot'
You know what, God will judge us and we will all be equal in he eyes of Him
Why should I be afraid. Why should I be silent. And thank you TAC for the opportunity to
post.
I too came here for interesting commentary, - and even better comments... five years ago or
so?
I found the original articles mostly okay, often too verbose, meandering for my taste but
the different point of view made them worthwhile. The readers' comments, now that is
priceless. That brings the real value. That's where we learn. That's where I learn, anyway.
:)
It never occurred to me to message to any politician, I think my voice would be lost in the
cacophony.
The target of my curiosity is that when all these articles start to point in one direction
(like belligerence toward China) how does it happen? Is there a chain of command? It seems
coordinated.
It's possible to be anti-neocon, for their being too ideological, and not pacifist. That is
basically my position.
I agree with most here on Russia and Iran. They are not threats, and in specific cases
should be partners instead. Agree on American imperialism being foolish and often evil. I
believe in a multipolar world as a practical matter. I don't take a soft view of China
however. I believe they do intend to replace nefarious American hegemony with their own
relevant, but equally nefarious, flavor of hegemony. There are few countries in the world
with such a pathological distrust of their own people. I truly believe that country is a
threat that needs to be checked at least for a couple of decades by the rest of the
world.
As to the editorial direction, I think it is merely capitalism. China's perception in
the world is extremely bad lately. I would fully expect the always somewhat Russophile
environment here to seize the moment to say 'see! Russia is not a true threat! It's China!'
RT itself soon after Trump's election I recall posted an article complaining about total
disregard for Chinese election meddling.
You can see when the people holding the leash give a tug on the collar. And it's clear that
the GOP is feeling the need for a warlike political environment.
The most blatant presstitution example, of course, was the National Review, going from
'Never Trump' to full time servicing.
Of all the options in the Western arsenal against China, arresting Huawei's heir apparent
on blatantly forged charges is easily one of the worst.
Chinese or not Chinese, fact is Meng is a member of the bourgeoisie. She is one of them.
It doesn't matter if Huawei only became big and prosperous thanks to the CCP: bourgeoisie is
bourgeoisie, and having a strong one within communist China's belly is essential for the long
term success of capitalism in its war against communism.
By arresting Meng, the capitalists (i.e. Americans) are just driving a hedge between
inside the "Capitalist International". The Chinese capitalist class - who was certainly very
interested in ganging up with their western counterparts to, in the long term, topple the CCP
- is now completely at the mercy of the CCP, as the CCP is now the only guarantor of their
own class status.
The correct strategy would be for the Western bourgeoisie to woo the Chinese bourgeoisie
with as many tax breaks, green cards and other kinds of flattery, so that, withing the course
of some generations, the Chinese bourgeoisie become fully liberal (westernized). It would
then make the infamous "middle class insurgence" theory feasible.
But (and there's always a "but" in the real world), it seems that capitalism itself is in
crisis. It seems that, all of a sudden, the pot became too small to make every alpha male
happy. The international bourgeoisie is now devouring its children (the petite-bourgeoisie,
the "small business owners") and is beginning to devour itself.
Meng is a high profile scalp but won't change anything. it'll just up the ante in this
game of chicken.
in regards to HK's special trading rights, it's horseshit really. HK hasn't made anything
anyone needed for decades. the biggest use of this special relationship (cough cough) is to
move mainland product through Hong Kong to skirt quota and tariff restrictions. as an
inhabitant I won't be sorry to see it go. it hasn't and doesn't benefit the people here
anyway.
as to it's status as a financial hub, do you really think the bankers will leave if there
are money to be made? c'mon who are we kidding here. actually, if it means driving away a few
expat bankers who does nothing except creating glass ceilings and hanging out in various golf
and aristocratic clubs in hk, I'm all for it too.
as to visa free travel, again it's a non issue as well. I remember before the 1997
handover having to get visas to go pretty much anywhere with my HK British passport it was an
utterly useless 3nd class citizen passport. so nothing changes. ironically all of the visa
free agreement came after the handover with no thanks to the Brits.
if USA start freezing assets of individuals and businesses it'll be a sloppily slope for
Trumpville. For one freezing individuals assets won't hurt China on the whole one iota,
second, China can play that game too. US businesses and assets can all be nationalised.
I'm still waiting for China to cancel all Boeing and GE orders because they're defense
suppliers of USA, just as USA is claiming huawei to be as the reason for sanctions.
"The Chinese capitalist class - who was certainly very interested in ganging up with their
western counterparts to, in the long term, topple the CCP - is now completely at the mercy of
the CCP, as the CCP is now the only guarantor of their own class status."
I think you nailed it on the head there. it's not just capitalists, a lot of party
officials shipped their families to the 5 eye countries thinking it's their plan B (often
with obscene, questionable wealth and under fake identities as dual citizenship is not
allowed in China). now it's becoming clear to them they're now in the pocket of uncle Sam,
their loved ones to be sacrificed and used against them in any moment.
I agree, stripping HK of its' special trading agreement isn't going to hurt China in any
meaningful way and I don't think the financial elite of HK are going to flee from China over
this. However, the way in which the US is doing this is an insult to the Chinese (not just
the government, but the Chinese people themselves). The US claiming to have the right to
adjudicate over the domestic policies of other countries is not just an insult but also an
implied threat. In international politics claiming that you have a right of approval over
another nation's internal policies is in effect a claim of superior authority over that
country than that country's own government and it logically brings up all sorts of questions
about what happens if they refuse to accept your claim, do you impose sanctions or go to war
over it?
The bigger threats are coming over Taiwan and Tibet, the US suggesting that it might pass
legislation recognizing them as independent countries means that the US feels it has the
right to unilaterally impose new boarders on countries - that only happens if you win a war,
so the US feels it is at war with China and that it has already won or is so certain to win
that it can announce what it wants the new boarders to look like. That is crazy. What's next,
will the US do what they did with Venezuela and declare some random oligarch the new Chinese
President then sign agreements with him and insist that they are real legal documents (that
might very well be the plan for the leader of the HK protests Joshua Wong).
The US was stupid or crazy or both to try this path with Venezuela to try this with China
means war.
@ 25 kadath... isn't this what the usa is doing with the huawei case in canada? they are
essentially saying - our rules 'trump' all of yours... this is how exceptional nations work
ya know... either that or the bullying tactics are wearing thin with me...
Since the subject of Meng Wanzhou's court case came up, I thought I'd post more detail.
"Meng's lawyers argued that the fact Canada does not have economic sanctions against Iran
meant her alleged actions would not have been considered a crime in Canada because no bank
would have suffered a loss in an identical set of circumstances.
But the judge said Meng's lawyers were trying to make the scope of her analysis too
narrow.
"Canada's law of fraud looks beyond international boundaries to encompass all the relevant
details that make up the factual matrix, including foreign laws that may give meaning to some
of the facts," Holmes said.
____
OK, so that's settled but there is a lot more to come:
"The judge still has to hold hearings to determine whether there is sufficient evidence to
warrant extradition, and Meng has also claimed that her rights were violated at the time of
her arrest.
Holmes pointed out that Canada's minister of justice will also have a chance to weigh in
on whether a decision to commit Meng for extradition would be contrary to Canadian
values.
The ministry confirmed in a statement that extradition proceedings will go ahead "as
expeditiously as possible."
The extraterritoriality the US is claiming over everything related to international
finance and sanctions (not just Iran, but also Cuba, Russia, roughly 1/3 of the world is
under some form of US sanctions) is a constant crime which kills thousands of people per
year. But what the US has been doing over the past few years, changing boarders unilaterally
without evening going to war is a step towards pure insanity. The US "declares" that the
"Golan heights" belong to Israel, the US hates the current President of Venezuela so they
declare some random guy the new President and bully other countries into pretending his is as
well. Ultimately, this is a sign of growing weakness, when the US wanted to change the
government of Iraq they invaded (and failed), when they wanted to breakup Syria they
bankrolled a bunch of mercenaries (and failed again). Now the US isn't even confident enough
to invade Venezuela and impose a new government, so instead they play make-believe with
Guaido. Despite this, Venezula isn't strong enough to punish the US for its' delusions but if
the US insists on playing make-believe with China they will learn some very painful lessons
because China is strong enough to push back.
The Meng case has always been part of the Trump campaign to put pressure on China. The
Judge's ruling today is quite ludicrous but wholly consistent with Canada's historic
tradition of carrying out instructions from the Imperial capital, whether that be in London
or Washington.
It is sad to see a national ruling class prostituting itself and sadder still when it does so
out of fear rather than for profit.
It is all about China, which is in an invulnerable position thanks to Washington having spent
the last twenty years forcing Russia and Iran into Beijing's arms. Having given up diplomacy
in order to concentrate on gangster bullying tactics the US has ended up, the way all
declining empires do, with no friends except those countries so weak that they still crave
the Emperor's favour.
An important ruling in the Canada-US extradition case of Huawei CFO Meng Wanzhou will be
announced shortly. A Canadian court will rule if the case has suitable "double-criminality"
- i.e. an act illegal in both countries - and Men will either be free or one step closer to
being delivered to the Americans. While it is claimed the arrest was political in nature
due to an off-the-cuff comment by Trump, the politicized nature of the charge and
extradition request goes back ten years as revealed in the New York Times in December 2018
(How A National Security Investigation of Huawei Set Off an International Incident Dec 14,
2018):
"The details of the criminal charges against Ms. Meng, filed under seal, remain murky. But
court filings in Canada and interviews with people familiar with the Huawei investigation
show that the events leading to her arrest were set in motion years ago.
How a National Security Investigation of Huawei Set Off an International Incident - The
New York Times 2018-12-15, 4*50 PM
They grew out of an Obama administration national security investigation into Chinese
companies -- including Huawei -- that act as extensions of the country's government,
according to the people familiar with the investigation. The focus only recently shifted to
whether Huawei, and specifically Ms. Meng, deceived HSBC and other banks to get them to
keep facilitating business in Iran. Former federal prosecutors said pursuing Ms. Meng, 46,
for alleged bank fraud proved to be a better line of attack than trying to build a case on
national security grounds...
Counterintelligence agents and federal prosecutors began exploring possible cases
against Huawei's leadership in 2010, according to a former federal law enforcement
official. The effort was led by United States attorney's offices in places where Huawei has
facilities, including Massachusetts, Alabama, California, New York and Texas."
In other words, the Americans had decided to use its courts against Huawei many years
before any charges directed at Meng came to pass. They were literally in search of a
crime.
Some of the uglier features of the Canadian political establishment and media have been
pounding the drums for expanded hostilities directed at China, in concert with other Five
Eyes partners.
Well now that it's 95% sure that Meng will be extradited to the US by the Canadian poodle
courts, we should now consider how China will respond as the full court press against China
has really heated up in the past month. If Meng is extradited to the US, she'll almost
certainly be kept in a high security prison, as I can't imagine the US allowing her to
remain free on bail during the trial and then given a 10-15yr prison sentence which will be
used as a bargaining chip in the US-China trade war. US intelligence agencies will
constantly interrogate/torture/bribe her in efforts to get her to flip against the Chinese
government or provide them some intelligence. Given her high status I think China may want
to consider the following options
1. Arrest some more Canadian "diplomats" (i.e. spies) and perhaps even up the ante by
arresting a US spy.
2. Pull an Assange and have Meng flee to the Chinese Consulate in Vancouver, I've seen the
Consulate and it is much roomier than the Ecuadorian embassy that Julian was stuck in. This
would ensure her protection and bypass the corrupt Courts, making it purely a question of
diplomacy between states (not that Canada has good diplomacy skills, but if China was also
holding a bunch of Canadian spies it would make sense to make this problem go away).
6 months ago, I think the Chinese would have allowed her to be extradited to the US and
then fought it out in backdown diplomacy with the US. But will all of the crazy things the
US has done in the past 2 months I think China has had enough and will start pushing back.
Heck, in the past 48 hours a congressman put forth a motion to declare Tibet an independent
country illegally occupied by China and the Whitehouse is threatening to strip Hong Kong of
special trading rights.
Of all the options in the Western arsenal against China, arresting Huawei's heir
apparent on blatantly forged charges is easily one of the worst.
Chinese or not Chinese, fact is Meng is a member of the bourgeoisie. She is one of them.
It doesn't matter if Huawei only became big and prosperous thanks to the CCP: bourgeoisie
is bourgeoisie, and having a strong one within communist China's belly is essential for the
long term success of capitalism in its war against communism.
By arresting Meng, the capitalists (i.e. Americans) are just driving a hedge between
inside the "Capitalist International". The Chinese capitalist class - who was certainly
very interested in ganging up with their western counterparts to, in the long term, topple
the CCP - is now completely at the mercy of the CCP, as the CCP is now the only guarantor
of their own class status.
The correct strategy would be for the Western bourgeoisie to woo the Chinese bourgeoisie
with as many tax breaks, green cards and other kinds of flattery, so that, withing the
course of some generations, the Chinese bourgeoisie become fully liberal (westernized). It
would then make the infamous "middle class insurgence" theory feasible.
But (and there's always a "but" in the real world), it seems that capitalism itself is
in crisis. It seems that, all of a sudden, the pot became too small to make every alpha
male happy. The international bourgeoisie is now devouring its children (the
petite-bourgeoisie, the "small business owners") and is beginning to devour itself.
"... Guo was far less vocal than colleague Richard Yu, who runs the consumer division responsible for smartphones. The outspoken executive said the restrictions that ostensibly aim to allay U.S. cybersecurity concerns are really designed to safeguard American dominance of global tech. ..."
"... "The so-called cybersecurity reasons are merely an excuse," Yu, head of the Chinese tech giant's consumer electronics unit, wrote in a post to his account on messaging app WeChat earlier on Monday. "The key is the threat to the technology hegemony of the U.S." posed by Huawei, he added. ..."
Trump's economic war on China comes in the shadow of an even deadlier military escalation.
And it may not stop after November, no matter who wins the election.
Economists like to
think of the wreckage caused by stock market downturns, widespread bankruptcies, and corporate
downsizing as "creative destruction." As it destroys the old and the dysfunctional, the
capitalist system continually spurs innovation, much as a forest fire prepares the ground for
new growth.
Or so the representatives of the dismal science argue.
Donald Trump, who is neither economist nor scientist, has his own version of creative
destruction. He is determined to destroy the Affordable Care Act and replace it with his own
health insurance alternative. He has torn up the Iran nuclear deal in favor of negotiating
something brand new with Tehran. He has withdrawn from the Paris climate accord and argues that the United
States is reducing carbon emissions in its own superior manner.
The problem, of course, is that Trump is very good at destruction but, despite his previous
job as a real estate mogul, exceedingly bad at construction. Indeed, there's abundant evidence
that he never intended to replace what he is destroying with anything at all. Trump has never
offered any viable alternative to Obamacare or any new negotiating framework with Iran. And
prior to the recent economic downturn, U.S. carbon emissions were increasing after several
years of decline.
Perhaps the most dangerous example of Trump's uncreative destruction is his approach to
China.
Previously, Trump said that he simply wanted to level the playing field by placing trade
with China on a fairer and more reciprocal basis, strengthening the regime of intellectual
property rights, and stopping Beijing from manipulating its currency.
He was willing to go to great lengths to accomplish this goal. The tariffs that Trump
imposed on Chinese products precipitated a trade war that jeopardized the livelihoods of
millions of American farmers and workers. The initial trade deal that the United States and
China signed in January, even though many of the U.S. tariffs remain in place, was supposed to
be the grand alternative to the old and dysfunctional trade relationship.
But here again, Trump is not telling the truth. He and his team have a very different set of
objectives. As with so many other elements of his domestic and foreign policy, Trump wants to
tear apart the current system -- in this case, the network of economic ties between the United
States and China -- and replace it with absolutely nothing at all.
Oh sure, Trump believes that U.S. manufacturers can step up to take the place of Chinese
suppliers. More recently, as the administration "turbocharges" its efforts to isolate China in
response to its purported pandemic mistakes , it has
talked of creating
an Economic Prosperity Network of trusted allies like South Korea, Australia, India, and
Vietnam. But this is all whistling in the dark, because the administration doesn't really
understand the consequences -- for the world economy, for the U.S. economy -- of tearing apart
the global supply chain in this way.
Just how poorly Trump understands all this is reflected in
his statement last week that "we could cut off the whole relationship" with China and "save
$500 billion." This from the president who erroneously believes that China
is paying the United States "billions and billions of dollars of tariffs a month." What else do
you expect from a man who received a BS in economics from Wharton?
Unlike many of the administration's other policies, however, its hardline approach to China
has some bipartisan support. Engagement with China has virtually
disappeared as a policy option in the Democratic Party. Joe Biden, the Democrats'
presumptive presidential candidate, has attempted to present himself as the tougher alternative
when it comes to China, a misguided
effort to fend off charges of his bedding down with Beijing.
Finger to the wind, Biden is crafting policies in response not just to Trump but to public
opinion. In 2017, 44 percent of Americans had a favorable view of China, compared to 47 percent
who held an unfavorable opinion of the country, according to Pew. In
this year's survey , only 26 percent looked at China positively versus 66 percent who
viewed it negatively. The latter category includes 62 percent of Democrats.
Writing for the Atlantic Council, Michael Greenwald
sums up the new conventional wisdom of the centrists:
The United States can no longer remain content with the notion of a Chinese economic
threat arising in the distant future. The advent of COVID-19 has made it more apparent than
any other time including the US-China trade war that now is the moment for the United States,
European Union, and other like-minded countries to diversify supply chains away from
China.
That's what makes Trump's uncreative destruction vis a vis China so dangerous. It may not
stop after November, no matter who wins the election.
The Great Disentanglement
China's economic shutdown at the onset of the coronavirus pandemic disrupted many global supply
chains, prompting a number of countries and corporations to accelerate their strategy of
reducing their dependency on China for components.
Rising labor costs in China, concerns over human rights abuses there, but especially the
trade war between Washington and Beijing had contributed to the
U.S. fashion industry and tech firms
like Apple rethinking their own supply chains. Japan, heavily dependent on Chinese trade,
is
using $2 billion in economic stimulus funds to subsidize the move of Japanese firms out of
China.
The Trump administration is thus swimming with the current in its effort to isolate China.
It has imposed sanctions because of China's violations of Uyghur human rights. It has levied
penalties against China for its cooperation with Iranian firms. And it has threatened to add
another set of tariffs on top of the existing ones for China's handling of the coronavirus.
Its latest initiative has been to tighten the screws on the Chinese technology firm, Huawei.
Last week, the administration announced sanctions against any firms using U.S.-made equipment
that supply the Chinese tech giant. The chief victim of these new restrictions will be the
Taiwanese firm TSMC, which supplies 90 percent of Huawei's smartphone chips.
In other words, the Trump administration is committed not only to severing U.S. economic
connections with China. It wants to put as much pressure on other countries as well to
disentangle themselves from Chinese manufacturing. Taiwan, of course, has no particular love
for Mainland China. It battles Beijing on a daily basis to get international recognition --
from other countries and from global organizations like the World Health Organization.
But the Taiwanese economy is also heavily dependent on its cross-strait neighbor. As Eleanor
Albert points
out :
China is Taiwan's largest trading partner, accounting for nearly 30 percent of
the island's total trade, and trade between the two reached $150.5 billion in 2018 (up from
$35 billion in 1999). China and Taiwan have also agreed to allow banks, insurers, and other
financial service providers to work in both markets.
And it probably won't be Huawei but Taiwan that suffers from the U.S. move. As Michael
Reilly notes
, "Huawei's size in the global market means its Taiwanese suppliers cannot easily find an
alternative customer of comparable standing to replace it." China, meanwhile, will either find
another source of chips outside the U.S. sphere, or it will do what the United States has been
threatening to do: bring production of critical components back closer to home.
Another key player in the containment of China is India. Trump's friendship with Indian
Prime Minister Narendra Modi, a right-wing Hindu nationalist, is more than simply an
ideological affection. Trump sealed
a $3 billion in military sales deal with India in February, with a trade deal still on the
horizon.
Modi, in turn, is hoping to be the biggest beneficiary of the falling out between Washington
and Beijing. "The government in April reached out to more than 1,000 companies in the U.S. and
through overseas missions to offer incentives for manufacturers seeking to move out of China,"
reports Bloomberg . "India is prioritizing medical equipment suppliers, food processing
units, textiles, leather, and auto part makers among more than 550 products covered in the
discussions."
Vietnam is another regional competitor that the United States is supporting in its
containment strategy. With only a couple hundred reported coronavirus cases and zero deaths,
Vietnam is
poised to emerge from the current crisis virtually unscathed. With low labor costs and an
authoritarian government that can enforce deals, it is already a favored alternative for
corporations looking for alternatives to China. But wildcat strikes have been happening in
greater numbers in the country, and the Vietnamese government recently
approved the country's first independent trade union.
Yet with a more technologically sophisticated infrastructure, China will continue to look
more attractive to investors than India or Vietnam.
Don't Count Out China
If your image of the Chinese economy is stuck in the 1980s -- cheap toys and mass-produced
baubles -- then you probably think that severing economic ties with the country is no big deal.
America can produce its own plastic junk, right?
But China is no longer hurrying to catch up to the West. In some ways, the West is already
in China's rearview mirror.
Huawei is well-known for the part it's playing in the rollout of 5G networks worldwide.
China is not only ahead of the curve in upgrading to 5G domestically, it is busy manufacturing
all the new tech that will run on these high-speed networks, like virtual reality and
augmented reality and AI-driven devices.
Perhaps more to the point, China is not simply part of the global supply chain. It is using
these new technologies to revolutionize the global supply chain.
For instance, it's using 3-D modeling to shorten product development. It has long integrated
drones into its distribution networks. "Chinese supply chain companies are incorporating
groundbreaking technologies like cloud-based systems, data analytics, and artificial
intelligence (AI) and using them to redesign supply chain operations," writes Adina-Laura
Achim.
And don't discount the role of a well-financed, centralized, authoritarian government. The
Trump administration is, frankly, at a huge disadvantage when it tries to pressure companies to
relocate their operations. Writes
Manisha Mirchandani:
The global technology and consumer electronics sectors are especially reliant on
China's infrastructure and specialized labor pool, neither of which will be easy to
replicate. The Chinese government is already mobilizing resources to convince producers of
China's unique merits as a manufacturing location. Zhengzhou, within Henan Province, has
appointed officials to support Apple's partner Foxconn in mitigating the disruptions caused
by the coronavirus, while the Ministry of Finance is increasing credit support to the
manufacturing sector. Further, the Chinese government is likely to channel stimulus efforts
to develop the country's high-tech manufacturing infrastructure, moving away from its
low-value manufacturing base and accelerating its vision for a technology-driven services
economy.
The Trump administration is playing the short game, trying to use tariffs and anti-Chinese
sentiment to hobble a rising power. China, on the other hand, is playing the long game,
translating its trade surpluses into structural advantages in a fast-evolving global
economy.
Will the Conflict Turn Hot?
Despite the economic ravages of the pandemic, the Pentagon continues to demand the lion's
share of the U.S. budget. It wants another $705 billion for 2021, after increasing its budget
by 20 percent between 2016 and 2020.
This appalling waste of government resources has already caused long-term damage to the
economic competitiveness of the United States. But it's all the money the Pentagon is spending
on "deterring China" that might prove more devastating in the short term.
The U.S. Navy announced
this month that it was sending its entire forward-deployed sub fleet on "contingency
response operations" as a warning to China. Last month, the U.S. Navy Expeditionary Strike
Group
sailed into the South China Sea to support Malaysia's oil exploration in an area that China
claims. Aside from the reality that oil exploration makes no economic sense at a time of record
low oil prices, the United States should be helping the countries bordering the South China Sea
come to a fair resolution of their disputes, not throwing more armaments at the problem.
There's also heightened risk of confrontation in the Taiwan Strait, the East China Sea, and
even in outer space . A huge portion of the Pentagon's budget goes toward preparing for war
with China -- and, frankly, provoking war as well.
What does this all have to do with the Great Disentanglement?
The close economic ties between the United States and China have always represented a
significant constraint on military confrontation. Surely the two countries would not risk
grievous economic harm by coming to blows. Economic cooperation also provides multiple channels
for resolving conflicts and communicating discontent. The United States and Soviet Union never
had that kind of buffer.
If the Great Disentanglement goes forward, however, then the two countries have less to lose
economically in a military confrontation. Trading partners, of course, sometimes go to war with
one another. But as the data
demonstrates , more trade generally
translates into less war.
There are lots and lots of problems in the U.S.-China economic relationship. But they pale
in comparison to World War III. Share this:
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So, yes, the West still has a realistic chance of destroying China and inaugurating a new
cycle of capitalist prosperity.
What happens with the "decoupling"/"Pivot to Asia" is that, in the West, there's
a scatological theory [go to 10th paragraph] - of Keynesian origin - that socialism can
only play "catch up" with capitalism, but never surpass it when a "toyotist phase" of
technological innovation comes (this is obviously based on the USSR's case). This theory
states that, if there's innovation in socialism, it is residual and by accident, and that
only in capitalism is significant technological advancement possible. From this, they posit
that, if China is blocked out of Western IP, it will soon "go back to its place" - which is
probably to Brazil or India level.
If China will be able to get out of the "Toyotist Trap" that destroyed the USSR, only time
will tell. Regardless, decoupling is clearly not working, and China is not showing any signs
so far of slowing down. Hence Trump is now embracing a more direct approach.
As for the USA, I've put my big picture opinion about it some days ago, so I won't repeat
myself. Here, it suffices to say that, yes, I believe the USA can continue to survive as an
empire - even if, worst case scenario, in a "byzantine" form. To its favor, it has: 1) the
third largest world population 2) huge territory, with excellent proportion of high-quality
arable land (35%), that basically guarantees food security indefinitely (for comparison, the
USSR only had 10% of arable land, and of worse quality) 3) two coasts, to the two main Oceans
(Pacific and Atlantic), plus a direct exit to the Arctic (Alaska and, de facto, Greenland and
Canada) 4) excellent, very defensive territory, protected by both oceans (sea-to-sea),
bordered only by two very feeble neighbors (Mexico and Canada) that can be easily absorbed if
the situation asks to 4) still the financial superpower 5) still a robust "real" economy -
specially if compared to the micro-nations of Western Europe and East-Asia 6) a big fucking
Navy, which gives it thalassocratic power.
I don't see the USA losing its territorial integrity anytime soon. There are separatist
movements in places like Texas and, more recently, the Western Coast. Most of them exist only
for fiscal reasons and are not taken seriously by anyone else. The Star-and-Stripes is still
a very strong ideal to the average American, and nobody takes the idea of territory loss for
real. If that happens, though, it would change my equation on the survival of the American
Empire completely.
As for Hong Kong. I watched a video by the chief of the PLA last year (unfortunately, I
watched it on Twitter and don't have the link with me anymore). He was very clear: Hong Kong
does not present an existential threat to China. The greatest existential threat to China
are, by far, Xinjiang and Tibet, followed by Taiwan and the South China Sea. Hong Kong is a
distant fourth place.
One problem with your scenario is that the US navy may be over-extended in parts of the
world where all the enemy has to do is to cut off supply lines to battleship groups and then
those ships would be completely helpless. US warships in the Persian Gulf with the Strait of
Hormuz sealed off by Iran come to mind.
Incidents involving US naval ship collisions with slow-moving oil tankers in SE Asian
waters and some other parts of of the the world, resulting in the loss of sailors, hardly
instill the notion that the US is a mighty thalassocratic force.
It's my understanding also that Russia, China and maybe some other countries have invested
hugely in long-range missiles capable of hitting US coastal cities and areas where the bulk
of the US population lives.
And if long-range missiles don't put paid to the notion that projecting power through
sending naval warships all over the planet works, maybe the fact that many of these ships are
sitting ducks for COVID-19 infection clusters might, where the US public is concerned.
I agree the new anti-ship missile technology may have changed the rules of naval
warfare.
However, it's important to highlight that, contrary to the US Army, the USN has a stellar
record. It fought wonderfully against the Japanese Empire in 1941-1945, and successfully
converted both the Pacific and the Atlantic into "American lakes" for the next 75 years. All
the Americans have nowadays it owes its Navy.
But you may be right. Maybe the USN is also susceptible to degeneration.
Of the existing 30 or so high-tech productive chains, China only enjoys superiority at 2
or 3 (see 6:48). It is still greatly dependent on the West to development and still is a
developing country.
Based on what I've read, China is on a fast track to develop technology on their own. In
addition, technology development is world-wide these days. What China can not develop itself
- quickly enough, time is the only real problem - it can buy with its economic power.
"if China is blocked out of Western IP, it will soon "go back to its place" - which is
probably to Brazil or India level."
Ah, but that's where hackers come in. China can *not* be blocked out of Western IP. First,
as I said, China can *buy* it. Unless there is a general prohibition across the entire
Western world, and by extension sanctions against any other nation from selling to China -
which is an unenforceable policy, as Iran has shown - China can buy what it doesn't have and
then reverse-engineer it. Russia will sell it if no one else will.
Second, China can continue to simply acquire technology through industrial espionage.
Every country and every industry engages in this sort of thing. Ever watch the movie
"Duplicity"? That shit actually happens. I read about industrial espionage years ago and it's
only gotten fancier since the old days of paper files. I would be happy to breach any US or
EU industrial sector and sell what I find to the Chinese, the Malaysians or anyone else
interested. It's called "leveling the playing field" and that is advantageous for everyone.
If the US industrial sector employees can't keep up, that's their problem. No one is
guaranteed a job for life - and shouldn't be.
"1) the third largest world population"
Which is mostly engaged in unproductive activities like finance, law, etc. I've read that
if you visit the main US universities teaching science and technology, who are the students?
Chinese. Indians. Not Americans. Americans only want to "make money" in law and finance, not
"make things."
"2) huge territory, with excellent proportion of high-quality arable land (35%), that
basically guarantees food security indefinitely"
In military terms, given current military technology, territory doesn't matter. China has
enough nuclear missiles to destroy the 50 Major Metropolitan Areas in this country. Losing
100-200 millions citizens kinda puts a damper on US productivity. Losing the same number in
China merely means more for the rest.
"3) two coasts, to the two main Oceans (Pacific and Atlantic)"
Which submarines can make irrelevant. Good for economic matters - *if* your economy can
continue competing. China has one coast - but its Belt and Road Initiative gives it economic
clout on the back-end and the front-end. I don't see the US successfully countering that
Initiative.
"4) excellent, very defensive territory, protected by both oceans (sea-to-sea)"
Which only means the US can't be "invaded". That's WWI and WWII thinking the US is mired
in. Today, you destroy an opponent's military and, if necessary, his civilian population, or
at least its ability to "project" force against you. You don't "invade" unless it's some weak
Third World country. And if the US can't "project" its power via its navy or air force,
having a lot of territory doesn't mean much. This is where Russia is right now. Very
defensible but limited in force projection (but getting better fast.) The problem for the US
is China and Russia are developing military technology that can prevent US force projection
around *their* borders.
"bordered only by two very feeble neighbors (Mexico and Canada) that can be easily
absorbed if the situation asks"
LOL I can just see the US "absorbing" Mexico. Canada, maybe - they're allies anyway.
Mexico, not so much. You want a "quagmire", send the US troops to take on the Mexican drug
gangs. They aren't Pancho Villa.
"4) still the financial superpower"
Uhm, what part of "Depression" did you miss? And even if that doesn't happen now,
continued financial success is unlikely. Like pandemics, shit happens in economics and
monetary policy.
"a big fucking Navy, which gives it thalassocratic power."
That can be sunk in a heartbeat and is virtually a colossal money pit with limited
strategic value given current military technology which both China and Russia are as advanced
as the US is, if not more so. Plus China is developing its own navy quickly. I read somewhere
a description of one Chinese naval shipyard. There were several advanced destroyers being
developed. Then the article noted that China has several more large shipyards. That Chinese
long coast comes in handy for that sort of thing.
China Now Has More Warships Than the U.S.
But sometimes quantity doesn't trump quality. [My note: But sometimes it does.] https://tinyurl.com/y7numhef
That's just the first article I found, from a crappy source. There are better analyses, of
course.
"I don't see the USA losing its territorial integrity anytime soon. There are separatist
movements in places like Texas and, more recently, the Western Coast. Most of them exist only
for fiscal reasons and are not taken seriously by anyone else."
I'd agree with that. I hear this "California secession" crap periodically and never
believe it. However, for state politicians, the notion of being "President" of your own
country versus a "Governor" probably is tempting to these morons. State populations are
frequently idiots as well, as the current lockdown response is demonstrating. All in all,
though, if there are perceived external military threats, that is likely to make the states
prefer to remain under US central control.
"Britain had to agree to the pact because it had lost the capability to defend the
colony.".."
That was the excuse. I believe HK was offered to China in return for Deng to open up and
turn China capitalist. Deng was not the one who
demanded HK return. Britain initiated the discussions. Deng gladly accepted although he
insisted on maintaining their authoritarian form of undemocratic government and left HK's
fate ambiguous so Britain could get support from their people and the HK elite. The party
elites were happy to be able to join the Western Elites in accumulating an unequal share of
the wealth. The Soviet elites led by the US Globalist puppet Gorbachev chose the same path
although they chose Fake Democracy and rule of the oligarchs as in the US rather than party
control of China
HK is protected against US tarrifs imposed on China goods. China exports a good chunk of
goods through HK. If Trump were really serious he would remove HK's protected status.
The timing doesn't add up. China opened up in 1972 (the famous Nixon-Mao handshake), while
the UK's agreement to give HK back was from 1984 - well into the Thatcher Era.
The most likely reason for the UK to decide to obey the lease deal was of military nature:
the valuable land necessary to defend HK was the flatland adjacent to the city proper, where
potable water comes from. It already part of the Mainland, thus rendering the defense of HK
virtually impossible without an outright invasion of the Mainland itself.
Margaret Thatcher probably didn't want to obey the treaty (99-year lease), as a good
neoliberal she was, but her military advisors probably warned her of the practical
difficulties, and, since it was a 99-year lease anyway, she must've agreed to simply allow
the treaty to be followed.
It is important to highlight that, in 1984, there were a lot of reasons the capitalist
world should be optimist about China becoming capitalist. After all, it really got off the
Soviet sphere after 1972, and Deng's reforms were - from the point of view of a vulgar
(bourgeois) economist - indeed a clear path to a capitalist restoration. It didn't cross
Thatcher's mind that China could stand its ground and remain socialist - at least not in
1984. If you read the sources of the time, you will easily see the Western elites treated
China's return to capitalism as a given.
It is still greatly dependent on the West to development and still is a developing
country.
So, yes, the West still has a realistic chance of destroying China and inaugurating a new
cycle of capitalist prosperity.
What happens with the "decoupling"/"Pivot to Asia" is that, in the West, there's
a scatological theory [go to 10th paragraph] - of Keynesian origin - that socialism can
only play "catch up" with capitalism, but never surpass it when a "toyotist phase" of
technological innovation comes (this is obviously based on the USSR's case). This theory
states that, if there's innovation in socialism, it is residual and by accident, and that
only in capitalism is significant technological advancement possible. From this, they posit
that, if China is blocked out of Western IP, it will soon "go back to its place" - which is
probably to Brazil or India level.
If China will be able to get out of the "Toyotist Trap" that destroyed the USSR, only time
will tell. Regardless, decoupling is clearly not working, and China is not showing any signs
so far of slowing down. Hence Trump is now embracing a more direct approach.
As for the USA, I've put my big picture opinion about it some days ago, so I won't repeat
myself. Here, it suffices to say that, yes, I believe the USA can continue to survive as an
empire - even if, worst case scenario, in a "byzantine" form. To its favor, it has: 1) the
third largest world population 2) huge territory, with excellent proportion of high-quality
arable land (35%), that basically guarantees food security indefinitely (for comparison, the
USSR only had 10% of arable land, and of worse quality) 3) two coasts, to the two main Oceans
(Pacific and Atlantic), plus a direct exit to the Arctic (Alaska and, de facto, Greenland and
Canada) 4) excellent, very defensive territory, protected by both oceans (sea-to-sea),
bordered only by two very feeble neighbors (Mexico and Canada) that can be easily absorbed if
the situation asks to 4) still the financial superpower 5) still a robust "real" economy -
specially if compared to the micro-nations of Western Europe and East-Asia 6) a big fucking
Navy, which gives it thalassocratic power.
I don't see the USA losing its territorial integrity anytime soon. There are separatist
movements in places like Texas and, more recently, the Western Coast. Most of them exist only
for fiscal reasons and are not taken seriously by anyone else. The Star-and-Stripes is still
a very strong ideal to the average American, and nobody takes the idea of territory loss for
real. If that happens, though, it would change my equation on the survival of the American
Empire completely.
As for Hong Kong. I watched a video by the chief of the PLA last year (unfortunately, I
watched it on Twitter and don't have the link with me anymore). He was very clear: Hong Kong
does not present an existential threat to China. The greatest existential threat to China
are, by far, Xinjiang and Tibet, followed by Taiwan and the South China Sea. Hong Kong is a
distant fourth place.
"They Saw This Day Coming" - Huawei Forges Alliances With Rival Chipmakers As
Washington's Crackdown Intensifies by Tyler Durden Fri, 05/22/2020 - 18:05 The US
Commerce Department's latest move to block companies from selling products to Huawei that were
created with American technology, equipment or software has undoubtedly hurt the Chinese
telecoms giant. But it won't be nearly enough to take it down.
Since Washington launched its campaign against Huawei two years ago (when the trade tensions
between the US and China started to heat up, as President Trump started slapping more tariffs
on foreign goods) the company has been strengthening ties with contract chipmakers in Taiwan
and elsewhere, while ramping up its own microchip-technology arm, known as HiSilicon
Technologies.
On Friday,
Nikkei reported that Huawei had initiated conversations with other mobile chipmakers to try
and figure out where it might source certain essential components for its handsets (remember,
Huawei is the second-largest cellphone maker by sales volume) and other products.
Of course, the crackdown cuts both ways, as several American companies relied heavily on
Huawei's business (they can still apply for licenses to continue selling to Huawei...so long as
Commerce approves).
As
we reported earlier this week , it's not just American chipmakers that are distancing
themselves from Huawei: some Taiwan-based chipmakers are also dropping the telecoms giant for
fear of being targeted by Treasury sanctions, including TSMC, the world's largest contract
chipmaker.
Now, Huawei is reportedly in talks with MediaTek, the world's second-largest contract chip
producer.
Huawei Technologies is seeking help from rival mobile-chip makers to withstand a U.S.
clampdown aimed at crippling the Chinese company, sources familiar with the matter told the
Nikkei Asian Review.
Huawei is in talks with MediaTek, the world's second-largest mobile chip developer after
Qualcomm of the U.S., and UNISOC, China's second-largest mobile chip designer after Huawei's
HiSilicon Technologies unit, to buy more chips as alternatives to keep its consumer
electronics business afloat, the sources said.
To work with a contract chipmaker, Huawei would still need to design its own chips. Over the
past two years, Huawei has expanded its team of engineers working on chip design to more than
10,000, Nikkei said.
To be sure, MediaTek already makes low- and medium-end chips for Huawei, evidence that the
company, which was founded by a veteran of China's PLA, and purportedly maintains strong links
to the Chinese military, has been bracing for the other shoe to drop. MediaTek, meanwhile, is
still trying to figure out if it can meet Huawei's latest bid.
"Huawei has foreseen this day coming. It started to allocate more mid- to low-end mobile
chip projects to MediaTek last year amid its de-Americanization efforts," one of the sources
said. "Huawei has also become one of the key clients for the Taiwanese mobile chip
developer's mid-end 5G mobile chip for this year."
MediaTek is evaluating whether it has sufficient human resources to fully support Huawei's
aggressive bid, as the Chinese company is asking for volume 300% above its usual procurement in
the past few years, another source familiar with the talks said.
The situation has also created an opportunity for small Chinese chipmakers (working, we
imagine, mostly with technology stolen from American and Taiwanese companies) to expand.
Huawei also seeks to deepen its collaboration with UNISOC, a Beijing-backed mobile chip
developer that relies mostly on smaller device makers as customers and mainly supports
entry-level products and devices for emerging markets. Previously, Huawei used only very few
UNISOC chips for its low-end smartphone and tablet offerings, sources said.
"The new procurement deals would be a great boost to help UNISOC further upgrade its chip
design capability," said a chip industry executive. "In the past, UNISOC was struggling quite
a bit, because it could not really secure big contracts with global leading smartphone makers
as these top smartphone makers could find better offerings elsewhere. This time could be an
opportunity that it could really seek to match the international standard."
UNISOC last year accelerated its 5G chip development to catch up with Qualcomm and
MediaTek, Nikkei has reported. More recently, the company received 4.5 billion yuan ($630
million) from China's national integrated circuit fund, the so-called Big Fund.
UNISOC is preparing to list on the Shanghai STAR tech board, the Chinese version of
Nasdaq, later this year. Qualcomm has needed a license from the U.S. Department of Commerce
to supply Huawei since mid-May of 2019.
Huawei has already expanded production of in-house mobile processors for its smartphone
business to 75%, up from 69% in 2018 and 45% in 2016, according to to data from GF Securities
cited by Nikkei. Huawei shipped 240 million smartphones in 2019. And with China now throwing
caution to the wind and cracking down on Hong Kong, we wouldn't be surprised to see more Huawei
drama in the headlines next week, with serious market repercussions for the US semiconductor
industry.
That will be an interesting chess party. The USA moved way to many plants to Chine to get out
of this conflict without major losses
Notable quotes:
"... Secretary of State Mike Pompeo slammed China as “hostile to free nations,” portraying Beijing as fundamentally opposed to the United States, on Wednesday. ..."
"... But the Secretary of State pointed to deeper issues in the relationship, claiming that “the nature of the regime is not new.” “For several decades, we thought the regime would become more like us through trade, scientific exchanges, diplomatic outreach, letting them in the [World Trade Organization] as a developing nation,” he said. “That didn’t happen.” ..."
'The regime is ideologically and politically hostile to free nations.'
Secretary of State Mike Pompeo slammed China as “hostile to free nations,”
portraying Beijing as fundamentally opposed to the United States, on Wednesday.
Tensions between the United States and China have reached a fever pitch during the
coronavirus pandemic. Pompeo’s speech at a Wednesday morning press conference laid out a
vision of a global clash between two fundamentally different societies.
“China’s been ruled by a brutal, authoritarian regime, a communist regime since
1949,” he said. “We greatly underestimated the degree to which Beijing is
ideologically and politically hostile to free nations. The whole world is waking up to that
fact.”
He added that a focus on the coronavirus pandemic “risks missing the bigger picture of
the challenge that’s presented by the Chinese Communist Party.”
The pandemic has accelerated U.S.-China tensions.
Last week, a Chinese Communist Party news threatened sanctions against U.S. lawmakers for
attempting to sue the Chinese government for the pandemic, and U.S. law enforcement accused
Chinese hackers of cyberattacks against U.S. researchers.
But the Secretary of State pointed to deeper issues in the relationship, claiming that
“the nature of the regime is not new.” “For several decades, we thought the
regime would become more like us through trade, scientific exchanges, diplomatic outreach,
letting them in the [World Trade Organization] as a developing nation,” he said.
“That didn’t happen.”
Pompeo accused the World Health Organization’s director-general Dr. Tedros Adhanom
Ghebreyesus of “unusually close ties to Beijing” that “started long before
this current pandemic.”
The Trump administration has accused China of covering up information about the novel
coronavirus—even implying that the virus emerged from a lab accident in Wuhan,
China—and pointed the finger at the World Health Organization for aiding China’s
coverup.
The Secretary of State slammed the public health group for excluding Taiwan in his Wednesday
speech, touching on a sensitive topic for Beijing.
Taiwan, an island that was once ruled by China, has ruled itself since the end of the
Chinese Civil War in 1950. Beijing considers the island a breakaway Chinese province that must
be reunited with the mainland, while Taiwan’s ruling Pan-Green Alliance leans towards
independence.
“The democratic process in Taiwan has matured into a model for the world,”
Pompeo said, congratulating President Tsai Ing-wen on her re-election. “Despite great
pressure from the outside, Taiwan has demonstrated the wisdom of giving people a voice and a
choice.”
But he shied away from changing U..S. policy towards Taiwan..
Pompeo said that work that “comports with the history of the agreements between the
United States and China is the right solution to maximize the stability there in the
straits.”
The United States acknowledged the Chinese position that “there is but one China and
Taiwan is part of China” as part of a 1979 joint communique with Beijing, and does not
officially recognize Taiwan as a state, but maintains close informal ties with the Taiwanese
government and opposes attempts to change the island’s government by force.
“The President talked about how we’re going to respond [to China], how
he’s beginning to think about responding to the calamity that has befallen the world as a
result of the actions of the Chinese Communist Party,” Pompeo said. “I don’t
want to get ahead of him in terms of talking about how the administration will respond to that,
but you can already begin to see the outlines of it.”
Matthew Petti is a national security reporter at the National Interest. Follow him on
Twitter: @matthew_petti. This article initially stated that the United States “recognized
that ‘there is but one China and Taiwan is a part of China’ in a 1979 joint
communique.” The communique actually states that the United States
“acknowledges” this as the Chinese position. The article has been updated to more
correctly reflect the communique. Image: Reuters.
"... The Chinese will not start a shooting war and the US has no guts for one. Its industry has been hollowed out not just by outsourcing but by corruption as well. The campaign of demonization against China is very obvious, how far it is working I have no way of telling. Among the 5-eyes probably quite well, in the rest of the World rather less well, I would imagine. Notably, the British economy has been hollowed out in exactly the same manner as the US's. Canada's, Australia's, NewZealand's? Could they, would they support a war? ..."
"... Right now, China is leading the vaccine race and has developed an antibody treatment for Covid-19 that should be ready this year. ..."
"... Interesting article by Escobar. If one cares to notice, this anti-China cold war is a neocon based aggression. The primary movers of it are mostly neocons or the sorts who follow the neocon lead. ..."
"... "Again! Trump is talking nonsense." Trump seems to be losing his mind right now. Even he has such crazy ideas of cutting ties with China, US politicians, businessmen and Americans would not allow him to do so, Xin Qiang, deputy director of the Center for US Studies at Fudan University, told the Global Times. ..."
"... Jin Canrong, the associate dean of Renmin University of China's School of International Studies in Beijing, told the Global Times on Thursday that Trump made very irresponsible and emotional remarks in the interview. ..."
"... "For Trump, fantasy is power; bluffing is power, so he might use the future of his country to gamble with China. Although China always believes cooperation is the only right choice for the two countries to solve the problems together, if the US unilaterally and irrationally chooses all-out confrontation, China also needs to be prepared." ..."
Washington wants to prevent Russia and China supplanting US interests. Moscow and Beijing
pursue what they see as their own legitimate interests. What we face is not a "hybrid" war or
"New Cold War" but a world war. https://www.ghostsofhistory.wordpress.com/
What we face is not a "hybrid" war or "New Cold War" but a world war.
Honestly, I don't see it. My reasoning is simple, maybe too simple. The Chinese will
not start a shooting war and the US has no guts for one. Its industry has been hollowed out
not just by outsourcing but by corruption as well. The campaign of demonization against China
is very obvious, how far it is working I have no way of telling. Among the 5-eyes probably
quite well, in the rest of the World rather less well, I would imagine. Notably, the British
economy has been hollowed out in exactly the same manner as the US's. Canada's, Australia's,
NewZealand's? Could they, would they support a war?
The other reason I think a shooting war is less likely than might appear, is that the the
MIC is doing so well with the current cold war; that it would seem stupid to allow the
massive disruption and uncertainty that a shooting war would cause to interrupt the torrent
of cash being shoveled its way at the moment.
[Hide MORE]
1990. China's economy has come to a halt. The Economist
1996. China's economy will face a hard landing. The Economist
1998. China's economy's dangerous period of sluggish growth. The Economist
1999. Likelihood of a hard landing for the Chinese economy. Bank of Canada
2000. China currency move nails hard landing risk coffin. Chicago Tribune
2001. A hard landing in China. Wilbanks, Smith & Thomas
2002. China Seeks a Soft Economic Landing. Westchester University
2003. Banking crisis imperils China. New York Times
2004. The great fall of China? The Economist
2005. The Risk of a Hard Landing in China. Nouriel Roubini
2006. Can China Achieve a Soft Landing? International Economy
2007. Can China avoid a hard landing? TIME
2008. Hard Landing In China? Forbes
2009. China's hard landing. China must find a way to recover. Fortune
2010: Hard landing coming in China. Nouriel Roubini
2011: Chinese Hard Landing Closer Than You Think. Business Insider
2012: Economic News from China: Hard Landing. American Interest
2013: A Hard Landing In China. Zero Hedge
2014. A hard landing in China. CNBC
2015. Congratulations, You Got Yourself A Chinese Hard Landing. Forbes
2016. Hard landing looms for China. The Economist
2017. Is China's Economy Going To Crash? National Interest
2018. China's Coming Financial Meltdown. The Daily Reckoning.
2019 China's Economic Slowdown: How worried should we be? BBC
2020. Coronavirus Could End China's Decades-Long Economic Growth Streak. NY Times
Forbes – May 15 2012 – Meghan Casserly The American Dream Is Alive And Well In New Jersey
American Express – November 6 2012 – Rieva Lesonsky The American Dream is Alive and Well -- and Transformed
The Telegraph – August 4 2014 – Jeremy Warner The American Dream is alive and well, if you are trained for the jobs of the future
Forbes – September 30 2015 – John Tamny – FreedomWorks Ignore The Left And Right, The American Dream Is Alive And Well
FOX Business – August 22 2016 – Steve Tobak The American Dream Is Alive and Well
Forbes India – November 1 2016 – Monte Burke The American dream is alive and well
Washington Times – June 19 2017 – Ed Feulner – Heritage Foundation The American Dream, alive and well
KEDM – July 4 2018 – Byron Moore, Argent Advisors, Inc. The American Dream is Alive and Well
New York Times – February 2 2019 – Samuel J. Abrams – American
Enterprise Institute The American Dream Is Alive and Well
Daily Caller – February 6 2019 – Steve Sanetti – NSSF Firearm Industry
Trade Association The American Dream Is Alive And Well
FOX Business – September 30 2019 – Julia Limitone Eric Trump: The American Dream is alive and well
Mail Online – October 2019 – Lauren Fruen The American Dream is still alive! Children of poor immigrants still beat US-born kids up the
ladder – just as they did 100 years ago – but now Chinese and Indian migrants
have replaced Italian and Irish as the most successful
CNBC – November 14 2019 Billionaire Bob Parsons: The American Dream is alive and well
FOX News – November 26 2019 – Carol Ross Carol Roth: The American Dream is alive and well -- Let's be thankful for it
Clarion Ledger – December 10 2019 – Lynn Evans The American Dream is alive and well, but redefined
Wall Street Journal – January 31, 2020 – Michael R. Strain, American
Enterprise Institute The American Dream Is Alive and Well
Newsweek – February 27 2020 – Lee Habeeb The American Dream Is Alive and Well. Just Ask District Taco's Osiris Hoil
The Independent Voice – May 7 2020 – Barbara Ball The American Dream is alive and well
eKenyan – May 8 2020 Opinion | The American Dream Is Alive and Well
New York Times – May 18 2020 – Michael R. Strain – American Enterprise
Institute The American Dream Is Alive and Well
Chinese strategists like Liu He publicly acknowledge that epidemics can catalyze geopolitical
changes.
Right now, China is leading the vaccine race and has developed an antibody treatment
for Covid-19 that should be ready this year.
If development is successful and if it donates the cure to the world as Xi promised
and if WHO's investigation shows China is not the source of the virus, and if
China's economy is firing on all cylinders in November, it's game over: 3-0 China.
Interesting article by Escobar. If one cares to notice, this anti-China cold war is a
neocon based aggression. The primary movers of it are mostly neocons or the sorts who follow
the neocon lead. China is one country the zionazi-gays have not been able to dominate.
Coupled with China's economic rise and appeal to developing countries, these zionazi
oligarchs are going apeshit trying to bring China down. In addition to other articles
referenced in the article, see also this Global Time report:
[MORE] "Again! Trump is talking nonsense." Trump seems to be losing his mind right now. Even he
has such crazy ideas of cutting ties with China, US politicians, businessmen and Americans
would not allow him to do so, Xin Qiang, deputy director of the Center for US Studies at
Fudan University, told the Global Times.
He noted that Trump is bluffing and acting tough toward China to win more support. Fox
News, which has been regarded as Trump's defender and is notorious for a lack of
professionalism, is also making eye-catching news to draw attention.
Jin Canrong, the associate dean of Renmin University of China's School of
International Studies in Beijing, told the Global Times on Thursday that Trump made very
irresponsible and emotional remarks in the interview.
"The China-US relationship is the most important bilateral relationship in the world and
involves huge interests of the two countries, as well as the rest of the world. Therefore, it
is not something he can cut off emotionally," Jin said.
"If the US unilaterally cuts off ties, the American people will pay a heavier price than
us, because China's domestic market is huge and 75-80 percent of Chinese manufacturers are
supplying China's market, and the 2 to 5 percent that supply the US can also be absorbed by
the domestic market," he noted.
China has nothing to be afraid of as "in the past, we didn't solve the Taiwan question
because we wanted to maintain the China-US relationship, and if the US unilaterally cuts it
off, we can just reunify Taiwan immediately since the Chinese mainland has an overwhelming
advantage to solve this long-standing problem."
"Trump is like a giant baby on the brink of a meltdown as he faces tremendous pressure due
to massive failures that caused such a high death toll," Shen Yi, an expert from Fudan
University, told the Global Times. "It's like someone who wants to show his guts when he
passes by a cemetery in midnight. He needs to shout to give himself the courage," he
said.
Shen also noted that the American companies and industries would suffer the most severe
consequences, because the supply chain has been integrated with China.
"The Chinese public would only take such bluffing as a joke," Shen said, adding that there
has been no US president in the history who has made such a ridiculous statement against
China, not even during the Cold War.
Yuan Zheng, a research fellow at the Chinese Academy of Social Sciences (CASS), said he
could not even remember any US leader who took a similar action. "His flip-flop rhetoric is
unprecedented, but we need to take a look at whether Trump will take real action," he said,
noting that there is no need to pay attention to claims that are unrealistic and
meaningless.
"For Trump, fantasy is power; bluffing is power, so he might use the future of his country
to gamble with China. Although China always believes cooperation is the only right choice for
the two countries to solve the problems together, if the US unilaterally and irrationally
chooses all-out confrontation, China also needs to be prepared."
@Godfree
Roberts China's economy won't be firing on all cylinders by November, but the important
parts of it will be. The manufacturers I talk to have weathered the worst of it, and their
order books for Q4 are more or less back to what they were in January (or at least healthy
enough to prevent soft skill losses). Many are upbeat about the future. (Not all of them will
survive, and the ones that die probably should have done so years ago.)
Compare this to the rest of Asia (Bangladesh, Pakistan, India, Cambodia, Myanmar, and
others): they are a mess. Bangladesh put all its eggs in the huge volume low quality basket
and will now pay a fatal price. Pakistan was dead before corona, and is now in a
manufacturing death spiral. India has the capacity to succeed, but is hamstrung by a
caste-based barbarism that has jettisoned all pretense of decency by throwing migrant workers
in the informal economy to their deaths. This will not be forgotten and I predict years of
trouble. The others only have a manufacturing sector because the Chinese moved their
factories there. Vietnam has some chance, and should be a big winner as China moves out of
low- to middle-end manufacturing.
Countries in South America have lost their opportunity. China passed them by years ago.
It's a tragedy, but they really have themselves to blame for it. And Africa, the last
frontier, is already dominated by China (15 years ago I'd bump into Chinese businessmen who'd
ship a 40-foot container of – 'insert any product you can think of' – to some
back of beyond place in Africa and refuse to come home until everything was sold). They've
moved up the ladder since then. Ethiopia, the fastest-growing economy on the continent, is
essentially an industrial zone for Chinese manufacturing.
Australia has become a mine/farm for China. New Zealand and Canada likewise, and a nice
place to send your teenagers to get educated and perhaps for retirement.
The EU, led by Germany, will be back on track soon. The winners here should be the former
USSR countries, with low labor costs and strong soft skills. With EU companies wanting to
bring the supply chain closer to home, this is their moment. If they screw it up, they will
spend another 30 years wondering what went wrong. I hope they won't, but if you spend any
time working with these people you know they often fail at the final hurdle (as though on
purpose – the psychology of self-destruction is their Achilles heel).
It's China's game to lose. And quite frankly, at this point, I don't see how. This has
been in the making since the late 70s. Perhaps earlier. I admire them for their intelligence,
their work ethic, their organizational capacity, their can-do spirit, and – yes –
their creativity (if you think China is Japan in the 60s, you need to spend some serious time
with younger Chinese in China).
The Chinese problem is, of course, its culture of responsibility avoidance. But even with
this issue, they are on track for a knockout victory. Most people in the West have no idea
what going on, which is exactly how You Know Who likes it.
I have no intention of letting my tribe be overrun by Chinese. But I have enough
experience to know they're smarter than my tribe, and it would be a wise thing to start
thinking more strategically and tactically about how to carve out a space in a new world most
people are unable to imagine (which is less than 10 years away).
The center of gravity of global economic power keeps moving, inexorably, toward
Asia.
it's game over
While the U.S. spent recent decades policing the world in pointless wars, China was about
the business of building an infrastructure in which all roads lead to Beijing, railroad cars
and boatloads of wealth. Just keep it coming, folks. Those roads and railroads and shipping
are linking nothing less than Eurasia, Sir Halford's World Island. It took this coronavirus
to show the imperial subjects that the Empire is naked and that China had already surpassed
it economically several years ago. It seems like it really is game over. I'm sad in a way,
but I would rather have a normal country than a hegemon; that is, if normalcy is still a
possibility.
What about the biggest hybrid war going on since centuries ago: jews (including crypto-jews,
hybrids and minions) versus everybody else?
The chinese had the full cooperation of diaspora jews (and their sayanim network) and
israelis. Specially the Chabad Lubavich.
From the referenced Global Times article, the US attack on Huawei (with its 5G leadership +
NSA proof encryption ) is at the heart of the story:
Based on Global Times sources, if the US further pinches Chinese telecommunication giant
Huawei by blocking companies such as TSMC from providing chips to the company, China will
carry out countermeasures, such as including certain US companies into its list of
"unreliable entities," imposing restrictions on or investigating US companies such as
Qualcomm, Cisco and Apple, and suspending purchases of Boeing aircraft.
The US would lose this fight. Apple for example manufactures in China with only a small
percentage of the sales price staying in China. If Apple manufacturing is shut down then
Apple is the big loser. They're already trying to move manufacturing to India but that's not
going to work.
We must be clear that coping with US suppression will be the key focus of China's
national strategy. We should enhance cooperation with most countries. The US is expected to
contain China's international frontlines, and we must knock out this US plot and make
China-US rivalry a process of US self-isolation.
China has plenty of alternative markets. US corporations mostly only sell to the US using
(now very sophisticated) Chinese manufacturing. Take this away, and Apple for example, have
no alternative supplier for the volumes, quality, sub-contractor network and export
infrastructure required.
General Qiao dismisses the possibility that Vietnam, the Philippines, Bangladesh, India
and other Asian nations may replace China's cheap workforce: "Think about which of these
countries has more skilled workers than China. What quantity of medium and high level human
resources was produced in China in these past 30 years? Which country is educating over 100
million students at secondary and university levels? The energy of all these people is
still far from being liberated for China's economic development."
True.
This will imply a concerted offensive, trying to enforce embargoes and trying to block
regional markets to Chinese companies. Lawfare will be the norm. Even freezing Chinese
assets in the US is not a far-fetched proposition anymore.
If the US steals the $ trillions China has invested in US treasuries, then the US dollar
also forfeits its claim to be the world reserve currency (safe place to hold international
trade balances).
Still, scores of nations are being asked, bluntly, by the hegemon to position themselves
once again in a "you're with us or against us" global war on terror imperative.
9/11 was fakery pumped up by the MSM to target Iraq/Iran and Covid-19 is more of the same
– this time targeting China. European states are getting tired of this game. For
example they were all dragged into supporting the Venezuela CIA coup that fizzled, and are
now trying to disentangle from it.
General Qiao counsels, "Don't think that only territorial sovereignty is linked to the
fundamental interests of a nation. Other kinds of sovereignty – economic, financial,
defense, food, resources, biological and cultural sovereignty – are all linked to the
interests and survival of nations and are components of national sovereignty."
If the US public look carefully at General Qiao's list they will realize that they have
already lost more than 50% of these sovereignties.
" General Qiao dismisses the possibility .. India and other Asian nations may replace China's
c: "Think about which of these countries has more skilled "
Everyday US. news are amplifying the bipartisan chorus against China . India is begging
for favors from USA while serenading USA with reinforcing American position.
India is stealing land from Nepal and Indian media thinks that ultranationalist of Nepal
are to blame for questioning Indian stance .
China is under a real threat of concerted attacks by the US 's opportunistic vassals.
There will be a seismic change affecting the alliances and the future .
Can China persuade Nepal Bangladesh Pakistan Sri Lanka Afghanistan Iran and Myanmar to work
together and persuade them move out of India's hegemony ?.
It's always astounding to read a geopolitical analysis by a journalist who completely ignores
the climate pollution crisis with it's impending effects overhanging every strategy any state
may envision to dominate the planet. It's as if the writer lives in an imaginary world devoid
of nature, along with his supposed expert sources and well placed powerful state movers and
shakers. This is delusional. China's cheap forced labor, making more crap for the planet's
shrinking population of affluent consumers, competing with other countries with equally
desperate workers. Countries competing to build the most dangerous bio-weapons in their
unsafe, leaky level 4 labs. All the while the atmosphere is being polluted to the point of
melting all the ice on the planet, the air is being degraded to the point of being disgusting
to see and carcinogenic to breath, the fresh water supply is being depleted and polluted, the
oceans degraded into radioactive chemical cesspools (soon to be a brown sludge inhabited by
only bacteria, viruses and fungus), the land ceded with thousands of chemicals that have no
purpose other than to kill. The existential threshold is within a few years. The geopolitical
strategy of the US and China can be summarized as a strategy to kill all sentient life on the
planet in order to have a some sort of imaginary strategic dominance. It is mass psychosis.
@foolisholdman
Old man, don't be foolish, they all hate us human scum, and will gladly go to war, are at
war. Remember how, in Catch 22, the opposing sides eventually saved a crap load of money by
geting Milo de Milo to bomb their own airfields using his supply planes? Its already
happening, us plebs are just in the way. In the end, the Protocols calls for one government
ruling what's left of mankind "with an iron staff." I cannot tell you (yet) what Zion's hold
on Beijing is, but be assured, "bring on the war" is the swill of Zion being lapped up by
little globalist piggies trying to get to the trough.
People think 'hybrid warfare" is some kind of technological term. Zion chooses its words very
carefully, and your first defence is your dictionary. The USAGE of words change with time,
the MEANING is constant. Now let's go find them hybrids, before Bill Gates can create enough
microcephalics to man his man/machine interfaced battle 'droids armed with depleted uranium
bullets and virally-delivered vaccines.
@carlusjr
Pollution sure is an important issue, one of the most important of our time, yes. The subject
matter at hand though, is mostly military, with economics as a condiment to explain the sour
taste. China might be the one manufacturing plastic turds, but it is the so-called western
media that is teaching your children the dire need to own the latest version of plastic poop.
China would not bother with plastic poop, but you voted for people who decided China makes
the best poo at the lowest cost and highest profit. Don't blame China for taking advantage of
YOUR leadership's desire to disown YOU and hand your habitat over to those who "know how to
make a profit" from your suffering, while dangling a piece of plastic poop in front of you,
calling it ambition, and deplatforming you if you refuse their offer of improved
turdiness.
But yah, now we know you hate pollution. Soon we will close down all the factories, and ban
all cars, and only those on "official business" will be alowed on aeroplanes, and then you
can breathe freely, as you stand in line, so the Special Agents can see if you have the Bill
Gates vaccine licence to visit the plastic poop and soylent green depository that we used to
call a supermarket.
A toxic racism-meets-anti-communism matrix is responsible for the predominant
anti-Chinese sentiment across the US, encompassing at least 66% of the whole
population.
No it isn't.
A hint of what is responsible is this from the same article:
"They have state of the art technology, but not the methods and production capacity. So
they have to rely on Chinese production."
Our jobs, our industry, our hard-earned intellectual property, and our money have all gone
to China. Our own leaders of industry and government are to blame for our predicament, but
our anger at China is the result.
Funny this from the Chinese General Qiao:
"as a producing country, we still cannot satisfy our manufacturing industry with our own
resources and rely on our own markets to consume our products."
No kidding, General. Your country built itself up by selling to us! We made you into our
own rival. Thanks are in order, but instead you plot to weaken us.
@Godfree
Roberts Sounds like a man who has no understanding of the science regarding the matter,
but so doesn't most of the world. Vaccine? Anti-body treatment? Does anybody know what they
are and how they work (or doesn't) or mean? From those tests to those invasive ventilators,
it shows me how people can easily be herded towards slaughter, for their safety, ofc, because
"science." And just over a mild cold no less.
So much for China's brilliance; they are as dumb or brainwashed by 'accepted science' as the
next moronic authority figure.
But exploiting the situation, that's something else that should be appreciated.
This will be China's contribution to ensuring vaccine accessibility and affordability in
developing countries." The Global South is paying attention.
Do the underdeveloped (hate the PC term "developing") countries even want a vaccine? They
have too many people anyway, any moderate dying will be an advantage to their societies. And
another point is that the anti-vaxxer movement there might be on the rise, just as it is in
America – remember how the Philippines government was watching a conspiracy video about
evil Bill Gates? I have talked to anti-vaxxer people in my Ukrainian university!
"Containment" will go into overdrive. A neat example is Admiral Philip Davidson –
head of the Indo-Pacific Command – asking for $20 billion for a "robust military
cordon" from California to Japan and down the Pacific Rim, complete with "highly
survivable, precision-strike networks" along the Pacific Rim and "forward-based, rotational
joint forces" to counteract the "renewed threat we face from great power competition."
My prediction is the US goes into a civil war > the liberals start losing > the
liberals invite the Chinese into California > the Chinese exterminate all Americans and
get a large Lebensraum in the East.
a Korea War pictorial. Nice.
It's long long ago since China made the last movie about Korea War. Too long ago that they
are in black and white.
Recently someone is preparing for a new movie: The Chosin Lake.
I really hope it will be well made. I love war movies, especially the ones on historical big
wars.
@Buzz
Mohawk I think the Western globalists though that China would be subservient to them and
not get any funny ideas, this virus is just a cover for antipathy that was building up for
years, similar to how the poor Jews being persecuted in Germany was used by propagandists to
whip up Germany sentiment, because of German economic prowess.
Western thinking is dominated by this balance of power mentality, the same mentality such
caused it to enter into two fratricidal wars not too long ago.
One can only hope this is good news for us, but I fear the globalists will just use this
time to move manufacturing to other Third World countries instead of bringing it back
home.
I agree that it was a huge mistake transferring our IP to China, they would simply have
not got to this point if we hadn't. This is also why the Chinese are not taking any chances
in their BRI, and are using Chinese labour instead of doing the more sustainable thing and
training up local workers, that would mean a destruction of their market! Sadly this will
continue, on top of the terrible policy of mass Third World immigration, we let Chinese into
out top companies and research facilities, some of whom no doubt pass this information back
home.
So the Global South is going to be "grateful" to China for coming up with vaccination after
innudating it with the Chinese virus in the first place Pepe, lay of the Mezcal because is
clouding your opaque thinking!
Let me make this clear. America is self-destructing. A malignant narcissist in charge and a
man who cannot construct a sentence is an alternative. A stock market devoid of reality and a
1 percent devoid of conscience. Any remote consideration of the other 99 percent is soley
based on profit. Any civilization that cannot reverse itself is doomed. China maybe a
shortterm factor yet not a factor in the longer considerations.
{ .. and the US has no guts for one. Its industry has been hollowed out not just by
outsourcing but by corruption as well.}
Even in the 50s when US industry was not hollowed out ( ran supreme) and China had no
nukes, US was unable to defeat China in a ground war in Korea. Of course there was talk in US
of using nukes against China (Gen. MacArthur), but cooler heads prevailed, arguing that, that
would trigger USSR to use nukes too, resulting in world wide nuclear conflagration.
Now China has nukes, and delivery systems, and US cannot possible defeat China
conventionally, so US will huff-and-puff, try to damage China financially, or steal its
holdings in US*, but nothing will come out of it.
Sad that US screwed itself over the years so badly that it is in this predicament now.
_____________________________
* There has been semi-serious talk in US of just taking $ hundreds of billions of Chinese
holdings in US as payment for ' damages' China has supposedly caused US by
Covid-19.
All this big nation state fluff stinks today as it did when the first two Western ones,
England and France had a 100 Years War and it has stunk throughout history.
We humans are born naked, helpless, and totally ignorant. We also have an evil streak in
us; vide Adam and Eve. And as Shakespeare stated we must consign ourselves to a willing death
each eve or we die. We are so haughty yet the first thing we must do upon wakening from our
nightly death is evacuate waste.
We have never respected Nature. Now we spray aluminum and plastic microns in the upper
atmosphere which we all breathe as they fall and have virtually destroyed the ozone layer and
the biosphere. We live in 1984 right now!
True libertarianism which is no aggression against person or property and backed up by
cheap, Natural Law arbitration courts works. It is that or sayonara humans.
My reasoning is simple, maybe too simple. The Chinese will not start a shooting war and
the US has no guts for one.
You may be right about the Chinese (their government looks after 1,3 billion people) and
that the US has no guts. But what is the "US"? If you mean the (mostly Jewish) ruling cabal
and their goyim political clowns and puppets, you have no reason to be so sanguine about the
"no guts". It's not their guts that will be on the line, for they will be quite happy so
sacrifice millions of the plebes for the greater good of Israel and rebooting the "economy".
War devastations (and pandemics) are the greatest source for immiserating and culling the
masses and channeling wealth to the banksters.
Facing the demise of the Jewish-led hegemony through its PNAC's "full-spectrum dominance"
– and what that could do to the SHITIS (shit-state of Israel) – it is reasonable
(in their twisted minds) to step to the brink and beyond. Besides, the most recent great wars
(the greatest carnages in the world's history) were not intended to end the way the warhawks
wanted (neither Hitler not Chamberlain wished the destruction of country or empire) but the
power dynamics unleashed by geopolitical gamesmanship suppresses reason.
@paranoid
goy Non-CO2 pollution is a non-issue. It was far worse in the USA and China 50 years ago
(air and water), and in Europe/East coast USA over 200 years ago. Wildlife populations are
also rebounding. Every time I hear some retard complaining about pollution on the internet, I
want to reach through the monitor and pepper spray them.
The zionists are in control of China and the ZUS and Russia and Europe and India and
everywhere in central and South America, and the fact is the zionist control was proven by
every country that forced their people into the forced lockdown, using this scam of a
coronavirus as an excuse.
These wars are a deversion, as the zionist install their global prison.
General Qiao dismisses the possibility that Vietnam, the Philippines, Bangladesh, India
and other Asian nations may replace China's cheap workforce: "Think about which of these
countries has more skilled workers than China. What quantity of medium and high level human
resources was produced in China in these past 30 years? Which country is educating over 100
million students at secondary and university levels? The energy of all these people is
still far from being liberated for China's economic development."
Once again, I must caveat this with the proclamation I was not and I am not an advocate
for Obama's TPP. The reason I'm not an advocate is for environmental purposes. I believe
growth is killing the living planet and soon enough will extinct humans as well as many, most
even, other species on the planet. The TPP did nothing to address growth and instead enabled
it further by enhancing global trade versus diminishing it.
That being said, the TPP was a strategy to contain China's growing influence. It was
intended to put global trade eggs in many baskets and not just in the basket labeled China.
What does Trump do? He puts all the trade eggs in China's basket under the aegis/rubric of
repatriating manufacturing to America. He put a knife in TPP and killed it but he never
brought manufacturing back to America. Now America is truly good and fucked. Over a barrel.
No options. Can you believe this moron and the cabal that's using him as a foil? Like I said
before, if Trump didn't exist, the CCP would have to invent him because more than any other
power player, be it Russia or Saudi Arabia or Israel, Trump has been extremely beneficial to
China. Under Trump's watch, China is now the most powerful country in the world. Because of
Trump, China is now the leader of the world. America, finally, has been knocked from its
perch just as England was over 100 years prior. Once knocked from the perch, there is no
regaining the status you once enjoyed. I suspect that within five years the dollar will no
longer be the world's currency. When that happens, it's lights out for America FOR REAL. All
this banter is whistling past the graveyard. What's done is done.
House Democrats who've been interfering with President Barack Obama's ability to
negotiate the Trans-Pacific Partnership are missing something very important: The trade
deal isn't primarily significant because of the economy. It matters because it's part of
the broader American geostrategic goal of containing China -- which pointedly hasn't been
invited to join the TPP.
In the new cool war, China's rising economic influence is giving it greater geopolitical
power in Asia. The TPP is, above all, an effort to push back on China's powerful trade
relationships to reduce its political clout. By weakening Obama's ability to pursue it,
congressional Democrats had been unintentionally weakening the U.S. side in the cool
war.
In all this, China is using its close economic relationship with its neighbors as
leverage to build its geopolitical position. Its ultimate goal is to displace the U.S. as
the regional hegemon. President Xi Jinping's slogan of the "Chinese dream" requires nothing
less.
The TPP aims to reduce some of China's geopolitical resurgence by damping down the
extent of China's regional trade dominance. China itself has a proposed regional trade
alliance, the Regional Comprehensive Economic Partnership, that would include 16 members
and exclude the U.S. Australia, Japan and South Korea are all involved in negotiations to
become members. The TPP is a direct, competitive counterpart to the RCEP.
Fyi, the following cartoon is per China Daily , a publication owned and run by the
CCP. It's favorable to Trump. It's clear by virtue of Trump's cozy relationship with Putin
and Xi that Trump is a communist in capitalist clothing. He is a communist trojan horse in
the oval office. But he's even more than that. He has many hats. He's a tool, a
self-promoting front man, for any tyrant or tyranny that expands his brand masquerading as a
man of the people. As if. He's a man, albeit an insane moron, of the extractive elite and the
extractive elite are transnational and transcultural. The extractive elite are a nation and
culture unto themselves and the rest of us are their slaves on this global plantation.
@Weston
Waroda Once reserved currency status of dollar is over n done with, there would be zero
need for the huge military budget. That is the silver lining of this whole thing. The wars
might finally stop. But living standards will take a hit from the devaluation of the dollar.
But but, Jobs would return through that weakened dollar as off shoring jobs would no longer
make sense. And just maybe, our political class might finally focus on domestic issues and
improve the country after 4 decades of stagnation.
@Miro23
Apple follows every single law in China. Apple makes a lot of money in China, but also pays
alot of taxes. I highly doubt it would be a target of retaliation. But other companies are
fair game. Just something I noticed.
@carlusjr
Spot on. Humans are drowning in their own filth. There's an adage, "don't shit where you
eat." Humans invented the saying but apparently don't abide by it and in fact zealously defy
it. Here we are. It will be one pandemic after another from now until human is no more. Rapid
pace, like automatic weapon fire. The center cannot hold and is not holding. Civilization is
going down. Will the Samson Option be utilized? Man's last act? Destroy the planet
entirely if he can't have it entirely? My bet is this is how it will go down. All you have to
do is extrapolate the curve.
@bigduke6
It is quite obvious why they are doing, they are using Europeans' own liberal ideology
against them. In today's Western world, nothing is worse than being a "racist" (except maybe,
just maybe a paedophile necrophiliac, but even that is a close one) as such they will use
these terms to beat down Europeans. Erdogan recently likened Greece to "Nazis", due to their
brave defiance to Third World invaders.
As if they genuinely give a shit about Nazis, a particularly European obsession due to
decades of brainwashing by the Jewish media elite. Even if one believes the textbooks in
relation to Nazi atrocities, the fact is that such things are normal for history. No other
people's beat themselves down over bad stuff they've done, hell, the Mongolians have erected
a big statue of Genghis Khan, one of the greatest mass murderers in history!
Extremely misleading headline. Since the Asia Times story is actually about economic
and political sovereignity – always a big issue for China ever since the Eight Powers
carved up the nation in the past: Germany, Japan, Russia, Britain, France, Italy,
Austria-Hungary, and the U.S.
It doesn't speak about warfare against the U.S. It speaks about meeting a threat from the
U.S. It does speak of taking Taiwan, though by avoiding outright warfare. This is not
something we should desire, but it is not war against the U.S., as the misleading headline is
intended to make people believe.
As usual most of the rubes will only read the headline and look at the pictures, maybe
skim through the text a bit, before typing out an angry post based on whether they like or
dislike whatever nation is mentioned. Much like cruzbots and Bush lovers use Breitbart
comments to screech against Iran and praise Israel. No facts needed.
"... An example, referring to Covid-19, is the capacity to produce ventilators: "Out of over 1,400 pieces necessary for a ventilator, over 1,100 must be produced in China, including final assembly. That's the US problem today. They have state of the art technology, but not the methods and production capacity. So they have to rely on Chinese production." ..."
"... The gold standard expression has come in a no-holds barred Global Times editorial : "We must be clear that coping with US suppression will be the key focus of China's national strategy. We should enhance cooperation with most countries. The US is expected to contain China's international front lines, and we must knock out this US plot and make China-US rivalry a process of US self-isolation." ..."
"... An inevitable corollary is that the all-out offensive to cripple Huawei will be counterpunched in kind, targeting Apple, Qualcom, Cisco and Boeing, even including "investigations or suspensions of their right to do business in China." ..."
"... So, for all practical purposes, Beijing has now publicly unveiled its strategy to counteract U.S. President Donald Trump's "We could cut off the whole relationship" kind of assertions. ..."
"... The politicians controlling US foreign policy are leading us straight into the 19th century, with their updated gunboat diplomacy ..."
The bulk of his argument concentrates on the shortcomings of U.S. manufacturing: "How can
the US today want to wage war against the biggest manufacturing power in the world while its
own industry is hollowed out?"
An example, referring to Covid-19, is the capacity to produce ventilators: "Out of over
1,400 pieces necessary for a ventilator, over 1,100 must be produced in China, including final
assembly. That's the US problem today. They have state of the art technology, but not the
methods and production capacity. So they have to rely on Chinese production."
... ... ...
Gloves Are Off
Now compare General Qiao's analysis with the by-now-obvious geopolitical and geo-economic
fact that Beijing will respond tit for tat to any hybrid war tactics deployed by the United
States government. The gloves are definitely off.
The gold standard expression has come in a no-holds barred Global Times editorial : "We must be
clear that coping with US suppression will be the key focus of China's national strategy. We
should enhance cooperation with most countries. The US is expected to contain China's
international front lines, and we must knock out this US plot and make China-US rivalry a
process of US self-isolation."
An inevitable corollary is that the all-out offensive
to cripple Huawei will be counterpunched in kind, targeting Apple,
Qualcom, Cisco and Boeing, even including "investigations or suspensions of their right to do
business in China."
So, for all practical purposes, Beijing has now publicly unveiled its strategy to counteract
U.S. President Donald Trump's "We could cut off the whole relationship" kind of assertions.
A toxic racism-meets-anti-communism matrix is responsible for the predominant anti-Chinese
sentiment across the U.S., encompassing at least 66 percent of the whole population. Trump
instinctively seized it – and repackaged it as his re-election campaign theme, fully
approved by Steve Bannon.
The strategic objective is to go after China across the full spectrum. The tactical
objective is to forge an anti-China front across the West: another instance of encirclement,
hybrid war-style, focused on economic war.
This will imply a concerted offensive, trying to enforce embargoes and trying to block
regional markets to Chinese companies. Lawfare will be the norm. Even freezing Chinese assets
in the U.S. is not a far-fetched proposition anymore.
Every possible Silk Road branch-out – on the energy front, ports, the Health Silk
Road, digital interconnection – will be strategically targeted. Those who were dreaming
that Covid-19 could be the ideal pretext for a new Yalta – uniting Trump, Xi and Putin
– may rest in peace.
"Containment" will go into overdrive. A neat example is Admiral Philip Davidson – head
of the Indo-Pacific Command – asking for $20 billion for a
"robust military cordon" from California to Japan and down the Pacific Rim, complete with
"highly survivable, precision-strike networks" along the Pacific Rim and "forward-based,
rotational joint forces" to counteract the "renewed threat we face from great power
competition."
Davidson argues that, "without a valid and convincing conventional deterrent, China and
Russia will be emboldened to take action in the region to supplant U.S. interests."
... ... ...
From the point of view of large swathes of the Global South, the current, extremely
dangerous incandescence, or New Cold War, is mostly interpreted as the progressive ending of
the Western coalition's hegemony over the whole planet.
Still, scores of nations are being asked, bluntly, by the hegemon to position themselves
once again in a "you're with us or against us" global war on terror imperative.
... ... ...
For the first time in 35 years, Beijing will be forced to relinquish its economic growth
targets. This also means that the objective of doubling GDP and per capita income by 2020
compared with 2010 will also be postponed.
What we should expect is absolute emphasis on domestic spending – and social stability
– over a struggle to become a global leader, even if that's not totally overlooked.
... ... ...
Internally, Beijing will boost support for state-owned enterprises that are strong in
innovation and risk-taking. China always defies predictions by Western "experts." For instance,
exports rose 3.5 percent in April, when the experts were forecasting a decline of 15.7 percent.
The trade surplus was $45.3 billion, when experts were forecasting only $6.3 billion.
Beijing seems to identify clearly the extending gap between a West, especially the U.S.,
that's plunging into de facto New Great Depression territory with a China that's about to
rekindle economic growth
Zhu , May 20, 2020 at 00:34
"A toxic mixture of racism and anti-communism" sounds about right. The Chinese government
is not submissive and the "Chinks" are getting too prosperous. That's bound to infuriate both
elite and grass-roots Americans.
Drew Hunkins , May 20, 2020 at 00:34
"For the first time in 35 years, Beijing will be forced to relinquish its economic growth
targets. This also means that the objective of doubling GDP and per capita income by 2020
compared with 2010 will also be postponed. "
Good, good, just wonderful. This will really endear the United States to the Chinese
people.
All that the Chinese govt did for its people over the last 30 years is totally eliminate
poverty, that's all. Gotta love how our Western mass media won't shut their mouths about this
small achievement.
Drew Hunkins , May 20, 2020 at 00:15
"Those who were dreaming that Covid-19 could be the ideal pretext for a new Yalta –
uniting Trump, Xi and Putin – may rest in peace."
Rest in peace, no doubt. Washington is all about unilateralism, period. This is the crux
of the issue, the rapacious capitalist-imperialists who infest Wall St, the military
contractors and corporate mass media want nothing to do with a multi-polar world. This could
lead to putting the far east on a dangerous path with U.S. warships provocatively traversing
the area.
gcw , May 19, 2020 at 21:08
The politicians controlling US foreign policy are leading us straight into the 19th
century, with their updated gunboat diplomacy . Never a thought to the impending
disaster of climate change and unparalleled social and environmental chaos, they dream
instead of yet another Cold War (Yellow-Peril 2.0), all the time sustaining a gargantuan
military establishment which is draining the life-blood from American society. The Covid-19
virus is just a warning to us: we have about 5% of the world's population, yet lead the pack
in deaths from the virus. If this monumental display of incompetence doesn't wake us up, what
will?
@utu ... He produces evidence, evidence in response to highly-coordinated anti-China
propaganda, the mountains of belligerent lies that are all that remain today of the failed
state the USA. Those lies plus its military killing millions all over the world, incessantly
destroying or attempting to destroy states simply for being independent.
The best argument I have read from the anti China camp has been that if China succeeds, US
dollar will be kaput, living standard in the USA will tanked to shit levels compare to right
now.
Why would China succeeding reduce our living standard?
@Realist If China succeeds, that means dollar as reserve currency is kaput. Without the
reserved currency status, dollar will devalue by 50% or more. Living standard auto lowers by
50% or more.
Just a thought: what if people like Gordon Guthrie Chang, Jennifer Zeng, Peter Navarro or
even Maria Bartiromo suggest to the two dude Trump and Pompeo sending FBI, CIA agents
or even national guard to American's rural areas, small isolate farming communities in
Pennsylvania, Oregon ripping off every Huawei and ZTE hardwares 2G, 3G, 4G and maybe 5G if
any, cell towers and replaced it with Ericsson and Nokia. Would it make America great again
?
Almost every freaking day Trump and Pompeo bashing China including Huawei.. Not a day of
peace without china bashing.
Days earlier ZeroHedge, SCMP and other media reported freaking Trump and Pompeo... no
companies inside or outside USA can sell American software or technology items or chips made
with USA properties or machines to Huawei.
Meaning TSMC a Taiwan chip's foundry not permitted to sell any chips to Huawei, TSMC has
been the world's dedicated semiconductor foundry. "curtailing its chip supply, an
escalation of its campaign against the Chinese company that may also hurt Taiwan
Semiconductor Manufacturing Co."
"China has the most fab projects in the world.... 30 facilities planned, including
10/7nm processes, but trade war and economic factors could slow progress...... SMIC 's
move would put it on par with some of its foreign rivals. In addition, SMIC has
obtained $10 billion in funding to develop 10nm and 7nm. Semiconductor Manufacturing
International Corporation (SMIC) is a publicly held semiconductor foundry company, and the
largest in China.
"Wuhan Hongxin Semiconductor Manufacturing (HSMC), a logic IC foundry founded in late
2017, is gearing up for 14nm and 7nm process manufacturing eyeing to be China's most advanced
contract chipmaker.....Shang-yi Chiang, the former executive VP and co-chief operating
officer overseeing R&D for Taiwan Semiconductor Manufacturing Company (TSMC), will join a
Wuhan-headquartered foundry in China. "<
Gone are the "good 'ole days" of BRICS bonhomie when the Alt-Media Community used to sing the
praises of this nascent trade bloc and portray it as a game-changing development in
International Relations. Although promising on paper, BRICS was always destined
to be disappointing due to the irreparable differences between India and China that were
either downplayed or outright ignored by this organization's loudest advocates. The author has
been consistently warning for over the past four years that " India Is Now An American Ally " after it
clinched the Logistics Exchange Memorandum Of Agreement (LEMOA) with the US to allow the latter
to use its military infrastructure on a case-by-case "logistical" bases. Since then, India has
fully submitted to the Pentagon's "Indo-Pacific"
strategy of empowering the South Asian state as a "counterweight" China, with even Russian
Foreign Minister Lavrov loudly warning his
country's strategic partner of
the pitfalls of this scenario as recently as early January of this year while speaking at a
conference in their country.
Modi's Military Madness
Alas, whether due to long-lasting ignorance of the situation, unchecked professional
incompetence, and/or shadowy motives that can only be speculated upon, the majority of the
Alt-Media Community still refuses to recognize these facts, though the latest developments
pertaining to Indian-Chinese relations might finally cause them to reconsider their
inexplicable stance of always "covering up" for New Delhi. India has recently clashed with
China
along the Line of Actual Control (LAC) in
Indian-Occupied Kashmir 's Ladakh region and close to the Donglang Plateau (described as
"Doklam" by India and thus widely reported upon with this name in the Western Mainstream Media
and among the members of the Alt-Media Community sympathetic to New Delhi) near Sikkim where
they had their infamous three-month-long standoff
in summer 2017 (which threatened
to repeat itself in 2018). So tense has the situation become in Ladakh that China
reportedly flew several helicopters near the scene while India flew a few fighter jets,
significantly upping the ante.
India's Attempt To "Poach" Chinese-Based Companies
The backdrop against which these clashes are transpiring is India's aggressive attempt to
"poach" foreign companies from the People's Republic, which the author analyzed last month in
his piece about how " India's Selective Embrace
Of Economic Nationalism Has Anti-Chinese Motivations ". Of relevance, India has also set
aside land
twice the size of Luxembourg for such companies to exploit in the event that they decide to
re-offshore from the East Asian state to the South Asian one.
This perfectly dovetails with Trump's " trade
war " plans to encourage foreign companies to leave his country's rival and either return
home or set up shop in a friendly pro-American country instead. Of note, India is also
vehemently opposed to China's Belt & Road Initiative ( BRI ) behind the US on
the basis that its flagship project of the China-Pakistan Economic Corridor ( CPEC
) traverses through territory that New Delhi claims as its own per its maximalist approach to
the Kashmir Conflict .
Obviously, the US couldn't have found a better ally than India to thwart China's economic
plans.
The US Might Rule The WHO Via Its Indian Proxy
On the soft power front, India is
slated to assume leadership of the World Health Assembly (WHA, the governing body of the
World Health Organization, WHO) from Japan later this month, and it's already being widely
speculated in Indian media that the country might be
seriously considering taking the US' side in respect to investigating the WHO for its
alleged pro-Chinese
bias . Not only that, but India might even be receptive towards Taiwan's request to
participate in the organization's meetings, the scenario of which has already concerned China
so much that its embassy in New Delhi
felt compelled to remind the Indian leadership that doing so would violate the One China
principle. From the American perspective, this is an unprecedented opportunity for Washington
to exercise proxy leadership of the WHO through its "junior partner" of India, which could add
a speciously convincing degree of credibility to its anti-Chinese claims in an attempt to win
back the many hearts and minds that it's lost to its rival throughout the course of World War
C .
The Indo-American Hybrid War On China
Taken together, India is indisputably intensifying its American-backed Hybrid
War against China as a sign of fealty to its new ally, especially considering that it's
only officially been the US' " comprehensive global
strategic partner " since Trump's landmark visit to the country a few months back in
February and thus feels like it has something to prove. Both countries share the grand
strategic goal of "containing" China, to which end they're working hand-in-glove with one
another to carry out this concerted campaign against the People's Republic.
Building off of the idiom, the American hand is unquestionably controlling the Indian
glove after Trump cracked the whip on
Modi by forcing him to export hydroxychloroquine to
the US last month, which asserted his country's dominance as India's neo-imperial master.
Whether across the military, economic, or soft power domains, the US-Indian alliance is
doing its utmost to create serious difficulties for China. With India now suspecting China of
building an island off of its coast, ties will likely continue to worsen to the US'
benefit.
An anonymous reader shares a report: China is ready to take a series of countermeasures against
a US plan to
block shipments of semiconductors to Chinese telecom firm Huawei , including putting US
companies on an "unreliable entity list," launching investigations and imposing restrictions on
US companies such as Apple and suspending the purchase of Boeing airplanes, a source close to
the Chinese government told the Global Times. The Trump administration on Friday moved to block
shipments of semiconductors to Huawei from global chipmakers. The US Commerce Department said
it was amending an export rule and the Entity List to "strategically target Huawei's
acquisition of semiconductors that are the direct product of certain US software and
technology," according to a statement on its website. "China will take forceful countermeasures
to protect its own legitimate rights," if the US moves forward with the plan to bar essential
suppliers of chips, including Taiwan-based TSMC, from selling chips to the Chinese tech giant,
the source told the Global Times in an exclusive interview.
China will also put a lot of money into making things that it has, up to now, obtained
from the USA. It might take a few years, but China's government set up (ie one party always
in power) means that it does not have to do things to an electoral cycle.
"... Sad but true. We are all given our illusions. In US its the illusion of democracy which is a fake democracy cloaking our totalitarian reality. In China they give the people the illusion of moving towards socialism, a fake socialism to be sure, never mind all the billionaire party members (and they don't have universal health care either, its insurance based) .The people have long accepted the reality of totalitarianism so they are one step ahead. ..."
Sad but true. We are all given our illusions. In US its the illusion of democracy which
is a fake democracy cloaking our totalitarian reality. In China they give the people the
illusion of moving towards socialism, a fake socialism to be sure, never mind all the
billionaire party members (and they don't have universal health care either, its insurance
based) .The people have long accepted the reality of totalitarianism so they are one step
ahead.
Since China doesn't have another party to blame they must blame external enemies like the
US and we happily play along with tarrifs paid for by us dumb sheep who cry out in
satisfaction "take that". Lol
A fake Cold War works for us too. Trump says we are in a race for 5G and AI/Robotics with
China. We must win or all is lost to China. Social credit scores, digital ID and digital
currency along with Total Information Awareness and Full Spectrum Dominance over the
herd.
Health effects of 5G will be blamed on CoVID. Fake Science is a great tool. Scientists
never lie, they can be trusted, just like Priests . They are the Priests of the New
Technocratic World Order. Global Warming and COVID- We must believe. They say Vaccines and 5G
are good for you, just like DDT and Tobacco were said to be Good by Scientists of another
time. We must believe. Have Faith and you will earn social credit bonus points.
Reality is Fake Wrestling. Kayfabe all the way baby. Who is the face and who is the heel?
We are free to choose. So who says we don't have freedom?
But it was natural target of offshoring manufacturing during neoliberal globalization frenzy.
Now the USA needs to pay the price for the betryal of its elite.
Notable quotes:
"... China is not a natural ally of the US. It was helped for decades as a counterweight to the USSR and that policy continued after the Cold War ended because the Western elite reaped vast profits from the entry of a billion Chinese into the world labour markets. We have created a monster of arrogance and economic dynamism that refuses to take measures against novel coronaviruses springing out of their peculiar eating and aphrodisiac medicine habits. ..."
The USA is under no obligation whatsoever to be friendly to Russia, and especially not to
China which rather owes America for everything and has repaid it in death. Capital and
technology has flowed to China from America for decades. In return they sent profit to Wall
St, Wuhan made Fentanyl the death of choice for whites desperate as a result of the policies
that made China did so well out of, and now they send us a deadly epidemic.
China is not a natural ally of the US. It was helped for decades as a counterweight to
the USSR and that policy continued after the Cold War ended because the Western elite reaped
vast profits from the entry of a billion Chinese into the world labour markets. We have
created a monster of arrogance and economic dynamism that refuses to take measures against
novel coronaviruses springing out of their peculiar eating and aphrodisiac medicine
habits.
It was coffee made from beans taken from civet faeces that led to the SARS-CoV bat/ civet
recombination virus and the 2002 Sars outbreak, during which China lied about what was
happening as they subsequently admitted. The SARS-CoV 2 receptor-binding domain from
pangolins ( world's most trafficked animal, is in demand by Chinese as a male enhancer) and
it recombined with a bat virus was hundreds of times more effective a pathogen in humans than
the one from bat–civet recombination of eighteen years ago.
But that is not what the Chinese said. Researchers in Wuhan on December 31st told the
world about the Wuhan disease having been identifies as a coronavirus but said, 'It's not
highly transmissible'. As late as the the 24th of January, Doctor Fauci w gave a briefing for
senators in which he said there was very little danger to the US from the Wuhan disease.
Later that day he repeated that opinion at a press conference.
So China said it was not infectious between people and there was nothing much to worry
about. When Trump began to restrict travel into the US from China on the 31st January there
was uproar about this supposed further evidence of his xenophobia,.
President Trump has used his executive power to take a hatchet to 40 years of America's
China policy. His administration has called for a
"whole-of-government" approach to counter Beijing's unfair economic practices, initiated a
damaging trade war, banned Chinese telecommunication equipment from domestic networks, and
implemented stringent regulations to vet Chinese investments in sensitive industries.
In a novel development, the administration has begun coaxing individual states to aid the
federal government in its anti-China fervor. Speaking to the National Governors Association in
early February, Secretary of State Mike Pompeo warned that "competition with
China is not just a federal issue It's happening in your states with consequences for our
foreign policy, for the citizens that reside in your states, and indeed, for each of you."
The administration's enlisting of states in the broader U.S.-China competition has
significant economic implications for subnational actors. Increasingly hawkish incumbents, as
well as congressional candidates, could provoke economic pushback from Beijing. Many of these
officials have bought into the Republican Party's strategy of carrying out an " anti-China
assault " on the campaign trail, scapegoating Beijing for the coronavirus outbreak in the
United States instead of acknowledging the Trump administration's central role in the country's
failure to prepare itself properly.
While Washington is correct to scrutinize Chinese investments in sensitive technologies
and pursue reciprocal trade and economic relations, politically motivated, opportunistic
anti-China rhetoric could threaten individual states' cooperation with China, one of the few
remaining productive aspects of the bilateral relationship. Indeed, as Hu Xijin, editor of
Chinese tabloid Global Times, tweeted , "Beijing is already
preparing to take necessary punishment measures against some members of the US Congress, the
state of Missouri, and relevant individuals and entities."
China-skeptic sentiment in the U.S. government and on the campaign trail is not a new
phenomenon , but the
coronavirus pandemic and resultant economic crisis have afforded many politicians the cover to
push hawkish policies. Some of their proposals would benefit the United States, including
reducing
U.S. reliance on Chinese-made pharmaceutical products , a motion broadly backed by both
Republicans and Democrats. But many of their arguments are politically motivated and risk
further inflaming U.S.-China tensions and painting Beijing as an enemy, à la the Soviet
Union during the Cold War, rather than a competitor.
Senator Tom Cotton made waves last month by arguing that U.S. universities should not
accept Chinese STEM students given the chance they might return home and use their training
to drive China's scientific advances. Senators Josh Hawley and Marco Rubio have also joined the
fray, advocating that the United States reduce its reliance on China and punish the country for
failing to contain the COVID-19 outbreak. The attorneys general of Missouri and
Mississippi have filed lawsuits seeking damages from Beijing for the coronavirus.
Incumbents, however, are not the only ones wagering their political futures on China. Senate
candidates in Tennessee , Arizona , and
Alabama , among other states,
have adopted overtly hawkish stances toward Beijing, blaming China for the pandemic, painting
their opponents as soft on the country, and using the China threat to push anti-immigration
policies .
Amid Washington's anti-China turn, preserving cooperation at the state level will be
critical to maintaining any semblance of productive bilateral ties going forward. As Los
Angeles Deputy Mayor of International Affairs Nina Hachigian said at a Brookings panel
last year, "cities and states can take advantage of the trade, investment, students, climate
change cooperation, culture, and tourism China offers without really having to balance the
broader national security, geopolitical, and human rights questions."
It is no coincidence that three of the past four U.S. Ambassadors to Beijing previously
served as governors of states with deep links to China: Terry Branstad (Iowa), Gary Locke
(Washington), and John Huntsman (Utah).
The aforementioned politicians may be fighting to relocate supply chains outside of mainland
China and decouple vast sections of the two countries' economies, but their rhetoric may also
lead Beijing to move Chinese-owned businesses out of the United States or cut imports from the
country. Despite bilateral tensions, there is clear evidence that Chinese investments in the
United States can be beneficial. In the midst of the trade war, a Chinese takeover of a failing
paper mill in Maine helped revitalize a local community. In Tennessee, Chinese investments in
automotive
parts ,
mattresses , and porcelain manufacturing have benefited the state's economy. There is a
real risk that Chinese companies, seeing both politicians' and the American public's growing
distaste for China, could simply up and leave.
A more likely outcome of the growing antagonism, however, is for Beijing to engage in
economic coercion , which it uses to try to force nations, companies, and officials into
doing its bidding and punish those who do not. The Chinese Communist Party (CCP) has developed
a wide-ranging and flexible toolkit of coercive measures that it has used strategically
throughout the world.
When South Korea agreed to host the United States' Terminal High Altitude Area Defense
(THAAD) missile defense system, Beijing did not impose tariffs on Seoul despite its
displeasure. China instead
restricted flights to South Korea, drummed up nationalist sentiment among the Chinese public to
boycott South Korean goods, and even shut down China-based outlets of Lotte Group, the Korean
company on whose land THAAD was installed.
China took a similar approach with the
Philippines following a 2012 dispute over claims in the South China Sea. In order to cause
significant economic pain, Beijing tightened quality controls on agriculture exports from
Manila while stemming the flow of Chinese tourists to the Philippines. And most recently,
Beijing
threatened and then
followed through on a boycott of Australian beef after Canberra called for an independent
investigation into the origins of the coronavirus.
Beijing coerces not only countries but also private companies for perceived transgressions.
Marriott, Delta Airlines, and Zara all faced the prospect of losing business in China after
listing Taiwan, Hong Kong, or Tibet as sovereign nations. Last fall, Beijing suspended
broadcasts of NBA games after Houston Rockets general manager Daryl Morey tweeted his support for pro-democracy
protestors in Hong Kong.
If public sentiment across the United States continues to turn against China, Beijing may
begin adapting its methods of economic coercion to retaliate against states and politicians it
perceives as hostile to its interests.
Indeed, China is clearly paying attention to U.S. domestic politics and state officials'
views of China. A think tank in Beijing recently ranked
all 50 governors on their attitudes toward China, information the CCP values as it attempts to
mold the views of officials outside of Washington. As Dan Blumenthal has noted ,
Beijing "split[s] Americans into 'friends of China' who might lobby on their behalf and others
who refuse to do so [and] will not be granted access to China's massive market."
In recent years, Beijing has provided glimpses of what economic coercion in the United
States might look like. During the initial stages of the trade war, China's retaliatory tariffs
disproportionally targeted Red
states critical to Trump's 2016 election victory. Furthermore, China
identified key officials able to influence U.S. policy, such as then-Wisconsin
Representative Paul Ryan and Senate Majority Leader Mitch McConnell, and levied tariffs that
threatened jobs in and exports from their states in a bid to pressure the politicians to split
with Trump.
These actions are possible harbingers of economic pressures to come. Beijing may be tempted
to pressure local officials to influence policy from the bottom up. As the aforementioned think
tank report explicitly notes
, Beijing believes that "State-level officials 'enjoy a certain degree of diplomatic
independence,'" and that "Governors can ignore orders from the White House."
Recent downturns in public opinion in both countries, the result of several years of
increasing competition, and an emerging view that the other views the pandemic as a strategic
opportunity, could even see Beijing move beyond tariffs and drum up anti-U.S. sentiment. It
could even encourage citizens to boycott American products, the political and economic effects
of which could be devastating.
While the United States imports more from China than it exports, China-bound exports
supported around
one million U.S. jobs in 2018. According to the U.S.-China Business Council, 42 states counted
China among their top five export destinations in 2019. Chinese FDI, which peaked
at $46.5 billion in 2016, dropped to just over $3 billion in 2019 -- a decline of over 90
percent. Industries ranging from energy, agriculture, and manufacturing could be negatively
affected by an exodus of Chinese investment, a freeze on new Chinese FDI into the United
States, or increased tariffs on or bans of imports.
Given the astronomically high
unemployment rate and ballooning federal and state debt levels, U.S. states are in no
position to lose more investments or export-supporting jobs. Senator McConnell's recent call
for states to file
bankruptcy highlights their increasingly gloomy economic prospects, and already over 25
percent of state revenues have
disappeared due to the coronavirus.
The United States certainly needs to diversify its supply chains so as not to depend so much
on China. Washington has already rolled out several measures to better screen Chinese
investments in the country and limit sensitive technology exports. The increasingly prevalent
and politically expedient one-size-fits-all anti-China position espoused by many state-level
politicians, however, could endanger China-state ties, the locus of the two countries' economic
relationship, and threaten China-owned U.S.-based companies that pose no national security
threats and provide hundreds of thousands of jobs.
I recently came across a Facebook comment
from a Hongkonger, arguing that the Chinese Communist Party (CCP) is nothing communist
given China's prosperous private sector after 1979's reform . He then linked
a video to mock
the western electoral democracy that put Trump and Hitler into the office, leading to the
conclusion that the West has no credential to criticize the one-party system of China for
the lack of democracy. His comment represents the contemporary Chinese sentiment and is
quite understandable given the ongoing color revolution in Hong Kong
2019 , which is still lukewarm to this day, and the unrelenting
blame of COVID19 on China . Although the hybrid war waged on
China is unjust, the current Chinese mindset does not help to diffuse but only fuels
the conflict even further.
The Facebook comment was right about CPP not being Communist that seeks total control
of the economy by the state. Yet, China is state capitalism, an oligarchy, or crony
capitalism. China is a plutocracy by the marriage between the party leadership (the state),
and the monopolizing mega-corporations (the money) like Huawei, Ali, the four state-owned commercial
banks , and Sinopec Group .
It is far from a free-market where the only way to win a competition is to provide
excellent products, where the state has no role in deciding the winner and no ability to
finance itself by forcing the circulation of central-banknotes. China does have a private
sector – the semi-free-market, the good part of our bad plutocracy. Still, even that
part is
weathering after supreme leader Xi took power, and most Chinese do no realize that we
are marching back into a more planned, more communism, more Mao Zedong like system, slowly
but surely. In China, life is artificially expensive under the tightening state control
that imposes layers upon layers of covert taxation, to the point of causing hesitation
to have more children .
However, the west, in general, is fundamentally the same, albeit having a
façade electoral democracy where no crucial issues (i.e., war and peace, monetary
policy, and downsizing the government) are allowed into a debate.
The real private sector (not the likes of Google and Lockheed Martin) is also dying. The
states interfere with the market relentlessly, in the name of safety, welfare, and
stimulating the economy, which achieved the opposite (i.e., the 1929 great depression, 2000
dot com bubble, and 2008 housing bubble). The Federal Reserve finances the government
spending via debt, encourages malinvestment by
atrocious QE packages , which all translate into taxing away people's purchasing power
by creating tons of money out of thin air.
We see the same unholy marriage between the state and the money like big techs, big
pharma, and, most disgustingly, the Military-Industrial Complex. People are either covertly
forced, or duped into funding the nonsense by paying tax, no matter which party they
elect.
Therefore, the Chinese are right about the West not in the position of a critic, but
for the wrong reason. We either fail to realize or willfully deny that we are living
under a harsh plutocracy. Instead, we are distracted by the never losing fake debate about which system
elects the better government, since the "one-party system" is most attacked by western
pro-democracy voices.
Strangely though, both systems have seemingly good intentions, either emphasizing a
person's moral conduct and experience in low-tier office (the Chinese internal nomination),
or the people's direct control of the government (the West electoral democracy). Strangely,
both unanimously favor the use of "government power" the "right way."
Yet, power always corrupts its user by attracting the money, no matter how
well-disciplined, how experienced he/she was. A system that operates on coercive power
always finds its way to circumvent any laws and regulations meant to promote meritocracy.
Both have tried to fight cronyism rigorously with new agencies and new legislation, but in
the end, cronyism always prevails, for both. For the most part of history, the essence
of the Chinese system is not much different from the West, since they are all plutocracies
that conned the people into helplessly relying on more power to solve problems caused by
power until it collapses.
In
a 1979 Chinese opera broadcasted nationwide, the protagonist, a low tier official,
finds himself risking his political career to enforce the law on the aristocrats who made
the law; intoxicated, he yelled in desperation
"谁做管官的官," which literally is " Quis
custodiet ipsos custodes " in Chinese; in the end, he left his career behind
– adding no more to the bloated, self-conflicting bureaucracy, to preserve his
integrity. Maybe this was a coincidence, 1979 was the year the Chinese leadership decided
to let the
government govern less – kudos to them.
The year 1979, and the economic boom that followed, is
one of the most common counter-arguments from a Chinese when you criticize the draconian
practices of CCP. Admittedly, there are times the state power is not insane. In 1979 Deng
Xiaoping at least gave up
some government mandate to allow the private sector to grow , resulting in the
exploitative system we see today, nonetheless a society much more productive than Mao
Zedong's total state dominance. Some state heads refrained from moving the government
"muscle" too much, such as Jimmy Carter's
resistance to wars and money supply that reduced overspending and inflation since the
Vietnam War. In these "less bad, more sensible" eras, it is easier for people's
entrepreneurial spirit and creativity to overcome the innate
irresponsibility of centralized capital management. As a result, we saw significant
progress like the Chinese miracle, and the upswing during the Reagan presidency (even if he
turned up wars, debt, and the Fed's money machine again). Sadly, the leaderships are eager
to claim credits, creating the impression that it is the right administration resulting in
progress and recovery when it is the lack of governing that allows the people to make
sensible decisions on their own, achieving faster growth.
If we Chinese and the American attack each other's electoral system, it is like the two
worst kids in the class picking on each other over their looks rather than their poor study
and bullying of other kids, which only makes them both worse. In the real world, we leave
the unhinged growth of government power – the real enemy of all people, Chinese and
American alike, unattended.
Like that Hongkonger, most Chinese learned to mock Trump's personal, and naively
conclude that the democracy that put him (and Hilter) in the office is a joke. Some more
informed Chinese mock the media's clownish, unfair treatment of Trump, and naively conclude
that the freedom of the press is a joke. However, a bombastic president, the democracy, and
the media are not the problems; neither are the aggressive
sino-phobic policies of which Trump pretends to be in charge. The actual problem is the
monstrous government, married with big money, capable of waging costly war, funding
wasteful programs that drain the middle class to enrich a selected few, no matter who is in
the office. It can either be the well-spoken Obama loved by the media, who started
seven
wars and won the Nobel peace prize, or the bombastic, scandalous New Yorker hated by
the press, who nonetheless continued these wars. People coerced into funding this abusive
machine themselves are part of, with their hard-earned tax dollars, is the problem. Yet,
you do not see the Chinese majority mocking this miserable setup and come to realize that
we are under the same situation!
For us, the Chinese, the real issue is not the superficial corruption that the supreme
leader XI fiercely fought, nor the insanity, the incompetence, and the betrayal of the oath
of some party members. It is our innate reliance on authorities and the love of collective
glory, a part of our culture passing down through generations over more than 2400 years,
being the problem. We can never break the dynastic cycle if we do not see the path
to the self-destruction of unhinged state power, such as Mao's era . If we are still yearning
for a "just leader" to solve issues like retirement, education, and medication, still
admiring exhaustive achievements such as the Belt and Road, the South China Sea, and
Taiwan, we then have learned nothing from the downfall of thirteen dynasties and countless
hegemonies throughout the history of China. The collective conscious of the Chinese have so
far failed to realize the force driving the rise and fall of a dynasty is not the moral and
intellect of the leaders, but the people's economic freedom relatively untouched or
infringed at times, by a mixture of chance, sanity, and imperialism vainglory. The blind
reliance on leaders and the love of collective grandiosity is only compounded when the
Americans fail to take back their power from the government, who is warring with China and
covertly overtaxing them. The collective enlightenment of the Chinese population is nearly
impossible, since the tyrants in Beijing have no shortage of strawman to throw at the
people and say "that is the problem, blame the belligerent Trump and the jealous
Americans", and the Communist Dynasty will always enjoy the " mandate of heaven ".
Even with a sheep's mindset, the Chinese economy will overtake the US, despite the slow
death of its most productive private sector. The sheer momentum of the slight right turn to
liberty 40 years ago is good enough for China, since the Americans do not restore their
free-market and liberty that had made them an exceptionally productive civilization for a
long time. But then what? We Chinese are just molecules burnt to fuel the blinding flash of
a new empire not far from its fourteenth dynastic downfall, just like the Achaemenids, the
Romans, the Umayyads, the Ottomans, Napoleon's France, the British, and the Americans
before us.
Xiaoran Tong has a Ph.D. in
Epidemiology from the Michigan State University (MSU). He is originally from Kunming,
Yunan, China and arrived in the US in 2014 to pursue his Ph.D. at MSU. He is Interested in
the history of America and its similarities with ancient and contemporary
China.
Amid the ongoing diplomatic spat between Washington DC and Beijing,
which now also includes the deployment of B-1B
bombers and warships in the South China Sea , late on Monday (local time) China's Global Times
reported , citing sources close to the Chinese government, that some "hawkish" officials in
China are calling for a renegotiation the the "phase one" trade deal with Washington as well as
a "tit-for-tat approach on spiraling trade issues after US' malicious attacks on China ignited
a tsunami of anger among Chinese trade insiders."
The calls to renegotiate the current version of the deal - which has yet to be actively
implemented - emerge amid dissatisfaction because "China has made compromise for the deal to
press ahead."
While in the past, these same trade negotiators "believed that it would be worthwhile to
make certain compromise to reach a partial truce in the 22-month trade war and ease escalating
tensions", given what the Global Times called "President Donald Trump's hyping an anti-China
conspiracy that aims to cover up his mishandling of the COVID-19 pandemic", advisors close to
the trade talks have suggested Chinese officials rekindling the possibility of invalidating the
trade pact and negotiating a new one to tilt the scales more to the Chinese side, sources close
the matter told the Global Times.
A former Chinese trade official told the Global Times on condition of anonymity on Monday
that China could complete such procedures based on force majeure provisions in the pact.
"It's in fact in China's interests to terminate the current phase one deal. It is beneficial
to us. The US now cannot afford to restart the trade war with China if everything goes back to
the starting point," another trade advisor to the Chinese government told the Global Times,
pointing to the staggering US economy and the coming of the US presidential election this
year.
"After signing the phase one deal, the US intensifies crackdown in other areas such as
technology, politics and the military against China. So if we don't retreat on trade issues,
the US could be trapped," the former official noted.
Some could disagree, and counter that Trump can certainly restart the trade war especially
since it suits his pre-election agenda - after all, now that the fate of the market is entirely
in the hands of the Fed which has gone full MMT, Trump is no longer afraid by the market's
response to a renewed trade war. In fact, with over 60% of the US population seeking to
distance US from China, it would appear that Trump's best bet to winning independent votes is
precisely to keep hammering China.
Confirming this, Trump said on Friday that he was "very torn" about whether to end the
China-US phase one deal, Fox News reported, with some observers interpreting his words as
equating to a threat from the US to re-launch a trade war against China.
Then again, over the weekend, the SCMP reported that US source familiar with recent
discussions stated US officials acknowledged China was largely delivering its pledges on
structural issues such as opening market access and improving IP protection but they have yet
to agree in some details including IP action plan and easing equity caps for foreign investors.
Furthermore, the source stated fallout from the virus meant agreement on purchasing US goods
has become much more important and that many believe China needs to increase pace on
purchases.
Meanwhile, Gao Lingyun, an expert at the Chinese Academy of Social Sciences who advises the
government on trade issues, told the Global Times on Monday that China has "well documented"
Washington's usual threats after previous rounds of confrontation. That means if the trade war
restarts, "China knows how to respond, and it is able to retaliate quickly and inflict serious
harm on the US economy," Gao said.
Still, as the Global Times concludes, analysts noted that terminating the phase one trade
deal would be China's "last option" and one that China would only resort to under extremely
hostile conditions.
"... What does a developing country like China, still mired in socio-economic inequality, technological dependence, political corruption and environmental degradation do? Concentrate on its own hinterland while bidding its time? Confront the hegemon head-on which would lead to military conflict? Or control its responses while cultivating partnerships with ALL peace-loving countries, whether rich or poor, First World or Third World, Western or non-Western? ..."
Unlike Escobar, Roberts, et al, I am much more sanguine about the prospects of China's rise
which has threatened the indispensable nation of Yankistan because China was not supposed to
rise above its assigned role as the cheap cog of the globalist economy serving the Capitalist
Oligarchy of the NWO. By dint of hard work, sly cunning and shrew tactics, China outgrew its
role by becoming the hub of the international economy via its New Silk Road and the BRI.
What does a developing country like China, still mired in socio-economic inequality,
technological dependence, political corruption and environmental degradation do? Concentrate on
its own hinterland while bidding its time? Confront the hegemon head-on which would lead to
military conflict? Or control its responses while cultivating partnerships with ALL
peace-loving countries, whether rich or poor, First World or Third World, Western or
non-Western?
The rapid decoupling of China's economy away from the USA started with the GFC 2008 but has
since accelerated with Obama's "Pivot to Asia" and Trump's trade war with China. Exports to the
USA account for less than 3% of China's GDP today with 60% of those exports being either US or
foreign goods manufactured in China. So the real figure is 1% of China's GDP consists of
Chinese goods exported to the US market, consisting mostly of industrial commodities or
consumer products.
As China has already charted its own independent path of building trading/investment
partnerships with Europe, Asia, Africa and Latin America, the USA has become threatened by
China's successful decoupling from its export dependence on the US market as proven by its
hostile reaction to Xi's BRI and China's New Silk Road. In addition, the US was caught
off-guard by the sudden rise of Chinese tech firms such as Huawei which is the world's number
one vendor of telecommunications equipment with undisputed world leadership in 5G
technology.
Shocked to find its manhood as no longer exceptional, Uncle Sam feels the need to show off
to the world: "Me Gringo! Big Dick!"
China has become, over the past two decades, the planet’s second-most powerful nation after the United States. Booming
economic growth has lifted millions of its citizens out of poverty and catapulted it to the world’s second-largest economy,
while increased military spending has made it the second-largest military power (though its military spending, and nuclear
stockpile, are still a small fraction of the U.S.’s).
That growth — in both economic and military power — has led U.S. officials to conclude that they must do more to counteract
what they regard as China’s growing influence. President Obama, early in his administration, memorably vowed an “Asia pivot,”
whereby the U.S. would devote fewer resources and less attention to the Middle East and more toward China’s growing power in its
own region.
That led to some moderate escalation in adversarial relations between the two countries — including the Trans Pacific
Partnership trade agreement (TPP) and other regional skirmishes — but nothing approaching direct military confrontation.
President Trump, since taking office, has largely heaped praise on the Chinese government and its leader President Xi Jinping,
siding with Xi over democracy protests in Hong Kong and even Beijing’s handling of the coronavirus outbreak.
But this pandemic has seriously escalated tensions between the two countries given the increasingly hostile rhetoric
emanating from various sectors of the west, making it more urgent than ever to grapple with the complex relations between the
two countries and how China ought to be perceived.
The question is far more complex than the usual efforts to create a new U.S. Enemy because numerous power centres in the U.S.
and the west generally — particularly its oligarchs, Wall Street, and international capital — are not remotely hostile to
Beijing but, quite the contrary, are both fond of it and dependent upon it. That’s why — unlike with other U.S. enemies such as
Saddam Hussein, Fidel Castro, the Iranian government or Nicolas Maduro — one finds very powerful actors, from Bill Gates to
Michael Bloomberg to the consulting giant McKinsey to Trump himself, defending Chinese officials and urging better relations
with them.
That, in turn, reflects a critical reality about U.S./China relations that defies standard foreign policy frameworks: while
hawkish, pro-war political elements in both parties speak of China as an adversary that must be confronted or even punished, the
interests of powerful western financial actors — the Davos crowd — are inextricably linked with China, using Chinese markets and
abusive Chinese labor practices to maximize their profit margins and, in the process, stripping away labor protections, liveable
wages and jobs from industrial towns in the U.S. and throughout the west.
That is why standard left-wing anti-imperialism or right-wing isolationism is an insufficient and overly simplified response
to thinking about China: policy choices regarding Beijing have immense impact on workers and the economic well-being of citizens
throughout the west.
Today’s new episode of SYSTEM UPDATE is devoted to sorting through the complexities of this relationship and how to think
about China. I’m joined by two guests with radically different views on these questions: the long-time Singeporean diplomat who
served as President of the U.N. Security Council, Kishore Mahbubani, whose just-released compelling book “Has China Won?” argues
that the U.S. should view China as a friendly competitor and not as a threat to its interests; and Matt Stoller, who has worked
on issues of economic authoritarianism and the U.S. working class in multiple positions in Congress and in various think tanks,
culminating in his 2019 book “Goliath,” and who argues that China is a threat to the economic well-being of the U.S. working
class and to civil liberties in the west.
The show, which I believe provides excellent insight into how to think about these questions, debuts this afternoon at 2:oo
pm ET on the Intercept’s YouTube channel or can be viewed on the player below at 2:30 p.m. As always, a transcript of the
program will be added shortly thereafter.
Update: May 7, 1:54 p.m. EDT
The debut time for this episode has been moved by 30 minutes; it will not debut on the Intercept’s YouTube channel at 2:30 pm
ET.
I have been watching China's gradual rise in the world's GDP– as well as GDP-per-capita– charts and a concomitant fall in the United
States' position in these charts, for nearly 20 years now. The United States' decline is still relative rather than absolute. In
absolute terms, its GDP is still "Number 1!" But the decline was accelerated from 2003 on, when successive US presidents decided
to pour massive amounts of government revenues into large-scale and always disastrous military adventures all around the world. As
of last November, Brown University's "Costs of War" project
tallied the U.S. budgetary costs of these wars, FY2001-2020, to be $6.4 trillion. These were funds that could have been invested,
instead, in repair and upgrading of vital infrastructure here at home– including vital health infrastructure. But no. Instead, the
money was shoveled into the pockets of the large military contractors who then used a portion of it on expensive lobbying operations
designed to ensure that the sow of military spending continued feeding her offspring (them.)
When Donald Trump became president, in 2017, one of his early instincts was to pull back from the foreign wars. (This was about
his only sound instinct.) The military-industrial complex then proved able to slow-walk a lot of the military-retraction moves
he wanted to make One of the other abiding themes of Trump's presidency has been his desire to "decouple" the U.S. economy from the
tight integration it had developed at many levels with the economy of China, as part of broader push to halt or slow the rise of
China's power in the global system. At the economic level, we have seen the "tariff wars" and the campaign against Huawei. At the
military level, we have seen a slight escalation in the kinds of "demonstration operations" the U.S. Navy has been mounting in the
South China Sea. Mobilizing against "Chinese influence" also seems to come naturally to a president who shows no hesitation in denigrating
anyone– even US citizens and politicians– who happens not to be of pale-complected European-style hue.
With the eruption of Covid-19 in U.S. communities nationwide, Pres. Trump's pre-existing proclivity to demonize and denigrate
anything Chinese has escalated considerably– spurred on, it seems, by his evident desire to find an external scapegoat to blame for
the terrible situation Covid-19 has inflicted on Americans and to detract voters' attention from the grave responsibility he and
his administration bear for their plight.
He and his economic advisors clearly realize that, with the supply chains of major US industries still inextricably
tied
up with companies located in China and with China still
holding $1.1 trillion-worth of U.S. government debt, he
can't just cut the cord and decouple from China overnight. Yesterday, his Treasury Secretary and the US Trade Representative held
a
phone call with China's Vice Premier Liu He, the intent of which was to reassure both sides that a trade deal concluded four
months ago would still be adhered to.
But today, less than 12 hours after the reassuring joint statement released after the phone call, Trump
told Fox News that he was
"very torn" about the trade deal, and had "not decided" whether to maintain it. This, as he launches frequent verbal tirades against
China for having "caused" the coronavirus crisis. US GDP is highly inflated by counting financial moves on Wall Street (extracting
money from suckers and moving money from one hand to another) as productive activity. China's purchasing power parity already exceeds
the US and I suspect its actual GDP does as well. Only US financialization is able to mask the lack of actual productivity in the
US economy.
I am somewhat skeptical about China chances in this race. That will be much tougher environment for China from now on. And
other major technological powers such as Germany, Korea and Japan are still allied with the USA.
The major problem for China is two social systems in one box: state capitalism part controlled by completely corrupt Communist
Party (which completely abandoned the communist doctrine and became essentially a religious cult ) + no less corrupt neoliberalism
part created with the help of the West.
The level of corruption inherent in the current setup (first adopted in Soviet NEP -- New Economic Policy) is tremendous, as
the party has absolute political power and controls the major economic and financial areas while the entrepreneurs try to bribe
state officials to get the leverage and/or enrich themselves at the state expense or bypass the bureaucratic limitations/inefficiencies
imposed by the state, or offload some costs. So mafia style relationship between party officials and entrepreneurs is not an aberration,
it is a norm. And periodic "purges" of corrupt Party officials do not solve the problem. Ecological problems in China are just
one side effect of this.
Add to this the certain pre-existing tendencies within Chinese society to put greed above everything else, the tendency clearly
visible in some emigrants and to which Yen devoted one post recently. Riots in some Asians countries against Chinese diaspora
are often at least partially caused by this diaspora behavior, not only by xenophobia. Note that several African countries with
Chinese investments now intent to sue China for damages from COVID-19. This is not accidental.
Technologically the USA and its G7 satellites are still in the lead although outsourcing manufacturing to China helped Chinese
tremendously to narrow the gap. For example, Intel CPUs still dominate both desktops and servers. All major operating systems
(with the exception of some flavors of Linux) are all USA developed.
You rise important points, but I respectfully disagree with all of them.
1) I don't think China is a "State capitalism" country. The term "State capitalism" was first coined by Lenin for a very specific
situation the USSR was in. Yes, the similarities are striking - and Deng Xiaoping's reforms were clearly inspired by Lenin's NEP
- but it is important to state that the CCP actively avoided the term and built upon the concept both theoretically and in practice.
Besides, we don't need to read Lenin's works critically, an not take him as the second coming of Jesus: when he used the term
"State capitalism", he used it in a clearly desperate moment of the USSR, almost by improvisation. Lenin's last years were definitely
desperate times.
Besides, the NEP didn't culminate with the capitalist restoration of the USSR. On the contrary: it collapsed in 1926 (after
another bad harvest) and gave way to the rise of Stalin and the radical faction of the CPSU. The Five-year plans were born (1928),
and agriculture would be fully collectivized by the end of the 1930s (a process which catapulted Molotov to the second most powerful
man in the USSR during the period). By the end of WWII, the USSR had a fully collectivized economy.
2) The corruption hypothesis is an attractive one - specially for the liberal middle classes of the post-war and for the Trotskyists
- but it doesn't stand the empirical test. The USA was an extremely corrupt nation from its foundation to pre-war, and it never
stopped it from growing and reaching prosperity. The Roman Empire and Republic were so corrupt that it was considered normal.
There's no evidence the PRC is historically exceptionally corrupt. However, I can see why the CCP is worried about corruption,
as it is a flank through which the West can sabotage it from within.
3) The COCOM tactic will be much harder to apply against China than against the USSR. For starters, the USSR lost circa 35%
of its GDP in WWII. This gave it a delay from which it never recovered. Second, the USSR fought against capitalism when capitalism
was at its apex. Third, the USSR collectivized and closed its economy too early, not taking into account that it still lived in
a capitalist world.
China doesn't have that now. It is fighting against capitalism in a phase where it is weakened. It is open and intimately integrated
economically with its capitalist enemies. It closed or is about to close the technological gap in many strategic sectors during
a stage where the capitalists have low retaliation capacity. It found time to close at least the GDP gap. It found time to recover
fully from its civil war and the Japanese Invasion of the Northeast.
Germany, South Korea and Japan are not technologically more advanced than the USA. This is a myth. Plus, they are too small.
They may serve as very useful - even essential - pawns for the USA-side, but I don't see any of the three ever achieving Pax
.
HiSilicon , Huawei
Technologies ' in-house semiconductor and integrated circuit design company, has surpassed
US chip giant Qualcomm in
terms of smartphone processor shipments in China for the first time amid coronavirus-linked
disruptions that have hit most major players, according to a report.
In the first quarter of 2020, HiSilicon shipped 22.21 million smartphone processors,
according to Chinese research firm CINNO's latest monthly report on China's semiconductor
industry. Although HiSilicon's shipments only increased slightly from the 22.17 million units
it shipped in the first quarter of last year, it was the only major company that did not see a
year-on-year decline in the quarter, CINNO said in a summary of the report posted on its
official WeChat account.
As a result, the Huawei subsidiary's market share surged to 43.9 per cent, from 36.5 per
cent during the same period last year, and beat Qualcomm for the first time to become China's
top smartphone processor supplier. HiSilicon's steady performance comes at a time when the
Chinese smartphone industry is being battered by delayed product launches and dampened consumer
sentiment linked to the coronavirus pandemic. Smartphone shipments in the country
slumped by 34.7 per cent – more than a third – to 47.7 million units in the
first quarter of 2020, according to a report released earlier this month by the China Academy
of Information and Communications Technology.
US-based Qualcomm, the long-time market leader, fell to second place in the latest quarter
with a year-on-year decline in its market share from 37.8 per cent to 32.8 per cent. Taiwan's
Mediatek maintained its third-place position, but also saw its market share slide year-on-year
from 14 per cent to 13.1 percent
.
Table showing the market share of smartphone processor supplies according to
CINNO Research. Source: CINNO Research / WeChat
Huawei, HiSilicon's parent company, is at the
centre of a high-profile US-China tech war. The Trump administration
added the company to its Entity List last year, citing the risk that Huawei could give
Beijing access to sensitive data from telecommunications networks. The trade blacklist
effectively bars Huawei from buying US products and services. In response, the Chinese company,
which has denied the allegations, is
ramping up its own capabilities to produce more American component-free network gear,
including through HiSilicon.
Huawei is also reportedly shifting
production of HiSilicon-designed chips
away from Taiwan Semiconductor Manufacturing Co (TSMC) and towards Shanghai-based
Semiconductor Manufacturing International Corp (SMIC) as Washington
readies new rules which would require foreign companies using US chipmaking equipment to
obtain a license before supplying chips to Huawei – a move that would directly affect
TSMC.
Over 90 per cent of Huawei phones in China now use HiSilicon processors, according to CINNO.
However, Huawei founder Ren Zhengfei said in an interview with Yahoo Finance last year that the
company would continue using chips from US vendors such as Intel and Qualcomm as long as it is
still allowed by US regulators.
In the face of the upcoming presidential elections, Republicans launched a new China Task
Force committee in US Congress on Thursday to attract attention despite its futile efforts to
pass the buck amid the pandemic. But this not-so-surprising move only shows how hysterical and
desperate Republicans have become as criticism of the government's mishandling of the domestic
coronavirus outbreak increases, experts said.
Following a series of anti-China moves the Trump administration has made when its epidemic
prevention spiraled out of control with more than 1.2 million infections - the world's largest
number - to date, House Minority Leader Kevin McCarthy announced on Thursday a proposal to set
up a new "China Task Force" which will develop legislative policies to curtail Chinese
influence. The committee currently consists of 15 Republicans with no Democrats joining.
McCarthy said the pandemic made it apparent "for a national strategy to deal with China."
The task force will hold meetings and briefings on China-related issues, which include China's
influence inside the US, presence on American campuses and control over important supply
chains, the Washington Post reported.
A search for the members in the China Task Force revealed their antagonism toward China. One
of them is Rep. Elise Stefanik, who in late April asked Secretary of State Mike Pompeo and the
attorney general to bring China to the International Court of Justice for the handling of
COVID-19, according to a report by The Adirondack Daily Enterprise.
Analysts said setting up the new China committee is the Republicans' new tactic to fuel
anti-China sentiment, but this won't help stop power from shifting from the West to East, which
was happening before the pandemic. The pandemic is very likely to speed up this process.
Democrats not joining the committee does not mean they are more China-friendly, but they
don't want Republicans to shift the focus of President Donald Trump's failure to handle the
pandemic. Since last year, both parties passed several bills regarding China's Xinjiang and
Hong Kong, interfering in China's internal affairs, Diao Daming, an associate professor at the
Renmin University of China in Beijing, told the Global Times on Friday.
Diao noted the Democrats in the Congress won't endorse the legislation but will support
other anti-China measures that the new committee aims to push forward.
"The pandemic will very likely further weaken the US and strengthen China," he said.
A man covering his face walks in Manhattan, New York on April 6 amid the serious outbreak
of COVID-19 in the US. Photo: AFP
Treating China as equals
In the past months, certain American politicians, including Pompeo, kept passing the buck,
making groundless accusations that China was responsible for the outbreak, and hyped
conspiracy theories by calling it the "China virus" to claim the virus originated from a
Wuhan lab. At Friday's media briefing, Chinese Foreign Ministry spokesperson Hua Chunying
joked that the press conference was almost all about refuting Pompeo's lies.
The extreme atmosphere has made many people in the US worry for a return of the McCarthy
era, where free speech in the country was curtailed. A former US Ambassador to China pointed
out in a CNN interview the US is now similar to Germany in the 1930s.
Li Haidong, a professor at the Institute of International Relations of the China Foreign
Affairs University, told the Global Times on Friday the task force will fuel the existing
unfriendly atmosphere toward China at the local level in the country.
Trump administration's China policy focuses on conflicts, and the task force could further
aggravate tensions, he said.
Former US Ambassador to China Max Baucus said in an interview with CNN that "The [Trump]
administration's rhetoric is so strong against China. It's over the top. We're entering a
kind of an era which is similar to Joe McCarthy back when he was red-baiting the State
Department, attacking communism."
"A little bit like Hitler in the 30s. A lot of people knew what was going on was wrong.
They knew it was wrong, but they didn't stand up and say anything about it. They felt
intimidated," he said.
Analysts warned that China needs to stay alert as the US is trying to create a new
McCarthy era of international repression on China.
But, on the other hand, we should be aware that most countries won't follow the US, Li
said.
"It's difficult for the US to mobilize the world against China. People know how selfish
and self-centered the US is. So only a few of its allies will join," he told the Global
Times.
The US interception of other countries' anti-virus medical supplies and pointing a finger
at the WHO when international cooperation is urgently needed occupied world headlines.
Meanwhile, the Chinese government had provided over 150 countries and international
organizations with supplies, hosted over 120 video conferences with health experts from more
than 160 members of the international community, and dispatched 19 medical groups to 17
countries, according to the Zhang Ming, Chinese Ambassador to the European Union, at a
Coronavirus Global Response pledging event on Monday.
Li told the Global Times that most countries, including its traditional allies, such as
Germany and France, have different demands from the US. So they won't join this wave.
As early as February 1, the European Union had dispatched tons of medical supplies to
assist China. And in March when the continent was hit hard, China immediately provided more
than 2 million protective masks and sent medical groups. Positive reactions were constantly
heard in Europe on China.
Meanwhile, it has been reported that China faces a rising wave of hostility led by the US
amid the pandemic. The discrimination against Chinese people is growing in some parts of the
world.
Li said "The rising hostility shows some Western countries are not accustomed to a rising
China. It's a challenge for them to learn to see China on an equal footing, which adds to
their anxiety."
He added that they need to learn to respect differences and deal with other countries
equally.
Analysts noted that China should step up efforts to enhance its own capabilities in
high-tech, military and other fields. It should also conduct far-reaching international
cooperation and uphold multilateralism to share its benefits with other countries, rather
than being distracted by the anti-China wave.
Cooperation amid competition
The task force on China is not the first one in the West. On April 24, several UK
Conservative MPs launched a "China Research Group" to promote "factual debate" in dealing
with the "rapidly changing nature of the relationship" between China and the UK. The group
would attempt to look "beyond" the coronavirus pandemic to "examine China's long-term
economic and diplomatic aims," BBC reported.
Kevin Hollinrake, an MP and a member of the group, told the Global Times that the group
will make some inquiries on specific policy areas. The group will look at, for example, how
the Chinese political system and business work.
It will look at certain work streams and develop fact-based reports based on those work
streams. "They may be reported back to parliament or published in the public domain,"
Hollinrake said.
Although the group was set up at a time when the virus was rampant in the UK, "the
pandemic itself is not the underlying issue," Hollinrake noted.
The China Research Group is likely to "lobby for a less cooperative approach to China, and
for the UK to align more with the US on China policy," Tim Summers, senior consulting fellow
on the Asia-Pacific program at Chatham House, told the Global Times.
However, Chris Wood, the British Consul General in Shanghai, told the Global Times that
"We will see continued discussions and collaboration. There is no global challenge that can
be solved without China's participation. We recognize that we very much want to work with
China on these big global issues, and that will continue."
In the post-coronavirus era, China and Europe might continue to seek cooperation amid
competition, analysts said, pointing out that Europe's anxieties are, to a large extent,
provoked by the US.
In the early stages of the pandemic, despite old disputes, cooperation was the mainstream
in China-Europe interactions. But things have changed since the US became the new epicenter,
Sun Keqin, a research fellow at the China Institutes of Contemporary International Relations,
told the Global Times.
Sun told the Global Times that to reduce the negative influence from the US on European
countries, China needs to make efforts to let its voice heard in international public opinion
and seek cooperation opportunities. What the US is advocating is nothing but rumors and
conspiracy, and China must smash these lies with sound and reasonable evidence and awaken
European countries, Sun said.
Casey •
19
hours ago So, is it correct that the DNC had some kind of Obama-era "chi-merica" project to
further their globalist, neolib project -- as it became obvious that the US was never going to
be able to pull off the unipolar Empire -- into the new century with a sort of US/China
alliance, with a substantial US aligned fifth-column (if that's the right phrase) working in
China to further the project? Then Trump came in a screwed that all up, trying to pretend to be
friendly to Russia, which the DNC promptly scuttled. And now the net result is Russia and China
growing relations, which is a very real nightmare for the US, the absolute worst possible
outcome for the globalists? Probably I have this all ass-backwards. Also, really, how long
would it take to relocate important industries to the US? Wouldn't that need to be a
multi-generational project because you can;t turn baristas into machinists over night? Also,
what prevents the US from taking over Venezuela right now, militarily, instead of those
apparently poorly organized attempts to infiltrate with mercenaries, as was recently
revealed?
If Uncle Sam defaults on his debts, that would be the biggest own goal ever. The whole
financial system is based on US Treasury bonds, and a default would send their value to zero.
The US Social Security Trust Fund is still worth almost three trillion dollars, most of it in
US Treasury bonds. Default means Goodbye Social Security Pensions, or at least a huge
"haircut".
I think Pompous Ass is bluffing. One reason is that Wall Street parasites have been
salivating over the Social Security trust fund for decades, and GW Bush was working on a plan
to give it to them. I don't think the bankster parasites will sit on their hands and let the
Trump idiots blow up their entire system. I think there would be a palace coup d'etat
first.
The US wants to сut industrial and supply dependence on China amid rising tensions between the two powers. However, not everyone
is eager to pack their bags and leave the lucrative Chinese market in the midst of the previous row.
The Trump administration has long been pushing American firms to get back to US soil, especially when trade tensions were flaring
between the two biggest global economies. Now the US has revived the trade war rhetoric again.
Read more
Asian markets plunge amid escalating US-China tensions
"We've been working on [reducing the reliance of our supply chains in China] over the last few years but we are now
turbo-charging that initiative,"
Under Secretary for Economic Growth, Energy and the Environment at the US State Department
Keith Krach told Reuters.
Krach as well as other officials told the agency that some critical and essential manufacturing should be moved from the
country, and the government may take steps on it soon. Apart from the US' seemingly favorite options of tariffs and sanctions,
the plans may include tax incentives and potential reshoring subsidies as well as closer relations with Taiwan – a move which has
always angered Beijing.
Washington is also mulling the creation of what one of the officials called 'Economic Prosperity Network' which would include
companies and groups from some
"trusted partners."
The network is set to share the same standards
"on everything
from digital business, energy and infrastructure to research, trade, education and commerce."
China's vital role in global supply chains was felt sharply amid the coronavirus pandemic as many international giants – from
tech to car industries – are reliant on the country. The pandemic has forced some US companies to seriously consider at least
partial relocation and changing supply chain strategy, according to one of the latest polls conducted by the American Chamber of
Commerce in China and its sister organization in Shanghai. However, the majority of firms said that the outbreak does push them
to turn their backs on China.
Nevertheless, one of the
"China hawks"
told Reuters that the virus created "a perfect
storm" as it
"crystallised all the worries that people have had about doing business with China"
and
the damages from Covid-19 have eclipsed possible profits.
When the trade war showed no signs of abating last year and the US and China were still hitting each other with tariffs,
another AmCham poll showed that the punitive measures were hurting US businesses operating in China. While over forty percent of
the 250 respondents were
"considering or have relocated"
production facilities outside China, some 35 percent of
companies said they would rather source within China and target the domestic market. Fewer than six percent wanted to move or
already shifted their factory operations to the US.
Set aside the enormous relocation costs – which the White House has recently pledged to cover should an American company
decide to ditch China – there is still another massive hurdle in this plan. China is still the world's top producer of rare earth
metals – the group of elements vital for production of multiple devices, from cell phones to some advanced military gear. Should
all the production be moved from China, it could ban exports of these materials. Last year Chinese media said the option was
already being mulled by Beijing, and it could consider the drastic measure again if trade war tensions further escalate.
The new rules will require licenses for US companies to sell certain items to companies
in China that support the military, even if the products are for civilian use. They also do
away with a civilian exception that allows certain US technology to be exported without a
license.
They come as relations between the United States and China have deteriorated amid the
new coronavirus outbreak
####
It's far too late and will be significantly damaging to US companies. No doubt Washington
still expects Beijing to buy Boeing airliners. If Beijing were to pull that plug, then it
would take out Arbus, P&W, GE, CFM all the suppliers, MRO ventures and collapse the whole
western airline supply chain. It would obviously kill any Chinese or Russian airline program
that has any western content . I doubt Beijing will go that far so they'll be looking
at actions, not words.
t-Rump and co need to show something sym-bollox to the American electorate that yet again
they are being 'tough on China' during this erection year but it requires China to play
along. It simply might not. It is reported that China is currently purchasing large
quantities of American LNG to fulfill 'Phase one' of t-Rump's Deal of the Century with
China.
Maybe that is the obvious counter, threatening to pull the whole DoC, starting with
dumping LNG purchases as a direct warning. t-Rump's Administration has pushed itself into a
smaller and smaller box, all of its own making. As I've always said and I still believe to be
true, the biggest threat to t-Rump's re-erection is t-Rump himself.
Paradoxically, the more Trump's belligerence and 'gut-based' trade policies damage
international trade, the more convinced his supporters become that only Trump can handle
increasingly-complicated trade relationships. This probably stems from his going into a
meeting under difficult conditions, emerging to fire off a miracle tweet, "China will now buy
massive quantities of our agricultural products", and ducking out the back without
elaboration. This leads to a misplaced belief that Trump can perform miracles, as much of a
jerk as he can be, because his loyalists rarely pay attention long enough for the rebuttal
which always comes, laying out his serial exaggerations. Remember when U.S. Steel was
building three new steel plants, on the strength of Trump's hard-ass negotiations in the
Canada-Mexico-USA Free Trade deal? Lighthizer's hard-ass negotiations, actually. Anyway,
yeah; totally made it up. He doesn't see anything wrong with making optimistic projections
which have no basis in fact.
Mind you, it would be a bit of a downer to have to explain again to Biden what 'oil' is,
every single time the subject comes up. But I wouldn't be too worried about that.
LNG is pretty cheap right now, like all energy products. I see China behaving much like
Russia; once it strikes an international bargain, it will stick to it until the terms play
out. But Trump might find a different China when he tries to strike the next agreement.
China can also take similar measures, sic (I read that) Alibaba and other gigantic Chinese
companies that rely on server farms are switching over to Chinese made chippery and not
buying foreign. Simply in lost sales for the foreseeable future is gigantic.
I imagine you are too young to remember Victor Kiam (he died in 2001) former president of the
Remington Razor Company. He had a popular line of commercials in the late 80's in which he
would say "I liked it so much, I bought the company".
The Chinese must have heard him, because they took his method to heart; Alibaba doesn't
just buy Chinese-made chips, they bought the company. Right after the United States started
up its
we-have-to-keep-priceless-American-technological-secrets-out-of-the-hands-of-the-thieving-Chinks
policies. Suit yourself, Sam.
Shanghai-based Semiconductor Manufacturing International, a $5.4 Billion company and one
of the largest such companies in China, pulled its listing from the NYSE.
In 2018, Skyworks Solutions had 83% of its business in China. Apple had 20%, but 20% of
Apple's revenue is a shitload of money. I had to laugh at the line, "Investors are
increasingly concerned over the prospect of rising global protectionism." 'Global
protectionism' pretty much covers The Donald's act.
Justin GLyn @ 65 is correct: New Zealand Prime Minister Jacinda Ardern instituted a Stage
4 lockdown in her country in mid-to-late March with the aim of eliminating the virus from
Kiwi shores. That goal is no longer feasible but
the country has begun relaxing its lockdown to Stage 3 in an effort to revive its
economy.
The US failure to anticipate blowback can be understood in one way: assuming that the US
did indeed seed the virus in Wuhan, then we might speculate that the seeding was timed to
coincide with the flu season in China and with mass preparations for Chinese New Year. The
thinking was that the virus would spread through public transportation networks throughout
the country and Beijing would have a full-time job on its hands just dealing with massive
viral outbreaks all over the country, and fail to deal with them even adequately, leading to
mass riots and eventually widespread resistance to Beijing, and maybe even the eventual
disintegration of the CCP and its overthrow. US and other expatriates would be trapped in the
country, and foreign embassies and consulates might even be torched, prompting a US-led
coalition to invade parts of the country (like the south and the southeast) and take over in
a start to the balkanisation of the country cunningly disguised as foreign help to keep
order.
The US certainly did not anticipate that Chinese people trusted enough in Beijing to be
willing to carry out whatever orders Beijing issued; the US assumption seems to be that
everywhere around the planet, people yearn to be just as individualistic and suspicious of
Big Government as Americans are, and that what they think of their local councils and
regional governments is the same as what they think of their national governments.
The reality is that in many countries, whatever people think of their local councils and
regional (state, provincial) governments may not be true of what they think of their national
governments, because the functions of the three tiers of government in their countries may
not overlap to the extent that they might do in the Anglocentric world.
Neither did the US anticipate that Chinese society could be advanced in its own way
technologically with various functions such as public health, public transport and others
integrated enough that the Chinese could respond to a rapidly spreading crisis in the way
they did. That is in part because US society and values are based on competition, mutual
suspicion and top-down orders among other things, rather than co-operation, collective
behaviour and willingness to consider solutions based on ideas from divergent yet integrated
sources.
That is a very plausible working hypothesis, and I mean it working, the main assumption is
still to be proven but it explains many other observations of fact. But I will append a
variable in the main assumption: we could even replace the initiative's agent with some
non-state actor, ie Big Pharma. I am unable to "decide" between these possibilities. Are the
Imperial forces conflicting to the extent implied? Are we yet at the point that a non-state
actor is bold enough for such an action? I really don't want to stretch a perfectly good
hypothesis but am I?
I was in China at the time when this unfolded and note the following: 1: The Chinese
cultural mindset is totally different from the Western one, and the gap much greater than
most Westerners realise. Look at the videos of the 75th Anniversary of Modern China for a few
clues 2: As the worlds largest atheist nation, death is considered final, rituals
notwithstanding So they are motivated to survive..( and focus on delicious food to this end)
3: They talk. Incessantly. It is no accident that WeChat has grown exponentially.. What
happens in one part of China is pretty quickly spread to other parts And on the Flipside,
there are surveillance cameras everywhere
So when this unfolded, Mid Spring festival when the cities were emptied, the memory of the
SARS epidemic sprang to forefront of the official mind. Xi JingPing appeared on most TV
Channels, making it clear that he was taking responsibility for the government response. And
implicitly, that if he failed, he would be gone, in keeping with the long tradition of
Chinese leadership.
At this point we decided to bail, being prime targets to host the virus. Avoided getting
quarantined in HongKong by 4 hours, and quarantine in Manus Island, Aus by one phone
call.
There were 6 temperature checks and 4 police checks on route to HongKong Airport; arriving
in New Zealand expecting some major medical checks. None. Just 2 nurses at a deck asking if
we felt OK - handed a pamphlet and sent on our way. I did try to follow up but given official
discouragement. So NZ was asleep at the wheel for weeks, and just plain lucky. However, once
NZ woke up, the response was excellent; PM Jacinda Adern's speech was masterful and the
response excellent. We had only two CoVid cases yesterday, as we move into level 3.
There are big problems in economic recovery here, but the alternative scenarios would have
been far worse. And theres got to be a reason why various luxury private jets are turning up
unannounced and often unmarked at the airports here :-)
Each of your explanations are compelling in their own way.
A few things that your explanations left out (this is not meant to be a comprehensive
list):
The strange resignation/firing of John Bolton.
The strangely good timing of the ARAMACO IPO;
Trump's strange reversal of his stated intention to not do partial trade deals with
China - he did a partial deal in January a couple of weeks after the virus became
known;
The strange non-resistance by medical establishment to Trump's failure to respond - no
one resigned as the Trump dragged his feet.
IMO any theory of deliberate release should consider these points.
Bolton's was asked to leave the administration because he was involved in pushing
development of a virus which accidentally escaped the lab -OR- willingly left to give
Trump/Deep State a scapegoat in case it became known that the use of the virus was
deliberate? In either case, the virus was already "in the wild" ...
... which would explain why no medical professional resigned in Feb/March. It was never
going to be possible to contain the virus in the West.
This would also explain why virus discussion were classified.
Trump did a trade deal with China that he knew they would have trouble to satisfy the
terms of. The ARAMACO IPO - which had been delayed several times - came just about 6 weeks
before the new virus was identified. And it was done despite the Houthi attack on ARAMACO
facilities two months before (investors should've been very wary of the continuing war at
the super high valuation).
<> <> <> <> <>
PS I do know that New Zealand had a lock-down but they did that as soon as they found
'community spread' and their vigilance has allowed them to start lifting the lock-down after
only a short period.
As the usual suspects fret over the "stability" of the Chinese Communist Party (CCP) and
the Xi Jinping administration, the fact is the Beijing leadership has had to deal with an
accumulation of extremely severe issues: a swine-flu epidemic killing half the stock; the
Trump-concocted trade war; Huawei accused of racketeering and about to be prevented from
buying U.S. made chips; bird flu; coronavirus virtually shutting down half of China.
Add to it the incessant United States government Hybrid War propaganda barrage, trespassed
by acute Sinophobia; everyone from sociopathic "officials" to self-titled councilors are
either advising corporate businesses to divert global supply chains out of China or
concocting outright calls for regime change – with every possible demonization in
between.
There are no holds barred in the all-out offensive to kick the Chinese government while
it's down.
A Pentagon cipher at the Munich Security Conference once again declares China as the
greatest
threat , economically and militarily, to the U.S. – and by extension the West,
forcing a wobbly EU already subordinated to NATO to be subservient to Washington on this
remixed Cold War 2.0.
The whole U.S. corporate media complex repeats to exhaustion that Beijing is "lying" and
losing control. Descending to sub-gutter, racist levels, hacks even accuse BRI itself of
being a
pandemic , with China "impossible to quarantine".
All that is quite rich, to say the least, oozing from lavishly rewarded slaves of an
unscrupulous, monopolistic, extractive, destructive, depraved, lawless oligarchy which uses
debt offensively to boost their unlimited wealth and power while the lowly U.S. and global
masses use debt defensively to barely survive. As Thomas Piketty has conclusively shown,
inequality always relies on ideology.
We're deep into a vicious intel war. From the point of view of Chinese intelligence, the
current toxic cocktail simply cannot be attributed to just a random series of coincidences.
Beijing has serial motives to piece this extraordinary chain of events as part of a
coordinated Hybrid War, Full Spectrum Dominance attack on China.
Enter the Dragon Killer working hypothesis: a bio-weapon attack capable of causing immense
economic damage but protected by plausible deniability. The only possible move by the
"indispensable nation" on the New Great Game chessboard, considering that the U.S. cannot win
a conventional war on China, and cannot win a nuclear war on China.
A biological warfare weapon?
On the surface, coronavirus is a dream bio-weapon for those fixated on wreaking havoc
across China and praying for regime change.
Yet it's complicated.
This report is a decent effort trying to track the origins of coronavirus. Now compare it
with the insights by Dr. Francis Boyle, international law professor at the University of
Illinois and author, among others, of Biowarfare and Terrorism . He's the man who
drafted the U.S. Biological Weapons Anti-Terrorism Act of 1989 signed into law by George H.
W. Bush.
Dr. Boyle adds, "all these BSL-4 labs by United States, Europe, Russia, China, Israel are
all there to research, develop, test biological warfare agents. There's really no legitimate
scientific reason to have BSL-4 labs." His own research led to a whopping $100 billion, by
2015, spent by the United States government on bio-warfare research: "We have well over
13,000 alleged life science scientists testing biological weapons here in the United States.
Actually this goes back and it even precedes 9/11."
Dr. Boyle directly accuses "the Chinese government under Xi and his comrades" of a cover
up "from the get-go. The first reported case was December 1, so they'd been sitting on this
until they couldn't anymore. And everything they're telling you is a lie. It's
propaganda."
The World Health Organization (WHO), for Dr. Boyle, is also on it: "They've approved many
of these BSL-4 labs ( ) Can't trust anything the WHO says because they're all bought and paid
for by Big Pharma and they work in cahoots with the CDC, which is the United States
government, they work in cahoots with Fort
Detrick ." Fort Detrick, now a cutting-edge bio-warfare lab, previously was a notorious
CIA den of mind control "experiments".
Relying on decades of research in bio-warfare, the U.S. Deep State is totally familiar
with all bio-weapon overtones. From Dresden, Hiroshima and Nagasaki to Korea, Vietnam and
Fallujah, the historical record shows the United States government does not blink when it
comes to unleashing weapons of mass destruction on innocent civilians.
For its part, the Pentagon's Defense Advanced Research Project Agency (DARPA) has spent a
fortune researching bats, coronaviruses and gene-editing bio-weapons. Now, conveniently
– as if this was a form of divine intervention – DARPA's "strategic allies" have
been chosen to develop a genetic vaccine.
The 1996 neocon Bible, the Project for a New American Century (PNAC), unambiguously
stated, "advanced forms of biological warfare that can "target" specific genotypes may
transform biological warfare from the realm of terror to a politically useful tool."
There's no question coronavirus, so far, has been a Heaven-sent politically useful tool,
reaching, with minimum investment, the desired targets of maximized U.S. global power –
even if fleetingly, enhanced by a non-stop propaganda offensive – and China relatively
isolated with its economy semi paralyzed.
Yet perspective is in order. The CDC estimated that up to 42.9 million people got sick
during the 2018-2019 flu season in the U.S. No less than 647,000 people were hospitalized.
And 61,200 died.
This report
details the Chinese "people's war" against coronavirus.
It's up to Chinese virologists to decode its arguably synthetic origin. How China reacts,
depending on the findings, will have earth-shattering consequences – literally.
Setting the stage for the Raging Twenties
After managing to reroute trade supply chains across Eurasia to its own advantage and
hollow out the Heartland, American – and subordinated Western – elites are now
staring into a void. And the void is staring back. A "West" ruled by the U.S. is now faced
with irrelevance. BRI is in the process of reversing at least two centuries of Western
dominance.
There's no way the West and especially the "system leader" U.S.
will allow it. It all started with dirty ops stirring trouble across the periphery of Eurasia
– from Ukraine to Syria to Myanmar.
Now it's when the going really gets tough. The targeted assassination of Maj. Gen.
Soleimani plus coronavirus – the Wuhan flu – have really set up the stage for the
Raging Twenties. The designation of choice should actually be WARS – Wuhan Acute
Respiratory Syndrome. That would instantly give the game away as a War against Humanity
– irrespective of where it came from.
YOU are completely MISreading the events so yo miss the target by 90% NO it wasnt the
Russians . neither the Chinese..
IT was the FREEtraders NEOcons from Wallstreet and CFR, that transfer all american
manufacturing overseas (china) deabsing the dollar into fiat money, banktupted the USA
traesury The USA is entering its Byzanntyne Empire pahse a Spartan roque millitary nation
while inploding intrenally the Angloamerican zionists already ecided toi amke China de first
world power
@Anonymous How should I describe it? The Chinese Communist Party has formed a plutarchy
and an oligopoly "with Chinese characteristics".
Sometime before the 20th century closed, there was a term coined: the "Princelings". These
were the extravagantly wealthy offspring of many of the leadership of the CCP, and
grandchildren of the men who endured the "Long March".
"Genocide" is a term that is broadly applied to what is more accurately described as
"ethnic cleansing". The Hans have taken over Tibet and Xin Jiang, and have oppressed the
locals in a ruthless manner, that is comparable to what the Jews have done to
Palestinians.
Systematically, the Chinese are converting the indigenous populations of poorer countries
into indentured servants. These countries are so indebted to their Chinese "benefactors" that
they have no hope for redemption, unless the Chinese are prepared to forgive the loans. So
far, the Chinese have not been disposed to do so.
The effect and the consequence of these developments are close enough to warrant the
comparison.
"The vicious virus, the polarization of US politics and deepening international
divergences have plunged humanity into unprecedented uncertainties. A jumbled,
irresponsible and impulsive US greatly enhanced the risks the world is facing.
"What's worse, the US did not engage in any reflection, and the inability of its
government was only attributed to partisanship. The anti-China element in its public
opinion has been brewing with the instigation of the administration and some politicians.
This has greatly crumbled the US' self-correction ability.
"The harm on humanity caused by a virus, no matter how frightening it is, only remains
at the physical level. But the US destruction at the political level is amplifying this
crisis that endangers global governance. Even if the pandemic is put under control,
humanity has to face the turbulence post-pandemic. Such dual uncertainties have gone
beyond the imagination of people even with their decades of living experience."
IMO and contrary to the editorial's conclusion, "populist politics" had nothing to do
with Trump's beyond mediocre response; rather, it's all been ideological beginning with
the utter lack of preparation.
Is the troop deployment along the Canadian border is to stop anyone interfering in the
coming chaos?
Posted by: Ian2 | Mar 26 2020 20:34 utc | 36
You have a point there --the coming chaos after the COVID-19 Health crisis.
Wondering if Trudeau knows about the fences that were erected this morning?
Maybe I missed Trump's tweet on his declaration of War.
- He has imposed more sanctions on Iranians.
- Indicted Maduro of Venezuela on narco trafficking, sponsor of terrorism; placed a $15
million bounty on his head --straight from the Panama playbook.
and this beauty - continues his trade war on China because -----
(Reuters) - Senior officials in the Trump administration agreed to new measures to
restrict the global supply of chips to China's Huawei Technologies, sources familiar with
the matter said, as the White House ramps up criticism of China over coronavirus.
The move comes as ties between Washington and Beijing grow more strained, with both
sides trading barbs over who is to blame for the spread of the disease and an escalating
tit-for-tat over the expulsion of journalists from both countries.
Under the proposed rule change, foreign companies that use U.S. chipmaking equipment
would be required to obtain a U.S. license before supplying certain chips to Huawei. The
Chinese telecoms company was blacklisted last year, limiting the company's
suppliers.[.]
"This is going to have a far more negative impact on U.S. companies than it will on Huawei,
because Huawei will develop their own supply chain," trade lawyer Doug Jacobson said.
"Ultimately, Huawei will find alternatives."[.]
Huawei has been doing just that - finding alternatives. Trade wars have been proven to end
badly. They end up going hot.
Here was me thinking the Western elites wanted to continue making money on Chinese
growth.
Much of the US elite is sinecured in the media, foreign policy, and national security
state establishments, whose status depends on the relative power and prestige of the US
state. The relative power and prestige of the US state is jeopardized by the continued growth
of China.
If you follow US coverage of China in the US, you'll find that this US elite is generally
critical of China, although style and presentation vary. The liberal "China watchers" among
the US elite in the media and foreign policy establishment tend to focus on human rights,
democracy promotion, and liberalism as vectors to attack the Chinese state. They tend to be
polished and more subtle rather than explicitly hostile.
The US elite in the national security establishment tend to be more overt about military
containment and or confrontation with China, and on developing an anti-China coalition in the
Pacific.
"Perhaps this will finally burst the out-of-control asset price bubble and drop-kick the
Outlaw US Empire's economy into the sewer as the much lower price will rapidly slow the
recycling of what remains of the petrodollar. Looks like Trump's reelection push just fell
into a massive sinkhole as the economy will tank."
Posted by: karlof1 | Mar 9 2020 1:29 utc | 49
....
Call me crazy- but this Virus provides great cover as to why the economy plummets, the
Murikan sheeple will eat it up. Prepare for the double media blitz on the virus AND the
economy tanking as its result.
Don't worry...just continue to go shopping and take those selfies.
It will be hard for the American people to swallow that one. From day 1 I've read a lot of
"articles" and "papers" from know-it-all Western doctors and researchers from commenters here
in this blog, all of them claiming to have very precise and definitive data on what was
happening. A lot of bombastic conclusions I've read here (including one that claimed R0 was
through the roof - it's funny how the R0 is being played down after it begun to infect the
West; suddenly, it's all just a stronger cold...).
And that's just here, in MoA's comment section. Imagine what was being published in the
Western MSM. I wouldn't be surprised there was a lot of rednecks popping their beers
celebrating the fall of China already.
Since China allegedly had a lot of idle industrial capacity - that is, if we take the
Western MSM theories seriously (including the fabled "ghost towns" stories) - then boosting
production wouldn't be a problem to China.
Disclaimer: it's normal for any kind of economy - socialist or capitalist - to have a
certain percentage of idle capacity. That's necessary in order to insure the economy against
unexpected oscillations in demand and to give space of maneuvre for future technological
progress. Indeed, that was one of the USSR's mistakes with its economy: they instinctly
thought unemployment should be zero, and waste should also be zero, so they planned in a way
all the factories always sought to operate at 100% capacity. That became a problem when
better machines and better methods were invented, since the factory manager wouldn't want to
stop production so that his factory would fall behind the other factories in the five-year
plan's goals. So, yes, China indeed has idle capacity - but it is mainly proposital, not a
failure of its socialist planning.
By the latest count, in addition to yuan loans worth 113 billion U.S. dollars granted by
financial institutions and more than 70 billion U.S. dollars paid out by insurance companies,
the Chinese government has allocated about 13 billion U.S. dollars to counter fallout from
the outbreak.
The numbers could look abstract. However, breaking the data down reveals how the money is
being carefully targeted. The government is allocating the money based on a thorough
evaluation of the system's strengths.
...
Local governments are equipped with more local knowledge that allows them to surgically
support key manufacturers or producers that are struggling.
Together, they have borne the bulk of the financial responsibility with an allocation of
equivalently more than nine billion U.S. dollars. It is carefully targeted, divided into
hundreds of thousands of individual grants that are tailor-made by and for each county, town,
city and business.
This is the mark of a socialist system.
The affected capitalist countries will simply use monetary devices (so the private sector
can offset the losses) and burn their own reserves with non-profitable palliatives such as
masks, tests, other quarantine infrastructure etc.
Sounds like US socialism. Basically corporate socialism. Loans are just dollars created out
of thin air, same as in US. Insurance payouts come from premiums, nothing socialist about
that, pure capitalism. Government hand outs to provinces, cities, state owned
corporations,well all of these are run by the party elite, its called pork. US handed out a
lot of pork during the last financial crisis. None of it trickled down to the little people.
I doubt it does in China either.
All crisis are opportunities for the elite to get richer. Those Biolake firms in Wuhan
will make out like bandits. Chinese firms will double the price of API's sold to India and
US. China will knock out the small farmer in the wake of concurrent chicken and swine flu so
the big enterprises take over, a mimicry of the US practice over the last century. China tech
firms will double up on surveillance apps, censoring tools, surveillance and toughen up
social credit restrictions. 5G will allow China to experiment with nanobots to monitor
citizens health from afar (thanks to Harvards Dr Leiber).
Oh yes, socialism with Chinese characteristics is a technocratic capitalists dream. Thats
why the West has never imposed sanctions on China since welcoming them to the global elites
club. Sanctions are reserved for those with true socialism, especially those who preach
equality and god forbid, democracy.
Call me crazy- but this Virus provides great cover as to why the economy plummets, the
Murikan sheeple will eat it up. Prepare for the double media blitz on the virus AND the
economy tanking as its result.
Don't forget the Russians.. They have to be to blame. See they just kept the price of oil low
so now the rest of the world gets gas cheaper than the USA. The USA motorist now has to bail
out the dopey frackers and shale oil ponzis.
Global envy will eat murica. Maybe they will just pull out all their troops and go home.
;)
As far as I know, no one here has mentioned that because of the
globalization drive by Clinton, Bush, and Obama, 85% of the medicines
used in the United States are manufactured in China. Even U.S. troops
depend on medicines from China! China could bring the entire health
system in the U.S. to a stop in a matter of months. This is what our inept
elites have done to America – they gave away the shop. People are beginning
to realize that manufacturing our own medicines is a matter of national
security but it'll take years to bring the factories back to the U.S. So
much for globalization.
Rod Dreher's blog IMHO is the best source for quick info on the coronavirus
because he is in touch with American M.D.'s who are married to women
from China who in turn are in contact with relatives at home and the Chinese
media. Of course, Rod himself can be hysterical at times but, apparently,
that's what it takes to have a successful blog. The M.D.'s are reporting
that the U.S. is already beginning to run out of certain medications, and
recommend stocking up on the basic necessities, i.e., recommend assuming
the mental framework of the survivalists – have plenty of canned goods, etc
and refill your prescriptions ASAP. This is what many people here seem to
forget – the coronavirus's indirect effects due to having no access to medications
may be much worse than the direct pathogenic effects.
"... the American-led takedown of the post-World War II international system has shattered long-standing rules and norms of behavior. ..."
"... The combination of disorder at home and abroad is spawning changes that are increasingly disadvantageous to the United States. With Congress having essentially walked off the job, there is a need for America's universities to provide the information and analysis of international best practices that the political system does not. ..."
I think this would be very informative for anybody seriously interested in the USA foreign
policy. Listening to him is so sad to realize that instead of person of his caliber we have
Pompous Pompeo, who forever is frozen on the level of a tank repair mechanical engineer, as
the Secretary of State.
Published on Feb 24, 2020
In the United States and other democracies, political and economic systems still work in
theory, but not in practice. Meanwhile, the American-led takedown of the post-World War II
international system has shattered long-standing rules and norms of behavior.
The combination of disorder at home and abroad is spawning changes that are increasingly
disadvantageous to the United States. With Congress having essentially walked off the job,
there is a need for America's universities to provide the information and analysis of
international best practices that the political system does not.
Ambassador Chas W. Freeman, Jr. is a senior fellow at Brown University's Watson
Institute for International and Public Affairs, a former U.S. Assistant Secretary of
Defense, ambassador to Saudi Arabia (during operations Desert Shield and Desert Storm),
acting Assistant Secretary of State for African Affairs, and Chargé d'affaires at
both Bangkok and Beijing. He began his diplomatic career in India but specialized in
Chinese affairs. (He was the principal American interpreter during President Nixon's visit
to Beijing in 1972.)
Ambassador Freeman is a much sought-after public speaker (see http://chasfreeman.net ) and the author of several
well-received books on statecraft and diplomacy. His most recent book, America's Continuing
Misadventures in the Middle East was published in May 2016. Interesting Times: China,
America, and the Shifting Balance of Prestige, appeared in March 2013. America's
Misadventures in the Middle East came out in 2010, as did the most recent revision of The
Diplomat's Dictionary, the companion volume to Arts of Power: Statecraft and Diplomacy. He
was the editor of the Encyclopedia Britannica entry on "diplomacy."
Chas Freeman studied at the Universidad Nacional Autónoma de México and in
Taiwan, and earned an AB magna cum laude from Yale University as well as a JD from the
Harvard Law School.
He chairs Projects International, Inc., a Washington-based firm that for more than three
decades has helped its American and foreign clients create ventures across borders,
facilitating their establishment of new businesses through the design, negotiation,
capitalization, and implementation of greenfield investments, mergers and acquisitions,
joint ventures, franchises, one-off transactions, sales and agencies in other
countries.
He is the author of several books including the most recent
Interesting times: China, America, and the shifting balance of prestige
(2013)
In unusually blunt statements, top Chinese officials hit back during last weekend's Munich Security Conference at Washington's
confrontational stance toward Beijing on a range of issues, including the Chinese tech giant Huawei and China's response to the coronavirus.
Trump administration officials, supported to the hilt by top Democrats, took a particularly aggressive attitude at the conference,
warning European powers that intelligence sharing could end if Huawei equipment were used in building 5G telecommunications networks.
US Secretary of State Mike Pompeo branded "Huawei and other Chinese state-backed tech companies" as "Trojan horses for Chinese
intelligence." In his speech, US Defence Secretary Mark Esper accused Beijing of carrying out a "nefarious strategy" through Huawei.
In a bid to intensify its pressure on its European allies, the US last week announced new charges of racketeering and theft of
trade secrets against Huawei. These follow the arrest of the company's chief financial officer, Meng Wanzhou, in Canada last year
after the US filed charges of fraud and sanctions evasion, and sought her extradition.
Esper made clear that the US attack on China was across the board. He declared that under President Xi Jinping's rule, "the Chinese
Communist Party is heading even faster and further in the wrong direction -- more internal repression, more predatory economic practices,
more heavy-handedness, and most concerning for me, a more aggressive military posture."
Asked about the speeches by Pompeo and Esper, Chinese Foreign Minister Wang Yi did not mince words, branding the US allegations
as "lies." He said their remarks were part of "a common scenario" everywhere they went. "I don't want to waste our time responding
to each and every thing they've said. The thing I want to say is that all these accusations against China are lies and not based
on facts."
Wang pointed to the driving force behind the confrontation -- the US drive to ensure its continued global domination by every
available means. "The root cause of all these problems and issues is that the US does not want to see the rapid development and rejuvenation
of China, still less would they want to accept the success of a socialist country, but that is not fair, China has the right to develop."
China, with its burgeoning markets, stock exchanges, billionaires and deep social divide, is not a socialist country. In fact,
Huawei, as Wang said in countering US criticism, is a privately-owned company: the world's largest telecommunications equipment provider
with nearly 200,000 employees.
Wang described the US attack on Huawei as "immoral" and asked: "Why can't America accept that other countries' companies can also
display their talent in the economy, in technology? Perhaps deep down, it doesn't hope to see other countries develop." He accused
the US of resorting to rumours to defame Huawei and declared there was no credible evidence that the company has a so-called back
door that harms US security.
The US accusations against China and Huawei are utterly hypocritical. The revelations by the whistleblower Edward Snowden demonstrated
that the US routinely spies electronically on the world's population, including governments and government leaders, allies and rivals
alike, as well as its own citizens.
The US intelligence establishment has long relied on electronic "back doors" provided by American tech corporations to gather
intelligence. The use of Huawei equipment not only threatens the economic position of US companies, but could undermine US spying
operations.
China's forthright push back against heavy US criticism in Munich stems firstly from the relentless campaign by Washington, not
only in propaganda, but through trade war measures and a huge military build-up in Asia against Beijing. Secondly, the Chinese regime
is seeking support from the European powers. Wang's comments gained traction in Munich amid deepening conflicts between the US and
its erstwhile European allies.
Britain has given the go-ahead for the inclusion of Huawei components in non-core aspects of its 5G rollout, while Germany and
France have signaled they will do the same. The European decisions are largely driven by technical and economic factors, as Huawei
is a leader in 5G technology and produces at a lower cost.
Washington's threats to end intelligence-sharing arrangements with the European powers could end up affecting US spying operations
as much as those of its European rivals. The New York Times
The US has sought to exploit the coronavirus outbreak in China to add to the barrage of criticism against Beijing. Trump's
economic adviser Larry Kudlow last week complained about the lack of Chinese transparency over the disease. He declared that Washington
was disappointed that American health experts had not been allowed into China, and questioned Chinese statistics.
A considerable portion of Wang's speech to the Munich Security Conference was devoted to defending China's handling of the
outbreak. He said the coronavirus largely had been confined to the city of Wuhan and Hubei Province, and the number of cases outside
China was a small percentage of the total. Wang said this was the outcome of the rapid development of a test for the virus, the dispatch
of 20,000 health workers to the area and the building of new health facilities.
Wang said: "In the spirit of openness and transparency, we promptly notified the world about the outbreak and shared the genetic
sequence of the virus. We have been working closely with WHO [World Health Organisation], invited international experts to join our
ranks, and provided assistance and facilitation to foreign nationals in China."
In comments to Reuters, the Chinese foreign minister effectively criticised the harsh travel restrictions imposed by the US
on any foreign nationals coming from China. "Some countries have stepped up measures, including quarantine measures, which are reasonable
and understandable, but for some countries they have overreacted which has triggered unnecessary panic," he said.
If Washington expected European support on the issue, its hopes were dashed. Conference chairman Wolfgang Ischinger praised
China's response to the epidemic and declared it was "not getting a very fair deal I think China deserves a little bit of compassion
and cooperation, and encouragement rather than only criticism."
China's reaction to the US criticisms in Munich underscores again the sharpening geo-political rivalries and break-up of longstanding
alliances being fueled by worsening global economic conditions. Far from responding to the lack of support from Europe against China
by moderating its confrontation, the US will intensify its provocative campaign, not just against Beijing, but any threat to its
global position, including from its European allies.
That such cynicism was wholly justified became evident when Edward Snowden revealed the NSA
machinations. Soon thereafter Juniper Networks, a provider of large backbone equipment, was
found to
have at least two NSA backdoors in its operation system. Other 'western' telecommunication
equipment companies were similarly manipulated :
Even neutral countries firms are not off-limits to NSA manipulations. A former Crypto AG
employee confirmed that high-level US officials approached neutral European countries and
argued that their cooperation was essential to the Cold War struggle against the Soviets. The
NSA allegedly received support from cryptographic companies Crypto AG and Gretag AG in
Switzerland, Transvertex in Sweden, Nokia in Finland, and even newly-privatized firms in
post-Communist Hungary. In 1970, according to a secret German BND intelligence paper,
supplied to the author, the Germans planned to "fuse" the operations of three cryptographic
firms-Crypto AG, Grattner AG (another Swiss cipher firm), and Ericsson of Sweden.
So why was the allegedly secret CIA history of an already known story leaked right now? And
why was it also leaked to a German TV station?
If you want to understand why the US intelligence community is so freaked out about Huawei,
it's because they've been playing the same game for decades.
The warmed up Crypto AG story is a subtle smear piece against Huawei and Kapersky.
The U.S. wants to convince European countries to not buy Huawei products for their 5G
networks. It wants to remind them that telecommunication products can be manipulated. It wants
to instill fear that China would use Huawei to spy on foreign countries just like the U.S. used
Crypto AG.
This is also the reason for this recent misleading Reuters headline which the story
itself debunked:
"At the end of 2019, intelligence was passed to us by the U.S., according to which Huawei is
proven to have been cooperating with China's security authorities," the newspaper quoted a
confidential foreign ministry document as saying.
'U.S. intelligence' that is handed over to manipulate someone is of course not 'proof' for
anything.
Secretary of State Mike Pompeo declared the Chinese Communist Party "the central threat of
our times" on Thursday, even as he sought to talk up the prospects of a United States trade
deal with Britain, which rebuffed American pressure to ban a Chinese company from future
telecommunications infrastructure.
The scathing criticism of the Chinese government was the strongest language Mr. Pompeo has
used as the Trump administration seeks to convince American allies of the risks posed by
using equipment from Huawei, a Chinese technology giant.
A week after Pompeo's panic message Trump took to the phone to convince Boris Johnson who
was
not impressed :
Donald Trump's previously close relationship with UK Prime Minister Boris Johnson looks close
to collapse, following new revelations that the president slammed down the phone on him.
Trump's behaviour during last week's call was described by officials as
„apoplectic," and Johnson has now reportedly shelved plans for an imminent visit to
Washington.
...
The call, which one source described to the Financial Times as „very difficult," came
after Johnson defied Trump and allowed Chinese telecoms company Huawei the rights to develop
the UK's 5G network.
Trump's fury was triggered by Johnson backing Huawei despite multiple threats by Trump and
his allies that the United States would withdraw security co-operation with the UK if the
deal went ahead.
Trump's threats reportedly „irritated" the UK government, with Johnson frustrated at
the president's failure to suggest any alternatives to the deal.
Huawei products are pretty good, relatively cheap and readily available. They are just as
buggy as the products of other equipment providers. The real reason why the U.S. does not want
anyone to buy Huawei products is that it is the one large network company the U.S. can not
convince to provide it with backdoors.
European countries do not fear China or even Chinese spying. They know that the U.S. is
doing similar on a much larger scale. Europeans do not see China as a threat and they do not
want to get involved in the escalating U.S.-China spat:
"Whose side should your country take in a conflict between the US and China?" Source - bigger
The U.S. just
indicted four Chinese military officers for the 2017 hacking of Equifax during which
millions of addresses and financial data were stolen. The former CIA Director General Michael
Hayden
had defended such pilfering as "honorable espionage" and Equifax had made it laughably easy
to
get into its systems :
[J]ust five days after Equifax went public with its breach -- KrebsOnSecurity broke the news
that the administrative account for a separate Equifax dispute resolution portal catering to
consumers in Argentina was wide open, protected by perhaps the most easy-to-guess password
combination ever: "admin/admin."
To indict foreign military officers for spying when they simply pilfered barely protected
servers is seen as offensive. What will the U.S. do when China does likewise?
Every nation spies. It is one of the oldest trades in this world. That the U.S. is making
such a fuss about putative Chinese spying when it itself is the biggest sinner is unbecoming.
Posted by b on February 11, 2020 at 18:52 UTC |
Permalink
thanks b...no shortage of hypocrisy in all this...
regarding @ 4 mike r which @8 ian2 linked properly to, i enjoyed the last paragraph which
i think sums it up well.. here it is..
"I continue to believe that the United States cannot effectively restrict the spread of a
technology under Chinese leadership without offering a superior product of its own. The fact
that the United States has attempted to suppress Huawei's market leadership in the absence of
any American competitor in this field is one of the oddest occurrences in the history of US
foreign policy. If the US were to announce something like a Manhattan Project for 5G
broadband and solicit the cooperation of its European and Asian allies, it probably would get
an enthusiastic response. As matters stand, America's efforts to stop Huawei have become an
embarrassment."
The reason European customers trust Huawei is because Huawei uses open-source software or at
least makes their code available for inspection by customers.
Closed-source software cannot provide secrecy or security. This was vividly demonstrated
last month when
NSA revealed a critical vulnerability in Windows 10 that rendered any cryptographic
security worthless.
Rashid's simulated attack exploits CVE-2020-0601, the critical vulnerability that
Microsoft patched on Tuesday after receiving a private tipoff from the NSA. As Ars
reported, the flaw can completely break certificate validation for websites, software
updates, VPNs, and other security-critical computer uses. It affects Windows 10 systems,
including server versions Windows Server 2016 and Windows Server 2019. Other versions of
Windows are unaffected.
The flaw involves the way the new versions of Windows check the validity of certificates
that use elliptic-curve cryptography. While the vulnerable Windows versions check three ECC
parameters, they fail to verify a fourth, crucial one, which is known as a base point
generator and is often represented in algorithms as 'G.' This failure is a result of
Microsoft's implementation of ECC rather than any flaw or weakness in the ECC algorithms
themselves.
The attacker examines the specific ECC algorithm used to generate the root-certificate
public key and proceeds to craft a private key that copies all of the certificate
parameters for that algorithm except for the point generator. Because vulnerable Windows
versions fail to check that parameter, they accept the private key as valid. With that, the
attacker has spoofed a Windows-trusted root certificate that can be used to mint any
individual certificate used for authentication of websites, software, and other sensitive
properties.
I do not believe this vulnerability was a bug. It is more likely a backdoor intentionally
left in the code for NSA to utilize. Whatever the case, NSA must have known about it for
years. Why did they reveal it now? Most likely someone else had discovered the back door and
may have been about to publish it.
(I
commented on these same issues on Sputnik a few weeks ago.)
The other possible US objection is that Huawei will only let their customers spy, not third
countries.
Posted by: Paul Cockshott | Feb 11 2020 21:57 utc | 24
It reminds me a joke about Emperor Napoleon arriving in a town. The population, the
notables and the mayor are greeting him, and the Emperor says "No gun salute, hm?". Mayor
replies "Sire, we have twenty reasons. Fist, we have canons", "Enough", replied Napoleon.
Isn't the "other possible US objection" exactly "Enough"? Of course, USA is not a mere
"third country", USA is the rule maker of rule based international order.
Last year I was so mad at USA bulling Huawei and ZTE, decided to buy a Huawei Honor View
V20 PCT-L29 Smartphone. Global version on T-Mobile network . Still fumbling
at the setting. This smartphone installed GPS and BeiDou (BDS). I never used Google searches
but instead DuckDuckGo long ago
I'm amazed that Chief Poodle Boris did not obediently obey His Master's Voice.
What is going on?
I could understand if this was DNC/CIA-MI6 passing orders down the line (a la Skripal) to
upset Trump but the US Intel Community has no interest in such a snub from the UK Govt.
Obviously this isn't the UK Govt asserting their independence from US instruction because
such a thing has never happened in my lifetime.
Wierd.
Anyway, too bad I won't be able to read the thread on my phone tomorrow as Bruce has just
broken the thread with his million-character link. :-(
I'm amazed that Chief Poodle Boris did not obediently obey His Master's Voice.
What is going on?
Posted by: Ash Naz | Feb 12 2020 0:20 utc | 39
However I cringe and the obedient vassals, and Boris who may well be the Chief Poodle,
given that exceedingly cute Justin is from another breed, Newtrumplander. But even poodles
have privacy concerns, you know? What you web surf, what you buy, whom do you send gifts and
WHAT gifts (dominatrix set?). However you trust NSA to use all that info solely for good
causes, well, you know, not everyone is an exhibitionist...
I'm amazed that Chief Poodle Boris did not obediently obey His Master's Voice.
Posted by: Ash Naz | Feb 12 2020 0:20 utc | 32
The reason is said to be that they've already bought and installed a lot of the
Huawei equipment, and the new decision is just a fake, to justify the position.
The reason is said to be that they've already bought and installed a lot of the Huawei
equipment, and the new decision is just a fake, to justify the position.
The financial angle makes sense, but what is the price of disobedience?
@Piotr Berman:
But even poodles have privacy concerns
The preventing blackmail angle makes sense too
And how useful to be able to use blackmail to get allies to jump when ordered? It's often
said that Washington has no real friends, just obedient vassals.
It would appear to me that the UK, by allowing Huawei (limited) access to their market,
are achieving several advantageous outcomes.
1) They are preventing potential for a duopoly of Eriksson & Nokia on the hardware by
allowing a third player into the market.
2) By only allowing a maximum of 35% of the market share, they prevent Huawei from quickly
out-competing the others on price and capturing a monopoly.
3) They are only allowing access to the network comm's market, and not the core of the
system, which may or may not protect against unwanted data capture and intrusion (by exactly
whom remains the question - as per the article above).
4) It allows the four main network providers (especially EE, owned by BT) and the
accompanying state surveillance apparatus the ability to familiarise themselves with Huawei
tech/code/vulnerabilities which may be invaluable going forward. On this point alone, the USA
(and Australia, among others) are doing themselves a great disservice by missing out on a
learning experience from arguably the world leader in this technology.
As md|Feb 12 2020 8:29 utc|44 alluded to, they are claiming to allow clintele access to
all code (and the freedom to modify it as desired). So denying them access to a particular
market only hinders the technical understanding of the technology and its implementation,
leaving such states behind.
The USA (and its' vassal client states) once again shoot themselves in the foot in a vain
attempt to create and re-create the archetypal "boogeyman" for the populace to wring their
hands over and keep them up at night. Fools.
I enjoy David Goldman (Spengler) article at Asia Times. He accurately notes the vast lead
Huawei/China has and then provides "but we can do something" bromides. What do mean "we",
kimosabe?
Per a quote from Newt Gingrich's book ""Trump vs. China: Facing America's Greatest Threat",
quoted recently by David Goldman. Gingrich didn't say who was the greatest threat, Trump or
China.
"It is not China's fault that in 2017, 89% of Baltimore eighth graders couldn't pass their
math exam
"It is not China's fault that too few Americans in K-12 and in college study math and
science to fill the graduate schools with future American scientists
"It is not China's fault that, faced with a dramatic increase in Chinese graduate students
in science, the government has not been able to revive programs like the 1958 National
Defense Education Act
"It is not China's fault the way our defense bureaucracy functions serves to create
exactly the 'military-industrial complex' that President Dwight Eisenhower warned about
"It is not China's fault that NASA has been so bureaucratic and its funding so erratic
that there is every reason to believe that China is catching up rapidly and may outpace us.
This is because of us not because of them
"It is not China's fault that the old, bureaucratic, entrenched American
telecommunications companies failed to develop a global strategy for 5G over the 11 years
that the Chinese company Huawei has been working to become a world leader "
Here is another Orwellian irony that has been forgotten down the MemoryHole.
Way back in 2014, Edward Snowden revealed that the Americans (and the NSA in particular)
were spying on Huawei dating back to at least 2007.
This American spying occurred before the current national security hysterics about Huawei,
indeed, before most people in the USA had even heard of the company itself.
As this article states,
"In the final analysis, the NSA spying campaign against Huawei has two fundamental
purposes. First, Huawei (unlike the American telecommunications companies) does not allow the
NSA free access to its infrastructure to conduct spying on its products' users. Accordingly,
as part of its mission of spying on the entire world's population, the NSA hacked into
Huawei's systems in order to gather information traveling through its infrastructure.
Second, the spying campaign against Huawei is part of broader efforts to protect the
profits and interests of American telecommunications companies at the expense of Huawei. This
is the purpose of the NSA's particular interest in Huawei's executives and their 'leadership
plans and intentions.'"
The other possible US objection is that Huawei will only let their customers spy, not third
countries.
Posted by: Paul Cockshott | Feb 11 2020 21:57 utc | 20
So it seems. In the words of Ren Zhengfei 'When we transfer the tech, they can modify code
on top of my tech, once that's through, it's not only shielded from me, it's shielded from
everyone else in the world US 5G will be their own thing, there's no security concern, the
only concern will be the U.S. keeping American companies (which bought it) in check.'
This corona virus panic is interesting. RT has an interesting piece that points out that
corona virus has been officially recognized in some 8,000 odd people and 200 odd people have
died from it, we need a sense of perspective. World wide seasonal flu, kills between 350,000
and 600,000 people each year. Tuberculosis kills over 1,000,000 people each year. Malaria
kills a similar number. AIDS killed over 500,000 last year. And we're panicking about 200 or
so?
Just had an email from a company I deal with in China, the relevant passages-
2. The company has been following instructions from the Chinese government to postpone
the Spring Festival holiday to Feb. 9th, 2020 if not any further postpone. But, we believe
most of our services should be provided as usual since then.
5. We also would like your attention that there's yet no evidence or cases to support
the transmission of the novel coronavirus through packages or imported goods. According to
the Centers for Disease Control and Prevention (CDC) of the US, because of poor survivability
of these coronaviruses on surfaces, there is likely very low risk of spread from products or
packaging that are shipped over a period of days or weeks at ambient temperatures. The
National Health Commission of the People's Republic of China advises that coronavirus is
spread most often by respiratory droplets from one person to another, regular packages from
Wuhan can be received as usual. Reference links are attached as the footnote below for your
references.[1]
6. The Company will take proactive measures like ultraviolet light to ensure a safe and
healthy environment of its warehouse. Disinfection work will be conducted before each
delivery.
"... The Americans are the ones who destroyed the country and wreaked havoc on it. They have refused to finish building the electrical system and infrastructure projects. They have bargained for the reconstruction of Iraq in exchange for Iraq giving up 50% of oil imports. So, I refused and decided to go to China and concluded an important and strategic agreement with it. Today, Trump is trying to cancel this important agreement. ..."
"... After my return from China, Trump called me and asked me to cancel the agreement, so I also refused, and he threatened [that there would be] massive demonstrations to topple me. Indeed, the demonstrations started and then Trump called, threatening to escalate in the event of non-cooperation and responding to his wishes, whereby a third party [presumed to be mercenaries or U.S. soldiers] would target both the demonstrators and security forces and kill them from atop the highest buildings and the US embassy in an attempt to pressure me and submit to his wishes and cancel the China agreement." ..."
"... It could also explain why President Trump is so concerned about China's growing foothold in Iraq, since it risks causing not only the end of the U.S. military hegemony in the country but could also lead to major trouble for the petrodollar system and the U.S.' position as a global financial power. Trump's policy aimed at stopping China and Iraq's growing ties is clearly having the opposite effect, showing that this administration's "gangster diplomacy" only serves to make the alternatives offered by countries like China and Russia all the more attractive. ..."
After the feed was cut, MPs who were present wrote down Abdul-Mahdi's remarks, which were
then given to the Arabic news outlet Ida'at .
Per that transcript , Abdul-Mahdi stated that:
The Americans are the ones who destroyed the country and wreaked havoc on it. They
have refused to finish building the electrical system and infrastructure projects. They have
bargained for the reconstruction of Iraq in exchange for Iraq giving up 50% of oil imports.
So, I refused and decided to go to China and concluded an important and strategic agreement
with it. Today, Trump is trying to cancel this important agreement. "
Abdul-Mahdi continued his remarks, noting that pressure from the Trump administration over
his negotiations and subsequent dealings with China grew substantially over time, even
resulting in death threats to himself and his defense minister:
After my return from China, Trump called me and asked me to cancel the agreement, so I
also refused, and he threatened [that there would be] massive demonstrations to topple me.
Indeed, the demonstrations started and then Trump called, threatening to escalate in the
event of non-cooperation and responding to his wishes, whereby a third party [presumed to be
mercenaries or U.S. soldiers] would target both the demonstrators and security forces and
kill them from atop the highest buildings and the US embassy in an attempt to pressure me and
submit to his wishes and cancel the China agreement."
"I did not respond and submitted my resignation and the Americans still insist to this day
on canceling the China agreement. When the defense minister said that those killing the
demonstrators was a third party, Trump called me immediately and physically threatened myself
and the defense minister in the event that there was more talk about this third party."
Very few English language outlets
reported on Abdul-Mahdi's comments. Tom Luongo, a Florida-based Independent Analyst and publisher of The Gold
Goats 'n Guns Newsletter, told MintPress that the likely reasons for the "surprising"
media silence over Abdul-Mahdi's claims were because "It never really made it out into official
channels " due to the cutting of the video feed during Iraq's Parliamentary session and due to
the fact that "it's very inconvenient and the media -- since Trump is doing what they want him
to do, be belligerent with Iran, protected Israel's interests there."
"They aren't going to contradict him on that if he's playing ball," Luongo added, before
continuing that the media would nonetheless "hold onto it for future reference .If this comes
out for real, they'll use it against him later if he tries to leave Iraq." "Everything in
Washington is used as leverage," he added.
Given the lack of media coverage and the cutting of the video feed of Abdul-Mahdi's full
remarks, it is worth pointing out that the narrative he laid out in his censored speech not
only fits with the timeline of recent events he discusses but also the tactics known to have
been employed behind closed doors by the Trump administration, particularly after Mike Pompeo
left the CIA to become Secretary of State.
For instance, Abdul-Mahdi's delegation to China ended on September 24, with the protests
against his government that Trump reportedly threatened to start on October 1. Reports of a
"third side" firing on Iraqi protesters were picked up by major media outlets at the time, such
as in this
BBC report which stated:
Reports say the security forces opened fire, but another account says unknown gunmen
were responsible .a source in Karbala told the BBC that one of the dead was a guard at a
nearby Shia shrine who happened to be passing by. The source also said the origin of the
gunfire was unknown and it had targeted both the protesters and security forces .
(emphasis added)"
U.S.-backed protests in other countries, such as in Ukraine in 2014, also saw evidence of a
"
third side " shooting both protesters and security forces alike.
After six weeks of intense protests , Abdul-Mahdi
submitted
his resignation on November 29, just a few days after Iraq's
Foreign Minister praised the new deals, including the "oil for reconstruction" deal, that had
been signed with China. Abdul-Mahdi has since stayed on as Prime Minister in a caretaker role
until Parliament decides on his replacement.
Abdul-Mahdi's claims of the covert pressure by the Trump administration are buttressed by
the use of similar tactics against Ecuador, where, in July 2018, a U.S. delegation at the
United Nations
threatened the nation with punitive trade measures and the withdrawal of military aid if
Ecuador moved forward with the introduction of a UN resolution to "protect, promote and support
breastfeeding."
The New York Times reported at the time that the U.S. delegation was seeking to
promote the interests of infant formula manufacturers. If the U.S. delegation is willing to use
such pressure on nations for promoting breastfeeding over infant formula, it goes without
saying that such behind-closed-doors pressure would be significantly more intense if a much
more lucrative resource, e.g. oil, were involved.
Regarding Abdul-Mahdi's claims, Luongo told MintPress that it is also worth
considering that it could have been anyone in the Trump administration making threats to
Abdul-Mahdi, not necessarily Trump himself. "What I won't say directly is that I don't know it
was Trump at the other end of the phone calls. Mahdi, it is to his best advantage politically
to blame everything on Trump. It could have been Mike Pompeo or Gina Haspel talking to
Abdul-Mahdi It could have been anyone, it most likely would be someone with plausible
deniability .This [Mahdi's claims] sounds credible I firmly believe Trump is capable of making
these threats but I don't think Trump would make those threats directly like that, but it would
absolutely be consistent with U.S. policy."
Luongo also argued that the current tensions between U.S. and Iraqi leadership preceded the
oil deal between Iraq and China by several weeks, "All of this starts with Prime Minister Mahdi
starting the process of opening up the Iraq-Syria border crossing and that was announced in
August. Then, the Israeli air attacks happened in September to try and stop that from
happening, attacks on PMU forces on the border crossing along with the ammo dump attacks near
Baghdad This drew the Iraqis' ire Mahdi then tried to close the air space over Iraq, but how
much of that he can enforce is a big question."
As to why it would be to Mahdi's advantage to blame Trump, Luongo stated that Mahdi "can
make edicts all day long, but, in reality, how much can he actually restrain the U.S. or the
Israelis from doing anything? Except for shame, diplomatic shame To me, it [Mahdi's claims]
seems perfectly credible because, during all of this, Trump is probably or someone else is
shaking him [Mahdi] down for the reconstruction of the oil fields [in Iraq] Trump has
explicitly stated "we want the oil."'
As Luongo noted, Trump's interest in the U.S. obtaining a significant share of Iraqi oil
revenue is hardly a secret. Just last March, Trump
asked Abdul-Mahdi "How about the oil?" at the end of a meeting at the White House,
prompting Abdul-Mahdi to ask "What do you mean?" To which Trump responded "Well, we did a lot,
we did a lot over there, we spent trillions over there, and a lot of people have been talking
about the oil," which was widely interpreted as Trump asking for part of Iraq's oil revenue in
exchange for the steep costs of the U.S.' continuing its now unwelcome military presence in
Iraq.
With Abdul-Mahdi having rejected Trump's "oil for reconstruction" proposal in favor of
China's, it seems likely that the Trump administration would default to so-called "gangster
diplomacy" tactics to pressure Iraq's government into accepting Trump's deal, especially given
the fact that China's deal was a much better offer. While Trump demanded half of Iraq's oil
revenue in exchange for completing reconstruction projects (according to Abdul-Mahdi), the deal
that was signed between Iraq and China would see around
20 percen t of Iraq's oil revenue go to China in exchange for reconstruction. Aside from
the potential loss in Iraq's oil revenue, there are many reasons for the Trump administration
to feel threatened by China's recent dealings in Iraq.
The Iraq-China oil deal – a prelude to something more?
When Abdul-Mahdi's delegation traveled to Beijing last September, the "oil for
reconstruction" deal was only
one of eight total agreements that were established. These agreements cover a range of
areas, including financial, commercial, security, reconstruction, communication, culture,
education and foreign affairs in addition to oil. Yet, the oil deal is by far the most
significant.
Per the agreement, Chinese firms will work on various reconstruction projects in exchange
for roughly 20 percent of Iraq's oil exports, approximately 100,00 barrels per day, for a
period of 20 years. According to Al-Monitor
, Abdul-Mahdi had the following to say about the deal: "We agreed [with Beijing] to set up a
joint investment fund, which the oil money will finance," adding that the agreement prohibits
China from monopolizing projects inside Iraq, forcing Bejing to work in cooperation with
international firms.
The agreement is similar to one negotiated
between Iraq and China in 2015 when Abdul-Mahdi was serving as Iraq's oil minister. That
year, Iraq joined China's Belt and Road Initiative in a deal that also involved exchanging oil
for investment, development and construction projects and saw China awarded several projects as
a result. In a notable similarity to recent events, that deal was put on hold due to "political
and security tensions" caused by unrest and the surge of ISIS in Iraq, that is until
Abdul-Mahdi saw Iraq rejoin the
initiative again late last year through the agreements his government signed with China
last September.
Chinese President Xi Jinping, center left, meet with Iraqi Prime Minister
Adil Abdul-Mahdi, center right, in Beijing, Sept. 23, 2019. Lintao Zhang | AP
Notably, after recent tensions between the U.S. and Iraq over the assassination of Soleimani
and the U.S.' subsequent refusal to remove its troops from Iraq despite parliament's demands,
Iraq quietly announced that it would dramatically increase its oil exports to China to
triple the
amount established in the deal signed in September. Given Abdul-Mahdi's recent claims about
the true forces behind Iraq's recent protests and Trump's threats against him being directly
related to his dealings with China, the move appears to be a not-so-veiled signal from
Abdul-Mahdi to Washington that he plans to deepen Iraq's partnership with China, at least for
as long as he remains in his caretaker role.
Iraq's decision to dramatically increase its oil exports to China came just one day after
the U.S. government
threatened to cut off Iraq's access to its central bank account, currently held at the
Federal Reserve Bank of New York, an account that
currently holds $35 billion in Iraqi oil revenue. The account was
set up after the U.S. invaded and began occupying Iraq in 2003 and Iraq currently removes
between $1-2 billion per month to cover essential government expenses. Losing access to its oil
revenue stored in that account would lead to the "
collapse " of Iraq's government, according to Iraqi government officials who spoke to
AFP .
Though Trump publicly promised to rebuke Iraq for the expulsion of U.S. troops via
sanctions, the threat to cut off Iraq's access to its account at the NY Federal Reserve Bank
was delivered privately and directly to the Prime Minister, adding further credibility to
Abdul-Mahdi's claims that Trump's most aggressive attempts at pressuring Iraq's government are
made in private and directed towards the country's Prime Minister.
Though Trump's push this time was about preventing the expulsion of U.S. troops from Iraq,
his reasons for doing so may also be related to concerns about China's growing foothold in the
region. Indeed, while Trump has now lost his desired share of Iraqi oil revenue (50 percent) to
China's counteroffer of 20 percent, the removal of U.S. troops from Iraq may see American
troops replaced with their Chinese counterparts as well, according to Tom Luongo.
"All of this is about the U.S. maintaining the fiction that it needs to stay in Iraq So,
China moving in there is the moment where they get their toe hold for the Belt and Road
[Initiative]," Luongo argued. "That helps to strengthen the economic relationship between Iraq,
Iran and China and obviating the need for the Americans to stay there. At some point, China
will have assets on the ground that they are going to want to defend militarily in the event of
any major crisis. This brings us to the next thing we know, that Mahdi and the Chinese
ambassador discussed that very thing in the wake of the Soleimani killing."
Indeed, according to news reports, Zhang Yao -- China's ambassador to Iraq -- " conveyed
Beijing's readiness to provide military assistance" should Iraq's government request it
soon after Soleimani's assassination. Yao made the offer a day after Iraq's parliament voted to
expel American troops from the country. Though it is currently unknown how Abdul-Mahdi
responded to the offer, the timing likely caused no shortage of concern among the Trump
administration about its rapidly waning influence in Iraq. "You can see what's coming here,"
Luongo told MintPress of the recent Chinese offer to Iraq, "China, Russia and Iran are
trying to cleave Iraq away from the United States and the U.S. is feeling very threatened by
this."
Russia is also playing a role in the current scenario as Iraq initiated talks with Moscow
regarding the
possible purchase of one of its air defense systems last September, the same month that
Iraq signed eight deals, including the oil deal with China. Then, in the wake of Soleimani's
death, Russia
again offered the air defense systems to Iraq to allow them to better defend their air
space. In the past, the U.S.
has threatened allied countries with sanctions and other measures if they purchase Russian
air defense systems as opposed to those manufactured by U.S. companies.
The U.S.' efforts to curb China's growing influence and presence in Iraq amid these new
strategic partnerships and agreements are limited, however, as the U.S. is increasingly relying on China
as part of its Iran policy, specifically in its goal of reducing Iranian oil export to zero.
China remains Iran's main crude oil and condensate importer, even after it reduced its imports
of Iranian oil significantly following U.S. pressure last year. Yet, the U.S. is now attempting to
pressure China to stop buying Iranian oil completely or face sanctions while also
attempting to privately sabotage the China-Iraq oil deal. It is highly unlikely China will
concede to the U.S. on both, if any, of those fronts, meaning the U.S. may be forced to choose
which policy front (Iran "containment" vs. Iraq's oil dealings with China) it values more in
the coming weeks and months.
Furthermore, the recent signing of the "phase one" trade deal with China revealed another
potential facet of the U.S.' increasingly complicated relationship with Iraq's oil sector given
that the trade deal
involves selling U.S. oil and gas to China at very low cost , suggesting that the Trump
administration may also see the Iraq-China oil deal result in Iraq emerging as a potential
competitor for the U.S. in selling cheap oil to China, the world's top oil importer.
The Petrodollar and the Phantom of the Petroyuan
In his televised statements last week following Iran's military response to the U.S.
assassination of General Soleimani, Trump insisted that the U.S.' Middle East policy is no
longer being directed by America's vast oil requirements. He
stated specifically that:
Over the last three years, under my leadership, our economy is stronger than ever before
and America has achieved energy independence. These historic accomplishments changed our
strategic priorities. These are accomplishments that nobody thought were possible. And
options in the Middle East became available. We are now the number-one producer of oil and
natural gas anywhere in the world. We are independent, and we do not need Middle East
oil . (emphasis added)"
Yet, given the centrality of the recent Iraq-China oil deal in guiding some of the Trump
administration's recent Middle East policy moves, this appears not to be the case. The
distinction may lie in the fact that, while the U.S. may now be less dependent on oil imports
from the Middle East, it still very much needs to continue to dominate how oil is traded and
sold on international markets in order to maintain its status as both a global military
and financial superpower.
Indeed, even if the U.S. is importing less Middle Eastern oil, the petrodollar system --
first forged in the 1970s -- requires that the U.S. maintains enough control over the global
oil trade so that the world's largest oil exporters, Iraq among them, continue to sell their
oil in dollars. Were Iraq to sell oil in another currency, or trade oil for services, as it
plans to do with China per the recently inked deal, a significant portion of Iraqi oil would
cease to generate a demand for dollars, violating the key tenet of the petrodollar
system.
Chinese representatives speak to defense personnel during a weapons expo organized
by the Iraqi defense ministry in Baghdad, March, 2017. Karim Kadim | AP
The takeaway from the petrodollar phenomenon is that as long as countries need oil, they
will need the dollar. As long as countries demand dollars, the U.S. can continue to go into
massive amounts of debt to fund its network of global military bases, Wall Street bailouts,
nuclear missiles, and tax cuts for the rich."
Thus, the use of the petrodollar has created a system whereby U.S. control of oil sales of
the largest oil exporters is necessary, not just to buttress the dollar, but also to support
its global military presence. Therefore, it is unsurprising that the issue of the U.S. troop
presence in Iraq and the issue of Iraq's push for oil independence against U.S. wishes have
become intertwined. Notably, one of the architects of the petrodollar system and the man who
infamously described U.S. soldiers as "dumb, stupid animals to be used as pawns in foreign
policy", former Secretary of State Henry Kissinger, has been advising
Trump and informing his China policy since 2016.
This take was also expressed by economist Michael Hudson,
who recently noted that U.S. access to oil, dollarization and U.S. military strategy are
intricately interwoven and that Trump's recent Iraq policy is intended "to escalate America's
presence in Iraq to keep control of the region's oil reserves," and, as Hudson says, "to back
Saudi Arabia's Wahabi troops (ISIS, Al Qaeda in Iraq, Al Nusra and other divisions of what are
actually America's foreign legion) to support U.S. control of Near Eastern oil as a buttress of
the U.S. dollar."
Hudson further asserts that it was Qassem Soleimani's efforts to promote Iraq's oil
independence at the expense of U.S. imperial ambitions that served one of the key motives
behind his assassination.
America opposed General Suleimani above all because he was fighting against ISIS and other
U.S.-backed terrorists in their attempt to break up Syria and replace Assad's regime with a
set of U.S.-compliant local leaders – the old British "divide and conquer" ploy. On
occasion, Suleimani had cooperated with U.S. troops in fighting ISIS groups that got "out of
line" meaning the U.S. party line. But every indication is that he was in Iraq to work
with that government seeking to regain control of the oil fields that President Trump has
bragged so loudly about grabbing. (emphasis added)"
Hudson adds that " U.S. neocons feared Suleimani's plan to help Iraq assert control of its
oil and withstand the terrorist attacks supported by U.S. and Saudi's on Iraq. That is what
made his assassination an immediate drive."
While other factors -- such as pressure
from U.S. allies such as Israel -- also played a factor in the decision to kill Soleimani,
the decision to assassinate him on Iraqi soil just hours before he was set to meet with
Abdul-Mahdi in a diplomatic role suggests that the underlying tensions caused by Iraq's push
for oil independence and its oil deal with China did play a factor in the timing of his
assassination. It also served as a threat to Abdul-Mahdi, who has claimed that the U.S.
threatened to kill both him and his defense minister just weeks prior over tensions directly
related to the push for independence of Iraq's oil sector from the U.S.
It appears that the ever-present role of the petrodollar in guiding U.S. policy in the
Middle East remains unchanged. The petrodollar has long been a driving factor behind the U.S.'
policy towards Iraq specifically, as one of the key triggers for the 2003 invasion of Iraq was
Saddam Hussein's decision to sell Iraqi oil in Euros opposed to dollars beginning in the year
2000. Just weeks before the invasion began, Hussein boasted that Iraq's Euro-based oil revenue
account was earning a higher interest rate than
it would have been if it had continued to sell its oil in dollars, an apparent signal to other
oil exporters that the petrodollar system was only really benefiting the United States at their
own expense.
Beyond current efforts to stave off Iraq's oil independence and keep its oil trade aligned
with the U.S., the fact that the U.S. is now seeking to limit China's ever-growing role in
Iraq's oil sector is also directly related to China's publicly known efforts to create its own
direct competitor to the petrodollar, the petroyuan.
Since 2017, China has made its plans for the petroyuan -- a direct competitor to the
petrodollar -- no secret, particularly after China eclipsed the U.S. as the world's largest
importer of oil.
The new strategy is to enlist the energy markets' help: Beijing may introduce a new way to
price oil in coming months -- but unlike the contracts based on the U.S. dollar that currently dominate global
markets, this benchmark would use China's own currency. If there's widespread adoption, as the
Chinese hope, then that will mark a step toward challenging the greenback's status as the
world's most powerful currency .The plan is to price oil in yuan using a gold-backed futures contract in
Shanghai, but the road will be long and arduous."
If the U.S. continues on its current path and pushes Iraq further into the arms of China and
other U.S. rival states, it goes without saying that Iraq -- now a part of China's Belt and Road
Initiative -- may soon favor a petroyuan system over a petrodollar system, particularly as the
current U.S. administration threatens to hold Iraq's central bank account hostage for pursuing
policies Washington finds unfavorable.
It could also explain why President Trump is so concerned about China's growing foothold
in Iraq, since it risks causing not only the end of the U.S. military hegemony in the country but
could also lead to major trouble for the petrodollar system and the U.S.' position as a global
financial power. Trump's policy aimed at stopping China and Iraq's growing ties is clearly having
the opposite effect, showing that this administration's "gangster diplomacy" only serves to make
the alternatives offered by countries like China and Russia all the more attractive.
One can see how all these recent wars and military actions have a financial motive at their
core. Yet the mass of gullible Americans actually believe the reasons given, to "spread
democracy" and other wonderful things. Only a small number can see things for what they really
are. It's very frustrating to deal with the stupidity of the average person on a daily basis.
This is not Trump's policy, it is American policy and the variation is in how he implements
it. Any other person would have fallen in line with it as well. US policy has it's own inner
momentum that can't change course. The US depends upon continuation of the dollar as the
world's reserve currency. Were that to be lost the US likely would descend into chaos without
end. When the USSR came apart it was eventually able to downsize into the Russian state. We
don't have that here; there is no core ethnicity with it's own territory left anymore, it's
just a jumble. For the US it's a matter of survival.
The Chinese, for now, are not contradicting the Trump administration on the promise of
Chinese mega-purchases, because when Trump is more amicable their interests align. If an empty
promise that wasn't even made means the trade war de-escalation goes on, that is fine with
them. They would like to calm the markets as much as Trump would, and in this way they have
added leverage on Trump. Should they change their minds they can always explode the fiction
later on and injure Trump, perhaps strategically right around October.
Now that the dust has settled on the US-China trade deal and analysts have had some time to
pore over its 90+ pages, various chapters and (non-binding) terms that comprise the body of the
agreement, one high-level observation noted by Rabobank, is that the agreement foresees the
total amount of goods exports from the US to China to reach above $ 290BN by end-2021.
The implication of this is that the chart for US exports to China should basically look like
this for the next two years:
As Rabobank's senior economist Bjorn Giesbergen writes, t here are probably very few
economists that would deem such a trajectory feasible (except for the perpetually cheerful
economics team at Goldman , of course), seeing that it took the US more than 15 years to
raise exports from around USD16bn in 2000 to USD 130bn in 2017.
Moreover, the Chinese purchases of goods are beneficial to US companies, but at the cost of
other countries, and the agreement is only for two years. If China will buy more aircraft from
the US, that could be to the detriment of the EU.
According to the document "the parties project that the trajectory of increases will
continue in calendar years 2020 through 2025." But "to project" does not sound as firm as
"shall ensure." So, as the Rabo economist asks, "are we going to see a repetition of the 2019
turmoil caused by the phase 1 trade negotiations after those two years? Or is this supposed to
be solved in the phase 2 deal that is very unlikely to be made? What's more, while the
remaining tariffs provide leverage for US trade negotiators, they are still a tax on US
importers and US consumers of Chinese goods."
But before we even get there, going back to the chart shown above, Bloomberg today points
out something we have pointed out in the past, namely that China's $200 billion, two-year
spending spree negotiated with the Trump administration appears increasingly difficult to
deliver, and now a $50 billion "hole" appears to have opened up : that is the amount of U.S.
exports annually left out and many American businesses still uncertain about just what the
expectations are.
Some background: while Trump officials stressed the reforms aimed at curbing
intellectual-property theft and currency manipulation that China has agreed to in the "phase
one" trade deal signed Wednesday, the Chinese pledge to buy more American exports has become an
emblem of the deal to critics and supporters alike.
The administration has said those new exports in manufactured goods, energy, farm shipments
and services will come over two years on top of the $130 billion in goods and $57.6 billion in
services that the U.S. sent to China in 2017 -- the year before the trade war started and
exports were hit by Beijing's retaliatory measures to President Donald Trump's tariffs.
And while
Goldman said it is certainly feasible that China can ramp up its purchases of US goods ,
going so far as providing a matrix "scenario" of what such purchases could look like
that now appears virtually impossible, because as Bloomberg notes, the list of goods
categories in the agreement covers a narrower group of exports to China that added up to $78.8
billion in 2017, or $51.6 billion less than the overall goods exports to the Asian nation that
year. The goods trade commitment makes up $162.1 billion of the $200 billion total, with $37.9
billion to come from a boost in services trade such as travel and insurance.
Here, the math gets even more ridiculous:
The target for the first year that the deal takes effect is to add $63.9 billion in
manufactured goods, agriculture and energy exports. According to Bloomberg economist Maeva
Cousin's analysis, that would be an increase of 81% over the 2017 baseline. In year two, the
agreement calls for $98.2 billion surge in Chinese imports, which would require a 125%
increase over 2017.
Importantly for China, the deal requires those purchases to be "made at market prices based
on commercial considerations," a caveat which spooked commodities traders, and led to a sharp
drop in ags in the day following the deal's announcement.
Can China pull this off? Yes, if Beijing tears up existing trade deals and supply chains and
imposes explicit procurement targets and demands on China's local business. As Bloomberg notes,
"critics argue that such pre-ordained demand amounts to a slide into the sort of
government-managed trade that U.S. presidents abandoned decades ago" and the very sort of act
of central planning that U.S. officials have , paradoxically, spent years trying to convince
China to walk away from.
This may also explain why a key part of the trade deal will remain secret: the purchase plan
is based on what the administration insists is a specific – if classified – annex
of Chinese commitments. "The 20-page public version of that annex lists hundreds of products
and services from nuclear reactors to aircraft, printed circuits, pig iron, soybeans, crude oil
and computer services but no figures for purchases."
Going back to the critics, it is this convoluted mechanism that has them arguing that
China's stated targets will likely never be met: "This is ambitious and it will create some
stresses within the supply system," said Craig Allen, the president of the U.S.-China Business
Council.
That's not all: as Allen said, among the outstanding questions was whether China would lift
its retaliatory duties on American products as the US keeps its tariffs on some $360 billion in
imports from China as Trump seeks to maintain leverage for the second phase of
negotiations.
Allen also made clear the overall purchase schedule left many U.S. companies uncomfortable
even as they saw benefits in other parts of the deal. "The vast majority of our members are
looking for no more than a level playing field in China," Allen said. "We are not looking for
quotas or special treatment."
As a result, for many manufacturers what is actually changing -- and what China has
committed to instead of given a "best efforts" promise to achieve -- remains unclear.
Major exporters such as Boeing Co., whose CEO Dave Calhoun attended Wednesday's signing
ceremony, have stayed mum about what exactly the deal will mean for their business with China.
In an attempt to "clarify", Trump tweeted that the deal includes a Chinese commitment to buy
$16 billion to $20 billion in Boeing planes. It was unclear if he meant 737 MAX planes which
nobody in the world will ever voluntarily fly inside again.
Finally, prompting the latest round of cronyism allegations, Trump's new China pact also
includes plans for exports of American iron and steel , "a potential gain for an industry close
to the president that has benefited from his tariffs and complained about Chinese production
and overcapacity for years." As Bloomberg adds, the text of the agreement lists iron and steel
products ranging from pig iron to stainless steel wire and railway tracks, but steel industry
sources said they had been caught by surprise and not been given any additional details on
China's purchase commitments.
It is unclear why Beijing would need US product s: after all, in its scramble to erect ghost
cities and hit a goalseeked GDP print, China produces more than 50% of the world's steel,
drawning criticism from around the world – if not Greta Thunberg – for the massive
coal-derived pollution that comes from flooding global markets with cheap steel.
This partly explains why the US is taking its battle on 5G technology with the Chinese so
seriously. As a faltering global leader, the Americans do not take it kindly when China tries
to snatch a lunch right from under their nose. As such, the US-China trade war goes beyond
economics and ideology. It is about global domination across every conceivable technology that
consumers and governments worldwide are addicted to these days.
Metaphorically, technology is the new opium that rakes in money, power and control. Take a
look at the way consumers across the world are utilizing technologies. From smartphones to
mobile apps, from cloud-computing to cybersecurity, trillions of dollars are being spent by
consumers and their governments. The Americans were laughing their way to the bank until the
Chinese came along and upset their game.
As greed has no boundary or limit, every challenger or opposition to the consumption of this
"new opium" means a loss in revenue, power and control for the US and its preferred allies.
Sharing the spoils with others is looking like an inconceivable option for them at this
stage.
To call the tension between the US and China a trade war undermines this greater reality.
From unilateral sanctions to outright destruction of economies, it is starting to look as if
the US is using technology to regain global domination at all costs.
"... Trump is covering his retraction by calling it a trade deal. China's part of the deal is to agree to purchase the US goods that it already intended to purchase. ..."
The first thing
to understand is that it is not a trade deal. It is Trump backing off his tariffs when he
discovered that the tarrifs fall on US goods and American consumers, not on China. Trump is
covering his retraction by calling it a trade deal. China's part of the deal is to agree to
purchase the US goods that it already intended to purchase.
The purpose of tariffs is to protect domestic producers from foreign competition by raising
the price of imported goods. What Trump, his administration, and the financial press did not
understand is that at least half of the US trade deficit with China is the offshored goods
produced in China by such corporations as Apple, Nike, and Levi. The offshored production of US
global corporations counts as imports when they are brought into the US to be sold to
Americans. Thus, the cost of the tariffs were falling on US corporations and US consumers.
Tariffs are not an effective way to bring offshored US manufacturing home. If Trump or any
US government wants to bring US manufacturing back to the US from its offshored locations, the
way to achieve this result is to change the way the US taxes corporations. The rule would be:
If a US corporation produces in the US with US labor for US markets, the firm's profits are
taxed at a low rate. If the corporation produces products for the US market abroad with foreign
labor, the tax rate will be high enough to more than wipe out the labor cost savings.
As I have emphasized for years, the offshoring of US manufacturing has inflicted massive
external costs on the United States. Middle class jobs have been lost, careers ended, living
standards of former US manufacturing workers and families have dropped. The tax base of cities
and states has shrunk, causing cutbacks in public services and undermining municipal and state
pension funds. You can add to this list. These costs are the true cost of the increased profits
from the lower foreign labor and compliance costs. A relatively few executives and shareholders
benefitted at the expense of a vast number of Americans.
This is the problem that needs to be addressed and corrected.
...if nothing had happened in the US-China trade war. Well, me might have gotten to where we
are supposed to be with the deal
..a honest question. In terms of the environment and global climate, is it a good thing that
farmers will be producing more monoculture grains, dairy, beef and pork for export?
There has been much hype about the signing of Phase One (and probably only) US-China trade
deal. However based on a front page story in today's Washington Post, there is not much there.
The US did not raise tariffs as planned, but tarifsf still remain on two thirds of the sectors
that had them, although some were halved. But numerous US sectors see no change at all and are
now viewing the situation as not likely to improve, with them suffering losses of business
likely to return. Among those are chemicals, apparel retailers, and auto parts. In these and
other sectors there is not much reduction of uncertainty regarding US-China trade, so not
likely much increase in investment.
The main items in it besides no worsening of tariffs, China has made promises not to
pressure US firms to turn over technology and also to increase imports from the US by $200
billion over the next two years, especially in energy and agriculture. So maybe US soybean
farmers will no longer need the bailouts of billions of $ Trump has been providing to them.
However, such promises have been made in the past.
As it is, I am watching commentators on Bloomberg, and about the most any of them are
willing to say is that this "puts a floor" on the "deterioration" of US-China trade relations.
That is far from some dramatic breakthrough, and most of the tariffs put on as part of the
US-China trade war remain in place.
Barkley Rosser
spencer , January 16, 2020 3:49 pm
This looks like it may be a way to make it a status quo or back burner issue until after
the election.
Of course Trump will always be able to blow it up if he decides that would be to his
advantage.
Bert Schlitz , January 16, 2020 4:53 pm
I don't see how they "buy" 200 billion worth of goods. The Chinese economy is slowing and
that is why purchases were flattening by 2014.
Its noise and circuses.
pgl , January 16, 2020 5:48 pm
Bert – I agree. Menzie Chinn over at Econbrowser has a lot of details on this noise
and circus. Check it out!
There has been much hype about the signing of Phase One (and probably only) US-China trade
deal. However based on a front page story in today's Washington Post, there is not much there.
The US did not raise tariffs as planned, but tarifsf still remain on two thirds of the sectors
that had them, although some were halved. But numerous US sectors see no change at all and are
now viewing the situation as not likely to improve, with them suffering losses of business
likely to return. Among those are chemicals, apparel retailers, and auto parts. In these and
other sectors there is not much reduction of uncertainty regarding US-China trade, so not
likely much increase in investment.
The main items in it besides no worsening of tariffs, China has made promises not to
pressure US firms to turn over technology and also to increase imports from the US by $200
billion over the next two years, especially in energy and agriculture. So maybe US soybean
farmers will no longer need the bailouts of billions of $ Trump has been providing to them.
However, such promises have been made in the past.
As it is, I am watching commentators on Bloomberg, and about the most any of them are
willing to say is that this "puts a floor" on the "deterioration" of US-China trade relations.
That is far from some dramatic breakthrough, and most of the tariffs put on as part of the
US-China trade war remain in place.
spencer , January 16, 2020 3:49 pm
This looks like it may be a way to make it a status quo or back burner issue until after
the election.
Of course Trump will always be able to blow it up if he decides that would be to his
advantage.
Bert Schlitz , January 16, 2020 4:53 pm
I don't see how they "buy" 200 billion worth of goods. The Chinese economy is slowing and
that is why purchases were flattening by 2014.
Its noise and circuses.
pgl , January 16, 2020 5:48 pm
Bert – I agree. Menzie Chinn over at Econbrowser has a lot of details on this noise
and circus. Check it out!
Coming decade could see the US take on Russia, China and Iran over the New Silk Road
connection
The Raging Twenties started with a bang with the targeted assassination of Iran's General
Qasem Soleimani.
Yet a bigger bang awaits us throughout the decade: the myriad declinations of the New Great
Game in Eurasia, which pits the US against Russia, China and Iran, the three major nodes of
Eurasia integration.
Every game-changing act in geopolitics and geoeconomics in the coming decade will have to be
analyzed in connection to this epic clash.
The Deep State and crucial sectors of the US ruling class are absolutely terrified that
China is already outpacing the "indispensable nation" economically and that Russia has
outpaced
it militarily . The Pentagon officially designates the three Eurasian nodes as
"threats."
Hybrid War techniques – carrying inbuilt 24/7 demonization – will proliferate
with the aim of containing China's "threat," Russian "aggression" and Iran's "sponsorship of
terrorism." The myth of the "free market" will continue to drown under the imposition of a
barrage of illegal sanctions, euphemistically defined as new trade "rules."
Yet that will be hardly enough to derail the Russia-China strategic partnership. To unlock
the deeper meaning of this partnership, we need to understand that Beijing defines it as
rolling towards a "new era." That implies strategic long-term planning – with the key
date being 2049, the centennial of New China.
The horizon for the multiple projects of the Belt and Road Initiative – as in the
China-driven New Silk Roads – is indeed the 2040s, when Beijing expects to have fully
woven a new, multipolar paradigm of sovereign nations/partners across Eurasia and beyond, all
connected by an interlocking maze of belts and roads.
The Russian project – Greater Eurasia –
somewhat mirrors Belt & Road and will be integrated with it. Belt & Road, the Eurasia
Economic Union, the Shanghai Cooperation Organization and the Asia Infrastructure Investment
Bank are all converging towards the same vision.
Realpolitik
So this "new era", as defined by the Chinese, relies heavily on close Russia-China
coordination, in every sector. Made in China 2025 is encompassing a series of techno/scientific
breakthroughs. At the same time, Russia has established itself as an unparalleled technological
resource for weapons and systems that the Chinese still cannot match.
At the latest BRICS summit in Brasilia, President Xi Jinping told Vladimir Putin that "the
current international situation with rising instability and uncertainty urge China and Russia
to establish closer strategic coordination." Putin's response: "Under the current situation,
the two sides should continue to maintain close strategic communication."
Russia is showing China how the West respects realpolitik power in any form, and Beijing is
finally starting to use theirs. The result is that after five centuries of Western domination
– which, incidentally, led to the decline of the Ancient Silk Roads – the Heartland
is back, with a bang, asserting its preeminence.
On a personal note, my travels these past two years, from West Asia to Central Asia, and my
conversations these past two months with analysts in Nur-Sultan, Moscow and Italy, have allowed
me to get deeper into the intricacies of what sharp minds define as the Double Helix. We are
all aware of the immense challenges ahead – while barely managing to track the stunning
re-emergence of the Heartland in real-time.
In soft power terms, the sterling role of Russian diplomacy will become even more paramount
– backed up by a Ministry of Defense led by Sergei Shoigu, a Tuvan from Siberia, and an
intel arm that is capable of constructive dialogue with everybody: India/Pakistan, North/South
Korea, Iran/Saudi Arabia, Afghanistan.
This apparatus does smooth (complex) geopolitical issues over in a manner that still eludes
Beijing.
In parallel, virtually the whole Asia-Pacific – from the Eastern Mediterranean to the
Indian Ocean – now takes into full consideration Russia-China as a counter-force to US
naval and financial overreach.
Stakes in Southwest Asia
The targeted assassination of Soleimani, for all its long-term fallout, is just one move in
the Southwest Asia chessboard. What's ultimately at stake is a macro geoeconomic prize: a
land bridge from the Persian Gulf to the Eastern Mediterranean.
Last summer, an Iran-Iraq-Syria trilateral established that "the goal of negotiations is to
activate the Iranian-Iraqi-Syria load and transport corridor as part of a wider plan for
reviving the Silk Road."
There could not be a more strategic connectivity corridor, capable of simultaneously
interlinking with the International North-South Transportation Corridor; the Iran-Central
Asia-China connection all the way to the Pacific; and projecting Latakia towards the
Mediterranean and the Atlantic.
What's on the horizon is, in fact, a sub-sect of Belt & Road in Southwest Asia. Iran is
a key node of Belt & Road; China will be heavily involved in the rebuilding of Syria; and
Beijing-Baghdad signed multiple deals and set up an Iraqi-Chinese Reconstruction Fund (income
from 300,000 barrels of oil a day in exchange for Chinese credit for Chinese companies
rebuilding Iraqi infrastructure).
A quick look at the map reveals the "secret" of the US refusing to pack up and leave Iraq,
as demanded by the Iraqi Parliament and Prime Minister: to prevent the emergence of this
corridor by any means necessary. Especially when we see that all the roads that China is
building across Central Asia – I navigated many of them in November and December –
ultimately link China with Iran.
The final objective: to unite Shanghai to the Eastern Mediterranean – overland, across
the Heartland.
As much as Gwadar port in the Arabian Sea is an essential node of the China-Pakistan
Economic Corridor, and part of China's multi-pronged "escape from Malacca" strategy, India also
courted Iran to match Gwadar via the port of Chabahar in the Gulf of Oman.
So as much as Beijing wants to connect the Arabian Sea with Xinjiang, via the economic
corridor, India wants to connect with Afghanistan and Central Asia via Iran.
Yet India's investments in Chabahar may come to nothing, with New Delhi still mulling
whether to become an active part of the US "Indo-Pacific" strategy, which would imply dropping
Tehran.
The Russia-China-Iran joint naval exercise in late December, starting exactly from Chabahar,
was a timely wake-up for New Delhi. India simply cannot afford to ignore Iran and end up losing
its key connectivity node, Chabahar.
The immutable fact: everyone needs and wants Iran connectivity. For obvious reasons, since
the Persian empire, this is the privileged hub for all Central Asian trade routes.
On top of it, Iran for China is a matter of national security. China is heavily invested in
Iran's energy industry. All bilateral trade will be settled in yuan or in a basket of
currencies bypassing the US dollar.
US neocons, meanwhile, still dream of what the Cheney regime was aiming at in the past
decade: regime change in Iran leading to the US dominating the Caspian Sea as a springboard to
Central Asia, only one step away from Xinjiang and weaponization of anti-China sentiment. It
could be seen as a New Silk Road in reverse to disrupt the Chinese vision.
Battle of the Ages
A new book, The Impact of China's Belt and Road
Initiativ e , by Jeremy Garlick of the University of Economics in Prague, carries the
merit of admitting that, "making sense" of Belt & Road "is extremely difficult."
This is an extremely serious attempt to theorize Belt & Road's immense complexity
– especially considering China's flexible, syncretic approach to policymaking, quite
bewildering for Westerners. To reach his goal, Garlick gets into Tang Shiping's social
evolution paradigm, delves into neo-Gramscian hegemony, and dissects the concept of "offensive
mercantilism" – all that as part of an effort in "complex eclecticism."
The contrast with the pedestrian Belt & Road demonization narrative emanating from US
"analysts" is glaring. The book tackles in detail the multifaceted nature of Belt & Road's
trans-regionalism as an evolving, organic process.
Imperial policymakers won't bother to understand how and why Belt & Road is setting a
new global paradigm. The NATO summit in London last month offered a few pointers. NATO
uncritically adopted three US priorities: even more aggressive policy towards Russia;
containment of China (including military surveillance); and militarization of space – a
spin-off from the 2002 Full Spectrum Dominance doctrine.
So NATO will be drawn into the "Indo-Pacific" strategy – which means containment of
China. And as NATO is the EU's weaponized arm, that implies the US interfering on how Europe
does business with China – at every level.
Retired US Army Colonel Lawrence Wilkerson, Colin Powell's chief of staff from 2001 to 2005,
cuts to the chase: "America exists today to make war. How else do we interpret 19 straight
years of war and no end in sight? It's part of who we are. It's part of what the American
Empire is. We are going to lie, cheat and steal, as Pompeo is doing right now, as Trump is
doing right now, as Esper is doing right now and a host of other members of my political party,
the Republicans, are doing right now. We are going to lie, cheat and steal to do whatever it is
we have to do to continue this war complex. That's the truth of it. And that's the agony of
it."
Moscow, Beijing and Tehran are fully aware of the stakes. Diplomats and analysts are working
on the trend, for the trio, to evolve a concerted effort to protect one another from all forms
of hybrid war – sanctions included – launched against each of them.
For the US, this is indeed an existential battle – against the whole Eurasia
integration process, the New Silk Roads, the Russia-China strategic partnership, those Russian
hypersonic weapons mixed with supple diplomacy, the profound disgust and revolt against US
policies all across the Global South, the nearly inevitable collapse of the US dollar. What's
certain is that the Empire won't go quietly into the night. We should all be ready for the
battle of the ages.
An extremely rare candid and somewhat precise piece of journalism by the NYT (albeit telling
the story from the point of view of the Americans/capitalists):
What it does not do is tackle the root causes of the trade war. The deal leaves
untouched Beijing's subsidies for homegrown industries and its firm control over crucial
levers of its hard-charging economy . The deal also keeps in place most of Mr. Trump's
tariffs on $360 billion worth of Chinese goods, a much heavier tax than Americans pay for
products from practically anywhere else.
Solving those issues could take years.
Interesting to see what the Americans consider to be China's "root causes of the trade
war". And we still have people who believe the war against China is not a war between
capitalism and socialism, but between "freedom and tyranny". Pure middle class liberal
dellusion of grandeur.
--//--
In the last open thread, in my first comment, I highlighted how fast the Western MSM gave
up the idea the Labour Party should have its first female leader in order to prop up their
guy, Keir Starmer (literally the only male still in the dispute right now). The reason, of
course, is that his main rival - Rebecca Long-Bailey - is Corbyn's successor and, as such,
has Momentum's (and, probably, of the unions) support.
I have been stating here for some time now that the function of the middle class is to
serve as the battering ram of the capitalists. They are the class tasked with fabricating the
narratives and "theories" which all the society should believe and never question. They are
what that 007 villain (Spectre) called "visionaires", or what the far-rightists in America
call "the experts".
If that's true, then postmodernism is their ideological weapon of choice nowadays.
doesn't matter in which order they're read, but Escobar's
latest intersects with Alastair
Crooke's to provide Big Picture perspective.
Towards his conclusion, Escobar cites retired US Army Colonel Lawrence Wilkerson, Colin
Powell's chief of staff from 2001 to 2005:
"We are going to lie, cheat and steal to do whatever it is we have to do to continue this
war complex. That's the truth of it. And that's the agony of it."
But nowhere in the citation does Wilkerson say that any of this effort's being done to
defend the USA, whereas its beyond clear that Iran, China and Russia are all working to
protect their nations and people. Rather, it appears as if "the profound disgust and revolt
against US policies all across the Global South" is finally being adopted by a majority of
the USA's polity as it becomes clear that all the lying, cheating and stealing is being done
at the expense of the 99% for the 1%'s benefit.
As Crooke alludes, wagging the dog a la Clinton might save Trump from being convicted and
removed by the Senate, but such a move will likely cost him the election, although much
depends on how those controlling the D-Party behave in the face of Sanders winning the
nomination via the primaries prior to the Convention.
Under the text of the Phase One deal - which
was released later in the day by the Office of the US Trade Representative - both sides
agree that they can formally complain to each other if either feels the other side is not
holding up its end of the bargain.
China Accepts Deal to Buy $200Bln in US Goods
First and foremost, the document obliges Beijing to purchase at least $200 billion worth of
US goods over the next two years.
"During the two-year period from January 1, 2020, through December 31, 2021, China shall
ensure that purchases and imports into China from the United States of the manufactured
goods, agricultural goods, energy products, and services identified in Annex 6.1 exceed the
corresponding 2017 baseline amount by no less than $200 billion", the text of the agreement
reads.
The agreement said China
will ensure that it buys $32.9 billion worth of US manufactured goods this year and $44.8
billion in 2021; $12.5 billion in US agricultural goods this year and $19.5 billion in 2021;
$18.5 billion in US energy products this year and $33.9 billion in 2021; and $12.8 billion in
US services this year and $25.1 billion in 2021.
US, China Agree to Protect Patents,
Fight Abuse of Trade Secrets
The United States and China agreed to protect patents, particularly in pharmaceuticals, and
ban counterfeit products and the misappropriation of trade secrets.
"China shall permit pharmaceutical patent applicants to rely on supplemental data to satisfy
relevant requirements for patentability, including sufficiency of disclosure and inventive
step, during patent examination proceedings, patent review proceedings, and judicial
proceedings", the text of the deal said. "The United States
affirms that existing US measures afford treatment equivalent to that provided for in
this Article".
Beijing and Washington also resolved to strengthen cooperation and coordination in combating
piracy, including counterfeiting on e-commerce platforms, in the agreement.
On the protection of trade secrets, the United States said China will treat as "urgent" the
use, or attempted use, of claimed trade secret information and provide its judicial authorities
the authority to order a preliminary injunction based on case facts and circumstances.
Washington pledged to do the same for China.
China to Boost US Energy Imports by $52
Bln
China also agreed to increase purchases of US energy products by $52 billion in the next two
years.
The US energy products will be part of the total $200 billion worth of US goods that China
will import through 2021, according to the agreement.
"For the category of energy products no less than $18.5 billion above the corresponding 2017
baseline amount is purchased and imported into China from the United States in calendar year
2020, and no less than $33.9 billion above the corresponding 2017 baseline amount is
purchased and imported into China from the United States in calendar year 2021", the text of
the deal said.
The agreement listed the US energy products that China will be buying as: crude oil,
liquefied natural gas, refined petroleum and coal.
China is the world's largest buyer of oil and the United States is the largest producer of
the commodity.
Oil prices, which hit five-week lows earlier on Wednesday, pared their losses after the
energy deal was announced by the US and Chinese governments.
Avoiding Currency
Manipulations
Under the Phase One deal China agrees to not engage in currency manipulation for the purpose
of achieving trade advantages over the United States.
"The Parties
shall refrain from competitive devaluations and not target exchange rates for competitive
purposes, including through large-scale, persistent, one-sided intervention in exchange
markets," the agreement states.
The United States and China will communicate regularly and consult on foreign exchange
markets, activities and policies as well as consult with each other regarding the International
Monetary Fund's assessment of the exchange rate of each country, the agreement states.
The agreement states that the United States and China should achieve and maintain a
market-determined exchange rate regime.
The agreement comes after two years of wrangling and numerous halts in discussions, during
which both sides piled hundreds of billions of dollars of tit-for-tat tariffs on each
other.
Despite the signing of the accord, the Trump administration
will maintain tariffs on $360 billion of Chinese goods in an attempt to hold Beijing
accountable to the deal, US officials said. The Chinese government has also said it will decide
later on the tariffs it has imposed on US imports, which last stood at $185 billion in
value.
The US-China trade war sparked in January 2019, when the Trump administration announced
duties on Chinese-made solar panels and washing machines. The Trump administration has since
placed tariffs on $550 billion worth of Chinese products.
'Phase Two' Will End US-China
Trade War?
US Treasury Secretary Steve Mnuchin commented earlier on Wednesday on the agreement and said
that certain technology and cybersecurity issues would be resolved in the next chapter of the
deal to end the trade dispute.
"I think a very significant amount of the technology issues are in Phase One. There are other
certain areas of services away from financial services that will be in Phase Two. There are
certain additional cybersecurity issues that will be in Phase Two [...] There still more
issues to deal with and we'll address those", Mnuchin said, cited by CNBC.
Although the timing and details of Phase Two remain vague, Mnuchin ruled out Huawei being
included,
claiming that the Chinese tech giant is part of "the national security dialogue".
Trump claimed during a news conference on Wednesday that he does not foresee a Phase Three
trade agreement with China, expecting to conclude the trade negotiations with Phase
Two.
"We've already begun discussions on a Phase 2 deal", Pence said, cited by Fox Business.
Trump said earlier that inking of the second phase of the deal may have to wait until after
the 2020 presidential election to allow time to negotiate a better agreement.
Phase One and Phase Two could reportedly ease trade tensions between the two major economic
powers but it would unlikely settle the dispute, The Washington Post reported.
According to the media outlet, the Trump administration is developing new export control
regulations aimed at limiting flows of sophisticated technology to China, while US officials
embarked on closely scrutinizing potential Chinese investments in the United States. Media
reports of alleged new economic and technology levies against Beijing sparked speculation
among analysts that Phase Three should not be excluded.
Despite the latest Sino-American phase one deal to ease tensions over trade, one former top
US official is now calling for a decoupling between both economies, reported the
South China Morning Post (SCMP).
Former US ambassador to India Ashley Tellis explains in a new book titled Strategic Asia
2020: US-China Competition for Global Influence -- that the world's two largest economies have
entered a new period of sustained competition.
Tellis said Washington had developed a view that "China is today and will be for the
foreseeable future the principal challenger to the US."
"The US quest for a partnership with China was fated to fail once China's growth in economic
capabilities was gradually matched by its rising military power," he said.
Tellis said Washington must resume its ability to support the liberal international order
established by the US more than a half-century ago, and "provide the global public goods that
bestow legitimacy upon its primacy and strengthen its power-projection capabilities to protect
its allies and friends."
He said this approach would require more strategic cooperation with allies such as
Australia, Japan, and South Korea.
"The US should use coordinated action with allies to confront China's trade malpractices
should pursue targeted decoupling of the US and Chinese economies, mainly in order to protect
its defense capabilities rather than seeking a comprehensive rupture."
The latest phase one deal between both countries is a temporary trade truce -- likely to be
broken as a strategic rivalry encompasses trade, technology, investment, currency, and
geopolitical concerns will continue to strain relations in the early 2020s.
A much greater decoupling could be dead ahead and likely to intensify over time, as it's
already occurring in the technology sector.
Tellis said President Trump labeling China as a strategic
competitor was one of "the most important changes in US-China relations."
The decoupling has already started as Washington races to safeguard the country's
cutting-edge technologies, including 5G, automation, artificial intelligence, autonomous
vehicle, hypersonics, and robotics, from getting into the hands of Chinese firms.
A perfect example of this is blacklisting Huawei and other Chinese technology firms from
buying US semiconductor components.
Liu Weidong, a US affairs specialist from the Chinese Academy of Social Sciences, told SCMP
that increased protectionism among Washington lawmakers suggests the decoupling trend between
both countries is far from over.
The broader shift at play is that decoupling will result in de-globalization ,
economic and financial fragmentation, and disruption of complex supply chains.
BEIJING, Dec. 21 (Xinhua) -- The
phase-one economic and trade deal between China and the United States benefits both sides and
the whole world, Chinese President Xi Jinping said Friday.
In a phone conversation with his U.S. counterpart, Donald Trump, Xi noted that the two
countries have reached the phase-one agreement on the basis of the principle of equality and
mutual respect.
Against the backdrop of an extremely complicated international environment, the agreement
benefits China, the United States, as well as peace and prosperity of the whole world, Xi
said.
For his part, Trump said that the phase-one economic and trade agreement reached between
China and the United States is good for the two countries and the whole world.
Noting that both countries' markets and the world have responded very positively to the
agreement, Trump said that the United States is willing to maintain close communication with
China and strive for the signing and implementation of the agreement at an early date.
Xi stressed that the economic and trade cooperation between China and the United States has
made significant contributions to the stability and development of China-U.S. relations and the
advancement of the world economy.
Modern economy and modern technologies have integrated the world as a whole, thus making the
interests of China and the United States more intertwined with each other, Xi said, adding that
the two sides will experience some differences in cooperation.
As long as both sides keep holding the mainstream of China-U.S. economic and trade
cooperation featuring mutual benefits and win-win outcomes, and always respect each other's
national dignity, sovereignty and core interests, they will overcome difficulties on the way of
progress, and push forward their economic and trade relations under the new historical
conditions, so as to benefit the two countries and peoples, Xi said.
China expresses serious concerns over the U.S. side's recent negative words and actions on
issues related to China's Taiwan, Hong Kong, Xinjiang and Tibet, Xi said.
He noted that the U.S. behaviors have interfered in China's internal affairs and harmed
China's interests, which is detrimental to the mutual trust and bilateral cooperation.
China hopes that the United States will seriously implement the important consensuses
reached by the two leaders over various meetings and phone conversations, pay high attention
and attach great importance to China's concerns, and prevent bilateral relations and important
agendas from being disturbed, Xi said.
Trump said he is looking forward to maintaining regular communication with Xi by various
means, adding he is confident that both countries can properly handle differences, and
U.S.-China relations can maintain smooth development.
Xi said he is willing to maintain contacts with Trump by various means, exchange views over
bilateral relations and international affairs, and jointly promote China-U.S. relations on the
basis of coordination, cooperation and stability.
The two heads of state also exchanged views on the situation of the Korean Peninsula. Xi
stressed that it is imperative to stick to the general direction of a political settlement,
saying all parties should meet each other halfway, and maintain dialogue and momentum for the
mitigation of the situation, which is in the common interests of all.
If true this china capitulation. Or some shrewd tactical maneuver, as the next year it is
China who hold trump cards -- it can derail Trump re-election with ease.
I have my doubts about Trump being the Grand Dealmaker he calls himself. Looking at seven
bankruptcies as a proof of that ... mythical skill I don't find much. I recall Trump suing the
Deutsche Bank after the bank wanted a credit back. His lawyers in court referred to the bank
crisis, called the Deutsche Bank as a bank responsible for that and said that thus they don't
deserve repayment. that was Chutzpah in the First Degree, For very obvious reasons Trump lost
that case and did pay back.
When Trunmp recently went on searching lawyers to work and sue for him he didn't find any. A
big corp lawyer anonymously briefly explained why: "Doesn't pay. Doesn't listen.'
A US-China trade deal was announced to chaotic fanfare late Friday Asian time – and we
are sceptical. First, we still don't have details other than that December tariffs were
postponed by both sides, the 15% US tariffs imposed on 1 September are to be reduced to 7.5% as
a sign of goodwill, and the 25% tariffs on USD250bn stay in place . Second, we aren't going to
get a signing ceremony between the US and Chinese leaders, which does not send an encouraging
signal. And third, what we see is close to the terms we previously criticized for being
unrealistic in reports such as 'A Great Deal of Nonsense" and "LOL-A-PLAZA".
The US Trade Representative (USTR) says the final text of the phase one
agreement is still being finalised, and he will sign it early next year for a likely incept
date of end-January 2020. The areas covered include: Intellectual Property (IP); Technology
Transfer; Agriculture; Financial Services; Currency; Expanding Trade; and Dispute Resolution.
Each of these promises much and yet potentially delivers little.
China has pledged to address issues of geographical indications, trademarks, and enforcement
against pirated and counterfeit goods. That's just after a Chinese court ruled that Japanese
retailer Muji doesn't own its own name in China and a local rival started years afterwards
does. Enforcement matters, not promises: more on that in a moment.
China has agreed to end forcing or pressuring foreign companies to transfer their tech as a
condition for obtaining market access or administrative approvals. Again, enforcement is all
that matters here. China also " commits to refrain from directing or supporting outbound
investments aimed at acquiring foreign technology pursuant to industrial plans that create
distortion. " That is China's reason for outbound investment! For example, Sweden's Defence
Research Agency just released a detailed survey of Chinese corporate acquisitions in their
country showing at least half are correlated with the "Made in China 20205" plan.
China will " support a dramatic expansion of US food, agriculture and seafood product
exports " , with the USTR stating the target is to jump to USD40bn in 2020, a USD16bn increase
over the pre-trade war level of USD24bn, and to aim for USD50bn. Part of that reflects China's
decimated pork herd, so is hardly a concession. Yet it is hard to conceive of how the total
figure can be achieved without China using the US to displace agri imports from other nations,
e.g., Argentinean and Brazilian soy, and perhaps Aussie and Kiwi farm goods. That also
increases China's economic exposure to the US at a time of rising geopolitical tensions between
the two (see news of the US' secret expulsion of two Chinese diplomats), and US' farmers
exposure to China in kind. For its part, the Chinese press are not mentioning these US hard
targets, and are talking about WTO trading terms, which bodes poorly.
The financial services chapter pledges China to an opening up already underway as it
searches for new sources of USD inflows, so again is not a concession. Interestingly, it also
says US ratings agencies will get access – which will be fun given the evident credit
stresses emerging in China just as US banks will be trying to sell China as an investment
destination. .
On currency the US is requiring "high-standard commitments" to refrain from competitive
devaluations and targeting of exchange rates. Everyone knows the CNY is not freely-traded
– but also that China is doing its best to prop it up, not to try to push it lower. The
key message is CNY is not going to be allowed to do what it ought to be doing, i.e., weakening,
as China is pledging new fiscal stimulus in 2020 that will decrease its external surplus. That
runs counter to market forces, and smacks of a kind of Plaza Accord. Of course, as long as this
US-China agreement holds that might be sustainable due to the promised higher capital
inflows...
Eexcept the expanding trade chapter implies the opposite. The USTR says China is pledging to
boost its 2020 imports of US goods and services by USD100bn over the level in 2017, and by
USD100bn again in 2021, for a total increase of USD200bn . Given 2017 was pre-trade war and US
exports to China dropped off a cliff in 2019, this means around a 110% y/y increase in
purchases in 2020 – and agri is only a portion of that. The problems should be obvious.
How can a slowing Chinese economy (imports are down y/y from most sources), see this kind of
increase without substituting US for world exports or local goods? How can a China with a USD
liquidity shortage serious enough to be driving said lowered import bill, and
'1USD-in/1USD-out' de facto capital controls, cope with the net reduction on the trade side? As
of November, the 12-month rolling Chinese global trade surplus with the US it was USD330bn and
globally was USD440bn. We are talking about reducing that US figure by 2/3 and the global total
by 1/2!
Which brings us to the last chapter: Dispute Resolution. Getting China to comply is far
harder than getting it to sign. The USTR notes the agreement " establishes strong procedures
for addressing disputes related to the agreement and allows each party to take proportionate
responsive actions that it deems appropriate ." In other words, each side can unilaterally do
what they want when they want! So much for the unilateral US control of the process.
So how to see this in summary? The reduction in tariffs from 15% to 7.5% is a positive,
albeit far less than the Wall Street Journal had promised. (NB, the USTR took the
extraordinary step of publicly chastising the WSJ journalists who wrote that story –
regular readers may recall I have also called them out more than once in the past.) Indeed, if
China really has agreed to all that is stated here then further incremental tariff rollbacks
can be seen – though the USTR has said the 25% tariffs will stay as collateral for a
phase two deal that nobody really expects to happen. Yet the terms of this phase one still seem
to be A Great Deal of Nonsense. How can China stop buying foreign tech? How can it buy as much
US stuff as pledged? How can it do so and not undermine the WTO? How can it do so and not
weaken CNY? And how can it do so with a strong CNY without increasing its USD debts, its
strategic reliance on the USD, and to US goods? In short, if China does as the USTR claims, the
US is a huge winner here (and there are lots of losers); if China does not comply with what
look an impossible import targets, then the US can frame China as the bad guy and the tariffs
can go back up again. Arguably, the question is not if that will happen, but when.
The most important thing about the "phase one" trade agreement announced Friday by U.S. and
Chinese officials is what won't happen: The two countries won't impose additional tariffs on
Sunday that would have further escalated the trade war.
There will also be a bit of de-escalation. In September, Trump imposed 15 percent
tariffs on $110 billion worth of Chinese consumer goods, such as clothing; those tariffs will
be cut in half, to 7.5 percent. But the largest piece of Trump's China tariffs -- a 25 percent
tariff on $250 billion in goods mostly sold to businesses rather than consumers -- will stay
unchanged, for now.
Awaited confirmation by China about the Trade Deal before writing about it. This article is what I
waited to be published: "Phase one trade deal a step forward, a new beginning," yes, an
optimistic tone, although tempered in the text:
"Rome was not built in a day. Trade protectionism has expanded in some places of the
world, affecting some people's thinking. It is not easy for China and the US to agree on the
text of the deal. But how to define this deal and whether it can keep its positive effects
on the global market and even accumulate more positive energy will depend on further efforts
from China and the US , as the global market has been disturbed by the trade war.
" We must see that the first phase of the trade agreement is a win-win outcome which
will deliver tangible benefits to the world . The response from investors around the
world is most real because they would not use their own money just to make a grand gesture.
However, some people in both China and the US may hype that their own country suffers loss
from this deal. This is a natural counter-stream of public opinion, but does not represent
the mainstream attitude on either side." [My Emphasis]
Gee, "benefits for the whole world," not just China and Outlaw US Empire? What forced the
Empire to compromise:
"The US-China trade war happens at a time when the US' strategic thinking on China has
changed. This requires Washington to find a strategic impetus to end the trade war. So what
would be such a strategic impetus?
"We believe as long as the US side is realistic, it is possible that such a strategic
impetus can be formed and gradually expanded. The trade war is not an effective way to
resolve the strategic competition between China and the US. It can neither scare China nor
effectively weaken China, but will cause a gradual rise in the cost of the US economy" .
[My Emphasis]
IMO, China's assessment's correct. The financialized economy of the Evil Outlaw US Empire
has drained it of the resilience it once enjoyed and that China's economy has obtained. Plus,
as I wrote several months ago, China's employing geoeconomic levers which the Empire can no
longer deploy and is thus stuck with using the only remaining tool it has--its waning
geopolitical levers.
Awaited confirmation by China about the Trade Deal before writing about it. This article is what I
waited to be published: "Phase one trade deal a step forward, a new beginning," yes, an
optimistic tone, although tempered in the text:
"Rome was not built in a day. Trade protectionism has expanded in some places of the
world, affecting some people's thinking. It is not easy for China and the US to agree on the
text of the deal. But how to define this deal and whether it can keep its positive effects
on the global market and even accumulate more positive energy will depend on further efforts
from China and the US , as the global market has been disturbed by the trade war.
" We must see that the first phase of the trade agreement is a win-win outcome which
will deliver tangible benefits to the world . The response from investors around the
world is most real because they would not use their own money just to make a grand gesture.
However, some people in both China and the US may hype that their own country suffers loss
from this deal. This is a natural counter-stream of public opinion, but does not represent
the mainstream attitude on either side." [My Emphasis]
Gee, "benefits for the whole world," not just China and Outlaw US Empire? What forced the
Empire to compromise:
"The US-China trade war happens at a time when the US' strategic thinking on China has
changed. This requires Washington to find a strategic impetus to end the trade war. So what
would be such a strategic impetus?
"We believe as long as the US side is realistic, it is possible that such a strategic
impetus can be formed and gradually expanded. The trade war is not an effective way to
resolve the strategic competition between China and the US. It can neither scare China nor
effectively weaken China, but will cause a gradual rise in the cost of the US economy" .
[My Emphasis]
IMO, China's assessment's correct. The financialized economy of the Evil Outlaw US Empire
has drained it of the resilience it once enjoyed and that China's economy has obtained. Plus,
as I wrote several months ago, China's employing geoeconomic levers which the Empire can no
longer deploy and is thus stuck with using the only remaining tool it has--its waning
geopolitical levers.
The take away quotes
"
...... the FT reports that Beijing has ordered all government offices and public institutions
to remove foreign computer equipment and software within three years.
..........
The take home message here is that US PC and software giants are about to lose billions in
sale to Chinese customers, a move that will infuriate Trump who will, correctly, see such
attempts to isolate the Chinese PC market from US vendors.
"
This is going to be difficult for China but they have a domestic OS, the Kylin OS, that is
Unix/Linux based, so much Open Source software is available to replace the Microsoft/Apple
software they currently use until they develop their own.
This speaks to Trump saying he can wait for a trade deal until after the (s)election but
it seems obvious that his negotiating position is going to get weaker by the day.
-------------------------------
Another aspect of the tech war that is financial also is that I am reading the China is on
the cusp of releasing a digital fiat RMD currency. This will have serious disintermediation
effects on the BIS, City of London Corp and others doing currency exchange if any can do such
on their phones. I am reading about digital currencies needing a blockchain underpinning but
if the US dollar can exist without one currently then what are the show stoppers except the
private finance dead weight in the middle?
"... When you factor in reelection worries, Trump needs to find a mutually agreeable solution to at least pause the trade war. Such a move will surely revive economic growth hurt by sanctions and ensure the smoothest possible path toward a second term. People vote with their wallets, and Trump gets that. ..."
"... Nothing could be worse for Xi than the markets concluding that China is in a recession with one of its prime economic centers now in open revolt. Just as quickly as China was dubbed the next rising superpower, her economic and political obituary could be written. ..."
"... Here is where a so-called Phase One trade deal could help patch up the relationship and give both sides the short-term domestic boost their leaderships are looking for. ..."
"... But there are reasons to worry. A recent report in Axios claims that China is quite angry over Trump's decision to sign the Hong Kong bill, and as a result talks between the two nations have "stalled." Still, both sides have ample reasons to get a trade deal done. However, if Trump does indeed get reelected and China feels stable domestically once again, the pull of history -- specifically, which nation will dominate geopolitics in the 21st century -- may be too strong to resist. ..."
Consider America's position. President Trump surely has incentives to push for what I would
call a strategic pause in his quest to contain a rising China through tough trade moves. At the
moment, staring down a possible vote on articles of impeachment and a Senate trial, rising
trade tensions, which could reignite fears of a recession, are the last thing the president
needs. When you factor in reelection worries, Trump needs to find a mutually agreeable
solution to at least pause the trade war. Such a move will surely revive economic growth hurt
by sanctions and ensure the smoothest possible path toward a second term. People vote with
their wallets, and Trump gets that.
Chinese president Xi Jinping, meanwhile, has similar concerns. China's 6 percent economic
growth, something Washington can only dream of, is likely a number that exists only on paper,
for Beijing is known to cook their books. With growth more than likely just barely in positive
territory, thanks in large part to U.S. trade tariffs, and the challenges in Hong Kong not
looking as if they will subside anytime soon, Xi needs to deliver what he can claim is a
victory that also revives economic growth, at least for the time being. This will help
stabilize China domestically, plus give Xi time to allow Hong Kong's protests to burn out while
not having to worry about economic troubles at the same time.
Nothing could be worse for Xi than the markets concluding that China is in a recession
with one of its prime economic centers now in open revolt. Just as quickly as China was dubbed
the next rising superpower, her economic and political obituary could be written.
Here is where a so-called Phase One trade deal could help patch up the relationship and
give both sides the short-term domestic boost their leaderships are looking for. A
potential deal could involve China rolling back tariffs on all U.S. goods, agreeing to a large
purchase of American agricultural goods, and providing basic protections on all U.S.
intellectual property involving high-technology goods (think 5G, computers, and robotics). In
turn, America would roll back all tariffs -- something China wants very badly --
including, and most importantly, agreeing not to launch the scheduled new round of massive
tariffs on December 15, which are viewed as potentially the most damaging to date. While such
an interim deal is far from perfect -- China hawks will surely go ballistic, calling the deal
nothing more than appeasement or select your other favorite neocon smear -- Xi and Trump are
pragmatic enough to see that a deal is in both sides' interests.
But there are reasons to worry. A recent report in Axios claims that China is
quite angry over Trump's decision to sign the Hong Kong bill, and as a result talks between the
two nations have "stalled." Still, both sides have ample reasons to get a trade deal done.
However, if Trump does indeed get reelected and China feels stable domestically once again, the
pull of history -- specifically, which nation will dominate geopolitics in the 21st century --
may be too strong to resist.
Harry J. Kazianis is a senior director at the Center for the National Interest and the
executive editor of The National Interest magazine.
By offering Hong Kong official tools of support, President Trump has broadened the trade
dispute...
Throughout negotiations, the Chinese have been reluctant to get a deal over the line,
walking away from agreed upon terms several times. By supporting Hong Kong, President Trump is
showing the Chinese Communist Party that he will not sit idly by while they jerk trade
negotiations around.
American tech companies are
getting the go-ahead to resume business with Chinese smartphone giant Huawei Technologies
Co., but it may be too late: It is now building smartphones without U.S. chips.
Huawei's latest phone,
which it unveiled in September -- the Mate 30 with a curved display and wide-angle
cameras that competes with Apple
Inc.'s iPhone 11 -- contained no U.S. parts, according to an analysis by UBS and Fomalhaut Techno Solutions, a Japanese
technology lab that took the device apart to inspect its insides.
In May, the Trump administration banned U.S. shipments to Huawei as trade tensions with
Beijing escalated. That move stopped companies like Qualcomm Inc. and Intel Corp. from exporting chips to the company, though
some shipments of parts resumed over the summer after companies determined they weren't
affected by the ban.
Meanwhile, Huawei has made significant strides in shedding its dependence on parts from
U.S. companies. (At issue are chips from U.S.-based companies, not those necessarily made in
America; many U.S. chip companies make their semiconductors abroad.)
Huawei long relied on suppliers like Qorvo Inc., the North Carolina maker of chips that are used
to connect smartphones with cell towers, and Skyworks Solutions Inc., a Woburn, Mass.-based company that
makes similar chips. It also used parts from Broadcom Inc., the San Jose-based maker of Bluetooth and
Wi-Fi chips, and Cirrus Logic Inc.,
an Austin, Texas-based company that makes chips for producing sound.
Yet Another Trump Trade Win
Trump cut off supplies so China looked elsewhere.
Trump changed his mind.
This is what constitutes a win.
"When Huawei came out with this high-end phone -- and this is its flagship -- with no U.S.
content, that made a pretty big statement," said Christopher Rolland, a semiconductor analyst
at Susquehanna International Group.
Huawei executives told Rolland that the company was moving away from American parts, but it
was still surprising how quickly it happened.
This was likely going to happen anyway, but Trump escalated the speed at which it
happened.
The trade war is the first act in the much larger game of hegemony.
Both sides are disentangling.
Apple finished their Indian plant.
Huawei went ex-US (but almost certainly not US IP)
Europe is already muttering about human rights in Hong Kong and Xiangjang.
We're nearly ready for act 2. That's when Europe joins in on squeezing trade, and the rest
of the democratic world and a few others is bullied and bribed to follow.
Do you know why Russia still sells rocket engines to US after being hit US sanctions?
Don't tell me they need US dollar.
Do you know that China is facing US embargo under the pretext of national security from
1949 until now and things allowed to export to China mostly agriculture produce, gas and oil?
This is the reason they develop their own technologies which the media told me stolen from
the US even that the US doesn't have like 5G, quantum satellite, hypersonic weapons just to
name a few.
russia needs to stop selling those engines to merica and cut them out of space... what a
dumb move... russia always trying to be friends with evil merica
Plainly, China will never buy the same amount of soybeans or chips than before as Russia
will never accumulate US dollars in its Reserve. They have discovered than US is not a
reliable partner.
Those that think that China is only about ripping off US technology are going to be
surprised. Sure that was once China's main method as it was for the early USA to rip off
British textile secrets. Trump trying to take down China's biggest technology company has
been a real wake up call for them. Now, they will own all of the content and will dominate in
Asian markets, the middle east, etc. They already did it in solar panels and much else. They
have a plan. They build infrastructure, we let it ours decay. They invest in education, we
leave out students in debt up to their eyeballs and then give them Starbucks jobs. They have
high speed trains everywhere, we have Amtrak. They are looking outward, we are looking
inward. America first, rah rah. This will end badly - for the USA.
no average american benefits from international trade unless the product is unattainable
state side. if we can grow it, we should. if we can make it, we should. excess can be sold
outside the nation but since everything has been weaponized, we are the ones caught in the
middle who suffer.
tariffs are good and we should use them to protect our industries. the problem is that our
industry was destroyed before implementing tarrifs.. that part doesn't make sense and all of
our major corporations have sold out anyways, further screwing john q public because lets be
real, companies are out for profit and shareholder return, not protecting employees and
consumers. so they could care less where its being made / sold as long as they see their
bottom line increase, no worries.
problem is big business doesn't want to pay it. it has always been that way. when the
money system was put in place, business owners didn't like the idea of increased competition
(less slaves and more company owners) and therefore they were given the ability to claim you
for tax purposes, hence why anytime you take a job they want your SS#. investment in the past
happened because of things that were to come in the future. the future in america from her
current vantage is trans/post humanism with the idea of automation, human/machine integration
and that leaves little room or interest in building $100m slave factories for working class
people to grind away in
chips have been made consistently in Malaysia, Taiwan and Korea for the better part of
almost 25 years, not real sure how any of what you said is relative to current events. just
syncrhonicity and morons like you saying dumb ****.
Wow, the article is really insulting to the Chinese. Like building a smart phone for them
was like landing on the moon or something. They steal everything from everyone anyways, so
who cares what they build.......
This is why they are trying to ban Chinese hardware... not because they fear they are
spying on us but because their govt mandated backdoors aren't installed on Chinese hardware.
The US govt wants to ban their use because they can't spy on them... That is the real
reason.
US is losing the technology race against China. In the first phase China copied the tech,
now it is on par, and in five to ten years the murican chip manufacturers are out of
business.
The point is this: the muricans are lazy bastards, most of the brain power is imported.
They lived too long off the dollar reserve currency status, soon enough nobody will
interested in that toilet paper anymore.
Two years ago, Donald *** Trumptard on behalf of his handler, the US War State/Dark
State/Deep State , launched a world wide war against the Chinky company, Huawei, in order, to
kill it.
But that failed spectacularly. Not only is Huawei not dead, but its revenue actually grown
24% in 2019.
Now, its smart phones, and 5G cell tower equipments are totally free of US components.
WHY IS THE US DARK STATE SO TERRIFIED OF HUAWEI'S 5G WIRELESS TECHNOLOGY?
The US Dark State/War State/Deep State, that is the NSA/CIA/Pentagon/MIC/MSM . . . etc has
forced every western tech companies to install backdoors and malwares on their equipments,
except Huawei. They have tried to force Huawei to install those NSA backdoors and malwares,
in 2014, but the company categorically refused.
"The real issue is that nothing has changed since a 2014 report from The Register that
Huawei categorically refuses to install NSA backdoors into their hardware to allow unfettered
intelligence access to the data that crosses their networks.
All our emails, text messages, phone calls, internet searches, web browsing, library
records, . . . etc, are recorded and stored by NSA/CIA's vast servers farms.
Now, Huawei is not only the leading 5G wireless provider, but it is the only one, so far.
The other companies like Nokia and Ericsson are far behind.
5G is going to completely replace 4G and 3G. It is about 200 times faster than 4GLTE, in
download speed.
What this means is that if the world adopts the Huawei equipments and standards, it will
threaten to UNDO the US Dark State's vast global surveillance network.
This is what terrifies the US Dark State. Their vast Global Surveillance Network is the
basis of its power, and tools to enslave mankind.
There is a very good reason, why the American Founding Fathers , enacted every measures,
to protect our rights and privacy, so that we will not be controlled and enslaved by the
tyranny of totalitarian government, which is already upon us, in the form of US Dark
State/War State .
The US Dark State/Deep State/War State does not represent America. It is Un-American. It
is not the American Republic founded by our Founding Fathers, and enshrined in the US
Constitution.
Maybe so, Asoka. I think the Rothschild Clan plays both sides. They are in China. Some
purport the family carrying that lineage is named Li.
The U.S. is slowly but surely being isolated for The Great Fall...when we lose world
currency status. The Banking Cartel will evidently make huge money and gain enormous power
once the U.S. collapses. China already has the massive surveillance state, lack of privacy,
institutionalized social scoring, and workers' living cubes located on factory premises...so
the Rothshilds are in love. Sigh. So much control!! So much degradation!!! They're in
love!!!
"I think the Rothschild Clan plays both sides. They are in China. Some purport the family
carrying that lineage is named Li."
They are trying hard to infiltrate China. But the Chinese banks and financial service
firms are State Owned . They are hard penetrate. That is why they are using Donald *** Trump
to launch the Mother of All Great Trade War , to force the Chinese to open up their financial
sector for infiltration and plundering.
Plus, Chinese and westerner looks distinctively different. And so, they are trying the
inter-marriage trick with the rich and powerful Chinese families.
"... More generally, I think AI gets far too much of the billing in authoritarian apocalypse forecasts. Cheap, ubiquitous cameras, microphones, and location trackers are the real issue. If the state can track everyone's movements and conversations, then it can build a better Stasi even with crude, simple ai. ..."
The theory behind this is one of strength reinforcing strength – the strengths of
ubiquitous data gathering and analysis reinforcing the strengths of authoritarian repression to
create an unstoppable juggernaut of nearly perfectly efficient oppression. Yet there is another
story to be told – of weakness reinforcing weakness. Authoritarian states were always
particularly prone to the deficiencies identified in James Scott's Seeing Like a State
– the desire to make citizens and their doings legible to the state, by
standardizing and categorizing them, and reorganizing collective life in simplified ways, for
example by remaking cities so that they were not organic structures that emerged from the
doings of their citizens, but instead grand chessboards
with ordered squares and boulevards, reducing all complexities to a
square of planed wood . The grand state bureaucracies that were built to carry out these
operations were responsible for multitudes of horrors, but also for the crumbling of the
Stalinist state into a Brezhnevian desuetude, where everyone pretended to be carrying on as
normal because everyone else was carrying on too. The deficiencies of state action, and its
need to reduce the world into something simpler that it could comprehend and act upon created a
kind of feedback loop, in which imperfections of vision and action repeatedly reinforced each
other.
So what might a similar analysis say about the marriage of authoritarianism and machine
learning? Something like the following, I think. There are two notable problems with machine
learning. One – that while it can do many extraordinary things, it is not nearly as
universally effective as the mythology suggests. The other is that it can serve as a magnifier
for already existing biases in the data. The patterns that it identifies may be the product of
the problematic data that goes in, which is (to the extent that it is accurate) often the
product of biased social processes. When this data is then used to make decisions that may
plausibly reinforce those processes (by singling e.g. particular groups that are regarded as
problematic out for particular police attention, leading them to be more liable to be arrested
and so on), the bias may feed upon itself.
This is a substantial problem in democratic societies, but it is a problem where there are
at least some counteracting tendencies. The great advantage of democracy is its openness to
contrary opinions and divergent perspectives . This opens up democracy to a specific set of
destabilizing attacks but it also means that there are countervailing tendencies to
self-reinforcing biases. When there are groups that are victimized by such biases, they may
mobilize against it (although they will find it harder to mobilize against algorithms than
overt discrimination). When there are obvious inefficiencies or social, political or economic
problems that result from biases, then there will be ways for people to point out these
inefficiencies or problems.
These correction tendencies will be weaker in authoritarian societies; in extreme versions
of authoritarianism, they may barely even exist. Groups that are discriminated against will
have no obvious recourse. Major mistakes may go uncorrected: they may be nearly invisible to a
state whose data is polluted both by the means employed to observe and classify it, and the
policies implemented on the basis of this data. A plausible feedback loop would see bias
leading to error leading to further bias, and no ready ways to correct it. This of course, will
be likely to be reinforced by the ordinary politics of authoritarianism, and the typical
reluctance to correct leaders, even when their policies are leading to disaster. The flawed
ideology of the leader (We must all study Comrade Xi thought to discover the truth!) and of the
algorithm (machine learning is magic!) may reinforce each other in highly unfortunate ways.
In short, there is a very plausible set of mechanisms under which machine learning and
related techniques may turn out to be a disaster for authoritarianism, reinforcing its
weaknesses rather than its strengths, by increasing its tendency to bad decision making, and
reducing further the possibility of negative feedback that could help correct against errors.
This disaster would unfold in two ways. The first will involve enormous human costs:
self-reinforcing bias will likely increase discrimination against out-groups, of the sort that
we are seeing against the Uighur today. The second will involve more ordinary self-ramifying
errors, that may lead to widespread planning disasters, which will differ from those described
in Scott's account of High Modernism in that they are not as immediately visible, but that may
also be more pernicious, and more damaging to the political health and viability of the regime
for just that reason.
So in short, this conjecture would suggest that the conjunction of AI and authoritarianism
(has someone coined the term 'aithoritarianism' yet? I'd really prefer not to take the blame),
will have more or less the opposite effects of what people expect. It will not be Singapore
writ large, and perhaps more brutal. Instead, it will be both more radically monstrous and more
radically unstable.
Like all monotheoretic accounts, you should treat this post with some skepticism –
political reality is always more complex and muddier than any abstraction. There are surely
other effects (another, particularly interesting one for big countries such as China, is to
relax the assumption that the state is a monolith, and to think about the intersection between
machine learning and warring bureaucratic factions within the center, and between the center
and periphery).Yet I think that it is plausible that it at least maps one significant set of
causal relationships, that may push (in combination with, or against, other structural forces)
towards very different outcomes than the conventional wisdom imagines. Comments, elaborations,
qualifications and disagreements welcome.
Ben 11.25.19 at 6:32 pm (no link)
This seems to equivocate between two meanings of bias. Bias might mean a flaw that leads to
empirically incorrect judgements and so to bad decisions, and it's true that that type of
bias could destabilize an authoritarian state. But what we usually worry about with machine
learning is that the system will find very real, but deeply unjust, patterns in the data, and
reinforce those pattern. If there's a particular ethnic group that really does produce a
disproportionate number of dissidents, and an algorithm leads to even-more-excessive
repression of that group -- I'm not sure why an authoritarian state would see a stability
threat in that tendency.
More generally, I think AI gets far too much of the billing in authoritarian
apocalypse forecasts. Cheap, ubiquitous cameras, microphones, and location trackers are the
real issue. If the state can track everyone's movements and conversations, then it can build
a better Stasi even with crude, simple ai.
I'd just like to point out (re: the tweet in the original post) that the "Uighur
face-matching AI" idea is bullshit invented by scaremongers, with no basis in fact and
traceable to a shoddy reddit thread. The Chinese government is not using facial recognition
to identify Uighur, and the facial recognition fears about the Chinese government are vastly
overstated.
Australia's border control facial recognition software is far more advanced than
China's, as is the UK's, and facial recognition is actually pretty common in democracies. See
e.g. the iPhone.
The main areas in which China uses facial recognition are in verifying ID for some high
cost functions (like buying high speed rail tickets), and it's quite easy to avoid these
functions by joining a queue and paying a human. The real intrusiveness of the Chinese
security state is in its constant bag searches and very human-centric abuses of power in
everyday life in connection with "security". Whether you get stopped and searched depends a
lot on very arbitrary and error prone judgments by bored security staff at railway stations,
in public squares, and on buses, not some evil intrusive state technology.
Conversely, the UK is a world leader in installing and using CCTV cameras, and has been
for a long time. Furthermore, these CCTV cameras are a huge boon to law-abiding citizens,
since they act as both excellent forms of crime prevention (I have had this experience
myself) and for finding serious criminals. The people responsible for the death of those 39
Vietnamese labourers in the ice truck were caught because of CCTV; so was the guy who
murdered that woman on the street in Melbourne a few years ago.
Finally to address another point that's already been raised (sadly): China no longer
harvests organs, and the 2019 report that says it does is a sham. The social credit system is
also largely a myth, and nobody from China even seems to know wtf it is.
If you're going to talk about how state's work, and the relative merits of autocratic vs.
democratic states and their interaction with technology, it's a really good idea to get the
basic facts right first.
Nathanael 11.26.19 at 6:10 am (no link)
I'll add that John Quiggin's point that Xi has already lost control of the provinces is
correct -- but it DOES threaten his position as dictator. Once the provincial governors know
they can act with impunity, it is absolutely standard for the next step to be getting rid of
that annoying guy who is pretending to be dictator. It may take a few years but Xi now has
dozens of powerful insiders who know that he's a weakling. They'll bide their time but when
he crosses too many of them they'll take him out. And if China doesn't shut down coal, he's
going to look like a weakling internationally too, in a couple of years. This will create a
new group of ambitious insiders with a different reason to take him out.
Xi broke the "technocratic consensus" which was present after Deng, of central committee
members who strove for competence and fact-based decision-making. That was a surprisingly
effective type of junta government which led to lots of thinkpieces about whether
authoritarian China would beat the democratic west. But it succumbed to the succession
problem, like all authoritarian systems; Xi made himself Premier-for-life and the country is
now exhibiting all the usual failures of authoritarian countries.
Hidari 11.26.19 at 9:08 am (no link)
@11 Yes it's strange that allegations of Chinese use of facial recognition software is
gaining so much traction at a time when the Trump regime is deliberately ratcheting up
tensions with China to pursue nakedly imperial goals, when the objective facts of Israeli use
of similar software, which the Israelis boast about (
https://www.nbcnews.com/news/all/why-did-microsoft-fund-israeli-firm-surveils-west-bank-palestinians-n1072116
) doesn't cause so much interest, at a time when the Trump regime has simple decreed that the
Israeli invasion/colonisation of Palestine is 'legal under international law'.
One of life's little mysteries I guess.
If we must talk about China could we at least bring it back to areas where we are
responsible and where, therefore, we can do something about it?
So in due course the trade war was replaced by the full scale cold war.
Notable quotes:
"... Needless to say, no differences will be "settled amicably" and now China will have no choice but to retaliate, aggressively straining relations with the US, and further complicating Trump's effort to wind down his nearly two-year old trade war with Beijing. ..."
"... The legislation, S. 1838, which was passed virtually unanimously in both chambers, requires annual reviews of Hong Kong's special trade status under American law and will allow Washington to suspend said status in case the city does not retain a sufficient degree of autonomy under the "one country, two systems" framework. The bill also sanctions any officials deemed responsible for human rights abuses or undermining the city's autonomy. ..."
"... The House cleared the bill 417-1 on Nov. 20 after the Senate passed it without opposition, veto-proof majorities that left Trump with little choice but to acquiesce, or else suffer bruising fallout from his own party. the GOP. ..."
"... In accordance with the law, the Commerce Department will have 180 days to produce a report examining whether the Chinese government has tried use Hong Kong's special trading status to import advanced "dual use" technologies in violation of US export control laws. Dual use technologies are those that can have commercial and military applications. ..."
"... The new law directs the US secretary of state to "clearly inform the government of the People's Republic of China that the use of media outlets to spread disinformation or to intimidate and threaten its perceived enemies in Hong Kong or in other countries is unacceptable." ..."
"... The state department should take any such activity "into consideration when granting visas for travel and work in the United States to journalists from the People's Republic of China who are affiliated with any such media organizations", the law says. ..."
"... Yes I think getting the western financial institutions out of HK is the plan. I'm sure they appreciate the US doing this for them, but of course they could never admit that. ..."
Less than an hour after Trump once again paraded with yet another all-time high in the
S&P...
... and on day 510 of the trade war, it appears the president was confident enough that a
collapse in trade talks won't drag stocks too far lower, and moments after futures reopened at
6pm, the White House said that Trump had signed the Hong Kong bill backing pro-democracy
protesters, defying China and making sure that every trader's Thanksgiving holiday was just
ruined.
In a late Wednesday statement from the White House, Trump said that:
I signed these bills out of respect for President Xi, China, and the people of Hong Kong.
They are being enacted in the hope that Leaders and Representatives of China and Hong Kong
will be able to amicably settle their differences leading to long term peace and prosperity
for all.
Needless to say, no differences will be "settled amicably" and now China will have no
choice but to retaliate, aggressively straining relations with the US, and further complicating
Trump's effort to wind down his nearly two-year old trade war with Beijing.
Trump's signing of the bill comes during a period of unprecedented unrest in Hong Kong,
where anti-government protests sparked by a now-shelved extradition bill proposal have
ballooned into broader calls for democratic reform and police accountability.
"The Hong Kong Human Rights and Democracy Act reaffirms and amends the United States-Hong
Kong Policy Act of 1992, specifies United States policy towards Hong Kong and directs
assessment of the political developments in Hong Kong," the White House said in a statement.
"Certain provisions of the act would interfere with the exercise of the president's
constitutional authority to state the foreign policy of the United States."
The legislation, S. 1838, which was passed virtually unanimously in both chambers,
requires annual reviews of Hong Kong's special trade status under American law and will allow
Washington to suspend said status in case the city does not retain a sufficient degree of
autonomy under the "one country, two systems" framework. The bill also sanctions any officials
deemed responsible for human rights abuses or undermining the city's autonomy.
The House cleared the bill 417-1 on Nov. 20 after the Senate passed it without
opposition, veto-proof majorities that left Trump with little choice but to acquiesce, or else
suffer bruising fallout from his own party. the GOP.
Trump also signed into law the PROTECT Hong Kong act, which will prohibit the sale of
US-made munitions such as tear gas and rubber bullets to the city's authorities.
While many members of Congress in both parties have voiced strong support for protesters
demanding more autonomy for the city, Trump had stayed largely silent, even as the
demonstrations have been met by rising police violence.
Until now.
The bill's author, Senator Marco Rubio of Florida, said that with the legislation's
enactment, the US now had "new and meaningful tools to deter further influence and interference
from Beijing into Hong Kong's internal affairs."
In accordance with the law, the Commerce Department will have 180 days to produce a
report examining whether the Chinese government has tried use Hong Kong's special trading
status to import advanced "dual use" technologies in violation of US export control laws. Dual
use technologies are those that can have commercial and military applications.
One other less discussed but notable provision of the Hong Kong Human Rights Act targets
media outlets affiliated with China's government. The new law directs the US secretary of
state to "clearly inform the government of the People's Republic of China that the use of media
outlets to spread disinformation or to intimidate and threaten its perceived enemies in Hong
Kong or in other countries is unacceptable."
The state department should take any such activity "into consideration when granting
visas for travel and work in the United States to journalists from the People's Republic of
China who are affiliated with any such media organizations", the law says.
* * *
In the days leading up to Trump's signature, China's foreign ministry had urged Trump to
prevent the legislation from becoming law, warning the Americans not to underestimate China's
determination to defend its "sovereignty, security and development interests."
"If the U.S. insists on going down this wrong path, China will take strong countermeasures,
" said China's foreign ministry spokesman Geng Shuang at a briefing Thursday in Beijing. On
Monday, China's Vice Foreign Minister Zheng Zeguang summoned the U.S. ambassador, Terry
Branstad to express "strong opposition" to what the country's government considers American
interference in the protests, including the legislation, according to statement. The new U.S.
law comes just as Washington and Beijing showed signs of working toward "phase-one" of deal to
ease the trade war. Trump would like the agreement finished in order to ease economic
uncertainty for his re-election campaign in 2020, and has floated the possibility of signing
the deal in a farm state as an acknowledgment of the constituency that's borne the brunt of
retaliatory Chinese tariffs.
Last week China's Vice Premier and chief trade negotiator Liu He said before a speech at the
Bloomberg New Economy Forum in Beijing, that he was "cautiously optimistic" about reaching the
phase one accord. He will now have no choice but to amend his statement.
In anticipation of a stern Chinese rebuke, US equity futures tumbled, wiping out most of the
previous day's gains... Still, the generally modest pullback - the S&P was around 2,940
when Trump announced the Phase 1 deal on Oct 11 - suggests that despite Trump's signature,
markets expect a Chinese deal to still come through. That may be an aggressive and overly
"hopeful" assumption, especially now that China now longer has a carte blanche to do whatever
it wants in Hong Kong, especially in the aftermath of this weekend's
landslide victory for the pro-Democracy camp which won in 17 of the city's 18
districts.
"Following last weekend's historic elections in Hong Kong that included record turnout, this
new law could not be more timely in showing strong US support for Hongkongers' long-cherished
freedoms," said Rubio
This is another attempt by the US to stop BRICS. They care NOTHING about HK, only its
usefulness in the US war on Chinas growing importance in world trade.
but no no no... trading with communists brings jobs to sell cheap crap. oh what was I
thinking.... cheap crap, jobs, and the richest of the rich get richer... my bad.
it ain’t like the commies are going to use the money to build up their military..
Of course the obvious solution is to just let people choose whatever or whomever they want
to associate with and be respected and left alone for their choice.
But no. We all have to live and abide by the wishes of other people bcuz of "unity" and
****.
Eh guys, you still do not understand that all this (not only China and Hong Kong) is a
very big "elite" performance for ordinary people to keep you (the rest of the boobies) in
subjection. It's like in boxing - contractual fights. Do you think world "elites" benefit
from peace and order? You are mistaken - these guys have the world as death (the death of
their Power and their Control). An example from the history of Europe - in the 18-19 and
early 20th century, Europe only did what it fought. But the funny thing is that the monarchs
(the real owners of Europe) were relatives among themselves. The First World War was
popularly called “The War of Three Cousins” (English monarch, German Kaiser and
Russian emperor). But the Europeans paid for the dismantling of relatives. Now the "monarchs"
are bankers and your position has not changed, you changed only the owners after 1918.
Problem with Hong Kong is, it is dependent on China to survive. That is not only true for
the most basic neccessities, but also as a port for international trade. However, in the last
25 years, Shenzhen and Guangzhou have built up their own trade hubs, which has pulled trade
away from being concentrated in Hong Kong, and consequently more dependent on China. Our
ideas of Hong Kong remaining an independent island nation isn't going to work for three
reasons:
1. Without being a doorway to China, there is no other reason for its existence.
2. Hong Kong is indeed Chinese sovereign territory, that was taken away from it to be made
into a trade colony by the British in 1841, under the Treaty of Nanking. The British gave up
Hong Kong in 1997, under the 1984 signed Sino-British Joint Declaration, in which Britain
agreed to return not only the New Territories but also Kowloon and Hong Kong itself. China
promised to implement a "One Country, Two Systems" regime, under which for fifty years Hong
Kong citizens could continue to practice capitalism and political freedoms forbidden on the
mainland. So, when the year 2047 comes around, Hong Kong will be fully absorbed and
integrated in a One Country, One system Chinese regime. In otherwords, Hong Kong's fate was
already sealed in 1984, and there is nothing America can legally do about it.
3. Hong Kong still needs the basic neccessities from China to survive. Don't count on
either the British or the Americans to provide it.
Yes I think getting the western financial institutions out of HK is the plan. I'm sure
they appreciate the US doing this for them, but of course they could never admit
that.
Xi Jinping tells that bullshit little story about China's 5,000 year History, but the truth
is really much more pragmatic: China doesn't aim to be an empire for the simple reason it
learned from America's mistakes.
The CCP already knows that being the sole superpower is unsustainable and, in the medium
term, goes even against its main objective, which is to establish a "moderately prosperous
society" in China until 2030 (they consider the 2000s Belgium as the standard for "moderately
prosperous").
Socialist China has shown, so far, an incredible capacity of learning from other nations'
mistakes:
1) It correctly read the historical conjuncture of the late 1960s, by concluding that the
historical cycle of socialist revolutions was over, and moved on to try to break the Cold War
embargo in order to initiate a cycle of wealth production. They achieved that in 1972. This was
when Mao Zedong was still alive and commanding China with absolute authority, so it's a myth
China "freed itself" only when and because Mao died (1976);
2) It learned from the failed experiment of the Brazilian liberal dictatorship, by doing
exactly the opposite of the Zona Franca de Manaus . The result was the creation of the
Special Economic Zones, which allowed capitalist investment from abroad to come to China but in
quarentene, and with technological transfer.
3) It learned from the trap the USSR fell, and used a peaceful geopolitical strategy. It
avoided an arms race and was able to expand its allied nations portfolio and slowly tightened
its grip over the American economy.
4) It learned from the the failure of Soviet socialism in producing very good quality
consumer goods. It solved this problem by "opening up" for capitalist exploitation the sectors
which produced and distributed consumer goods, without affecting the strategic sectors
(defense, finance, natural resources, etc.).
5) It learned from the failure of the American empire of maintaining its status as the
world's "lonely superpower" by not adopting a war culture in China and by being more tolerant
with its neighbors. But that didn't mean they didn't consolidated position: military spending
continues to go up and the Armed Forces continues to be modernized and under firm CCP control.
The South China Sea is a "corridor of life" for the Chinese, so the CCP quickly, but in a
peaceful manner, took control of it, very aware that it would probably cost the Vietnamese
friendship. But that was the exception that proves the rule, an exceptional situation where the
benefits were greater than the costs.
This isn't the only
article I've read over the past several days suggesting China won't agree to a trade deal
anytime soon. The following are amongst the reasons why:
"China's trade has gradually steadied as the nation moves to explore third markets. 'A
substantial decline in trade and a drastic fall in economic growth which some international
observers were worried about didn't occur, pointing to the potential and resilience of the
Chinese economy,' he went on to say.
"The US, for its part, has seen its current account deficit as a percentage of GDP shoot
up from 2.9 percent to 3.2 percent. This suggests the trade war is failing to address the
issue of the US' current account deficit, stressed Zhu, who is currently the Chairman of the
National Institute of Financial Research at Tsinghua University. He added that, more
worryingly, tariffs mean additional costs are put on US companies and consumers."
Evil Outlaw US Empire planners in their hubristic zeal to decouple from China's economy
erred massively in thinking China would be the one harmed and come begging for a trade deal.
Instead, China's geoeconomic strategy is clearly working and is more potent than what the
Empire can bring to the table--Oops! China can now play Trump.
psychohistorian 63
I see Trump's envoy Kissinger is standing next to Xi. Seems like Trump is trying to cook
something up with Kissinger regularly on the scene when it comes to Russia and China.
Interesting that Kissinger is there . Steve Pieczenik takes the very strong view
that Pompeo is a dead man walking. Worth every second of his five minute discourse . What I like
about Steve and his various takes on people of note is that he assassinates them immediately
and intensely with a quick turn of phrase.
Kissinger was also Nixon's envoy. He engineered the split between China and the Soviet
Union amongst other things. China and Russia's current leadership though may be above
Kissinger's pay grade.
Numbers show joke is on the US, not Huawei US ban lit a fire under Huawei, seen
taking lead in smartphones and awash in cash as bonds trade at a premium
By Umesh Desai
Unlisted Chinese telecommunications giant Huawei Technologies was made an international
pariah by US regulators earlier this year after a ban on buying key parts and on access to
crucial markets.
You think that sounded the death knell for the company? Think again.
This week, Huawei announced a US$286 million
bonuses bonanza to its employees . Its bonds continue to trade above par, and its cash
balances are massive. Hardly the signs of a company struggling under sanctions.
The company has repeatedly denied US allegations that it is a front for the Chinese
government – the justification Washington cited for banning US companies from using
Huawei-manufactured gear.
Huawei is the world's biggest telecom equipment maker and it's the second biggest smartphone
maker.
According to data from International Data Corporation, smartphone shipments in the
July-September quarter rose 18.6% to 66.6 million, just behind global leader Samsung's 78.2
million.
"Huawei has been gaining market share in China and overseas despite US trade war frictions
and may become the leading smartphone maker in the next two quarters," said Nitin Soni,
director of corporate ratings at Fitch Ratings.
He said telcos across emerging markets, which are facing capital expenditure pressures
and limited 5G business viability in the short term, may be willing to buy Huawei's 5G
equipment given it is cheaper and has better technology than European counterparts.
It's not just Soni. Industry leaders also acknowledge Huawei's quality standards
.
Indian telco Bharti Enterprises' chairman Sunil Mittal said recently, for example, "I can
safely say their products in 3G and 4G that we have experienced are significantly superior to
Ericsson and Nokia. I use all three of them. "
Indeed, the bond-market performance of the unrated, unlisted company confirms Huawei's
strength. Its dollar-denominated bonds traded in global markets are changing hands at above
par, indicating bond investors are confident about the company's cash position and liquidity
situation.
Its bonds due 2025, which pay a coupon of 4.125%, are trading at a price of $104 while the
holder would only get $100 at maturity. The premium would be compensated by the annual coupon,
which would reduce the yield. The bonds are currently yielding 3.4% compared with the 4.25%
yield at the time of the issuance. In price terms the bonds have rallied from $99 in 2015 to
$104. Prices move inversely to yields.
The financial highlights also betray no signs of weakness. The company has a cash hoard of
$39 billion and generates $10 billion from operations each year.
So, in fact, the US ban on Huawei may be helping the company.
"A ban on US companies such as Google to supply software to Huawei may lead to faster
innovation by Huawei to develop its own operating system and chips," said Soni.
America's misguided war on Chinese technology By Jeffrey D Sachs November 8,
2019
The worst foreign-policy decision by the United States of the last generation – and
perhaps longer – was the "war of choice" that it launched in Iraq in 2003 for the stated
purpose of eliminating weapons of mass destruction that did not, in fact, exist. Understanding
the illogic behind that disastrous decision has never been more relevant, because it is being
used to justify a similarly misguided US policy today.
The decision to invade Iraq followed the illogic of then-US vice-president Richard Cheney,
who declared that even if the risk of WMD falling into terrorist hands was tiny – say, 1%
– we should act as if that scenario would certainly occur.
Such reasoning is guaranteed to lead to wrong decisions more often than not. Yet the US and
some of its allies are now using the Cheney Doctrine to attack
Chinese technology. The US government argues that because we can't know with certainty that
Chinese technologies are safe, we should act as if they are certainly dangerous and bar
them.
Proper decision-making applies probability estimates to alternative actions. A generation
ago, US policymakers should have considered not only the (alleged) 1% risk of WMD falling into
terrorist hands, but also the 99% risk of a war based on flawed premises. By focusing only on
the 1% risk, Cheney (and many others) distracted the public's attention from the much greater
likelihood that the Iraq war lacked justification and that it would gravely destabilize the
Middle East and global politics.
The problem with the Cheney Doctrine is not only that it dictates taking actions predicated
on small risks without considering the potentially very high costs. Politicians are tempted to
whip up fears for ulterior purposes.
That is what US leaders are doing again: creating a panic over Chinese technology companies
by raising, and exaggerating, tiny risks. The most pertinent case (but not the only one) is the
US government attack on the wireless broadband company Huawei. The US is closing its markets to
the company and trying hard to shut down its business around the world. As with Iraq, the US
could end up creating a geopolitical disaster for no reason.
I have followed Huawei's technological advances and work in developing countries, as I
believe that fifth-generation (5G) and other digital technologies offer a huge boost to ending
poverty and other Sustainable Development Goals. I have similarly interacted with other telecom
companies and encouraged the industry to step up actions for the United Nations' SDGs. When I
wrote a short foreword (without compensation) for a
Huawei report on the topic, and was criticized by foes of China, I asked top industry and
government officials for evidence of wayward activities by Huawei. I heard repeatedly that
Huawei behaves no differently than trusted industry leaders.
The US government nonetheless argues that Huawei's 5G equipment could undermine global
security. A "back door" in Huawei's software or hardware, US officials claim, could enable the
Chinese government to engage in surveillance around the world. After all, US officials note,
China's laws require Chinese companies to cooperate with the government for purposes of
national security.
Given the technology's importance for their sustainable development, low-income economies
around the world would be foolhardy to reject an early 5G rollout. Yet despite providing no
evidence of back doors, the US is telling the world to stay away from Huawei
Now, the facts are these. Huawei's 5G equipment is low-cost and high-quality, currently
ahead of many competitors, and already rolling out. Its high performance results from years of
substantial spending on research and development, scale economies, and learning by doing in the
Chinese digital marketplace. Given the technology's importance for their sustainable
development, low-income economies around the world would be foolhardy to reject an early 5G
rollout.
Yet despite providing no evidence of back doors, the US is telling the world to stay away
from Huawei. The US claims are generic. As a US Federal Communications Commissioner
put it , "The country that owns 5G will own innovations and set the standards for the rest
of the world, and that country is currently not likely to be the United States." Other
countries, most notably the United Kingdom, have
found no back doors in Huawei's hardware and software. Even if back doors were discovered
later, they could almost surely be closed at that point.
The debate over Huawei rages in Germany, where the US government threatens to curtail
intelligence cooperation unless the authorities exclude Huawei's 5G technology. Perhaps as a
result of the US pressure, Germany's spy chief recently made a claim
tantamount to the Cheney Doctrine: "Infrastructure is not a suitable area for a group that
cannot be trusted fully." He offered no evidence of specific misdeeds. Chancellor Angela
Merkel, by contrast, is fighting
behind the scenes to leave the market open for Huawei.
Ironically, though predictably, the US complaints partly reflect America's
own surveillance activities at home and abroad. Chinese equipment might make secret
surveillance by the US government more difficult. But unwarranted surveillance by any
government should be ended. Independent UN monitoring to curtail such activities should become
part of the global telecommunications system. In short, we should choose diplomacy and
institutional safeguards, not a technology war.
The threat of US demands to blockade Huawei concerns more than the early rollout of the 5G
network. The risks to the rules-based trading system are profound. Now that the US is no longer
the world's undisputed technology leader, President Donald Trump and his advisers don't want to
compete according to a rules-based system. Their goal is to contain China's technological rise.
Their simultaneous attempt to neutralize the World Trade Organization by
disabling its dispute settlement system shows the same disdain for global rules.
If the Trump administration "succeeds" in dividing the world into separate technology camps,
the risks of future conflicts will multiply. The US championed open trade after World War II
not only to boost global efficiency and expand markets for American technology, but also to
reverse the collapse of international trade in the 1930s. That collapse stemmed in part from
protectionist tariffs imposed by the US under the 1930 Smoot-Hawley Act , which
amplified the Great Depression, in turn contributing to the rise of Adolf Hitler and,
ultimately, the outbreak of World War II.
In international affairs, no less than in other domains, stoking fears and acting on them,
rather than on the evidence, is the path to ruin. Let's stick to rationality, evidence and
rules as the safest course of action. And let us create independent monitors to curtail the
threat of any country using global networks for surveillance of or cyberwarfare on others. That
way, the world can get on with the urgent task of harnessing breakthrough digital technologies
for the global good.
The world's worst negotiating strategy is to give the other side everything they want in
exchange for worthless empty promises, yet this is exactly what Trump and his trade team are doing.
All
the Chinese trade team has to do to get rid of tariffs and other U.S. bargaining chips is mutter
some empty phrase about "agreeing in principle" and the U.S. surrenders all its bargaining chips.
If the other side are such naive chumps that they give you everything you want without
actually committing to anything remotely consequential, why bother with a formal agreement?
Just
play the other side for the chumps they are: if they threaten to reinstate tariffs, just issue
another worthless press release about "progress has been made."
The other guaranteed losing strategy in negotiation is advertise your own fatal
weakness, which in Trump's case is his obsession with pushing the U.S. stock market to new highs.
There
is no greater gift he could hand the Chinese trade team than this monumental weakness, for all they
have to do is talk tough and the U.S. stock market promptly tanks, sending the Trump Team into a
panic of appeasement and empty claims of "progress."
The Chinese team has gotten their way for a year by playing Trump's team as chumps and
patsies, so why stop now?
The Chinese know they can get way without giving anything away
by continuing to play the American patsies and using the president's obsession with keeping U.S.
stocks lofting higher to their advantage: declare the talks stalled, U.S. stocks crater, the
American team panics and rushes to remove anything that might have enforcement teeth, reducing any
"trade deal" to nothing but empty promises.
Given their success at playing America's team, why do a deal at all? Just play the
chumps for another year,
and maybe Trump will be gone and a new set of even more naive
patsies enter the White House.
If we put ourselves in the shoes of the Chinese negotiators, we realize there's no need
to sign a deal at all:
the Trump team has gone out of its way to make it needless for
China to agree to anything remotely enforceable. All the Chinese have to do is issue some stern
talk that crushes U.S. stocks and the Trump Team scurries back, desperate to appease so another
rumor of a "trade deal" can be issued to send U.S. stocks higher.
It would be pathetic if it wasn't so foolish and consequential.
"... Pompeo said the United States had long cherished its friendship with the Chinese people, adding the Communist government was not the same thing as the people of China. ..."
"... We are in a civilization war about the global social contract and whether sovereign public finance gets a chance to be compared against the Western centuries old private finance controlled world. ..."
"... The USA has been successful at bribing foreign leaders, taking them under their wing, and getting them to accept their place in the world order. They think they can do this with anybody. ..."
"... The US never really counts on foreign leaders taking their peoples interests at heart and standing up to the hegemon. As far as Pompeo goes this is classic projection. It is a sign they are losing and are worried about it. ..."
Below is a Reuters posting about Mike Pompeo presenting the public/private finance "dog
whistle" at a Hudson Institute think tank gala dinner....the pot calling the kettle
black.
"
WASHINGTON (Reuters) - U.S. Secretary of State Mike Pompeo on Wednesday stepped up recent
U.S. rhetoric targeting China's ruling Communist Party, saying Beijing was focused on
international domination and needed to be confronted.
Pompeo made the remarks even as the Trump administration said it still expected to sign
the first phase of deal to end a damaging trade war with China next month, despite Chile's
withdrawal on Wednesday as the host of an APEC summit where U.S. officials had hoped this
would happen.
Pompeo said the United States had long cherished its friendship with the Chinese people,
adding the Communist government was not the same thing as the people of China.
"They are reaching for and using methods that have created challenges for the United
States and for the world and we collectively, all of us, need to confront these challenges
... head on," Pompeo said in an address to a gala dinner in New York of the conservative
Hudson Institute think tank.
"It is no longer realistic to ignore the fundamental differences between our two systems,
and the impact that the differences in those systems have on American national security."
"
I posted the above about 6 hours ago on the Weekly Open thread and now get up to read that
the financial markets are down and Trump is tweeting that it is the Fed's fault for not
lowering rates even further even though there are a couple of ZH postings that refer to
China's response to Pompeo's remarks as offensive and maybe a trade deal won't get
signed...
We are in a civilization war about the global social contract and whether sovereign public
finance gets a chance to be compared against the Western centuries old private finance
controlled world.
Haha. The fight is an old one. Who is to be master and who is to be slave. China was supposed to happily be the world's
cheap manufacturer and not get too big for its britches. The USA has been successful at bribing foreign leaders, taking
them under their wing, and getting them to accept their place in the world order. They think they can do this with anybody.
They think every leader is a budding Lenin Moreno or that they can arrange a coup and force into office another Lenin
Moreno. Russia, China, and India will not allow it.
All have at one time or another (Russia quite recently) been under the heel of Western empire. All have old and proud
civilizations.
The US never really counts on foreign leaders taking their peoples interests at heart and standing up to the hegemon.
As far as Pompeo goes this is classic projection. It is a sign they are losing and are worried about it.
Chinese Patriotism: Huawei Smartphone Sales Jump 66% In China As Apple iPhone Sales Slump
by
Tyler Durden
Wed, 10/30/2019 - 13:50
0
SHARES
We're starting to get first-hand knowledge of what we're coining as the
"
blowback
period
"
in the trade war. This is a point in time when Chinese consumers, downright
furious of President Trump's protectionist policies that targeted Chinese companies over the
summer, have collectively stood up to an aggressor (the US), and have
secretly fired back,
targeting US firms by abandoning their products for domestic ones, all in the name of patriotism.
Honestly, over time, the trade war, if solved next month or next year, or who knows at this point
when it'll be solved, will have devastating consequences for corporate America as their market
share in China will erode as patriotism forces consumers to gravitate towards domestic brands.
A new report from
Canalys
, an
independent research firm focused on technology, has linked patriotism in China for the jump in
Huawei smartphone sales in the third quarter.
Huawei's 3Q19 smartphone sales soared by 66% YoY in China
, compared with a 31%
increase in 2Q19.
Between 2Q-3Q, President Trump escalated the trade war to near full-blown, and also attacked
individual companies with economic sanctions and banned certain ones from doing business in the US.
Chinese consumers responded by
ditching American products, like Apple iPhones
, as
this is some of the first evidence we've seen of the blowback period, likely to worsen in 4Q19
through 1Q20.
As shown in the chart below, the July-September period of 2019 was a devastating quarter for
Huawei's top rivals, including Vivo, Oppo, Xiaomi (other Chinese brands), along with depressing
sales from Apple.
Smartphone shipments overall were 97.8 million, down 3% from 100.6 million for the same period
last year.
Apple's YoY slump gained momentum from -14% in 2Q to -28% for 3Q
.
Chinese patriotism
allowed Huawei's market share in the country to expand from
24.9% to 42.4% over the past year.
Canalys analyst Mo Jia said, "The U.S.-China trade war is also creating new opportunities,"
adding that, "
Huawei's retail partners are rolling out advertisements to link Huawei with
being the patriotic choice, to appeal to a growing demographic of Chinese consumers willing to take
political factors into account when making a purchase decision.
"
The blowback period has begun, and corporate America should be terrified that their market share
in China is about to evaporate.
"As I have stated strongly before, and just to reiterate, if Turkey does anything that
I, in my great and unmatched wisdom, consider to be off limits, I will totally destroy
and obliterate the Economy of Turkey
(I've done before!)
"
Donald J. Trump
"China uses a host of monopolizing strategies to extend its geopolitical and commercial
power, everything from below cost pricing to grab market share, patent trolling,
espionage, mergers, and financial manipulation. In fact, the CCP is best understood as
a giant monopoly that also controls a nation of 1.4 billion people and a large military
apparatus...
China's biggest asset in gaining power was how most people in the West just didn't
realize that the CCP aimed to use it. Now China's cover is blown. The raw exercise of
power to censor a random Houston Rockets basketball executive has made millions of
people take notice. Everyone knows, the Chinese government isn't content to control its
own nation, it must have all bow down to its power and authority.
Matt overstates the headline I think. The empowerment of China may have gone into higher
gear with Bill Clinton perhaps, but has been fully supported by every President, both
parties, and especially the moneyed interests in the US, who place their short term greed
first and foremost.
Follow the money. China is certainly not alone among organizations, and even nations, in
playing on the personal greed, divided loyalties, and lust for power of our political and
financial class.
This in itself is nothing new. But the extent of it, and the fashionable acceptance of it
amongst our society's elites, the industrialization of political corruption and big money
in politics, has been breathtaking.
That looks like vast and generally incorrect exaggeration. While China mode substantial
progress in catching up with the West, the technology is still dominated by the West.
But as technological revolution is slowing down and in some areas coming to the end (die size
in semiconductors in one example; it is impossible to shrink it further; smartphones reached
saturation level, and hardware wise their capabilities are far above what a regular user needs or
wants) it is easier for other countries to catch up.
In any case, the main reason for trade war with China is to try to slow down its
ascendance.
The problem for China is that China converted to neoliberalism, and as such (like Russia) is
subject to all the ills the neoliberal society tend to bring into the country. Including a very
high level of inequality.
And while backlash against neoliberalism is growing and in the USA
neoliberalism entered a prolong crisis with secular stagnation as the "new normal" , the question
is what is that alternative ? And while backlash against neoliberalism is growing and in the USA
neoliberalism entered a prolong crisis with secular stagnation as the "new normal" , the question
is what is that alternative ?
Notable quotes:
"... Precisely! The war against the Soviet Union was hardly a war for economic survival of the United States. It was an ideological battle, which the United States, unfortunately won, because it utilized both propaganda and economic terror (the arms race and other means). ..."
"... Now, China is next on the list, and the White House is not even trying to hide it. But China is savvy. It is beginning to understand the game. And it is ready, by all means, to defend the system which has pulled almost all its citizens out of misery, and which could, one day soon, do the same for the rest of the world. ..."
"... China has more problems than the United States. Taiwan, Tibet, Hong Kong, persecuting Uyghurs in Xinjiang, Indonesia and Malaysia because of Islam, Inner Mongolia separatists, Kashmir and India, USA trade pressure, Japan and South Korea are competitors. ..."
It is very popular these days to talk and write about the "trade war" between the United
States and China. But is there really one raging? Or is it, what we are witnessing, simply a
clash of political and ideological systems : one being extremely successful and optimistic, the
other depressing, full of dark cynicism and nihilism?
In the past, West used to produce almost everything. While colonizing the entire planet (one
should just look at the map of the globe, between the two world wars), Europe and later the
United States, Canada and Australia, kept plundering all the continents of natural resources,
holding hundreds of millions of human beings in what could be easily described as 'forced
labor', often bordering on slavery.
Under such conditions, it was very easy to be 'number one', to reign without competition,
and to toss around huge amounts of cash, for the sole purpose of indoctrinating local and
overseas 'subjects' on topics such as the 'glory' of capitalism, colonialism (open and hidden),
and Western-style 'democracy'.
It is essential to point out that in the recent past, the global Western dictatorship (and
that included the 'economic system) used to have absolutely no competition. Systems that were
created to challenge it, were smashed with the most brutal, sadistic methods. One only needs
recall invasions from the West to the young Soviet Union, with the consequent genocide and
famines. Or other genocides in Indochina, which was fighting its wars for independence, first
against France, later against the United States.
*
Times changed. But Western tactics haven't.
There are now many new systems, in numerous corners of the world. These systems, some
Communist, others socialist or even populist, are ready to defend their citizens, and to use
the natural resources to feed the people, and to educate, house and cure them.
No matter how popular these systems are at home, the West finds ways to demonize them, using
its well-established propaganda machinery. First, to smear them and then, if they resist, to
directly liquidate them.
As before, during the colonial era, no competition has been permitted. Disobedience is
punishable by death.
Naturally, the Western system has not been built on excellence, hard work and creativity,
only. It was constructed on fear, oppression and brutal force. For centuries, it has clearly
been a monopoly.
*
Only the toughest countries, like Russia, China, Iran, North Korea or Cuba, have managed to
survive, defending they own cultures, and advancing their philosophies.
To the West, China has proved to be an extremely tough adversary.
With its political, economic, and social system, it has managed to construct a
forward-looking, optimistic and extraordinarily productive society. Its scientific research is
now second to none. Its culture is thriving. Together with its closest ally, Russia, China
excels in many essential fields.
That is precisely what irks, even horrifies the West.
For decades and centuries, Europe and the United States have not been ready to tolerate any
major country, which would set up its own set of rules and goals.
China refuses to accept the diktat from abroad. It now appears to be self-sufficient,
ideologically, politically, economically and intellectually. Where it is not fully
self-sufficient, it can rely on its friends and allies. Those allies are, increasingly, located
outside the Western sphere.
*
Is China really competing with the West? Yes and no. And often not consciously.
It is a giant; still the most populous nation on earth. It is building, determinedly, its
socialist motherland (applying "socialism with the Chinese characteristics" model). It is
trying to construct a global system which has roots in the thousands of years of its history
(BRI – Belt and Road Initiative, often nicknamed the "New Silk Road").
Its highly talented and hardworking, as well as increasingly educated population, is
producing, at a higher pace and often at higher quality than the countries in Europe, or the
United States. As it produces, it also, naturally, trades.
This is where the 'problem' arises. The West, particularly the United States, is not used to
a country that creates things for the sake and benefit of its people. For centuries, Asian,
African and Latin American people were ordered what and how to produce, where and for how much
to sell the produce. Or else!
Of course, the West has never consulted anyone. It has been producing what it (and its
corporations) desired. It was forcing countries all over the world, to buy its products. If
they refused, they got invaded, or their fragile governments (often semi-colonies, anyway)
overthrown.
The most 'terrible' thing that China is doing is: it is producing what is good for China,
and for its citizens.
That is, in the eyes of the West, unforgiveable!
*
In the process, China 'competes'. But fairly: it produces a lot, cheaply, and increasingly
well. The same can be said about Russia.
These two countries are not competing maliciously. If they were to decide to, they could
sink the US economy, or perhaps the economy of the entire West, within a week.
But they don't even think about it.
However, as said above, to just work hard, invent new and better products, advance
scientific research, and use the gains to improve the lives of ordinary people (they will be no
extreme poverty in China by the end of 2020) is seen as the arch-crime in London and
Washington.
Why? Because the Chinese and Russian systems appear to be much better, or at least, simply
better, than those which are reigning in the West and its colonies. And because they are
working for the people, not for corporations or for the colonial powers.
And the demagogues in the West – in its mass media outlets and academia – are
horrified that perhaps, soon, the world will wake up and see the reality. Which is actually
already happening: slowly but surely.
*
To portray China as an evil country, is essential for the hegemony of the West. There is
nothing so terrifying to London and Washington as the combination of these words: "Socialism/
Communism, Asian, success". The West invents new and newer 'opposition movements', it then
supports them and finances them, just in order to then point fingers and bark: "China is
fighting back, and it is violating human rights", when it defends itself and its citizens. This
tactic is clear, right now, in both the northwest of the country, and in Honk Kong.
Not everything that China builds is excellent. Europe is still producing better cars, shoes
and fragrances, and the United States, better airplanes. But the progress that China has
registered during the last two decades, is remarkable. Were it to be football, it is China 2:
West 1.
Most likely, unless there is real war, that in ten years, China will catch up in many
fields; catch up, and surpass the West. Side by side with Russia.
It could have been excellent news for the entire world. China is sharing its achievements,
even with the poorest of the poor countries in Africa, or with Laos in Asia.
The only problem is, that the West feels that it has to rule. It is unrepentant, observing
the world from a clearly fundamentalist view. It cannot help it: it is absolutely, religiously
convinced that it has to give orders to every man and woman, in every corner of the globe.
It is a tick, fanatical. Lately, anyone who travels to Europe or the United States will
testify: what is taking place there is not good, even for the ordinary citizens. Western
governments and corporations are now robbing even their own citizens. The standard of living is
nose-diving.
China, with just a fraction of the wealth, is building a much more egalitarian society,
although you would never guess so, if you exclusively relied on Western statistics.
*
So, "trade war" slogans are an attempt to convince the local and global public that "China
is unfair", that it is "taking advantage" of the West. President Trump is "defending" the
United States against the Chinese 'Commies'. But the more he "defends them", the poorer they
get. Strange, isn't it?
While the Chinese people, Russian people, even Laotian people, are, 'miraculously', getting
richer and richer. They are getting more and more optimistic.
For decades, the West used to preach 'free trade', and competition. That is, when it was in
charge, or let's say, 'the only kid on the block'.
In the name of competition and free trade, dozens of governments got overthrown, and
millions of people killed.
And now?
What is China suppose to do? Frankly, what?
Should it curb its production, or perhaps close scientific labs? Should it consult the US
President or perhaps British Prime Minister, before it makes any essential economic decision?
Should it control the exchange rate of RMB, in accordance with the wishes of the economic tsars
in Washington? That would be thoroughly ridiculous, considering that (socialist/Communist)
China will soon become the biggest economy in the world, or maybe it already is.
There is all that abstract talk, but nothing concrete suggested. Or is it like that on
purpose?
Could it be that the West does not want to improve relations with Beijing?
On September 7, 2019, AP reported:
White House economic adviser Larry Kudlow compared trade talks with China on Friday to the
U.S. standoff with Russia during the Cold War
"The stakes are so high, we have to get it right, and if that takes a decade, so be it,"
he said.
Kudlow emphasized that it took the United States decades to get the results it wanted with
Russia. He noted that he worked in the Reagan administration: "I remember President Reagan
waging a similar fight against the Soviet Union."
Precisely! The war against the Soviet Union was hardly a war for economic survival of
the United States. It was an ideological battle, which the United States, unfortunately won,
because it utilized both propaganda and economic terror (the arms race and other
means).
Now, China is next on the list, and the White House is not even trying to hide it. But
China is savvy. It is beginning to understand the game. And it is ready, by all means, to
defend the system which has pulled almost all its citizens out of misery, and which could, one
day soon, do the same for the rest of the world.
US is hemorrhaging around $1.7 trillion dollars(according to the bond king) a year with
the “greatest economy ever” and near zero interest rate. Clearly, this is not
sustainable and can’t last much longer. When the jig is up, whoever has the most
guns(not gold) will prevail. .
China has more problems than the United States. Taiwan, Tibet, Hong Kong, persecuting
Uyghurs in Xinjiang, Indonesia and Malaysia because of Islam, Inner Mongolia separatists,
Kashmir and India, USA trade pressure, Japan and South Korea are competitors.
China has some bright spots with Pakistan, North Korea and a very open hand negotiated
with the African Union to colonize that continent etc. Russia is neutral but if it is to fall
it will probably be towards Europe not the East.
Vietnam is falling away leaving Myanmar and Cambodia. Thailand might already be a Western
proxy.
You've broken down nothing. China can sell somewhere else, since it makes all the stuff.
The US makes very little and will pay far more Chinese equivalent goods. Further, China's GDP
is now 80% domestically generated; of the remaining 20% export income, the US accounts for
only 30% of it, ie 6%. China can stand a loss of 6% easily. While the Americans, led the
Ape-in-Chief have been thumping their chests, the nimble Chinese have taken markets
everywhere, diversified their manufacturing bases and transportation systems. The US is
shouting at the Moon. Enjoy the tan...
'The war against the Soviet Union was hardly a war for economic survival of the United
States. It was an ideological battle, which the United States, unfortunately won,'
Really !!! have a read of Gulag Archipelago before you come out with anything this
stupid.
The author apparently has never been to China to know what their perspective is. Instead,
he is superimposing what western ideologs think it is. To Americans, it is political and
ideological struggle. To the Chinese, it's basic economics and the welfare of its people. The
Chinese know better than anyone else, what it was like being down in the gutter for almost
200 years, about the time the British showed up with their opium trade in the 1830's. The
Chinese have made great strides in the last 45 years to get their people out of poverty,
modernize, and build an industrialized economy that rivals any other economy in the world.
The truth is, it's a feat that Americans are tacitly envious of, and will do whatever it
takes to cut the Chinese down.
The problem is, America is not the shining example of success and exceptionalism it thinks
it is. It has fallen behind the power curve and isn't competitive any longer. Free trade is
far and away better in China than what you will find in America. Don't believe it? Go there
and see for yourself. Then ask yourself, why did the greater chunk of American manufacturing
left and went to China in the first place, (besides chasing cheap labor), If it wasn't for
free trade?
Many other countries don't share the same ideology or values with Americans either,
particularly when America can't provide for the welfare of its own people, so why would they
want to copy that model of decay?
attractive properties in shenzhen or any tier 1 chinese cities are in the millions or tens
of millions of dollars. not likely to jump higher anytime soon but whole lot of downside
potential. Vancouver is full up. why not seattle, DC or somewhere with "cheap" prices?
They have two alternatives to SWIFT - CIPS & NSPK. Further, both Russia and China are
using their own and local currencies in trade, bypassing not only SWIFT fees and delays, but
the USD exchange rate rip-off.
Frankly ZH readers are about 10 yrs behind the latest developments, hence the rednecks
ranting about their already lost cause. Do some research.
"So far, China has exercised restraint." ...because they don't want the world to see what
a truly monstrous regime runs that country...much like Israhell tries to silence and stifle
criticism of its monstrous racist and supremacist regime.
Meanwhile the West is on meds as it willingly takes the dagger someone is handing it to
enable it to commit suicide..
I wonder who is pulling strings in the background?
Canada and australia most certainly did NOT plunder the world, at anytime. We have all the
resources we will ever need,and we have never sought an empire. Don't try to drag us down
into your pit for company. It is your pit, along with Britain. Let the British keep you
company.
China "is ready to defend the system which has pulled almost all its citizens out of
misery"
China is very late to the game of "printing debt" It has taken the USA 100 years to
bankrupt itself. China with it's 350% of GDP has managed it in 30 years.
That looks like vast and generally incorrect exaggeration. While China mode substantial progress in catching up with the West, the
technology is still dominated by the West.
But as technological revolution is slowing down and in some areas coming to the end (die size in semiconductors in one example;
it is impossible to shrink it further; smartphones reached saturation level, and hardware wise their capabilities are far above what
a regular user needs or wants) it is easier for other countries to catch up.
In any case, the main reason for trade war with China is to try to slow down its ascendance.
The problem for China is that China converted to neoliberalism, and as such (like Russia) is subject to all the ills the neoliberal
society tend to bring into the country. Including a very high level of inequality.
Notable quotes:
"... Precisely! The war against the Soviet Union was hardly a war for economic survival of the United States. It was an ideological battle, which the United States, unfortunately won, because it utilized both propaganda and economic terror (the arms race and other means). ..."
"... Now, China is next on the list, and the White House is not even trying to hide it. But China is savvy. It is beginning to understand the game. And it is ready, by all means, to defend the system which has pulled almost all its citizens out of misery, and which could, one day soon, do the same for the rest of the world. ..."
It is very popular these days to talk and write about the "trade war" between the United States and China. But is there really
one raging? Or is it, what we are witnessing, simply a clash of political and ideological systems : one being extremely successful
and optimistic, the other depressing, full of dark cynicism and nihilism?
In the past, West used to produce almost everything. While colonizing the entire planet (one should just look at the map of the
globe, between the two world wars), Europe and later the United States, Canada and Australia, kept plundering all the continents
of natural resources, holding hundreds of millions of human beings in what could be easily described as 'forced labor', often bordering
on slavery.
Under such conditions, it was very easy to be 'number one', to reign without competition, and to toss around huge amounts of cash,
for the sole purpose of indoctrinating local and overseas 'subjects' on topics such as the 'glory' of capitalism, colonialism (open
and hidden), and Western-style 'democracy'.
It is essential to point out that in the recent past, the global Western dictatorship (and that included the 'economic system)
used to have absolutely no competition. Systems that were created to challenge it, were smashed with the most brutal, sadistic methods.
One only needs recall invasions from the West to the young Soviet Union, with the consequent genocide and famines. Or other genocides
in Indochina, which was fighting its wars for independence, first against France, later against the United States.
*
Times changed. But Western tactics haven't.
There are now many new systems, in numerous corners of the world. These systems, some Communist, others socialist or even populist,
are ready to defend their citizens, and to use the natural resources to feed the people, and to educate, house and cure them.
No matter how popular these systems are at home, the West finds ways to demonize them, using its well-established propaganda machinery.
First, to smear them and then, if they resist, to directly liquidate them.
As before, during the colonial era, no competition has been permitted. Disobedience is punishable by death.
Naturally, the Western system has not been built on excellence, hard work and creativity, only. It was constructed on fear, oppression
and brutal force. For centuries, it has clearly been a monopoly.
*
Only the toughest countries, like Russia, China, Iran, North Korea or Cuba, have managed to survive, defending they own cultures,
and advancing their philosophies.
To the West, China has proved to be an extremely tough adversary.
With its political, economic, and social system, it has managed to construct a forward-looking, optimistic and extraordinarily
productive society. Its scientific research is now second to none. Its culture is thriving. Together with its closest ally, Russia,
China excels in many essential fields.
That is precisely what irks, even horrifies the West.
For decades and centuries, Europe and the United States have not been ready to tolerate any major country, which would set up
its own set of rules and goals.
China refuses to accept the diktat from abroad. It now appears to be self-sufficient, ideologically, politically, economically
and intellectually. Where it is not fully self-sufficient, it can rely on its friends and allies. Those allies are, increasingly,
located outside the Western sphere.
*
Is China really competing with the West? Yes and no. And often not consciously.
It is a giant; still the most populous nation on earth. It is building, determinedly, its socialist motherland (applying "socialism
with the Chinese characteristics" model). It is trying to construct a global system which has roots in the thousands of years of
its history (BRI – Belt and Road Initiative, often nicknamed the "New Silk Road").
Its highly talented and hardworking, as well as increasingly educated population, is producing, at a higher pace and often at
higher quality than the countries in Europe, or the United States. As it produces, it also, naturally, trades.
This is where the 'problem' arises. The West, particularly the United States, is not used to a country that creates things for
the sake and benefit of its people. For centuries, Asian, African and Latin American people were ordered what and how to produce,
where and for how much to sell the produce. Or else!
Of course, the West has never consulted anyone. It has been producing what it (and its corporations) desired. It was forcing countries
all over the world, to buy its products. If they refused, they got invaded, or their fragile governments (often semi-colonies, anyway)
overthrown.
The most 'terrible' thing that China is doing is: it is producing what is good for China, and for its citizens.
That is, in the eyes of the West, unforgiveable!
*
In the process, China 'competes'. But fairly: it produces a lot, cheaply, and increasingly well. The same can be said about Russia.
These two countries are not competing maliciously. If they were to decide to, they could sink the US economy, or perhaps the economy
of the entire West, within a week.
But they don't even think about it.
However, as said above, to just work hard, invent new and better products, advance scientific research, and use the gains to improve
the lives of ordinary people (they will be no extreme poverty in China by the end of 2020) is seen as the arch-crime in London and
Washington.
Why? Because the Chinese and Russian systems appear to be much better, or at least, simply better, than those which are reigning
in the West and its colonies. And because they are working for the people, not for corporations or for the colonial powers.
And the demagogues in the West – in its mass media outlets and academia – are horrified that perhaps, soon, the world will wake
up and see the reality. Which is actually already happening: slowly but surely.
*
To portray China as an evil country, is essential for the hegemony of the West. There is nothing so terrifying to London and Washington
as the combination of these words: "Socialism/ Communism, Asian, success". The West invents new and newer 'opposition movements',
it then supports them and finances them, just in order to then point fingers and bark: "China is fighting back, and it is violating
human rights", when it defends itself and its citizens. This tactic is clear, right now, in both the northwest of the country, and
in Honk Kong.
Not everything that China builds is excellent. Europe is still producing better cars, shoes and fragrances, and the United States,
better airplanes. But the progress that China has registered during the last two decades, is remarkable. Were it to be football,
it is China 2: West 1.
Most likely, unless there is real war, that in ten years, China will catch up in many fields; catch up, and surpass the West.
Side by side with Russia.
It could have been excellent news for the entire world. China is sharing its achievements, even with the poorest of the poor countries
in Africa, or with Laos in Asia.
The only problem is, that the West feels that it has to rule. It is unrepentant, observing the world from a clearly fundamentalist
view. It cannot help it: it is absolutely, religiously convinced that it has to give orders to every man and woman, in every corner
of the globe.
It is a tick, fanatical. Lately, anyone who travels to Europe or the United States will testify: what is taking place there is
not good, even for the ordinary citizens. Western governments and corporations are now robbing even their own citizens. The standard
of living is nose-diving.
China, with just a fraction of the wealth, is building a much more egalitarian society, although you would never guess so, if
you exclusively relied on Western statistics.
*
So, "trade war" slogans are an attempt to convince the local and global public that "China is unfair", that it is "taking advantage"
of the West. President Trump is "defending" the United States against the Chinese 'Commies'. But the more he "defends them", the
poorer they get. Strange, isn't it?
While the Chinese people, Russian people, even Laotian people, are, 'miraculously', getting richer and richer. They are getting
more and more optimistic.
For decades, the West used to preach 'free trade', and competition. That is, when it was in charge, or let's say, 'the only kid
on the block'.
In the name of competition and free trade, dozens of governments got overthrown, and millions of people killed.
And now?
What is China suppose to do? Frankly, what?
Should it curb its production, or perhaps close scientific labs? Should it consult the US President or perhaps British Prime Minister,
before it makes any essential economic decision? Should it control the exchange rate of RMB, in accordance with the wishes of the
economic tsars in Washington? That would be thoroughly ridiculous, considering that (socialist/Communist) China will soon become
the biggest economy in the world, or maybe it already is.
There is all that abstract talk, but nothing concrete suggested. Or is it like that on purpose?
Could it be that the West does not want to improve relations with Beijing?
On September 7, 2019, AP reported:
White House economic adviser Larry Kudlow compared trade talks with China on Friday to the U.S. standoff with Russia during
the Cold War
"The stakes are so high, we have to get it right, and if that takes a decade, so be it," he said.
Kudlow emphasized that it took the United States decades to get the results it wanted with Russia. He noted that he worked
in the Reagan administration: "I remember President Reagan waging a similar fight against the Soviet Union."
Precisely! The war against the Soviet Union was hardly a war for economic survival of the United States. It was an ideological
battle, which the United States, unfortunately won, because it utilized both propaganda and economic terror (the arms race and other
means).
Now, China is next on the list, and the White House is not even trying to hide it. But China is savvy. It is beginning to understand the game. And it is ready, by all means, to defend the system which has pulled
almost all its citizens out of misery, and which could, one day soon, do the same for the rest of the world.
That said, as
Bloomberg
noted, Liu didn't address specifics about the trade talks in his speech. Instead, the
vice premier said China would expand investments in core technologies to ensure the economic
restructuring of the economy was stable, adding that economic activity in the year ahead is "very
bright."
"We're not worried about short-term economic volatility. We have every confidence in our
ability to meet macroeconomic targets for the year," he said.
As reported on Friday, ahead of the latest round of talks, President Trump's top economic
advisors and industry experts warned him of an economic downturn if a further escalation in the
trade war is seen by 2020. As such, it is likely that a lite trade deal could be on the table next
month.
But as our readers have recently learned, the trade war didn't start the synchronized global
downturn, which has been almost entirely a function of China's clogged up credit impulse...
... so any deal - lite or otherwise - won't result in an immediate acceleration of global
growth; indeed, as some speculate, failure to observe a substantial economic rebound following a
"deal" could well mark the point when central banks and governments finally throw in the towel, as
they finally usher in the final lap in the global race to
debase
destroy fiat currencies and
hyperinflate away the debt: MMT and Helicopter Money.
Trump's pathetic Trade war accomplished nothing. US exports down
18% globally. Farmer destroyed. US markets for all goods harmed.
The world is offloading any and all dependence on US products.
Impulsive stupid jerk. 45% of the world population on US
Sanctions, rising black markets, US supply chain disruptions, US
manufacturing in a recession.
Tariffs are tax deductible so they
do not accumulate any tax benefit to the US Treasury. They are
virtually all rolled over into the national debt. So while the
consumer may not notice a rising CPI, they are getting drown in
Trump Debt, the largest spending deficits in US history, largest
debt to GDP of over 110% and rising. Trump has the fastest
acceleration of US debt of any white house occupancy nearly 4
trillion in 2.7 years. It is obvious Trump is clueless in
virtually everything. Has no capacity to comprehend a thing.
Look at this scatterbrained Turkey Kurds fiasco. Impulsive,
thoughtless and accomplished nothing. US troops now guarding
Syrian oil. Astonishing. Everything this guy touches turned into a
burning crap filled dumpster fire.
'I will be so good at the military, your head will spin'
"When those 'gunds' start shooting they tend to do things"
Then there are no deals from the self-proclaimed "art of the
Deal"... nothing. Look at Iran. He has made negative progress
across the board. Thank to the orange stupid nations across the
globe are circumventing US Dollar Reserve. Each day the US
importance and more importantly reliability is diminished.
Look at Trump in high tech... Merck has developed an Ebola
vaccine in EUROPE not the USA. The USA hasn't even approved it
yet. What is Trump doing... ATTACKING BIG PHARMA. Trumptards love
seeing that. Yet it is the Trumptards that keep screaming to buy
Murica products but if they have to pay more for them, then
suddenly they demonize the US companies. Big Pharma will be the
next sector to joint Semiconductor to leave the USA.
Trump blacklist Big tech. Why? Tech products have a very short
shelf life. If the US doesn't sell tech product what do they have
that others want? COAL? Soy Beans? From smart to stupid. Look at
Intel and Microsoft. Trump band Intel Chip sales to China and
threatens Microsoft operating software. In one year China now has
RISC V chips from Alibaba, all open source and the Chinese
Military has switched to Linux and UNIX GNU. So who loses here?
The US tech businesses. Look at Micron dying on the vine, tossed
from China.
Meanwhile China has 5G and has replaced all US components in
its boards with the help of Hitachi and Panasonic who are doing
the same with all their electronics to avoid Trump Blacklist
compliance. Trump is low tech and dumb as dirt. The US Tech sector
is being carpet bombed under Trump... and without tech, what
products does the US have to sell that world markets want? Not a
god damn thing.
Let's remember that Trump didn't want a partial deal... Now he
will take anything to get him out of his self-made wreckage.
Meanwhile impeachment is coming... Mista no deals is going down in
flames.
Last year 300,000 us farmers grew soy
and had 110 mmt. This year there are 100,000 us Soy farmers
left and they grew 34 mmt... not enough to export.
...
Arbitrary and capricious meddling by US politicians in
commodity contracts renders all contracts voidable under
force majeure. I would have thought with your handle you
would have known this. Those markets will never come back.
They will forever be marginalized and smaller. Trump's
damage to US trade is permanent.
In other words, consolidation among large corp farmers,
decimation of the smaller family farmers? I am truly
asking, but seems to remind me of the trend since the
1980s.
Trump and China claimed "substantial progress" this past spring,
and it all fell apart within a couple months. The same thing will
happen on this "deal"....
Former World Leaders: The Trade War Threatens
the World's Economy https://nyti.ms/2MAFOTC
NYT - Kevin Rudd, Helen Clark and Carl Bildt - October 11
Despite an interim deal, global peace and prosperity
remain at risk if the United States and China do not
fully resolve their conflict.
(The authors are former prime ministers
of Australia, New Zealand and Sweden.)
This piece has been updated to reflect news developments.
The 18-month trade war between the United States and China represents the single greatest
threat to global economic growth.
President Trump announced on Friday a preliminary trade détente with China, saying
that the two countries have a verbal agreement for an initial phase of a deal. The agreement
reportedly includes concessions from China to protect American intellectual property, to
accept guidelines on managing its currency and to buy tens of billions worth of American
agricultural products. Washington, for its part, will not go through next month with placing
more tariffs on Chinese products.
This is an encouraging sign, but a verbal agreement is just a first step. A failure to
bring the trade war to a final conclusion significantly increases the risk of recession next
year in the United States, Europe, Japan and other developed and emerging economies. It would
also seriously undermine China's near-term growth prospects.
That's why, as representatives of a group of 10 former prime ministers and presidents from
center-left and center-right governments that have enjoyed close relations with both the
United States and China, we are writing to urge Presidents Donald Trump and Xi Jinping to
reach a substantive trade agreement by year's end. It's time to bring this source of global
economic uncertainty to a close.
America's and China's prosperity have been built on global free trade. America has
profited immensely from access to global markets since its birth. China, since opening up 40
years ago, has lifted millions of its people out of poverty largely through global trade.
Indeed, much of the prosperity enjoyed by people across the world is anchored in our ability
to sell goods and services freely across national boundaries.
Now, however, we see global growth in trade lagging behind general economic growth for the
first time in decades. In part, this is the product of the expanding trade war between
America and China, the world's two largest economies. In part, it is because of a more
general outbreak of protectionism around the world. Both these factors threaten continued
global prosperity.
We recognize, as former leaders of countries with longstanding economic relationships with
China, the real difficulties regarding a number of Beijing's trade and economic practices. We
understand, for example, the challenges that arise from Chinese policies on intellectual
property and technology transfer, its restrictions on access to its markets, and its
subsidization of private and public companies that are active in the global marketplace. We
believe that these practices need to change in whichever countries may use them. But it is
particularly important in China, because it is the world's second-largest economy.
At the same time, as countries long committed to the principles of free trade, we do not
see the ever-widening tariff war, started by the United States, as an effective way to
resolve trade and economic disputes. Tariffs, by definition, are the enemy of free trade.
Their cumulative impact, particularly combined with the current resurgence of protectionism
worldwide, only depresses economic growth, employment and living standards. Tariffs raise the
cost of living for working families as consumer prices are driven up.
Stock markets rose on Friday with the news of the preliminary deal. The tariff war has
been creating economic uncertainty, depressing international investor confidence, compounding
downward pressure on growth and increasing the risk of recession. The disruption of global
supply chains is already profound, and it may continue until a final deal is reached.
We believe that the World Trade Organization, despite its limitations, is best positioned
to address China's trade practices. We also believe that the W.T.O. is the most appropriate
forum in which to resolve trade disputes. So we urge the United States and China to work with
other member states to strengthen the W.T.O.'s institutional capacity.
Our group of former prime ministers and presidents includes François Fillon of
France, Joe Clark of Canada, Enrico Letta of Italy, Jan Peter Balkenende of the Netherlands,
Felipe Calderón and Ernesto Zedillo of Mexico, and Han Seung-soo of South Korea. Given
our collective experience, we are not naïve about the inherent complexities in
negotiating trade agreements. Many of us have negotiated free-trade pacts with both the
United States and China. We are deeply familiar with the concerns of each country, including
the domestic political constituencies that argue for continued protection.
Many of those domestic concerns have focused on the long-term enforcement of any
agreement. On this point, we argue that it is in China's own long-term economic interest to
ensure the effective implementation of any new trade deal -- whether involving intellectual
property, technology transfer, state subsidies or market access. Such policies would also
need to apply to all of China's trading partners, just as they would need to apply to its
relationship with the United States.
On the question of enforcement, China must be acutely aware that if it fails to comply
with the terms of the agreement, an already damaging trade war is likely to resume. A new
trade agreement should include strong enforcement provisions, along with strengthened W.T.O.
dispute-resolution mechanisms, to give greater confidence to both parties.
For these reasons, and given the gravity of the global economic outlook for 2020, we urge
both countries to exercise every effort to reach a substantive agreement this year. We also
urge the United States to withdraw the punitive tariffs it has imposed -- and that China do
the same with the reciprocal tariffs it has enacted.
Beyond trade, we are anxious about the wider strategic impact of any further decoupling of
the Chinese and the American economies, particularly in technology and finance. Such a
decoupling would present a long-term threat to global peace and security.
It would also effectively constitute the first step in the declaration of a new Cold War.
As with the last Cold War, many nations would be forced to choose between the two powers. And
that is a choice none of us wants to make.
"... Meanwhile, Chinese consumers aren't paying higher prices for U.S. imports. A study by the Peterson Institute for International Economics shows that since the beginning of 2018, China has raised the average tariff rate on U.S. imports from 8.0 percent to 21.8 percent and has lowered the average tariff rate on all its other trading partners from 8.0 percent to 6.7 percent. China imposed tariffs only on U.S. commodities that can be replaced with imports from other countries at similar prices. It actually lowered duties for those U.S. products that can't be bought elsewhere more cheaply, such as semiconductors and pharmaceuticals. Consequently, China's import prices for the same products have dropped overall, in spite of higher tariffs on U.S. imports. ..."
"... Beijing has proved much more capable than Washington of minimizing the pain to its consumers and economy. ..."
"... The uncomfortable truth for Trump is that U.S. trade deficits don't spring from the practices of U.S. trading partners; they come from the United States' own spending habits. ..."
"... The United States has run a persistent trade deficit since 1975, both overall and with most of its trading partners. Over the past 20 years, U.S. domestic expenditures have always exceeded GDP, resulting in negative net exports, or a trade deficit. ..."
"... Even a total Chinese capitulation in the trade war wouldn't make a dent in the overall U.S. trade deficit. ..."
"... The U.S. economy, on the other hand, has had the longest expansion in history, and the inevitable down cycle is already on the horizon: second-quarter GDP growth this year dropped to 2.0 percent from the first quarter's 3.1 percent. ..."
"... If the trade war continues, it will compromise the international trading system, which relies on a global division of labor based on each country's comparative advantage. Once that system becomes less dependable -- when disrupted, for instance, by the boycotts and hostility of trade wars -- countries will start decoupling from one another. ..."
Everyone Loses in the US-Chinese Clash
-- but Especially Americans
... Economists reckon the dead-weight loss arising from the existing tariffs on $200
billion in Chinese imports to be $620 per household, or about $80 billion, annually. This
represents about 0.4 percent of U.S. GDP. If the United States continues to expand its tariff
regime as scheduled, that loss will more than double.
Meanwhile, Chinese consumers aren't paying higher prices for U.S. imports. A study by the
Peterson Institute for International Economics shows that since the beginning of 2018, China
has raised the average tariff rate on U.S. imports from 8.0 percent to 21.8 percent and has
lowered the average tariff rate on all its other trading partners from 8.0 percent to 6.7
percent. China imposed tariffs only on U.S. commodities that can be replaced with imports
from other countries at similar prices. It actually lowered duties for those U.S. products
that can't be bought elsewhere more cheaply, such as semiconductors and pharmaceuticals.
Consequently, China's import prices for the same products have dropped overall, in spite of
higher tariffs on U.S. imports.
Beijing's nimble calculations are well illustrated by the example of lobsters. China
imposed a 25 percent tariff on U.S. lobsters in July 2018, precipitating a 70 percent drop in
U.S. lobster exports. At the same time, Beijing cut tariffs on Canadian lobsters by three
percent, and as a result, Canadian lobster exports to China doubled. Chinese consumers now
pay less for lobsters imported from essentially the same waters.
THE INESCAPABLE DEFICIT
Beijing has proved much more capable than Washington of minimizing the pain to its
consumers and economy. But the trade war would be more palatable for Washington if its
confrontation with China were accomplishing Trump's goals. The president thinks that China is
"ripping off" the United States. He wants to reduce the United States' overall trade deficit
by changing China's trade practices. But levying tariffs on Chinese imports has had the
paradoxical effect of inflating the United States' overall trade deficit, which, according to
the U.S. Census Bureau, rose by $28 billion in the first seven months of this year compared
with the same period last year.
The uncomfortable truth for Trump is that U.S. trade deficits don't spring from the
practices of U.S. trading partners; they come from the United States' own spending habits.
The United States has run a persistent trade deficit since 1975, both overall and with most
of its trading partners. Over the past 20 years, U.S. domestic expenditures have always
exceeded GDP, resulting in negative net exports, or a trade deficit. The shortfall has
shifted over time but has remained between three and six percent of GDP.
Trump wants to boost
U.S. exports to trim the deficit, but trade wars inevitably invite retaliation that leads to
significant reductions in exports. Moreover, increasing the volume of exports does not
necessarily reduce trade deficits unless it is accompanied by a reduction in the country's
spending in terms of consumption and investment. The right way to reduce a trade deficit is
to grow the economy faster than concurrent domestic expenditures, which can be accomplished
only by encouraging innovation and increasing productivity. A trade war does the opposite,
damaging the economy, impeding growth, and hindering innovation.
Even a total Chinese capitulation in the trade war wouldn't make a dent in the overall
U.S. trade deficit. If China buys more from the United States, it will purchase less from
other countries, which will then sell the difference either to the United States or to its
competitors.
For example, look at aircraft sales by the U.S. firm Boeing and its European
rival, Airbus. At the moment, both companies are operating at full capacity. If China buys
1,000 more aircraft from Boeing and 1,000 fewer from Airbus, the European plane-maker will
still sell those 1,000 aircraft, just to the United States or to other countries that might
have bought instead from Boeing.
China understands this, which is one reason it hasn't put
higher tariffs on U.S.-made aircraft. Whatever the outcome of the trade war, the deficit
won't be greatly changed.
A RESILIENT CHINA
The trade war has not really damaged China so far, largely because Beijing has managed to
keep import prices from rising and because its exports to the United States have been less
affected than anticipated.
This pattern will change as U.S. importers begin to switch from
buying from China to buying from third countries to avoid paying the high tariffs. But
assuming China's GDP continues to grow at around five to six percent every year, the effect
of that change will be quite modest.
Some pundits doubt the accuracy of Chinese figures for
economic growth, but multilateral agencies and independent research institutions set Chinese
GDP growth within a range of five to six percent.
Skeptics also miss the bigger picture that China's economy is slowing down as it shifts to
a consumption-driven model. Some manufacturing will leave China if the high tariffs become
permanent, but the significance of such a development should not be overstated. Independent
of the anxiety bred by Trump's tariffs, China is gradually weaning itself off its dependence
on export-led growth. Exports to the United States as a proportion of China's GDP steadily
declined from a peak of 11 percent in 2005 to less than four percent by 2018. In 2006, total
exports made up 36 percent of China's GDP; by 2018, that figure had been cut by half, to 18
percent, which is much lower than the average of 29 percent for the industrialized countries
of the Organization for Economic Cooperation and Development. Chinese leaders have long
sought to steer their economy away from export-driven manufacturing to a consumer-driven
model.
To be sure, the trade war has exacted a severe psychological toll on the Chinese economy.
In 2018, when the tariffs were first announced, they caused a near panic in China's market at
a time when growth was slowing thanks to a round of credit tightening. The stock market took
a beating, plummeting some 25 percent. The government initially felt pressured to find a way
out of the trade war quickly. But as the smoke cleared to reveal little real damage,
confidence in the market rebounded: stock indexes had risen by 23 percent and 34 percent on
the Shanghai and Shenzhen exchanges, respectively, by September 12, 2019. The resilience of
the Chinese economy in the face of the trade war helps explain why Beijing has stiffened its
negotiating position in spite of Trump's escalation.
China hasn't had a recession in the past 40 years and won't have one in the foreseeable
future, because its economy is still at an early stage of development, with per capita GDP
only one-sixth of that of the United States. Due to declining rates of saving and rising
wages, the engine of China's economy is shifting from investments and exports to private
consumption. As a result, the country's growth rate is expected to slow. The International
Monetary Fund projects that China's real GDP growth will fall from 6.6 percent in 2018 to 5.5
percent in 2024; other estimates put the growth rate at an even lower number.
Although the
rate of Chinese growth may dip, there is little risk that the Chinese economy will contract
in the foreseeable future. Private consumption, which has been increasing, representing 35
percent of GDP in 2010 and 39 percent last year, is expected to continue to rise and to drive
economic growth, especially now that China has expanded its social safety net and welfare
provisions, freeing up private savings for consumption.
The U.S. economy, on the other hand, has had the longest expansion in history, and the
inevitable down cycle is already on the horizon: second-quarter GDP growth this year dropped
to 2.0 percent from the first quarter's 3.1 percent. The trade war, without taking into
account the escalations from September, will shave off at least half a percentage point of
U.S. GDP, and that much of a drag on the economy may tip it into the anticipated downturn.
(According to a September Washington Post poll, 60 percent of Americans expect a recession in
2020.) The prospect of a recession could provide Trump with the impetus to call off the trade
war. Here, then, is one plausible way the trade war will come to an end. Americans aren't
uniformly feeling the pain of the tariffs yet. But a turning point is likely to come when the
economy starts to lose steam.
If the trade war continues, it will compromise the international trading system, which
relies on a global division of labor based on each country's comparative advantage. Once that
system becomes less dependable -- when disrupted, for instance, by the boycotts and hostility
of trade wars -- countries will start decoupling from one another.
China and the United States are joined at the hip economically, each being the other's
biggest trading partner. Any attempt to decouple the two economies will bring catastrophic
consequences for both, and for the world at large. Consumer prices will rise, world economic
growth will slow, supply chains will be disrupted and laboriously duplicated on a global
scale, and a digital divide -- in technology, the Internet, and telecommunications -- will
vastly hamper innovation by limiting the horizons and ambitions of technology firms.
...
"... Yes, the U.S. government can hurt Huawei in the short term by limiting their access to technology (and to certain foreign markets). But, absent a viable competitor, this won't have much impact in the long term. Because Huawei is fundamentally not a technology company. Huawei is a human resources company. And is kind of obsessed with survival. ..."
"... Huawei's fundamental purpose has always been about survival. ..."
"... Huawei, like most engineering-based enterprises, has only one real resource, which is the cumulative brainpower of its people. This is the resource that creates the products and sells them to their customers. And as technology changes quickly, they must continually create and recreate the products – and therefore the value of the enterprise. Huawei's main strength is the system they have developed for the creation, assessment and distribution of value by over 190,000 people. It's about HR strategy. ..."
Huawei is going to beat Trump with human resources
By Jeff Towson
President Trump's placement of Huawei on the U.S. entity list was a body blow. The
magnitude of the hit should not be understated. Being cut off from U.S. technology so
suddenly staggered the multinational. But, to their credit, Huawei didn't go down. They took
the hit and stayed on their feet.
I'm not really sure what the U.S. government thought it would achieve with the ban. To
stop Huawei's growth in international markets? To shift 5G market share to Ericsson and
Nokia? To cripple the company? Just an assertion of principle?
I think they really just don't understand Huawei.
Yes, the U.S. government can hurt Huawei in the short term by limiting their access to
technology (and to certain foreign markets). But, absent a viable competitor, this won't have
much impact in the long term. Because Huawei is fundamentally not a technology company.
Huawei is a human resources company. And is kind of obsessed with survival.
Huawei's core strategy has always been about survival.
If you read Ren Zhengfei's talks and papers going back to the early 1990's, what jumps out
at you is how different Huawei is. The goal of the company has never really been about money.
Nor about becoming a tech giant. Nor about innovation. And it has definitely not been about
going public and getting a big payday. Huawei's fundamental purpose has always been about
survival.
"Being big and strong temporarily is not what we want. What we want is the ability and
resilience to survive sustainably," said Ren in 2001.
Actually he has been talking for literally decades about how Huawei can survive long-term
– and about the common causes of corporate decline. My simplistic take is that Ren came
up with a fairly logical plan for long-term survival: Serve your customers no matter what.
Then get big and slowly grind your competitors down with lower costs and greater R&D
spending. And within this, the only resource you really have are your people and their
cumulative brainpower.
Huawei's main resource is its people.
Huawei, like most engineering-based enterprises, has only one real resource, which is the
cumulative brainpower of its people. This is the resource that creates the products and sells
them to their customers. And as technology changes quickly, they must continually create and
recreate the products – and therefore the value of the enterprise. Huawei's main
strength is the system they have developed for the creation, assessment and distribution of
value by over 190,000 people. It's about HR strategy.
Unlike the companies in the U.S. and Europe, where the shareholders are the stakeholders
with ultimate say or multiple stakeholders, such as employees, owners and the community, at
Huawei, the only stakeholders you ever really hear about are the current employees. It's all
about the top contributing, current employees. Shareholders, providers of capital, retired
employees and even the founders are all a distant second in importance.
Note how different this is to other large engineering-focused companies (say GM and
Bosch), where much of the value goes into guaranteed salaries (regardless of contribution)
and into post-retirement benefits (i.e., not current employees). Huawei is not only focused
primarily on this one group, they are also operating much more as a meritocracy with regards
to labor.
Huawei to me looks a lot like what 3G capital has been doing in consumer-facing companies
like Budweiser and Burger King. They have instituted "meritocracy and partnership" on a
massive scale in a knowledge business. There is a lot of ownership. And you rise and fall
based on your performance.
Huawei is awesome at inspiring dedication in their top contributing, current employees.
And that is pretty logical. If brainpower is Huawei's main resource, this is the group that
creates that value. So recruiting and motivating this group is the biggest priority. And they
don't just want them motivated. They want them "all in."
In practice, this is actually pretty complicated. It's a big company. Employees are at
different stages of their lives and careers. How do you get current staff, senior staff and
incoming staff to go "all in" in creating value for customers – and therefore the
enterprise?
My outsider's take is that Huawei is mostly focused on motivating teams and team managers.
High-performance teams with aggressive and dedicated managers are the engine of Huawei. And
these are mostly in sales and marketing and R&D. They make the largest contributions to
the customers and therefore the enterprise. You motivate at the team level and within the
departments that matter most. And then you scale it up.
But how do you assess contributed value?
Staff are rated every 6-12 months across metrics such as sales performance (usually
team-based), talent, dedication, and the potential for advancement. The phrases I keep coming
across in my reading are "dedicated employees" and "high-performance teams." In fact, the
book on their HR book is titled Dedication.
Once assessed, how do you reward performance?
High-performing contributors are given higher bonuses, of course. But they are also
identified and given more opportunities (and responsibilities). They are given more training
and the option to participate in the employee share ownership program (very important). Low
performers, in contrast, are demoted or exited. Meritocracy works in both directions.
And this brings us back to the main point of this article: How does the U.S. tech ban
impact any of this? How does it impact an HR system for motivating the more than 190,000
employees that continually recreate the company and ensure its survival?
In the long term, it doesn't.
Yes, the company took a big hit in the short term in terms of its access to tech
(especially in semiconductors and in the consumer business) and to a few markets. But the
core of the company is still churning along like it has for 30 years. And I think it is very
likely Huawei will overcome these supply chain problems. And, ironically, the current crisis
is probably resulting in increased motivation and dedication across the company.
White House Weighs Blocking Chinese Companies From U.S. Exchanges
By Alan Rappeport and Ana Swanson
WASHINGTON -- The Trump administration is discussing whether to block Chinese companies
from listing shares on American stock exchanges, the latest push to try to sever economic
ties between the United States and China, according to people familiar with the
deliberations.
The internal discussions are in their early stages and no decision is imminent, these
people cautioned.
The talks come as senior officials from both countries are scheduled to resume trade
negotiations in Washington early next month. President Trump, who has continued to give mixed
signals about the prospect of a trade deal with China, said earlier this week that an
agreement could come "sooner than you think." His decision to delay an increase in tariffs
until mid-October and China's recent purchases of American agricultural products has fueled
optimism that the talks could produce an agreement.
But the prospect of further limiting American investment in China underscores the
challenge that the two sides will continue to face even as they try to de-escalate a trade
war that has shaken the global economy. The administration has already increased scrutiny of
foreign investment with a particular eye toward China, including expanding the types of
investments that can be subject to a national security review.
Last week, the Treasury Department unveiled new regulations detailing how a 2018 law, the
Foreign Investment Risk Review Modernization Act, will work to prevent foreign firms from
using investments like minority stakes to capture sensitive American information. And the
United States has already blacklisted some Chinese companies, including Huawei, effectively
barring them from doing business with American companies.
Stocks dropped on Friday after a report on the deliberations was published by Bloomberg
News. The market continued to slide through most of the day. At close, the S&P 500 was
down 0.5 percent and the Nasdaq composite index was down 1.1 percent.
Losses were particularly steep in the technology sector, and among semiconductor stocks,
two parts of the market that have been sensitive to the latest updates on the economic
tensions between China and the United States.
Details of how the United States would restrict Chinese companies from American stock
markets were still being worked out and the idea remained in its early stages, the people
familiar with the deliberations said.
China hawks within the administration have discussed the possibility of tighter
restrictions on listed Chinese companies for many months. Supporters say the efforts would
close longstanding loopholes that have allowed Chinese companies with links to its government
to take advantage of America's financial rules and solicit funds from American investors
without proper disclosure.
Skeptics caution that the move could be deeply disruptive to markets and the economy and
risk turning American investors and pension funds into another casualty of the trade war.
The effect of limiting Chinese firms from raising capital inside the United States could
be significant. As of the beginning of this year, 156 Chinese companies were listed on
American exchanges and had a total market capitalization of $1.2 trillion, according to the
U.S.-China Economic and Security Review Commission.
"The underlying concerns have merit, but how to deal with them without creating a lot of
collateral damage is tricky," Patrick Chovanec, managing director at Silvercrest Asset
Management, wrote in a post on Twitter. "Abruptly delisting Chinese firms en masse would
clearly send shock waves through markets."
The idea gained traction on Capitol Hill this summer when Republicans and Democrats in the
Senate and the House introduced legislation that would delist firms that were out of
compliance with American regulators for three years. The lawmakers argued that Chinese
companies have been benefiting from American capital markets while playing by a different set
of rules.
American complaints center on a lack of transparency into the ownership and finances of
Chinese firms. The business community has long criticized China for classifying some auditor
reports on company finances as state secrets and outlawing cross-border transfers of
auditors' documentation.
In 2015, the Chinese affiliates of the Big Four accounting firms -- Deloitte Touch
Tohmatsu, KPMG, PricewaterhouseCoopers and Ernst & Young -- paid $500,000 each to settle
a dispute about their refusal to provide documentation on Chinese companies to the Securities
and Exchange Commission, which an American judge had ruled was a violation of United States
law.
The White House has grown more interested in blocking Chinese firms in recent weeks, with
some in the administration describing it as a top priority. Officials say the topic is not
yet an issue in bilateral negotiations with the Chinese and inserting it into the talks could
lead negotiations to fall apart again.
"This would be another step in ratcheting up the pressure," said Michael Pillsbury, a
China scholar at the Hudson Institute who said he raised the concept of investment
restrictions with the White House after negotiations with China broke down in the spring.
The White House declined to comment.
The concept has divided Mr. Trump's advisers along their usual fault lines, with Peter
Navarro, Mr. Trump's trade adviser, advocating action and Treasury Secretary Steven Mnuchin
urging caution....
A house bill bans using Huawei and ZTE phones; also adds 1 billion in taxpayer paid for
equipment to be donated to to USA companies so the USA companies can trash the China made
equipment and exchange if for 1 billion in USA and Israel made equipment.
I wonder does this mean the USA and Israel cannot compete with the Chinese?
"... With the inaugural "Huawei AppGallery" emerging with the Mate 30, the company has now positioned itself on an investment trajectory to create a new "Huawei core" to compete with the world of Google-led Android systems outright. ..."
"... Beyond Apple and the iPhone, the Android operating system dominates in the global smartphone market. Describing it as an "operating system" is barely fitting; it might otherwise be described as "an ecosystem" with a wide range of Google orientated services within it. ..."
"... They include the popular browser Chrome, the YouTube video service, Google mail and, most critically, the "Google Playstore," which, owing to its popularity, attracts more developers and investors than any other unofficial App stores. This "ecosystem" creates a "web of comfort" which effectively entrenches the consumer in the Android orbit. ..."
"... p until May 2019, Huawei was a part of this orbit. Its subsequent estrangement from Android owing to the American government's decision has forced some difficult choices. It has made markets keen to observe how the Mate 30 will perform given its lack of Google applications and the need for users to obtain some apps through third-party stores. ..."
"... So, the question is: How are they now adapting and making that transition? Bengt Nordstrom of North Stream research in Sweden notes that "they have a strategy to become completely independent from U.S. technology. And in many areas, they have become independent." ..."
"... Huawei's announced bid to invest over 1 billion U.S. dollars in developing its own application "core" or ecosystem. This, in essence, is an effort to get developers to establish applications for the new "Huawei App store" and thus establish a self-reliant, independent path from the world of Android. ..."
"... To achieve this, the company has pledged a competitive revenue sharing scheme of 15 percent to developers, half of that what Apple and Google demand for participation in their own app-stores. ..."
September 21, 2019
Huawei's pivotal moment
By Tom Fowdy
Huawei launched its Mate 30 series on Friday, the first new device produced by the
Shenzhen telecommunications firm since it has been blacklisted by the United States
government and excluded from American technology markets.
The subsequent result of the listing had led Google to sever ties with the company and
prohibit new devices from using its Play Store services and operating system, something which
ultimately impacts the Mate 30 Series, which is using an open-source version of Android.
The impact of it all has led Western commentators to ask questions about Huawei's future
in Western smartphone markets, particularly what applications can it access.
However, not all is bleak, and what may start off as a hindrance for the company is set to
transform into an opportunity. The United States' assault on the company has forced Huawei to
innovate.
With the inaugural "Huawei AppGallery" emerging with the Mate 30, the company has now
positioned itself on an investment trajectory to create a new "Huawei core" to compete with
the world of Google-led Android systems outright.
In this case, what seems like a detriment is part of a broader pivotal moment for Huawei.
The company's portfolio is about to change forever.
Beyond Apple and the iPhone, the Android operating system dominates in the global
smartphone market. Describing it as an "operating system" is barely fitting; it might
otherwise be described as "an ecosystem" with a wide range of Google orientated services
within it.
They include the popular browser Chrome, the YouTube video service, Google mail and,
most critically, the "Google Playstore," which, owing to its popularity, attracts more
developers and investors than any other unofficial App stores. This "ecosystem" creates a
"web of comfort" which effectively entrenches the consumer in the Android orbit.
U p until May 2019, Huawei was a part of this orbit. Its subsequent estrangement from
Android owing to the American government's decision has forced some difficult choices. It has
made markets keen to observe how the Mate 30 will perform given its lack of Google
applications and the need for users to obtain some apps through third-party stores.
So, the question is: How are they now adapting and making that transition? Bengt
Nordstrom of North Stream research in Sweden notes that "they have a strategy to become
completely independent from U.S. technology. And in many areas, they have become
independent."
First of all, we are well aware that Huawei is developing its own Harmony Operating System
as a contingency measure, although it has not chosen to apply it to the Mate 30 as an olive
branch to Google.
Second, and most excitingly is Huawei's announced bid to invest over 1 billion U.S.
dollars in developing its own application "core" or ecosystem. This, in essence, is an effort
to get developers to establish applications for the new "Huawei App store" and thus establish
a self-reliant, independent path from the world of Android.
To achieve this, the company has pledged a competitive revenue sharing scheme of 15
percent to developers, half of that what Apple and Google demand for participation in their
own app-stores.
This effort is combined with a wider scope in research and development from the company,
which is also designed to forfeit dependence upon American technology chains in terms of
critical components and other parts.
We have already seen massive investment pledges from Huawei to build new research and
development centers in the United Kingdom, Belgium, Italy and Brazil. They are not empty
promises, but a serious and strategic effort.
In this case, what was intended to be a political effort to destroy and contain Huawei is
likely to prove a pivotal turning point in the company's history with huge repercussions for
global smartphone and technology markets.
Instead of having once been reliant on and thus beneficial to American technology markets,
the outcome is that Huawei will re-emerge independent of and competing against it.
Armed with a pending new operating system, a new application development drive and a
broader research effort, what seemed otherwise a detriment is likely to bring a massive
opportunity. Thus, it is very important to examine the long-term prospects for the company's
fortunes ahead of short-term challenges.
"... "The Kirin 990 is not only an SoC and a 5G modem glued together. We put a lot of effort in integrating the two chips. So the new chip uses less power and generates less heat while getting the job done," said Huawei fellow Ai Wei before the launch event. ..."
"... The whole Kirin 990 5G chip is so dense that it contains 10.3 billion semiconductors, the first and largest of its kind. ..."
"... Another example is AI-based video quality improvements, which takes in a low quality video and render a better one. Objects in the rendered video have much sharper edges. Huawei technicians refused to explain how they made it, but the underlying tech seems to be object recognition, content-based pixel generation and noise reduction, since these are the tricks AI does well. ..."
"... Huawei's P30 Pro smartphone, together with the Kirin 980 chip, has taken "smartphone zoom to the next level," according to third-party review site DxOMark. The phone was on top of all smartphones when it comes to photography in DxOMark's ranking. The Kirin 990 is packed with more graphic features to continue Huawei's dominance. ..."
Smartest and fastest: Huawei reveals new smartphone chip Kirin 990 5G
By Gong Zhe
Chinese smartphone giant Huawei, which has been under heavy attack from the U.S.
government during the last few months, just revealed its next-generation smartphone
system-on-a-chip (SoC) product "Kirin 990 5G," signaling the company's business is not
stalled by foreign strangling.
The launch event was held simultaneously at IFA electronic show in Berlin, Germany, and in
Beijing on Friday.
In his keynote speech, Huawei's head of gadgets Richard Yu told the press that the chip is
more advanced than other flagship smartphone SoCs, because it has a built-in 5G modem.
Current rivals of the chip, like Qualcomm's Snapdragon 855, have no 5G modem and have to
rely on an extra chip to support 5G.
"The Kirin 990 is not only an SoC and a 5G modem glued together. We put a lot of
effort in integrating the two chips. So the new chip uses less power and generates less heat
while getting the job done," said Huawei fellow Ai Wei before the launch event.
The whole Kirin 990 5G chip is so dense that it contains 10.3 billion semiconductors,
the first and largest of its kind.
Flexible AI power
The chip also features three AI cores, two larger than the other smaller. This design,
first in smartphones, saves battery power by only using the small core to process simple AI
tasks, while resorting to the larger cores for more complex jobs.
The company named the cores "Ascend Lite" and "Ascend Tiny" to relate the cores to
Huawei's new, self-proclaimed "fastest AI training chip in the world," the Ascend 910.
Huawei built a showcase at the Beijing launch event to demonstrate the chip's AI power.
They showed a FaceID-like face recognition feature in a Kirin 990-powered developer board
that can work when the person is four meters away from the phone, times further than Apple's
current product.
Another example is AI-based video quality improvements, which takes in a low quality
video and render a better one. Objects in the rendered video have much sharper edges. Huawei
technicians refused to explain how they made it, but the underlying tech seems to be object
recognition, content-based pixel generation and noise reduction, since these are the tricks
AI does well.
Even better photos
Huawei's P30 Pro smartphone, together with the Kirin 980 chip, has taken "smartphone
zoom to the next level," according to third-party review site DxOMark. The phone was on top
of all smartphones when it comes to photography in DxOMark's ranking. The Kirin 990 is packed
with more graphic features to continue Huawei's dominance.
A Kirin 990-powered smartphone can shoot 4K videos (3840 x 2160 pixels) at 60 frames per
second, on par with market flagship phones.
The chip can also run DSLR-level noise-reduction algorithm – namely "Block Match 3D"
– to bring professional tech to consumer devices.
"Porting an algorithm from DSLR to smartphone may be easy. But getting the program to run
fast enough can be hard for any phone maker," Ai told CGTN Digital.
Non-U.S. tech
The design of Kirin 990 is still based on technology Huawei bought from British tech
company ARM, used by several mainstream brands.
After the U.S. began imposing restrictions on Huawei, ARM cut ties with the Chinese phone
maker. Despite this, Huawei has been able to use and modify AMRv8 technology thanks to its
permanent ARM license. Hence why chips like Kirin 990 can still be legally built and
sold.
In addition to ARM, there are other major smartphone tech companies cutting ties with
Huawei, forcing the Chinese company to create its own alternatives. After Google announced to
bar Huawei phones from installing their apps, Huawei started porting its IoT system "Harmony"
to smartphones.
But Huawei still wishes to use technologies from all over the world. As Ai Wei explained
at the launch event, "Huawei will not deliberately remove all U.S. tech from its smartphones.
But when the supply from U.S. was cut, Huawei has to find a way to survive."
"That's why Huawei chose to create its own technology," Ai added....
The point in article after article is that China is emphasizing technical advance in building
the economy from rural to urban applications and the emphasis will not be lessened. The rural
applications I am reading about are especially exciting.
I appreciate the interview, but Clayton Dube as director of the University of Southern
California's U.S.-China Institute knows remarkably little about China or American relations
with China. Possibly Dube is being especially cautious, but still:
"The air in Los Angeles," the academic explains by way of an example, "is influenced by
the air coming out of northern China. But of course, that bad air in China is produced by
factories often producing for the American market. And so we have not only outsourced
production, we've outsourced pollution."
This is absurdly wrong. China has been working on cleaning the environment for years now
and the effects as monitored have been dramatic.
The idea that China thinks of 1849 to 1949 as a colonial period that took them 100 years to
get free from, for instance, immediately helps me understand some of where they are coming
from.
The idea that China thinks of 1849 to 1949 as a colonial period that took them 100 years to
get free from, for instance, immediately helps me understand some of where they are coming
from.
[ Surely so, this very day is "International Day of Peace in Nanjing" in memory of the
victims of the terrible Japanese occupation:
Four Years After Declaring War on Pollution, China Is Winning
Research gives estimates on the longer lives that are now possible in the country.
By Michael Greenstone
On March 4, 2014, the Chinese premier, Li Keqiang, told almost 3,000 delegates at the
National People's Congress and many more watching live on state television, "We will
resolutely declare war against pollution as we declared war against poverty."
China has had the benefit of skipping over other advanced nation's Legacy infrastructure.
Leapfrogging ahead in some areas of development is smart and saves money for China as
well, but that doesn't make China superior to other advanced nations.
The U.S. Has a Fleet of 300 Electric Buses. China Has 421,000
The rest of the world will struggle for years to match China's rapid embrace of electric
transit.
By Brian Eckhouse - Bloomberg
Fearing 'Spy Trains,' Congress May Ban a Chinese Maker of Subway Cars
By Ana Swanson
CHICAGO -- America's next fight with China is unfolding at a glistening new factory in
Chicago, which stands empty except for the shells of two subway cars and space for future
business that is unlikely to come.
A Chinese state-owned company called CRRC Corporation, the world's largest train maker,
completed the $100 million facility this year in the hopes of winning contracts to build
subway cars and other passenger trains for American cities like Chicago and Washington.
But growing fears about China's economic ambitions and its potential to track and spy on
Americans are about to quash those plans. Congress is soon expected to approve legislation
that would effectively bar the company from competing for new contracts in the United States,
citing national security and economic concerns. The White House has expressed its support for
the effort....
Terrific discussion on how the West perceives China...
[ Actually a discussion that shows a remarkable misperception of China even by an American
China academic-specialist. As such the discussion is important though discouraging. ]
"... I always thought globalization was about the opportunity for a handful of businesses and corporations to control major industries around the world. ..."
"... There is an anti-China hawks faction based in the Republican party that has made its present felt. People like Robert Lighthizer, Peter Navarro and Steve Bannon. I have seen this sentiment spill over into Australian politics but they have not reached the stage where they are asking: "Are you now, or have you ever been, born Chinese?". ..."
"... We have also seen hawk factions against Russia, Iran and not long ago Venezuela. The ones for Russia and Iran have been long going but the ones against China and Venezuela were sudden and new. It may be that tomorrow that Trump will do the same against Cuba and threaten any country that does trade with them. Who knows what other country may fall within his sights? ..."
"... it seems business people in the government are being pushed aside by hawkish factions who do not care what effect it has on the economy or the country. Great! ..."
"... Those are the same "hawks" that are busy destroying the rest of America as well. ..."
"... As it is now, China literally has the US by the jewels, and if a serious conflict ever arose, could squeeze them hard. Just their dominance in manufacturing a large percentage of the pharmaceuticals consumed by US patients alone creates a serious vulnerability. ..."
"... Situating the manufacturing in countries that are part of the Chinese sphere of influence won't help much in a conflict. China would probably be able to sweep through much of Southeast Asia quickly or interdict shipments if there was war. ..."
"... the world wide presence/threat of the USA military and diplomatic corps allows globalization to be less risky for USA businesses, so, in effect, the patriotic "spreading of democracy" around the world via military actions is a factor in USA job loss. This is yet another cost of the bloated military to the general USA population. ..."
"... Trump, as usual, got his strings pulled by the Deep State when he went for actual implementation of a campaign promise. The DS doesn't care about working Americans, they are simply against China. ..."
"... as Julius Krein, editor of American Affairs, writes: "United States industry is losing ground to foreign competitors on price, quality and technology. In many areas, our manufacturing capacity cannot compete with what exists in Asia." ..."
"... Back in the early 80s I saw a massive warehouse full of machine tools, Bridgeport mills, and such lined up, it seemed forever, the guy there said they were going to China. I asked my Dad about it, and he told me we were selling them to the Chinese for the price of scrap. The whole thing is mindless and pathetic, but the really maddening thing is the slippery way our 'leaders' can keep dodging the blame by simply pointing a finger in whatever direction, and everybody's eyes move in unison. ..."
"... The argument/discussion is not about how and where to outsource our jobs, it's about how stupid it was to do it in the first place ..."
"... Also the Chinese internal market continues to attract MNC's and this attraction will continue to grow far into the future. China's middle class is already larger than the total population of the US and it continues to grow rapidly. While down presently the Chinese internal consumption continues to grow at an annual rate of some 8.5%. ..."
"... Trump's approach to trade is isolating the US, blocking its Co's from the Chinese market, and incentivizing the Chinese to offer better conditions to Co's of the rest of the world. How can that help the US ? ..."
"... The relentless neoliberal race to the bottom, outsourcing, and austerity that marked the death blow to American Labor is over. In that light it makes little difference whether our corporations pull out of China, go to Vietnam, or come home. The exploitation of the poorest is coming to an end. And none too soon. ..."
"... I hope some candidates discuss the imperative to have the US start making it's own medications again. ..."
"... I could not believe the government has allowed the entire supply chain of building blocks of ALL our antibiotics to be sourced almost solely from China. To me THAT'S the national security issue we need to deal with immediately. As well as other vital drugs.. ..."
"... Chinese manufacturers have the wealth and experience to teach production line workers and make things anywhere. Western companies manufacturing in China have belatedly looked for facilities in neighboring countries and found the Chinese are already there. ..."
"... Trump doesn't give a damn about getting manufacturing jobs back into the United States! (Or at least his advisors don't). ..."
"... Low housing costs, lead to lower wages so UK employers were able to compete in a free trade world. William White (BIS, OECD) talks about how economics really changed over one hundred years ago as classical economics was replaced by neoclassical economics. ..."
"... He thinks we have been on the wrong path for one hundred years. Free trade requires a low cost of living and what was known in the 19th century had disappeared by the 20th. The West's high cost of living means high wages and an inability to compete in a free trade world. ..."
By Marshall Auerback, a
market analyst and commentator. Produced by Economy for All, a project of the Independent Media
Institute
"Chimerica" is a term originally coined by the historian Niall Ferguson and economist Moritz
Schularick to describe the growing economic relationship between the U.S. and China since the
latter's entry into the World Trade Organization (WTO) in 2001. In the words of Ferguson : "The Chinese did the saving, the
Americans the spending. The Chinese did the exporting, the Americans the importing. The Chinese
did the lending, the Americans the borrowing." Much of the pre-crisis boom in global trade was
driven by this economic symbiosis, which is why successive American presidents tolerated this
marriage of convenience
despite the increasing costs to the U.S. economy . The net benefits calculation, however,
began to change after 2008, and the conflict has intensified further after the 2016
presidential election result. Today, the cumulative stress of Donald Trump's escalating trade
war is leading to if not an irreparable breach between the two countries, then certainly a
significant fraying. The imminent resumption of trade talks notwithstanding, the rising cost of
the tariffs is already inducing some U.S. manufacturers to exit China. But in most instances,
they are not returning to home shores.
It may have taken Trump to point out the pitfalls of the Chimerica link, but coming up with
a coherent strategy to replace it is clearly beyond the president's abilities. America is
likely to remain a relative manufacturing wasteland, as barren as Trump's own ill-conceived
ideas on trade. At the same time, it's not going to be an unmitigated victory for China either,
as Beijing is increasingly suffering from a large confluence of internal and external
pressures.
Chimerica helped to launch China as a global trade power. To the extent that this marriage
helped the U.S. economy, it skewed toward the largely blue state coastal regions. Wall Street
banks located on the East Coast happily collected lucrative commissions and investment banking
fees, as China's export proceeds were recycled into U.S. treasuries, stocks, and high-end real
estate while the capital markets boomed; on the West Coast, "new economy" companies thrived,
their growth and profitability unhindered by the onslaught of Chinese manufactured exports. By
contrast, facilitated by technological advances that permitted large-scale outsourcing by U.S.
manufacturers, Chimerica laid waste to much of what was left of America's Rust Belt, and the
politics of many of the displaced workers mutated to the extent that Donald Trump became an
appealing alternative to the establishment in 2016.
The major legacy of Chimerica, then, is that too many American workers have been
semi-permanently replaced by low-cost offshored labor. Prior to great advances in technology,
along with globalization, displacement of the current labor force could only have occurred
through immigration of workers into the country. Historically, displacement by immigrants
generally began at the menial level of the labor force, and became more restrictive as when it
became correlated with significant unemployment. Given the rise of globalization and the
corresponding liberalization of immigration in the past few decades, however, policy no longer
arrests the displacement of American workers. The policy backlash has consequently manifested
itself more via trade protectionism. Trump has sought to consolidate his Rust Belt base of
supporters by launching a trade war, especially versus Beijing, the ultimate effects of which
he hoped would be to re-domicile supply chains that had earlier migrated to China.
Early on in his presidency, there was some hope that Trump's protectionism was at best a
bluff or, at worst, an aberration, and that the return of a Democrat to the White House in 2020
would eventually reestablish the status quo ante. But the president still can't get a wall, and
his protectionism has become more pronounced almost as if to compensate. The problem today is
that even if Trump is voted out of office in 2020, corporate America is becoming less inclined
to wait out the end of his presidency to return to the pre-Trump status quo of parking the bulk
of their manufacturing in China. There is too much risk in putting all of one's eggs in the
China basket, especially given
growing national security concerns . Hence, U.S. companies are taking action. In spite of
decades of investment in these China-domiciled supply chains, a number of American companies
are pulling out:
toy manufacturer Hasbro , Illinois-based
phone accessories manufacturer Xentris Wireless, and lifestyle clothing company PacSun are
a few of the operators who are exiting the country.
But they are not coming back to the U.S., relocating instead to places like Vietnam,
Bangladesh, Mexico, the Philippines and Taiwan. The chief financial officer of Xentris, Ben
Buttolph, says
that the company will never return to China: "We are trying to have multiple locations
certified for all of our products, so that if all of a sudden there's an issue with one of the
locations, we just flip the switch." Likewise, the CEO of Hasbro, Brian Goldner,
recently spoke of "great opportunities in Vietnam, India and other territories like
Mexico."
All is not lost for the U.S., however, as Goldner did celebrate the success of Hasbro's
facility in East Longmeadow, Massachusetts, which has resumed
production of Play-Doh in the U.S. for the first time since 2004 . It is doubtful, however,
that this represents the recapturing of the high value-added supply chains that Trump envisaged
when he first launched his trade assault on Beijing.
In general, as Julius Krein,
editor of American Affairs , writes: "United States industry is losing ground to foreign
competitors on price, quality and technology. In many areas, our manufacturing capacity cannot
compete with what exists in Asia."
These are not isolated examples.
Defense One also notes the following development:
It came without a breaking news alert or presidential tweet, but the technological
competition with China entered a new phase last month. Several developments quietly heralded
this shift: Cross-border investments between the United States and China plunged to their
lowest levels since 2014, with the tech sector suffering the most precipitous drop. U.S. chip
giants Intel and AMD abruptly ended or declined to extend important partnerships with Chinese
entities. The Department of Commerce halved the number of licenses that let U.S. companies
assign Chinese nationals to sensitive technology and engineering projects.
This development consequently makes it hard to proclaim Beijing a winner in this dispute
either. The country still needs access to U.S. high tech. The government announced yet
another fiscal stimulus to the economy earlier this month in response to a cluster of
weakening economic data, much of which is related to the trade shock. It is also the case that
China is being buffeted politically, both externally and internally: externally, in addition to
the escalating trade war, China's own efforts to counter the effects of rising protectionism by
creating a " reverse
Marshall Plan " via the Belt and Road Initiative is
floundering .
China's "iron brother," Pakistan, is increasingly being victimized by India's aggressive
Hindu-centric nationalism . It is hard to imagine the Modi government opportunistically
taking the step of annexing Kashmir and undermining Pakistan, had it not sensed Beijing's
increasing vulnerability.
Internally, Beijing is finding it increasingly challenging as it seeks to enforce its "One
China" policy in Hong Kong and Taiwan. The
withdrawal of the controversial extradition law that first precipitated widespread
demonstrations in Hong Kong has not alleviated the political pressures in the territory, but
simply allowed an even bigger protest culture to take root and strengthen an independent
political mindset. Similarly, Taiwan has also openly supported the Hong Kong protesters,
pledging help to those seeking asylum . Both regions now constitute both a huge humiliation
and challenge to the primacy of China's ruling Communist Party. And now on top of that, foreign
manufacturers are leaving the country, weakening a totally leveraged manufacturing complex.
The implications of this divorce go well beyond the U.S. and China. They constitute another
step toward regionalization, another step away from a quaint ideological "post-history"
construct that saw Washington, D.C., as the head office and the rest of the world as a bunch of
branch plants for "America, Inc." It's hardly comforting to contemplate that the last time we
reached this historic juncture was the early 1900s, when a similarly globalized economy broke
down, followed by the Great War. As Niall Ferguson points out , "a high level of economic integration does not
necessarily prevent the growth of strategic rivalry and, ultimately, conflict." There's no
doubt that both Washington and Beijing will likely making soothing noises to the markets in
order to create favorable conditions for the trade talks in October, but their actions suggest
that they are both digging in
for a longer struggle . Today's trade wars, therefore, are likely to morph into something
more destructive, which is a lose-lose in an era where human advancement depends on greater
integration between economic powers.
There may be another aspect to this development and that is of geopolitics. You can see
that in Marshall's article when the CFO of Xentris said: "We are trying to have multiple
locations certified for all of our products, so that if all of a sudden there's an issue with
one of the locations, we just flip the switch." There is an anti-China hawks faction based in
the Republican party that has made its present felt. People like Robert Lighthizer, Peter
Navarro and Steve Bannon. I have seen this sentiment spill over into Australian politics but
they have not reached the stage where they are asking: "Are you now, or have you ever been,
born Chinese?".
So we have seen a long string of sanctions and tariffs at play so that China will change its
laws and institutions to suit American interests. Yeah, I can't see that happening anytime
soon but hey, America First, Baby. We have also seen hawk factions against Russia, Iran and
not long ago Venezuela. The ones for Russia and Iran have been long going but the ones
against China and Venezuela were sudden and new. It may be that tomorrow that Trump will do
the same against Cuba and threaten any country that does trade with them. Who knows what
other country may fall within his sights?
That being the case if you were running an international country, you can no longer just have
your manufacturing base or service operations just in one country. If Xentris is an example,
US companies may have to split manufacturing into several countries in case one fine day that
Trump will sanction yet another country that your company depends on.
I would imagine that it
would not be so efficient but it seems business people in the government are being pushed
aside by hawkish factions who do not care what effect it has on the economy or the country.
Great!
Those are the same "hawks" that are busy destroying the rest of America as well. Another
four years of this will, effectively, dismantle what democracy is left. The world trade won't
be the big issue. The departure of millions of Americans will.
If that happens, be sure to thank the Catfood Democrats for it. Because they are the
people who will do their very best and hardest to throw the next election to Trump, one way
or another.
It seems like diversification of supply chains can only be a good thing. As it is now,
China literally has the US by the jewels, and if a serious conflict ever arose, could squeeze
them hard. Just their dominance in manufacturing a large percentage of the pharmaceuticals
consumed by US patients alone creates a serious vulnerability.
I really don't think it matters if manufacturing jobs are repatriated to the US, or just
set up and spread around elsewhere for now – since they'll be obsolete jobs in the near
future anyway, as robotics and AI get increasingly efficient at doing the work that human
workers currently do.
Situating the manufacturing in countries that are part of the Chinese sphere of influence
won't help much in a conflict. China would probably be able to sweep through much of
Southeast Asia quickly or interdict shipments if there was war.
So the status quo was preferable? The tone of the article seems to suggest that America should accept it place as a
third-world manufacturer, as if these Asian nations have some magical sauce that can't be
replicated. Gawd.
The US does have a lot of magic. Like one third of FDI related to tax evasion. Pulling Mac
Book manufacturing out of Austin for the lack of one 'screw', etc. So is the premise of going after China on trade and IP policies good. I would agree. Maybe
not in strategy, but at least someone has opened the box.
I agree with your comment, the article suggests the status quo was preferable. Of note, Trump has shown his supporters that something CAN be done other than follow the
"resistance is futile" path of the Bill Clinton/Bush Jr./Obama administrations.
I also suggest that the world wide presence/threat of the USA military and diplomatic
corps allows globalization to be less risky for USA businesses, so, in effect, the patriotic
"spreading of democracy" around the world via military actions is a factor in USA job
loss. This is yet another cost of the bloated military to the general USA population.
I worked in the electronics industry for 30+ years and watched high margin manufacturing
move to Asia. Now the lower level component manufacturers (PCBs, passives) are firmly established in
Asia as the USA companies have helped train worthy competitors overseas. It took 25+ years to move much of USA manufacturing overseas, indicating to me that it
will take a long time to bring it back significantly, well outside the Trump time frame.
But I suspect Trump voters will appreciate Trump's headline efforts. If the Democrats push for more Free Trade as good for the USA, it will hurt them at the
ballot box.
The second time as farce. How tragicomic that Trump has succeeded in little more than
repatriating the manufacture of Play-Doh. On the other hand, the shipping cost of unbaked brick seems a rational factor in Hasbro's
decision. A GND that shortens supply lines would be more effective in repatriating heavy
industry, but then printed circuit boards aren't all that heavy .
The thing is Trump, as usual, got his strings pulled by the Deep State when he went for
actual implementation of a campaign promise. The DS doesn't care about working Americans,
they are simply against China.
So he goes and puts tariffs on a country, not a product. And surprise, said product
doesn't come back on-shore. Comical (and yeah, cosmically a bit just) that Vietnam is getting
so much of that manufacturing. Wasn't what he was elected for.
In general, as Julius Krein, editor of American Affairs, writes: "United States industry
is losing ground to foreign competitors on price, quality and technology. In many areas, our
manufacturing capacity cannot compete with what exists in Asia."
As a engineer up to my elbows in manufacturing for forty years, this was awfully easy to
predict way back then (I gave up complaining about it about 2000), and then watch happen
– real time. And to once again state the obvious, China did not TAKE American jobs,
American CEOs GAVE them our jobs. We will not fix this problem until we identify and fix the
root cause.
Now the only way to fix it is (once again obviously) massive government investment such as
mandated by the GND. We need the GND, it is not only required to save the world, it will save
our country.
Cleaning Up Trump's Global Mess
Trump's Mexico Tariffs Are About White Nationalism, Not Trade
Trump's Trade War Is About Trump, Not China
Why Spend $54 Billion More on the Pentagon? To Start a War, Obviously.
Making China Great Again
© AP Photo / Carlos Osorio Fed Study Finds Trump's Trade Wars Backfired, Leading to Lost Jobs and Price Hikes Trump pointed out that his administration will begin Phase Two trade negotiations with China "shortly", without elaborating a timeline. US Vice President Mike Pence told Fox Business later in the day that the talks on the second phase were already underway.
By Jeffrey D Sachs November 8, 2019
