Tag Archives: China

The Growing China enigma

American policymakers are having to deal with an increasingly mystifying China.

The giant culture that is less than a nation-state but far more than an amorphous one and half billion people is, perhaps inevitably, moving rapidly in different and conflicting directions. As always is the case in a world of jungled conflicts, the U.S. must hope for the best but prepare for the worst. And that worst could be an inevitable conflict over basic American international policy, not least, freedom of the seas.

The Chinese are continuing to build what can only be called military bases in a barrier across one of the most strategic commercial route in the world through the South China Sea. It may take years before the Chinese can project sufficient power from those reconstructed coral shoals to challenge the U.S. Navy. But the world moves faster and faster, and assurances that we are technologically meeting the threat of asymmetrical warfare in which the Chinese traditionally have excelled has to be periodically reexamined

China continues spending in her own terms vast resources on these bases and on the expansion of her military, particularly her seapower. That’s despite the fact that her economy has drifted – one could say inevitably – into slower rates of growth than the double-digit increases of the past three decades. The actual drop, always subject to speculation because of Beijing’s “create accounting”, is perhaps less important than the speed at which she is slacking off.

This has already impacted world commodity markets where China custom had caused high growth, and those countries – including Russia — which had been sucked into single product export patterns. Beijing’s galloping economic invasion of raw material producers, particularly in Africa, where infrastructure projects were sold  as a “swap” for raw materials, are in trouble. That’s telling in such countries, such as Angola, with the energy price halving in no small measure because of the Shale Revolution in the U.S. American lower prices and a gas surplus has sent the oldtime oil price guardians such as Saudi Arabia, and now Iran, pumping as fast possible to maintain market share. But in Southeast Asia Beijing continues to push subsidized giant railroad and highway construction and damn the home finances.

These gambles have been matched by an unprecedented campaign against corruption by Pres. Xi Jinping in his effort to create a new personality political culture matching that of the fabled Mao Tse-tung. These campaigns in the past, while based on evidence in a totally corrupt society, actually are intended to eliminate opposition within the ruling one-party Communist state. More recently, Xi has gone further afield than just high Party officials, and named  multi-billionaire Party-favored oligarchs. That seems inevitably another economic gamble given the slowing economy.

In fact, Xi – despite criticism within and without the Party that they were the greatest obstacle to economic progress – has enhanced the power of the government-owned huge behemoths with near monopolies. Whittling them down and their political hold on credit for a move toward the tiny private sector and most of all, increased consumption, was supposed to be the order of the day. But it is not happening.

The Obama Administration, for the most part, is tip-toeing around all these issues and the puzzles they present for American policy in Asia, and, indeed, in the world. Cutting back on the U.S. military at a time of aggressive Chinese rhetoric and movement is not exactly apt. Minor tinkering with currency manipulation and export subsidies, which will probably expand given the Chinese slowdown, is not an answer to the loss of American manufacturing, now interestingly enough also moving away from China toward more low-wage countries.

China policy has, of course, been a major battleground for American strategists for the past half century or more. But it is looming still larger and the next administration, whatever and whoever it is, had better come with some preparation.




China crisis

China is hurtling toward a crisis of the regime. It is too early to know whether the Communist leadership, so astute in the past, will be able to untangle a cats cradle of issues.
The worldwide headlines, and nervous reaction of other markets, to the Shanghai stock markets rollercoaster is the least of Beijing’s worries. But it is, of course, symptomatic of deeper concerns.
With all the appearances of western exchanges the Shanghai market is profoundly different. It is not a primary collector of capital for investment. Capital and savings distribution in the Chinese system is largely through three government banks funded by the government – a top-down process Beijing’s wants to move toward market-oriented distribution. For while a private sector exists and disproportionately accounts for Chinese success, it is pitted against huge inefficient but politically connected government monopolies.
Communist leadership recently encouraged investors to get into the stock market, a part of trying to move toward more consumption and away from central planning which committed 50% of government funds to investment, with the inevitable waste. It had so taken after its Soviet model that whole ghost cities have been built without residents. But with the Chinese’ notorious gambling streak, stockmarket speculation skyrocketed until more adroit larger speculators pulled the rug.
Stuck with a propaganda disaster, Communist leadership – beginning in June – threw everything they had at the Shanghai market, including the central bank buying up equities. But the market kept collapsing and in the latest round, the powers that be apparently have given up, letting the investors, big and small, take their hit. With less than 20-20 insight, that is what they should have done in the first place instead of demonstrating increasing inability to direct a planned economy without a plan. [Shades of Mao Tse-tung’s Great Leap Forward which cost at least 30 million lives in famine!]
Even more important to the Communist Party’s power monopoly is the growing decline in overall growth. Having given up Marxist-Leninism-Maoism in all but name, rapid economic growth has become the regime’s raison d’etre. While the government claims 7.6%, well behind the remarkable claim of an average annual 10% growth over two decades, the always suspicious official figures look even more suspect. Many students of the numbers say it is closer to 5%. Again, although conventional wisdom held that 8% annual growth of the gross national product – all economic activity – was needed to preserve stability, what has been more worrying for Beijing is the speed of the decline.
Numbers are not the Communists’ only problem. Unlike his immediate two predecessors, Xi Jinping, China’s hefty holding all three slots – secretary of the Party, head of government, and chief of state – has abandoned any pretense of collegiality.. His grab for power has included a massive anti-corruption campaign, reaching into the highest echelons of the Party. With almost everyone with his fingers in the pot, frequent anti-corruption drives are a disguise for eliminating Party rivals.
Xi has gone after several politburo members at the top of the Communist heap, including head of the secret police and intelligence, Zhou Yongkang. Zhou was accused of everything from womanizing [including Jia Xiaoye, 43, niece of former president Jiang Zemin, who became Zhou’s second wife after his first wife died in a somewhat mysterious car accident] to his family hoarding $14.5 billion from bribery and embezzlement.
Zhou’s sentencing to life imprisonment in a secret trial is not likely to end the affair with so many Party officials his protégés. Xi, like his predecessor, has appointed large number of senior generals, most with no military experience, but it remains to be seen whether a rapidly expanding force with new technocratic elements, can be neutralized if Party divisions grow. There are, for example, unconfirmed reports Xi has put his immediate predecessor, Jiang Xemin, with a still strong following in the Party and among his military appointees, under house arrest.

East Asian worries

Anonymous leaks from Chinese spokesmen along with mistaken translations of Japanese Prime Minister Shinzo Abe’s private remarks at the gathering of our lords and masters at Davos World Economic Forumn are alarming.

Bombastic comments from the Chinese – including the military as well as the controlled government media – are nothing new. And interpreting the Japanese has always been an art form never developed by the West most especially lacking in American media and by most U.S. politicians.

But if you add to these mutterings to the growing lack of influence of a befuddled Obama foreign policy, it is as some would have it, the makings of new and extremely dangerous possibilities in East Asia. It may not be 1914, 1936 or 1941 but with growing antagonism and friction between the two most important players in the region, it is a worrying moment and needs the required defusing of an incipient crisis.

The background, of course, is that the Chinese Communist regime is in deep do-do. The fantastic growth of the last two decades is now behind them. Rapid economic growth with its enormous rewards for the elite has been the Communists’ answer to their abandonment in all but name of Marxist-Leninist-Maoism. The capitalist formula for a truly great leap forward – the introduction of outside capital and accompanying technology and the enormous expansion of the infrastructure – is coming to a close. Despite propaganda by the regime, too often echoed in the world media, China is in another transition with the outcome very much in doubt.

In fact, it’s been success as so often happens, that has been the death warrant for the strategy of the past three decades. Rapid domestic changes in the leading coastal cities, including a diminishing of what has been until now an unlimited pool of cheap rural labor, are ending. It is one of the results of the one-child birth control policies. A sputtering recovery among its main international customers, particularly the U.S., plus competition for exports is squeezing even the modest profit margins. The lower end of their factory to the world is being drained off to other low-wage economies and the galloping increases in productivity brought on by new technology in the West and Japan limit movement to higher profit products. All this will trim the expansion of exports. Growing anxiety over debt, particularly by local governments that have exhausted their use of land sales to finance often overly ambitious projects, is ending resort to the infrastructure gimmick.

So far the Party’s response has been to talk about “reforms”. But except for minor chipping around the edges, the leadership has not been able to dramatically reverse old policies and their results.

Nor is there much hope of further future implementation of these so-called reforms, all of which have been talked up for years, even in the controlled party organs. For one thing omnipresent corruption – both gross and sophisticated – blocks what all agree ought to be done. For example, the switch to a more balanced economy with a growing consumption sector rather than unlimited investment is easier said than done. Recent shifts are now reversing, if those damned statistics cane be believed. [Again we have that problem, for example, of provincial GDP figures not gibing with the national claims.]  Without expanding the accompanying social services to include millions of temporary workers in the large cities who in effect are there illegally, that kind of consumer market can not exist. But to move on the question of the part-time city dwellers would be to abandon the kinds of population controls which have been basic to the system of political repression by the regime.

By “sophisticated” corruption is meant the built-in interest groups that have developed alongside the hell-for-leather economic expansion. For example, ending at least partially the one-child program, which has now been decreed, however corrupted it has become at the lower echelons, is difficult if not impossible because of a powerful bureaucracy which has developed over several decades to enforce it. The problem of pollution of land, water and air, is so gigantic that under the best of circumstances it could not be solved for decades and it will take enormous investment to do so.

The lament among some Western observers that Chinese nationalism is being purposely stimulated by officialdom as a direct response to these growing economic problems is a misinterpretation. The kind of nationalism that almost destroyed European civilization in two World Wars does not now nor did it ever exist in China. That Chinese world of more than 1.3 billion is so vast with so many ethnic, regional and linguistic  competitions and conflicts, that only a few detribalized students pick up a Westernized nationalist flag.

But there is another very real element that is more dangerous. Chinese military expansion is accelerating. It seems likely that however ambitious it may be, it is not as competent as its announcements suggest. [That’s whether losing a balloon over the contested East Sea/Japan Sea rocky shoals difficulties. The further embarrassment was the chief of Chinese ballooning had to be picked up out of the water by the Japanese Coast Guard who made less of it in propaganda than they might have.]

But there is no doubt that a lot of young and ambitious soldiers and sailors have new toys they would like to play with, many the applications of American technology sold or stolen by Beijing. Nor can military anomalies be excluded by a U.S. military often complacent as its more than half century of total world dominance. [One remembers the stories of how the. Japanese Zero fighter was described as being put together with string and paste in the pre-1941 period, only to turn out to be one of the best fighter planes in World War II.]

It’s a slippery slope, as all characterizations of national character are, but there is another element: the Chinese have a sometimes fatal attraction for gambling. [All you have to do is look at the faces at the Las Vegas tables, or the gambling megametropolis of Macao]. By extension, recent Chinese history is replete with enormous political gambles, often failed ones costing millions of lives in Mao’s time. For an important if unnamed spokesman at Davos to be quoted as saying a Chinese strike at the contested rocky shoals in the East China could be effective before a Japanese [or U.S.] response is just that sort of gamble.

Into this mix comes a new Japanese turn, for the first time in several decades a strong Japanese prime minister would like to restore a modicum of national resolve to a population decreasing at a catastrophic rate but still hanging on to one of the world’s largest and most sophisticated economies That is going to mean, incidentally, throwing off some of the vestiges of the U.S. Occupation which tried to remold a more than usually tradition-bound society. Beijing, using the echo chamber of Western media and some U.S. scholars and politicians recalling the horrors of World War II, is trying to inhibit this resurrection of its old rival. Nor does the possibility even surface of comparing notes on Japanese wartime deprivations and the murder of a hundred million Chinese by the Maoist regime to which the current leadership still pays homage. The fact that China still depends to a considerable extent on imitating “the Japanese model” and the importance of Tokyo’s transfers of technology is another evidence of Beijing’s internal unresolved strategic conflicts.

Add to this the wandering strategies of the Obama Administration and the now challenged “traditional” role of the U.S. Navy to keep the seas open around the whole Eurasian land mass and you get some ugly possibilities. The Obama Administration, rather than playing a more substantial public role as an ally of Japan, has taken it on itself to be the part-time mediator between the two East Asian rivals. That not only befuddles Tokyo but obscures the issues, which at this time and place, is the aggressive Chinese demands. Beijing is being led to believe Washington will eventually accede to the expansion in its vast claims to areas which it believes can be restored to old traditions of East Asian suzerainty to the first centrally governed state in the region [and perhaps the world].

The American ambassador, an inexperienced Kennedy scion despite her attribute of a name that does have panache in Japan, is seemingly spending more time worrying about porpoises. The defense secretary refuses to cope with the anomalies of the troubled Tokyo-Seoul relations which is currently the chief obstacle to any regional stand-up to the Chinese. Washington is therefore counted among the missing. Its attention appears hung up somewhere between its Mideast fiascos, its domestic health care muddles, and a much publicized but unsubstantiated “pivot” to concentration on Asia.




China may soon become THE problem

Creeping up on the outer edges of Wall Street and The City soothsayers’ economic crystal ball, until now dominated by American and Euro crises, is growing concern about China.

The inane idea China [and India, which is also in trouble] would somehow rescue the world economy is now, finally, dismissed by the pundits — without apologies. How a largely export-led, mercantile economy was to save the world with its principle markets in the U.S. and the EU winnowing down was never explained. Continued wishful references to Chinese leadership’s equally improbable promises to boost domestic consumption are also falling away.

There is, in fact, a growing consensus the Chinese economy is spiraling down. One respected Hong Kong economist, Ms. Wang Tao of UBS, is predicting a gross domestic growth [GDP] rate toward 7% before yearend. That’s below the red line 8% long considered by the double-domes as the minimum to satisfy jobs for China’s growing population. Soon we can hope to hear an end to those straight-line projections – so wrong two decades ago in Japan predictions – which take China’s current world No. 2 GDP to soaring heights. Indeed, China is the classic example of inadequacies of GDP as an economic barometer. Even assuming official figures are reliable — which is a far stretch — China’s GDP has inflated with vast over expansion of infrastructure and massive corruption indicating enormous activity but not necessarily a basis for continued stability and growth. [Remember Euroland’s GDP/consumption figures before the fall!] Nor do we have more than a notional figure for huge military outlays.

Granted, some of us who have been predicting a China crash for years, arguing its miraculous transformation was jerrybuilt. But we have always said what would trip the fall, when, and how the Chinese would cope with it, is unpredictable – as so many things in life. Some full-time observers are now turning to the banking structure as chief concern. Whether you look at inadequacies of Communist Party decision makers in their see-saw battle to maintain maximum growth but head off any hint of inflation, a traditional Chinese destroyer of dynasties, the outlook is grim. Larry Lang, a Hong Kong TV personality and Chinese University professor of finance, recently labeled provincial finances as “China’s many Greeces”. Beijing’s writ – as an old proverb goes – ends no longer at the village gate but increasingly at the provincial capital where regional authorities defy the center, desperate to meet growing resources demands. Local politicos have wheedled, persuaded, bribed and threatened local government banks into credit far beyond their capacity to repay. Add that to the huge stock of non-performing loans banks give their Party buddies in the huge inefficient government companies and you have what could be the mother of all financial fiascoes.

Just as politics does not end at the banks’ doors, the Communist Party is moving into a generational leadership succession year. In theory, the new president and prime minister have been anointed. But there is a lot of shin-kicking with the usual Communist turn to so-called ideological arguments masking personality, regional and purely economic interests. A kind of neo-Maoism has surfaced. And it could take on new life as economic problems deepen because there has always been a strong Party constituency for preserving Soviet controls, planning and government ownership. Never mind that the fabled Chinese entrepreneurial spirit has taken hold with the partial liberalization of the past two decades. But much of this private sector with its disproportionately higher productivity was exports now hit hard with the downturn in the U.S. and Europe.

This has collapsed thousands of private businesses, particularly in South China’s clothing and gizmo assembly operations, leading to dramatic literal disappearances of owners and managers and growing unemployment. This, in turn, has fed already escalating unrest; Beijing has stopped reporting even the very suspect official figures. It’s early on, of course, to predict this would develop into the kind of provincial disintegration bringing down virtually every China ruling dynasty through its long history. Still… Meanwhile, China’s drop in demand for raw materials is already hitting world commodity markets – iron ore, for example, and soon to be coal and soya. That will have its effects on the overseas suppliers from Angola to Brazil to Australia [which has already seen a 10% drop in its high-flying dollar of a few weeks ago]


Is technology catching up with the Chinese Communists?

A continuing, often bitter, argument among “China hands” is over where the introduction of elements of market economy and attendant technology would take Communism “with Chinese characteristics”.

Just as two decades of remarkable Chinese economic successes has been exaggerated, Pollyannaish speculation argued economic development would bring greater freedom. Former Secretary of State Dr. Henry A. Kissinger, now claiming Chinese expertise, argues outside pressure cannot modify Beijing’s repression. But he holds out hope — as do many of his persuasion — economic progress will eventually bring a free society.

Another school has held economic development and technology is morally and politically “neutral”, as the successes of both the Nazi and Soviet regimes proved – at least temporarily. [The Nazis used vaunted German chemistry to develop a gas for efficient killing of Jews in the Auschwitz “showers”. And Stalinism sent man into space, suppressing all heavy missile launching losses.]

The Beijing regime’s successes after hundreds of rebellious students and workers were slaughtered at Tien An Mien square in 1989 has added weight to that hypothesis. For example, The Great Firewall of China, internet censorship – using at least 50,000 employees costing initially $800 million, along with “self-censorship”, the threat of imprisonment or worse — has stifled opposition.

But as so often happens, one event, sometimes relatively minor, can swerve history in new directions. We saw that when a Tunisian roadside fruit peddler’s self-immolation set off revolt throughout the Arab world. Surprisingly to most outside observers, Beijing feared contagion from Arab disturbances and launched a new crackdown. For example, in 2010 Beijing closed 1.3 million websites — almost halving the number.

Now comes the mid-August wreck of two new high-speed trains encapsulating what is happening culturally as well as in the economy and politics.

Having snookered Japanese, French and German train manufacturers into providing technology for vast high-speed rail network expansion, the Chinese had already tried to export trains. In the complex skein of globalized economy, there was a short-lived preposterous proposal to buy Chinese trains for California to be funded partly by Obama Administration’s stimulus funds. Foreign companies cried “foul”, arguing they were victims of all too common Chinese theft of intellectual property. And Japanese manufacturers formally abnegated responsibility for faulty Chinese manufacture and operation. Bottom line: the largely unexplained accident has dimmed hopes for high end exports needed to keep China’s boom going, now plagued with rising prices and worldwide competition from other low cost labor producers.

But the train accident unleashed far more. By standards of Chinese disasters, natural and man-made, it was small potatoes: officially 39 dead and 190 injured. Still some of China’s 457 million “netizens” [internet correspondents and bloggers] were quick to challenge official explanations one train had rammed into another immobilized by lightning. That kind of accident, Japanese developers of the first superfast trains were quick to point out, was impossible on their lines, virtually accident-free for three decades. And too many Chinese cellphone cameras recorded the wreck, government efforts to minimize the casualties, to bury wreckage and then – after protests — to uncover the same wreckage!

Quickly, too, bloggers ragged government’s dismissals of “responsible” railway officials – already under public accusations of corruption — when a replacement turned out to have been demoted after an earlier wreck. Then there was high comedy with outgoing Prime Minister Wen Jaibao who styles himself just a fuddydutty old Chinese grandfather arriving at disasters to console the mourners. This time he excused himself, ostensibly on doctor’s orders. But netizens quickly dug up video showing him buoyantly healthy, meeting a Japanese trade delegation only a day after the accident.

So loud has been the bloggers’ furor, official media reluctantly joined in — or as is common in intra-Party power struggles, were being used in the blame game, especially on the eve of next year’s planned generational changeover. An editorial in People’s Daily, the Communist Party mouthpiece, called for an end to the country’s blind pursuit of “blood-smeared GDP”. That comes close to the jugular: Beijing’s two decades old economic-political strategy in pursuit of maximum growth to assuage the absence of abandoned Communist orthodoxy. What has been that successful strategy to meet demands of an impoverished population is already threatened by cutbacks in its chief motor, unlimited infrastructure expansion, in order to rein in incipient inflation.

Next chapter in China’s 5,000-year history may have begun.


Just a jolly old anti-American singalong

Having apparently exhausted his roles as professor, geopolitician, author and businessman, Dr. Henry A. Kissinger was trying out for American Idol — but in Chungking, China, where he was an honored  celebrity at a “Red Songs Gala” celebrating the 90th anniversary of the Chinese Communist Party.  I vondah vat dat Bavarian-Manhattan Heights accent sounds like in Mandarin? The sing-along of a hundred thousand devoted comrades opened with that rollicking old favorite, “Follow the Communist Party”, followed by other classics, maybe including that alltime favorite “My Motherland”, abusing American GIs in the Korean War, played recently at the White House at another gala. http://www.youtube.com/watch?v=nmLxqYNxqzA

On China

I haven’t read Dr. Henry J. Kissinger’s latest book, On China. But as someone who for most of his adult life has lived in China’s shadow, including reading, thinking, exchanging ideas with students of that civilization, I was interested. But now I leave evaluating the work to scholars, as some have already done http://www.weeklystandard.com/articles/message-dr-k_573239.html
That’s come about because I heard the good doctor recently laying out a strategy for “accommodation” with China. One could excuse the cacophony of bromides — many fallacious — Dr. Kissinger trotted out in this wide-ranging NPR interview. http://onpoint.wbur.org/2011/05/12/kissinger-on-china Time was short, the interlocutor unskilled, and the subject matter vast.
But here is the crux of what Dr. Kissinger had to say:
“…through thousands of years of Chinese history, I know no examplewhere outside pressures about the domestic structure of China produced domestic changes in, in [cq] China. …”
This is stultifying, a misconception so wrong it puts into question any analysis Dr. Kissinger might otherwise make. In fact, although obviously a most original civilization, China nevertheless – like all other societies – has been impacted, often in revolutionary fashion, by outside forces. Space prohibits even an outline of such convoluted episodes. But let me cite three chronologically dispersed examples:

·        In the first century of the Common Era, Indian Buddhism entered China. It not only upended Chinese metaphysics but introduced such everyday artifacts as bridges, tea and the chair. [The Impact of Buddhism on Chinese Material Culture, John Kieschnick, Princeton University Press, 2003]

·        As a result of a humiliating defeat by the British in the First Opium War [1839-42], Taiping, a heterogeneous Christian sect, led two decades of bloody revolt. Before it was subdued [by China’s “alien” imperial rulers, the Manchu, with the help of foreign military] state levies shifted from land to trade and military power from central armies to regional warlords. Slavery, polygamy and foot-binding were banned if not eliminated. Most importantly, the Taping reaction to foreign intervention ended China’s isolation.

·        In 1949, after decades of Japanese invasion, the Chinese Communists established a unified government modeled on the USSR to be massively aided for almost two decades by Moscow. While conventional wisdom now holds the Chinese Communists have shed all but the rhetorical trappings of Marxist-Leninism, its economy remains largely in government hands, a complete break with China’s centuries of market economics [That concept, ironically, was passed to Europeans as laissez-faire by late 16th century European Jesuits in Beijing!]

·        In the first century of the Common Era, Indian Buddhism entered China. It not only upended Chinese metaphysics but introduced such everyday artifacts as bridges, tea and the chair. [The Impact of Buddhism on Chinese Material Culture, John Kieschnick, Princeton University Press, 2003]

·        As a result of a humiliating defeat by the British in the First Opium War [1839-42], Taiping, a heterogeneous Christian sect, led two decades of bloody revolt. Before it was subdued [by China’s “alien” imperial rulers, the Manchu, with the help of foreign military] state levies shifted from land to trade and military power from central armies to regional warlords. Slavery, polygamy and foot-binding were banned if not eliminated. Most importantly, the Taping reaction to foreign intervention ended China’s isolation.

·        In 1949, after decades of Japanese invasion, the Chinese Communists established a unified government modeled on the USSR to be massively aided for almost two decades by Moscow. While conventional wisdom now holds the Chinese Communists have shed all but the rhetorical trappings of Marxist-Leninism, its economy remains largely in government hands, a complete break with China’s centuries of market economics [That concept, ironically, was passed to Europeans as laissez-faire by late 16th century European Jesuits in Beijing!]

Dr. Kissinger’s formulation is no blooper.
It underpins his proposed strategy for dealing with Beijing’s growing power. It equates to his 1970s call for “détente” in The Cold War. That was to be an acceptance of Soviet power for a hoped for extended period of relaxed tension. That strategy proved precarious until Moscow imploded in 1990 — in no small part as a result of confrontation tactics by Pres. Ronald Reagan.
Historical analogies are misleading and often dangerous but marginally useful. China today does constitute a somewhat similar problem. While no sane person in the West and Japan advocates military engagement, not to recognize American interests are jeopardized by an increasingly powerful hostile China is to ignore reality.
That indeed, has been until now Washington’s modus operandi:
·        The U.S. has made great efforts to bring China into the highest world councils with Beijing responding by courting pariah regimes threatening peace and stability.
·        Washington has pursued free trade and investment with China while Beijing responds with unfair trade practices, protection for state corporations and markets, and financial manipulation.
·        Washington has sought open exchange of military information and lent security for an expanding China trade, but Beijing rejects transparency and secretly pursues a rapid military buildup against an unidentified enemy.
·        These American policies have strengthened the power and influence of a highly vulnerable Chinese regime, one facing great economic ambiguities and unpredictable political challenges.
Washington is now reexamining how to restrain what could well be a new aggressive formidable power. It must not repeat the long prelude to World War II when East Asia storm signals were largely ignored – incidentally, then too involving a burgeoning commercial relationship [with Japan].
That requires extensive, intensive and knowledgeable debate about Beijing’s capacities and goals — and America’s abilities to meet them
Dr. Kissinger contributes little to this gargantuan undertaking.

Famine season in North Korea

The probability of another government-induced and natural disaster famine in North Korea that took as many as two million or more lives in in a population of only about 20 million in the early 90s is now being predicted by the few observers permitted in the gulag country by the Pyongyang regime.  Former Pres. Jimmy Carter who proves that longevity may sometimes be a vice reported at least a third of the children were suffering from malnutrition. That has not been a secret with South Korean children, many of them from families of Northern origin in the exchanges during the Korean War, tower over their kinsmen by as much as a foot by adolescence.

Ccarter has called for a lifting of the embargoes on food shipments by the U.S., the South Koreans, and the Japanese. Were he only to put as much energy in fostering — a fat chance — a system of supervision in the ultra-Stalinist state to see that relief food shipments did not simply go to North Korea’s 1.2 million under arms and its massive diversion of resources to attempting to produce weapons of mass destruction, including nuclear.

But talk of famine reminds one of a recent ridiculous — if as esoteric as many of the letters exchanges in the TLS tend to be — argument over one of the recent books on the so-called secret Chinese famines during the Great Leap Forward of 1958-61.

Mao’s fantasy economic policies led to the death of at least 50 million people. But the TLS exchange is by the self-promoting author


and a critic who has charged he has not consulted the proper Chinese Communist repeat Chinese Communist sources.

In the first place, of course, the whole concept of the famine being secret is in the eye of the beholder, in this case poor scholarship [and that is giving them the benefit of the doubt]. As a Hong Kong friend says, “Yes, secret, except to three and a half million Chinese in Hong Kong trying desperately to get food-parcels to their starving relatives on The Mainland”.

What is even more ridiculous about Dikotter and his “critics” is the complete ignoring of the fact that a small but determined band of China hands were at the time giving  full vent to catastrophe. Father Ladeslaw Ladony, SJ, the editor and publisher of the unique China News Analysis, Miriam and Ivan London


Prof. Richard “Dixie” Walker


and a few others.  [Dikotter has the temerity not to even list them in his bibliography.]  If their voices were not heard, it was because virtually the entire Academy band of Chinese “scholars”, with their Maoist predilections, led by John K. Fairbank of Harvard, were simply ignoring anything that did not fit their anti-anti-Communist religion. Most of the Maoistas who are still alive — some even heading prestigious institutions such as The Asia Society — have still not have their “Kronstadt” and repented publicly.

All of this to ask whether an oncoming North Korean famine will be reported in the MSM contemporaneously and in proportion to its calamity. Don’t count on it!


Riding the golden tiger

Back in the late 40s when Thailand was more whimsical and less bloody, there was a curious hijacking. Cargoes of gold frequently flew through Krungtep [the Thai capital] for sale in China. There hyper-inflation – more potent than Communist arms — was toppling the Nationalists. The economic meltdown was the last straw for Generalissimo Chiang Kai-shek’s fragile regime which had stood alone for so long before Pearl Harbor.

Washington’s refusal to make a $500 million gold loan helped clinch Chiang’s fate. General U.S. war debt fatigue, Kuomintang corrupt reputation and a Congress faced with a wartime economy being restructured brought the decision. But we now know it stemmed, too, from Treasury officials with too close connections to the Soviets and budding Communist power in China.

Still, gold in a steady stream cascaded into the Chinese private sector. Shadowy international gold merchants were satisfying Chinese savers’ quest for security in a world coming apart. Little did they know within less than a decade, Mao Tse-tung’s bloody “land reform” would not only snatch their gold but his programs eventually would cost as many as 70 million lives of those who could not flee to Taiwan or beyond.

But in those heady days international trade was recovering from World War II. Early intercontinental flights, with no nonstops nor even night flying, carried the gold across South Asia. When it arrived at its last stopover at dusk, it was unloaded at Don Muang airport, convoyed into the Bank of Thailand, then brought back the next morning, reloaded to go on to Hong Kong.

One evening in May 1948, a multi-million dollar [1948 dollars!] shipment disappeared. The mystery was never solved. With occasional bars turning up, rumors had it that the gold had been stolen by Thai police guards or the army or airport officials — or maybe just ordinary ever-present k’moi [robbers]. As the last rumors died away, it was said, never with confirmation, that Lloyds, the insurers, had done a deal, splitting the difference with the thieves.

That old gold piracy comes to mind in mid-summer 2010 as Beijing announces “liberalization” of gold sales.

Like most of Beijing’s policy announcements, the message must be taken with more than a grain of salt. The new Chinese regulations come at a time when Western gold fever, at least temporarily, had died down a bit. “Gold bugs” have now concluded that, counterintuitively, central banks are not rushing into gold as a hedge against the declining dollar and the debt-ridden Euro. There is even a rumor the Reserve Bank of India mortgaged last November’s 200-ton purchase from the International Monetary Fund to “the world’s central banker”, the Bank for International Settlements, for currencies to fight its roaring 10% inflation. Nor is there any hint China is boosting bullion reserves despite Beijing’s steady public skepticism of the Obama Administration’s dollar strategies.

But popular gold demand in China has grown in 2010. China doesn’t officially disclose gold imports. However, total volume traded the first six months on the Shanghai Gold Exchange jumped 59% from a year earlier. China’s already has the world’s sixth largest hoard at 1,054 tons.

The usual suspects – gold promoters and participants in China’s boom — have welcomed the new regulations as part of China’s promised liberalization. That echoes Beijing’s rhetoric — if little action — its response to pressure from its trading partners to curb its unprecedented dollars accumulation resulting from currency manipulation and export subsidies.

Now the People’s Bank said it would “actively push infrastructure for gold trading and reserves to fend off disasters”. Underlining the announcement, five other government entities countersigned, saying “the need to perfect foreign exchange policies in the gold market is clear.”  But the government also hinted at more bullion taxes and dropped is earlier partial endorsement of gold as investment.

What seems more than likely is that operating again in omnipresent corruption, Beijing is battening down the hatches with what are, in reality, new controls, attempting to prevent a stampede by savers into gold. What with growing suspicion of its debt-ridden banks and investors shying away from the Shanghai stocks casino, gold fever increasingly has gripped those Chinese who can’t get their funds out of the country through massive export/import manipulation. Total 2009 consumer demand for gold – mostly for jewelry, a traditional Asian way of saving — grew 7 percent to more than $14 billion, 11% of global demand. China now has become the world’s second largest customer after India as well as the No. 1 producer. Its hoard is the world’s sixth largest at 1,054 tons.

Simultaneously Chinese spindoctors argue that gold is not all that useful. Why then does Beijing announce expansion of its own market? The big four state-owned banks will be permitted trading in gold bars. Qualified foreign gold suppliers may be allowed into the Shanghai market. Plans for investment in foreign bullion are on the docket. All this looks like Beijing’s familiar way of attempting control in finance and manufacturing through government fiat.

No doubt Beijing remembers those old frantic post-war years. But Confucius say: he who rides back of tiger may end up inside belly.


Taiwan: Guns, Beef — and Politics

Pres. Obama’s Chinese New Year’s gift, an arms purchase offer even with a $6.4 billion price tag, couldn’t be more welcome to Taiwan’s Pres. Ma Ying-jeou.

Last March his Kuomintang swept back into office with anti-corruption slogans, promising better relations with the Gigantest Panda across the Strait. That peaceful transition reconfirmed China’s first representative government in its vaunted 5,000-years for 23-million Taiwanese. But now the Mandarin-accented, Hong Kong-born, sleek politician’s polls droop.

Suffering from the world recession, constituents now want to know what Ma’s done for them lately

Welcome to democracy!

Furthermore, Pandas appearance is deceptive. They are notoriously uncuddly. [You wouldn’t be either if you only ate bamboo!]

Ma’s aggressive pragmatic courtship hasn’t stopped Beijing’s missile buildup [now at 1600], threatening the Island.

Furthermore, the Taiwan Relations Act – the Congressional initiative forced on Pres. Nixon and Henry Kissinger, a pledge the U.S. would come to Taiwan’s aid if and when – looks anemic. America’s extended engagements elsewhere, Mr. Obama’s attempted seduction of former foes including Beijing, his postponement of the next aircraft carrier, his lack of support during his Mainland visit last year, all look ominous. And despite a flip-flop by Panda-hugging Pearl Harbor U.S. Navy commanders – continued intel underestimation of growing Chinese naval strength seems to have produced that – Taiwanese are concerned their ambiguous de facto independence is at risk.

Despite Ma’s continued expressions of confidence in Mr. Obama, could the Americans get there quickly enough as in past crises?

The package – excluding F16s along with submarines which were at the heart of an original program almost twice that size, dawdling at both ends of the de facto alliance for almost a decade – is particularly fortuitous just now.

Ma has just come off his first Mainland trade negotiations. It’s the culmination of longtime pressure, particularly from American and Japanese multinationals, for more integration. Without closer Mainland ties, they argue, Taiwan would lose out among East Asia’s export-led economies. [Don’t hold your breath for promised swaps of expanded domestic markets for “export-led” strategies.] More than a half-million Taiwanese managing 7,000 Mainland firms with $150 billion investment doesn’t hack it, they argue; Taiwan industry is being hollowed out by the Island’s Number One trading partner.

And there’s little doubt that Ma’s “Economic Cooperation Framework Agreement” has been oversold.

He added the notion that without it, Taiwan would lose out in Southeast Asia after Beijing last year signed a free trade agreement with ASEAN [Association of South Asian Nations]. Closer examination, however, shows there is more sound and light than substance. After all these years the 10 ASEANs haven’t got their act together. Now one by one, to protect local industry, each country has caveated the agreement. [Vietnam had already seen its Tonkinese economy devastated through smuggled Chinese dumping.]

Meanwhile, many small Taiwan businessmen – where Ma’s Democratic Progressive Party opposition is strong – say they would be swamped by cheap Mainland imports. Ma already severely limited the opening to financial investment. Always cognizant inflation as much as Communist military prowess sank Chiang Kai-shek’s Mainland Kuomintang, Taipei has always clutched banking tightly.

Though former Pres. Chen Shui-bian and family were convicted on corruption charges, his DPP is making a comeback, capturing three January by-elections. Its southern agricultural heartland – after earlier seduction by Beijing’s special agricultural import deals – is worried. They blew Ma’s attempt at expanded U.S. trade, maybe eventually a free trade agreement, when the legislature forced a partial hold on beef imports. Enhanced communications including direct flights has increased Mainland tourism — but there are too many rumors of “tourists” disappearing into the woodwork.

It may take a while. But even in the new digital age, Taiwan’s role as “the unsinkable aircraft carrier” is bound to reassert its strategic importance as Beijing’s armaments drive turns hysterical in the face of a nonexistent enemy. Little boys given toys like to play with them. Example: the 2001 Hainan Incident when a hotshot fighterpilot crashed into an American spyplane over international waters. [Difficulties posed by Japan’s new government for the U.S.’ East Asia strategic redeployment don’t help.]

Beijing’s bombast over the long simmering deal is testing Mr. Obama. But cancellation of the two militaries’ contacts has been vastly overblown; they were never really reciprocal [During the Hainan crisis, the retired admiral ambassador, revealed his Chinese military “friends” wouldn’t return his calls.] And with American persistence, after a decent interval, the exchanges would probably be reinitiated as in past temporary cancellations.

But desperately grasping for some ideological footing for a regime long since abandoning Marx, Engels — and Mao, in all but iconography – Beijing has turned to traditional Chinese xenophobia/nationalism to keep out foreign “ideas”. That plus cyber warfare practice — and sheer Google hypocrisy — is the root of that current schemozzle.

The “Communists” have even resurrected once despised Confucianism as a cover for overseas propaganda. [George Mason University: shame on you selling out to this ploy!]

All this despite continued hot pursuit of foreign investment [and technological transfer] to keep the export-led jerry-built economy booming.

In all this muddle, “Taiwan” could again become a front burner issue.

Welcome to the real world, Pres. Obama!


The Mother of All Bubbles?

When Prime Minister Wen Jiabao trotted out his litany of promised reforms to the annual rubber-stamp parliament in early March, they reconfirmed growing suspicions of the Chinese economy’s fragility. Now more veteran observers are joining that little band [including this writer] who has predicted an implosion of the jerry-built system. Granted that some of us have been saying it for several years. But like most human and economic events, not only when but what would trip such a crash is rarely predictable [as was the case for the U.S. credit markets implosion].

Wen characteristically predicted the gross national product would grow by 8%. That is the magic number Chinese leadership – shorn of any other raison d’etre for the regime except rapid growth – has pulled out of the hat. Chinese and foreigners conventionally accept it as the minimum necessary to provide additional employment to ward off social instability. But like all GNP figures – but especially in China where “creative accounting” is a highly developed art form – it has limited validity.

I remember accompanying Prime Minister Jawaharlal Nehru many years ago to the old undivided Bihar, among India’s poorest states. Nehru, surrounded by thousands partaking of his darshan [“spiritual enrichment”], often oblivious to his stream-of-consciousness monologue, made a startling admission. He could not understand, he said, why he saw such poverty in Bihar while the per capita GDP statistics showed it one of India’s richest states. Common sense gave you the answer: Bihar by then already had India’s giant new steel mills. [Nehru called them “our modern temples”.] Not only was their product exaggerating the local per capita income count but its workers were recruited elsewhere nullifying benefit for local subsistence farmers and tribal hunter-gatherers.

Today China’s huge growing inequalities which Wen as always promised to eliminate are a function of what remains a still largely government-owned and mismanaged economy. Experts may argue over the extent China is an export-led economy. But three-quarters of those exports are from multinational companies assembling imported Taiwanese, Japanese, South Korean and other high value components. While producing jobs, they contribute minimally to the livelihood of most Chinese. For despite the vast migration into the cities – which regime policy rationalizes as strategy since it has no solution to a rural, agricultural sector it has shortchanged for more than two decades – no respite is in sight for growing regional and class disparities. And the highly publicized “Gucchi culture” of the coastal cities – increasingly the world’s largest market for luxury goods — represents only a small proportion of 1.3 billion Chinese.

Fewer world mainstream media maven are still pushing the idea Chinese growth would save the rest of the world from the continuing ravages of a universal recession. Since last fall when Beijing announced a somewhat bogus huge half trillion stimulus package [almost half was already committed funds to infrastructure projects decades out like the South-North Canal], there had been that hope. But the highly celebrated increase in intra-Asian trade depends on ultimate markets in the U.S. and the EU – both now deflated with stagnating if not increasing unemployment. China does rally the world commodities markets with energy and ore purchases albeit only as its steel inventories grow. [Beijing’s inexperience in negotiating with oligopolies is part of that mix.] Its vast foreign exchange holdings appear an unparallel asset – until it’s recalled they represent, largely, U.S. debt as counterpart for Chinese currency circulating in a rigidly protected and therefore limited consumer market.

After almost six months with foot on both gas and brake, Beijing has decided to slam the brakes, unable to “sterilize” stimulus funding even with the help of Chinese housewives’ phenomenal high household savings.

Not only are there signs of inflation, but the four major commercial banks – under political pressure from the semi-bankrupt State Owned Enterprises – were again tossing out vast loans likely never to be repaid. Instead of producing higher consumption over a broader market, estimates had 20% of the additional liquidity going into stocks despite unjustified dividend ratios. Real estate – including one infamous whole city in Inner Mongolia – for various reasons goes unsold and unoccupied. Like glorious Beijing Olympics white elephants, new skyscrapers were added to already untenanted silent towers a decade old in Shanghai’s Pudong “financial” district. Millions of motorcars have been sold with large government subsidies – but the cost of their operation including increasing imported energy is a calculation Beijing’s planners will soon have to face.

For all the talk of “capitalism with Chinese characteristics”, the economy remains run top-down in ghost-like Soviet fashion. True, the small private sector, even with its limited access to capital, produces most new jobs. But they are dependent largely on foreign markets which have not yet, and may not for the foreseeable future, return to their former glory.

Hang on for the Chinese to be mugged by reality. And the impact will hit its Asian trading partners hard too with unanticipated consequences for the West.



Rolling the dice in China

When scientists get further along with epigenetics, they may discover the Chinese have two unique DNA: a gambling gene, and another for hospitality. The first, of course, explains why Macau is odds-on favorite for replacing Vegas as No. 1 world gambling champion. The second suggests why few escape the lure of a Chinese campaign to win visitors’ hearts and minds.

Looking at a new determined shift in Beijing’s economic strategy, one has to chalk it up to that gambling gene. Intoxicated with turning into “the world’s factory”, Beijing plans to sail right past their successful collaborative development with foreign multinationals. Its new strategy literally amends Maximal Leader Deng Hsiao-ping’s dying instructions two decades ago to hide their capacities until they had achieved his four modernizations.

One can only chalk up Western businessmen naiveté to that second suspected Chinese gene, the ability to vamp any visitor. Of course, Frederick Engels, Karl Marx’s more literary companion, explained it all more than a century ago. He foresaw that on the way to the gallows, the capitalists’ greed would drive them to compete with one another to sell the rope to their executioners.

From mid-summer last year Chinese authorities – as a muddled but highly informative U.S. Chamber of Commerce report concludes – shifted from defense to offense. Years of studying their acknowledged total dependence on foreign technology has culminated in proposing 16 new megaprojects. With them they aim:

1] To provide new opportunities for stealing foreign technology. Now, before any technology can be introduced into China, it must be intensely “studied” — in fact, stolen even before it enters the market. Another is increased allocation of “patents” to Chinese firms with virtually no verification, making it virtually impossible to pursue legal indemnification for losses.

2] To restore the primacy of the SOEs, the state-owned enterprises, those giant behemoths notorious for their inefficiency and corruption but powerful political entities. Massive funds [$25 billion] — out of the huge 2008 stimulus package, originally aimed at warding off contagion from the world financial crisis – have been allocated to the SOEs to produce “indigenous innovation”

3] To continue to ensnare foreign companies, Beijing will suggest in return for continued tech transfers, they will get a share of the growing Chinese markets. They will also be offered participation in new technologies in China using government funds. But increasingly “import substitution”, that protectionist policy which crippled much of the third world before “globalization” became fashionable, is government policy.

Beijing’s new turn is loaded with risk. The history of Chinese innovation during the current boom is miserable. Eighty percent of China’s major firms do not have R&D at all.  One reason may be it has been so easy to rent or steal needed foreign technologies. But there may be even more important – if difficult to evaluate – cultural factors.

Although China was historically leader in basic scientific development, simply said, the Europeans picked up on those breakthroughs to initiate the industrial revolution leaving China behind. Why? The answer to this question is perennial among scholars. One answer lies in China’s intense bureaucratization, in part arising from the need for huge collective enterprises – largely for water control. Another, of course, is Chinese learning has always put the emphasis on rote memorization and an inordinate, even religious, respect and adherence to what has gone before. It may be no accident, as the Communists used to say, now bereft of its Marxist-Leninist-Maoist dogma Beijing is turning back to Confucianism. [A statue of Confucius was recently installed in Tien An Mien square alongside a huge portrait of his greatest adversary, Mao Tse-tung.] With its emphasis on ritual, Confucianism represents the antithesis to the restless European [Greek] mind. An even greater threat to the new effort to produce originality may be the all pervasive corruption permeating Chinese life today which means vast sums promised R&D will go astray.

China is also taking other risks. Despite an intense campaign, Beijing has not been able to lure home more than a few prominent scholars among more than 62,000 Chinese in the U.S., many in technological research. With ties in both cultures, they have been critical to transferring technology. The new Beijing strategy may jeopardize that relationship as American business, reluctantly, and the U.S. government becomes increasingly cautious about China deals.

True, economic development in East Asia was always full of warfare over intellectual property. Japan, Taiwan and South Korea have been major culprits. But the Chinese pour salt in the wound by offering products overseas based on stolen technology. Thus California’s former Gov. Arnold Schwarzenegger was talking to the Chinese about proposed federally subsidized high-speed rail based on their theft from three foreign companies that had cooperated in creating them in China. At the moment, Washington is grappling with the proposed purchase by Huawei, a Chinese entity with military connections, of an American IT company with the Pentagon as a client.

Beijing’s gamble if successful would insure continued giant leaps forward but like Mao’s infamous economic plays, this one could prove catastrophic.


Crises – but which is the one?

Clichés come in at least two varieties: those sayings artfully worded, however empty of logic. Others trotted out because they do represent universal truths, vetted over centuries. One of the latter: “history does not travel in a straight line”. Afterward, reinforced with additional retrieved facts and by fads, we concoct a simple, “logical” timeline.

For those of us who lived through long decades of The Cold War, we look back to mistaken views of a world scene played out on many stages. Then as now, drama tended to overshadow more important currents.

Relevant, perhaps, was the 1956 Hungarian Revolution. A Soviet satellite state, incidentally Bloc leader under benighted central planning, attempted escape from Moscow’s grip. It, too, began with youngsters in a square. In part, alas! they were emboldened then too by Washington’s support for “liberation”. But when the brave stood against Communist tanks, the U.S. blinked, fearing nuclear war.

Almost simultaneously, Egypt’s military dictator Abdul Gamal Nasser used the pretext of the Eisenhower Administration’s refusal to build the Aswan Dam megaproject  to “nationalize” the Suez Canal, for a century an immensely profitable Anglo-French commercial entity. To regain control, London and Paris used another pretext, warding off but actually colluding in an Israeli Sinai occupation to insure its own passage through the essential waterway.

U.S. Sec. of State John Foster Dulles adamantly forced America’s allies to relent. NATO Sec.-Gen. Belgian statesman Jean-Paul Spaak, an unsung hero of the epoch, literally in tears, beseeched Dulles: we have sinned but grab this opportunity to secure Europe’s lifeline to Mideast oil. Dulles, forever the moralist, refused “to reward aggression”. Nasser got the Canal, reinforced pan-Arabism sweeping the region, allied with Moscow to bedevil the West until his death. But his legacy was a mess of pottage, dismally failing to produce that long-awaited Arab renaissance, leaving a further discredited secularism for the benefit of his Moslem Brotherhood enemies.

Contradicting another cliché, history does not repeat itself, no more than the same water runs under the same bridge as the stream flows on. Nevertheless, while our attention is focused on increasingly bloody events in Araby, perhaps again more important happenings may germinate the kernel of world history elsewhere:

·        The German parliament has just laid down the law to a more than willing Chancellor Angela Merkel: it will not accept a “Europeanization” of the Euro’s financial debacle. With Greece near civil war trying to impose austerity, its southern tier debtor neighbors – facing rapidly increasing borrowing costs – move inexorably toward new “bail-outs”. No all-Europe institutions or mechanisms can meet those costs. Now the Bundestag has closed the door at least temporarily on Eurobonds [with Germany as prime guarantor] which might repeat might have been an “out”. The Euro as we knew it is doomed. Can “the European project” – the effort to create a stable continent shorn of its age-old capacity for intra-European violence — survive it?

·        A huge, new wave of Muslim refugees from Tunisia, Egypt, now Libya [accompanied by “transiting” Black Africans] is flooding Italy and Europe. They come as Chancellor Merkel, French Pres. Nicolas Sarkozy, and even U.K. Prime Minister David William Donald Cameron [the youngest British leader in 200 years], publicly declare “multiculturalism” dead. Failed Western assimilation of new workers in otherwise declining populations has led to indigestible, economically deprived enclaves abetting bankruptcy for “welfare states” created in the postwar prosperity.

·        The Europeans, as the U.S., finds itself in the grip of a growing threat to physical security from totalitarian Islam but bemused by intellectual confusion reminiscent of the1930s seduction of intellectuals by the Leninist road to utopia. When the Catholic Church’s scholarly leader, Joseph Aloisius Ratzinger, attempted to renew the dialogue between Christianity [and Judaism] with Islam – a 1500-year-old debate – at Regensburg in Sept. 2006, he was howled down by the politically correct. Yet native Europeans, their government – and their economies –are assaulted daily by immigrants who want to continue non-European lifestyles including some of the world’s most barbarous customs, exploiting modern Europe’s tolerance and freedom.

·        China, which within a generation has turned itself into “the world factory”, is being drawn into shaky collaborative international financial arrangements but at only a snailspace. Beijing uses its export of “capital” – slave labor and increasingly stolen technology – to blackmail its trading partners. It expands exponentially a military machine against fictitious enemies. Using largely American and EU debt, Beijing is spurring threatening worldwide inflation, uneconomically pursuing raw materials– and increasing worldwide food shortages which it has helped to create by neglect of its agriculture. Its unlimited infrastructure expansion and claptrap financial structure including unprecedented payments surpluses – now pressured by Washington’s “quantitative easing” in its effort to reflate the world’s engine, the American economy – promises a bubble bursting at any moment.

Therefore, as dramatic and seemingly all encompassing as current Arab world happenings would appear, when this period is looked back upon, it could be other contemporary world crises were more important. We, of course, will never know – which, should, inspire a little humility [admittedly not seen in this unavoidably brief review].




Hu, wok and Wen


Hu misidentified as dissident

HONG KONG – HONG Kong’s leading English-language newspaper has apologised for misidentifying Chinese president Hu Jintao as a jailed Chinese dissident in a front-page photo caption.

On Tuesday, the South China Morning Post’s main front-page photo showed Mr Hu arriving in the US for President Barack Obama’s nuclear security summit. The English caption identified Mr Hu correctly, but the Chinese characters printed in parentheses showed the name of Chinese dissident Hu Jia instead.

Hu Jia, who has championed Aids victims, has been in the news recently after Chinese authorities rejected him for medical parole after a possible diagnosis for liver cancer. The activist was jailed for sedition after being accused of plotting to disturb the Olympic Games.

Ye Olde Crabb sez:

Easy mistake to make. After all, when some foreign human rights activist was pressing Paramount Leader Deng Hiaoping to permit some Chinese to leave the country for the U.S., he quipped with something along the lines of how many would you like, several hundred thousands or millions?

Quibble, quibble, quibble!

Rio Tinto executive Stern Hu ‘will plead guilty’ to accepting bribe in China

Rio Tinto executive Stern Hu Source: The Australian

AUSTRALIAN Rio Tinto executive Stern Hu will plead guilty to bribery charges in China, but contest the amount of bribes he is alleged to have accepted, the lawyer for another defendant in the same Shanghai trial said today.

Chinese prosecutors have charged Australian national Stern Hu for accepting over CNY6 million and Chinese national Liu Caikui for accepting over CNY3 million in bribes, Tao Wuping, the attorney for Liu, told Dow Jones Newswires in a telephone interview.

The charges carry a jail term of more than five years, Tao said.

Ye Olde Crabb sez:

If man places self in way of finger of suspicion, must not be surprised if he receive poke in the eye. (Charlie Chan in the Secret Service)

[an Ozzie friend reminds us]

Rio Tinto executive Stern Hu ‘will plead guilty’ to accepting bribe in China


AUSTRALIAN Rio Tinto executive Stern Hu will plead guilty to bribery charges in China, but contest the amount of bribes he is alleged to have accepted, the lawyer for another defendant in the same Shanghai trial said today.

Chinese prosecutors have charged Australian national Stern Hu for accepting over CNY6 million and Chinese national Liu Caikui for accepting over CNY3 million in bribes, Tao Wuping, the attorney for Liu, told Dow Jones Newswires in a telephone interview.

The charges carry a jail term of more than five years, Tao said.

Ye Olde Crabb sez:

If man places self in way of finger of suspicion, must not be surprised if he receive poke in the eye. (Charlie Chan in the Secret Service)

[an Ozzie friend reminds us]

One Chinese import too many!

This one didn’t come through Walmart – even that purveyor of all things Chinese would have been hesitant.

It is the new Confucius Institute that George Mason University has decided to import. Shame on them! It joins the old and not very well publicized scandal that our universities – there must be some strange Jesuitical explanation at Georgetown – have sold out their Mideast studies to Saudi money. Can you imagine that Georgetown has an institute named for a Saudi billionaire who said we caused 9/11, the towelhead from whom Mayor Giuliani refused a check. But the good fathers have always had their own standards of morality!

But back to George Mason: it used to be an island of commonsense in Washington’s otherwise mediocrity [American], eroded [Catholic], and halting [George Washington] university circles. But obvious there is “change” in Obama’s Washington.

The Confucius institutes have very little to do with the old Chinese sage – not that probably any heir to the European Judeo-Christian tradition should trifle with the “rites” for very long. They are to be propaganda centers around the world for the most evil regime that even the bloody 20th century could produce.

The professors, who are obvious converts to Confusionism, wouldn’t know the difference between the Confucionists and the Legalists. In that they share intellectual abilities with the hacks now running the old Chinese empire.

Please don’t give me the line that the Goethe Institute, the British Council, l’Alliance Francaise are in the same category. The argument is idiotic. Those institutions represent and try in their humble way to perpetuate the values of Western civilization for representative, democratic governments.

To quote an old Chinese axiom: the barbarians are inside the gate, a time to rise!