Sunday, July 31, 2022

Open letter to Nancy Pelosi - If you step over the red line China has laid down, it can’t back down and not react

Watch Cyrus Janssen discuss the letter. Dear Nancy, In 1991, you were a member of the Congressional party invited to Beijing as guests of the Chinese government. There you held a well-planned “impromptu” press conference in Tiananmen Square where you unfurled a banner proclaiming “Human Rights in China.” A group of members of the western media patiently waited for you to break off from your official host and show up. That was just simply brilliant. The show-and-tell established your credentials as a human rights advocate. As a newly elected member of Congress, the publicity certainly didn’t hurt your chances of getting re-elected. Of course, the Chinese government probably regarded your breach of protocol as rude and uncouth, but hey, that was their problem. Now rumors have it that you are planning to visit Taiwan in August. A lot has changed since your trip to China more than 30 years ago. The Taiwan media are all in a tizzy asking each other, “Who invited Nancy Pelosi? After all, Taiwan isn’t some American offshore possession that Nancy can come and go as she pleases.” To paraphrase one of the commentators, “Doesn’t she understand that we can’t stand the excitement and tension of her visit?” “Most people of Taiwan,” he continues, “like the relations with the mainland just the way it is. Peaceful, stable, quiet and we sell a lot of our stuff across the Taiwan Straits, to the tune of over $100 billion in surplus every year.” Some say that you are visiting Taiwan to encourage the Taipei government to start a fight with the mainland. The people of Taiwan have seen how the U.S. has been helping Ukraine in their fight with Russia and they don’t want any part of that setup. Before the Ukraine war, around 60% of the people of Taiwan were sure that the American soldiers would join the fight in their defense. Now that number has fallen to around 30%. Maybe the publicity of your visit to Taiwan, daring the Peoples’ Republic of China to respond, will help your party in the midterm November election. However, you are now the Speaker of the House and two steps away from the presidency. Like it or not, your actions represent the official position of our country. If you step over the red line China has laid down, it can’t back down and not react. We don’t know what their response will be but it will be dangerous—potentially explosive, in fact. As a loyal American, I humbly ask for your careful consideration for the sake of world peace and your personal safety. Best person regards, George Koo The writer of this letter is a retired business consultant, resides in California and is deeply worried about the future of America.

Monday, July 25, 2022

Sputnik moment isn’t what it used to be

The first one in 1957 spurred the US on to technological greatness; now, China’s progress spurs stagnation and indolence First posted in Asia Times. When China successfully tested a hypersonic weapon system in October 2021, General Mark A Milley, chairman of the US Joint Chiefs of Staff, said this was very close to a “Sputnik moment.” The first Sputnik moment took place on October 4, 1957, when the Soviet Union surprised Washington by sending aloft the world’s first man-made satellite, called Sputnik 1. All of a sudden, the heretofore assumed technological superiority that Americans thought they had over the Soviets vanished overnight. Public panic fueled by fear and loathing became a national crisis. For the rest of that October, The New York Times talked about the Soviet satellite, on average, in 11 articles every day. The US under president Dwight Eisenhower responded promptly to the Sputnik moment. He ordered the formation of the Defense Advanced Research Projects Agency (DARPA) in February 1958 to develop emerging technologies for the military. In July, he signed the National Aeronautics and Space Act to create NASA. Response to Sputnik challenge Congress quickly followed by passing the National Defense Education Act to pour billions of dollars into the American education system and raise the quality and quantity of university graduates in science, mathematics and engineering. By the time the USSR sent Yuri Gagarin into orbit on April 12, 1961, the US was ready for the space race and set putting man on the moon as the goal. The culmination was the worldwide televised moon landing of astronauts Neil Armstrong and Buzz Aldrin from Apollo 11 in July 1969. DARPA and the National Aeronautics and Space Administration generated many noteworthy technological breakthroughs, and many of those were spun off into civilian uses. Some directly or indirectly became home-run investments that nurtured an emerging venture-capital industry. The budget appropriations for the National Science Foundation created by Congress in 1950 were boosted every year to encourage scientific research in academia and research institutes. The 1970s were undoubtedly the golden decade for America. Then-president Richard Nixon went to China in 1972, which later led to normalization of relations between the two countries. The endless war ended in Vietnam. America led in virtually every field of science and technology. The fruit orchards south of San Francisco became the now famous Silicon Valley. The US claimed ownership of most of the top universities in the world. International students all over the world aspire to do postgraduate studies in America. A flood of the best and brightest from China began in the 1990s. US won the rivalry over Soviet Union America had risen to the challenge of the Sputnik moment, and it was easy to be a proud American. The American people celebrated the collapse of the Soviet Union in 1991 and looked forward to a forthcoming “peace dividend” with enthusiasm and anticipation. Tragically, the dividend never materialized. Instead, the draft of the Wolfowitz Doctrine in 1992 became the guiding framework for future White House administrations. Paul Wolfowitz, undersecretary of defense at the time, was the principal author of the doctrine. As summarized by the documentary program Frontline, the essential points of the doctrine were: The No 1 objective of the US post-Cold War strategy is to prevent the emergence of a rival superpower. Another major objective is to safeguard US interests and promote American values. If necessary, the United States must be prepared to take unilateral action. The legacy of this doctrine has been America’s unilateral action in Iraq, Libya and many other less publicized overthrows or interference of regimes not to US liking. The price was the loss of millions of innocent lives. “Safeguard our interests and promote American values” are invariably part of Secretary of State Antony Blinken’s remarks supporting his justification for the threat of and actual unilateral action. China became the next designated adversary The doctrine needed a rival to warrant actions to “prevent emergence.” The US branded China as its next threat. To justify the American position, it declared a unilateral trade war and accused China of massive intellectual-property theft. And the US increased its military surveillance off the coast of China and justified increasing its naval presence in the South China Sea as based on “freedom of navigation.” A litany of US provocations succeeded in getting China to respond. One result was the hypersonic weapon system. But this was hardly a Sputnik moment. General Milley’s comment was meant to motivate increase budget allocation for weapon development. However, Washington and the mainstream media seem oblivious that the deliberate provocations have created a formidable opponent. Since the US declared China as an adversary, it has surpassed the US in many technical fields. One response was to deny China access to advanced semiconductor manufacturing technology in order to kneecap its semiconductor industry and cripple its manufacturing that depends on advanced chips. But as David Goldman observed in a recent Asia Times article, “The Biden administration’s belated attempt to suppress China’s semiconductor industry appears to have backfired. China has found workaround technologies that bypass the aging American IP that Washington has embargoed.” By concentrating its national energy and attention on stifling China’s advance, the US has neglected to invest in solutions and remedies that would have raised the well-being of America. We Americans could have raised the living standard of the poor. We could have made universal health care affordable for everyone. We could have repaired our old bridges and highways. We could have strengthened our law and order and made it fair to all regardless of race. We could have invested in our education and in scientific research to ensure our future. We could have done all that and more. Instead, we experienced more than 30 years of stagnation and indolence because of the US determination to rule the world.

Wednesday, July 13, 2022

Disintegration of unipolar world begins

The only sensible course of action for the US is to collaborate with China and find mutually beneficial outcomes First posted in Asia Times. In April, I was invited to speak about the US-China bilateral relationship. For the title of the speech, I chose, “Pushing China’s head under water won’t make American great again.” Recent developments suggest that an updated title would be, “Pushing China’s head under water will hasten America’s own demise.” There are two reasons for fine-tuning my title. First, the United States’ deliberate tactics to obstruct China’s growth and expansion have failed miserably while inflicting more hardship on Americans. The American people are paying a ghastly price for Washington’s obsession with China. Second, priorities of America’s foreign policy are not making any sense. The most recent example is the announcement by President Joe Biden that the US will contribute $200 billion to the G7 pool of funds to compete with China’s Belt and Road Initiative (BRI). It’s hard to tell where Biden is going to find the money. Even if all Group of Seven nations contribute their share of funds, it’ll be even harder to figure out to how they can implement BRI-like projects in the developing world. Most probably they would have to subcontract work to China, which knows how to implement it. On top of Biden’s dream of grandeur, he is sending billions’ worth of arms and weapons to Ukraine to prolong the conflict with Russia. Bipartisan approval is easy when it comes to making war. By contrast, to relieve the inflationary pressure on the American domestic economy, Biden is proposing to forgive 18 cents per gallon (4.76 cents per liter) of federal tax on gasoline for the three summer months. Wow. Billions to compete with China and Russia and an 18-cent discount for the American motorist. In California, a gallon of gasoline has gone over $6 ($1.59 a liter). Saving 18 cents per gallon from a fill-up will barely cover the cost of a cup of coffee. In the US, prices of everything are going up; inflation looms. Nay, inflation at 8.8% is already the highest in 40 years. Soon the American motorist won’t even get a cup of coffee from his gas-tax saving. Biden does not deny that Americans are facing inflation. He blames the inflation on Russian President Vladimir Putin and the war in Ukraine. He urges the American public to endure this “for as long as it takes” in order to defeat Putin – hardly encouraging words. Of course, most American people are not aware that it has been the US-led North Atlantic Treaty Organization that baited Putin over the decades into the war with Ukraine. Washington has since congratulated itself for successfully mounting a proxy war – getting Ukrainians to fight the Russians. Defense Secretary Lloyd Austin even explained that the war meets the objective to wear down the strength of Russia – albeit at the expense of Ukrainian casualties and property. Having successfully pushed Russia into invading Ukraine, NATO celebrated with a summit at the end of June where Sweden and Finland were formally inducted as new members. At the same time as having pushed Russia into a closer relationship with China, the organization accused China of not condemning Russia and therefore not standing with NATO. NATO is afraid of China At this NATO summit, Australia, New Zealand, Japan and South Korea were invited as observers, as a signal that NATO’s expansion plans now include the North Pacific. Just to make sure nobody misses that intention, for the first time NATO identified China as a potential adversary and a “systematic challenge.” So, what constitutes China’s threat to the security of NATO members? Apparently it is the fact that China has dominated manufacturing of goods at prices that the West cannot compete with. China’s GDP continues to grow, and that makes NATO members nervous. The West led by the US has repeatedly accused China of violating “rule-based international order.” The most recent action by the Biden White House was to impose sanctions on goods made in Xinjiang, alleging human-rights abuses there. In response, China, on the day after the conclusion of the NATO summit, announced the placement of an entire order for 292 commercial jetliners worth more than $37 billion with Airbus, the European consortium, and none to Boeing, the other major maker. This was a harsh, attention-getting message from China in response to Biden’s endless innuendos and baseless insults and a signal that China is ready to play hardball. All of Beijing’s past diplomacy seems to be misinterpreted by Antony Blinken et al as being soft. The Blinken team in the State Department seem to think they can cherry-pick issues to work with China on the one hand and otherwise castigate Beijing with a recitation of imagined violations of international rules. No more, says Beijing. Boeing recently made a market projection that China’s future demand for passenger jetliners was 8,700 planes worth $1.5 trillion over the next 20 years. If the US is determined to decouple from China, Boeing faces a bleak future in China. China offers EU partnership China’s other message is to the countries in the European Union, many of which are members of NATO. The Airbus order reaffirmed that China can be a major economic partner and poses no threat to the security of the EU. Inflation in the EU is rapidly getting out of control because of the war in Ukraine and the US-imposed sanctions on Russia. If Biden thought he was driving a stake into the heart of Russia’s economy, he miscalculated. Putin turned around and pegged Russia’s energy exports to the ruble. Consequently, the value of the ruble against the euro has reached a seven-year high. The artificial shortage in world oil caused by the US sanctions on Russian oil has not hurt Russia. It makes money selling its oil to China, India and other buyers at higher prices. Concurrently, the US and UK as oil exporters are also making money because of the shortage they created. However, major nations in the EU, especially France, Germany and Italy, are energy importers and they are beginning to question the wisdom of following the US leadership, which seems to work in favor of the US and UK at the expense of the EU. Such doubts were accentuated when Ukrainian President Volodymyr Zelensky recently announced that his country needs aid to the tune of $5 billion per month to survive and keep operating. On top of refugees, shortages of staples, and inflationary pressures, the EU leaders have to worry as to whether Uncle Sam will pick up the tab or pass it on to the EU. The world is beginning to see the difference between currencies based on assets and the American dollar based on the “full faith and credit” of the US government, in other words, the Federal Reserve’s printing press. Central banks of various countries are beginning to lighten their dollar holdings in favor of other reserve currencies, the most popular being China’s renminbi. According to the International Monetary Fund, the US dollar’s share of total global currency reserves has fallen to its lowest point in more than two decades. To take advantage of the availability of Russian oil at favorable discount, India entered a rupee-to-ruble deal and get around paying in dollars. For the first time, India also bought coal from Russia with the Chinese renminbi. BRICS as another pole While the G7 and then the NATO summit meetings took place in Europe, it was China’s turn to host the BRICS summit, which it did virtually. At the 2022 summit, Beijing invited many non-member countries as observers. Formed in 2009, BRICS consists of Brazil, Russia, India, China and South Africa. It is not a military alliance but is meant to promote collaboration for peace, security and global economic development. Compared with the G7, BRICS has three times the population but only about 70% of the G7’s GDP. At the 2022 summit, Argentina and Iran formally applied to join BRICS. Adjusted for purchasing parity, the GDP for BRICS+ would surpass the G7. And there is a proposal afoot to create a new global reserve currency based on a basket of BRICS+ currencies as an alternative to the US dollar. Rather than going around the world collecting military allies and imposing sanctions on countries that do not wish to align with the US, China invites partners to collaborate on mutually beneficial basis. Since it was initiated in 2013, China’s Belt and Road Initiative has launched more than 13,000 projects in 165 countries valued at nearly a trillion dollars. Most of the BRI projects have to do with upgrading badly needed infrastructure, which leads directly to a boost in the recipient country’s economy. There is now a high-speed rail linkage from China through Central Asia to Moscow and on to Rotterdam on the Atlantic coast. Twenty-five out of 31 Latin American countries are participants in the BRI, as is most of Africa. At the just-concluded Group of Twenty summit, the divide between the US-led Western bloc and China, Russia and the non-aligned members of the G20 became quite clear. The summit concluded without the usual group photo of smiling state leaders and no joint declarations expressing optimistic steps for the future. The Biden administration and the US Congress remain convinced that the way to suppress China from making economic progress is to deny it access to American technology and knowhow. As all nations know well from their own development history, among them Japan and the US, borrowing and copying from more advanced nations can only be a beginning. Unless they can build from there and innovate and originate their own breakthroughs, they will always be me-too laggards. Every year, China graduates eight times as many students in STEM (science, technology, engineering and math) than the US. These human resources power developments in high technology. The more pressure the US exerts to stifle China’s advance, the more determined the Chinese will be to find their own technical advances and skirt around American roadblocks. In some fields, China has caught up with and even surpassed the US. China is already the world leader in electric vehicles and the battery technology for the EVs, in fifth-generation and the future 6G in telecommunications and quantum computing, just to name a few examples. China’s latest aircraft carrier has an electromagnetic catapult system on par with the one on USS Gerald R Ford, the newest US carrier. China has demonstrated a hypersonic missile while US manufacturers are still tinkering with theirs. Despite the US-mounted trade war that “punished” Beijing with tariffs on imports, China has continued to expand exports and the trade surplus with the US has actually grown rather than lessened. The real impact was to raise the cost of living for the American public. The US has wasted a lot of energy and resources trying to suppress China’s rise. It hasn’t worked, and it won’t work in the future. With four times the population, China’s GDP exceeding that of the US is inevitable. If on the other hand the US should succeed in provoking a conflict with China, the Americans will rue that day, and most likely so will the world. Can US and China find common ground? The only sensible course of action is to collaborate with China and find mutually beneficial outcomes. As Asia Times recently urged, “there is a wide field for potential cooperation that would benefit both countries and give the United States more room to back out of the stagflation trap in which it finds itself presently.” On the sidelines of the G20 summit in Bali, Blinken held a five-hour conversation with Chinese Foreign Minister Wang Yi. The purpose was to pave the way for a future meeting between Biden and Chinese President Xi Jinping. The tone from Blinken was that US would like to restart a friendlier and more positive bilateral dialogue. China’s reply was that this is easy to do. To begin, all the US has to do is to recant all the lies, disavow the nasty rhetoric and stop blackening China. Whether Blinken and Biden will see the wisdom of non-confrontation and choose win-win outcomes in place of zero-sum results remains a question. Maybe we’ll know more after the two leaders meet.