Saturday, November 4, 2023

Review of documentary on Taiwan: "Invisible Nation," invisible for a reason.

Edited version of <b>Invisible for a reason</b> was posted on <a href="">Asia Times</a>.

I was interviewed on national podcast, "Critical Hour."  Critical_Hour_1342_seg_3.mp3

On Youtube video by Veterans for Peace,

A dear friend we have not seen for sometime invited us to attend a viewing of
“Invisible Nation,” at Stanford on Thursday evening. It was a chance to visit
with an old friend and pick up a light dinner promised by the organizers. By the
time we got there, all the bento boxes were taken. It was the first of a list of

Invisible Nation is billed as a documentary on Taiwan and is
beginning to be shown around America. By traditional standards of journalism, a
documentary film is supposed to inform and educate by presenting unadulterated
facts and let the viewers come to their own conclusion. “Invisible” makes a
mockery of the term of documentary. 

It is an unabashedly adulation of Tsai Ing-wen and blanket endorsement of Taiwan as a model democracy. 
The flaws of Invisible are many, mostly by calculated omissions of history and personal

The film portrays Taiwan’s history beginning with the Dutch
colonization of the island and claims that the only time one government
controlled both the mainland and Taiwan was from 1945 to 1949. The government
was the short reign of Chiang Kai-shek and the Kuomintang that reclaimed Taiwan
after the end of World War II, and ended when he had to flee from the mainland
to Taiwan. This is most misleading at best and outright lie at its worst.

<b>Koxinga, liberator of Taiwan, not in the narrative</b>

The film fails to even mention Koxinga, aka Zheng Chenggong, the end of Ming
dynasty leader who resisted the takeover of the mainland by the Manchus and
retreated to Taiwan by evicting the Dutch from the island. Zheng’s grandson
eventually surrendered to the Qing imperial court in Beijing. For centuries
thereafter, Taiwan was part of China until the Beijing government lost a sea war
to Japan and Taiwan was ceded to Japan in 1895. 

Invisible also does not mention the Potsdam Declaration that stipulated the terms of Japan’s unconditional
surrender, drafted by the allies, in which Japan was to hand Taiwan back to
China. Throughout the war, United States was insistent in recognizing Taiwan as
part of China. This recognition persisted when President Richard Nixon went to
China and reaffirmed by President Jimmy Carter and by every American president
ever since. 

The mockumentary did correctly attribute the actions of Lee Teng-hui
for the political turn away from the heavy-handed rule of the Nationalist
government. Lee succeeded Chiang Ching-kuo, the son of Chiang Kai-shek who led
the retreat from the mainland to Taiwan in 1949. The son took over in 1978 and
began to liberalize and loosen the control of the island. He selected Lee to be
his vice president because Lee was a Taiwan native born. 

Chiang was probably
unaware that Lee also went by his Japanese name, Iwasato Masao. In fact,
Lee/Iwasato, a native speaker of Japanese, was known to confide to visiting
dignitaries from Japan that his allegiance leaned more to Japan than to China.
In fact, his older brother was killed in action during WWII as a member of the
Japanese imperial army and his name is enshrined in the Yasukuni Shrine in Tokyo
among other war dead and some convicted war criminals. 

After WWII, there were
many Japanese that remained in Taiwan. They took on Chinese surnames and merged
into the local society. The question of divided loyalty and the influence of an
estimated hundred thousand Japanese that stayed along with their descendants on
Taiwan’s politics has not been studied.

<b>A Bian not in the narrative either</b>

In the case of Lee, after he assume the leadership of the Taiwan government, he
gradually undermined and weakened the KMT organization that paved the way for
Taiwan to elect its first president from the KMT opposition, the Democratic
Progressive Party, thus ending KMT’s 55 years of continuous rule. Somehow, the
name of Chen Shui-bian that should have figured prominently in the documentary
was not mentioned even once in Invisible. 

Chen Shui-bian not only became the
first president from DPP, he cleverly manipulated and divided the opposition and
became the only president to win with less than 40% of the votes. He also became
the first Taiwan president to be immediately imprisoned for wanton corruption at
the end of his term of office. He was the kind of president that would give any
democracy a bad name and one can hardly blame the director of the documentary
for leaving Chen out of her story. 

Aside from being a blot on Taiwan’s modern
history, Chen ordered a consequential rewrite of school children’s history
textbooks. Obliterated in the revised textbooks was any reference of Taiwan’s
linkage to China’s history, culture and ethnic origin. 

A generation of young
Taiwanese people grew up not knowing that their ancestors did not spring out of
the ground but came across the Taiwan strait from southern Fujian for many
generations. That the Taiwan dialect sounds almost exactly the same as Minnan
dialect off southern Fujian. That if they had a chance to study Chinese history,
they would know that as early as the Han dynasty around 200 BCE, the mainland
already knew about the island offshore. 

Small wonder that the generation of
young hotheads, that spearheaded the sunflower protest, screamed for freedom but
did not appreciate Taiwan’s economic dependence on trade with the mainland.
Every year, Taiwan’s trade surplus with mainland more than offset the entire
trade deficit with the rest of the world. The is a consequence of Beijing’s
deliberate policy to give Taiwan special preference. 

The sunflower protesters
were not as violent as the Hong Kong protesters of 2019 but they nevertheless
destroyed public property, invaded the government parliament, and insulted
publicly elected officials. All of which was recorded in the mockumentary. But
since it was in the name of fighting for democracy, what’s the big deal of
breaking a few laws along the way? 

Of course, not all Taiwan’s youth are
lunkheads. The intelligent, high achievers understand that their future lies
with the fast-growing mainland economy. Many live on the mainland and are
working for Taiwan companies located in China. Some are even working for locally
owned companies in China. The sunflower children may not care about economy,
jobs and a career. But the serious-minded young people do.

<b>A progressive image of DPP</b>

The film naturally featured many remarks and speeches by Tsai Ing-wen, the
current president of Taiwan. Other talking heads include her admirers and
followers, even transgender cabinet ministers. The film brag that Taiwan was the
first in Asia to recognize same sex marriage and protect the rights of the
LGBTQ. Certainly, a show of progressive mindset that is even steps ahead of the

The film also included a clip of House Speaker Nancy Pelosi’s drop in visit
to Taiwan, against all advice but to the thrill of Tsai and the DPP. The most
powerful woman in Washington meeting with Taiwan’s first woman president. Could
not have gotten any better than this. Thank goodness, Invisible did not include
the video of Tsai bestowing a beauty pageant sash on Pelosi. Also not included
was any discussion on how Pelosi having stepped on the red line, greatly raised
the cross-strait tension and prompted threatening hostile reaction from the PLA.

But there were a lot of folks the film could have interviewed but did not. They
could have interviewed the Taiwanese living and working on the mainland on their
perspective of the cross-strait relations. They could have interviewed the vast
majority of the people on Taiwan that prefer the status quo, neither for
unification or independence. 

They could have asked the persons on the street on
what they thought of the relations with Uncle Sam: Will the US really come to
fight alongside the troops of Taiwan? How do they feel about Washington forcing
the Tsai government to buy old outdated weapons? How do they feel about being
forced to buy tainted pork from American farmers? What do they think of Biden’s
strong arming Taiwan Semiconductor Manufacturing into moving their advanced chip
fabs to Arizona, and then run into unforeseen labor problem, cost overrun, and
construction delays? Has Biden shown any respect for Taiwan’s “sovereignty?”

Taiwan is an invisible nation for a simple reason. Taiwan is not a nation but a
province of China. Simple as that.

Monday, October 30, 2023

Discussion of the Hamas Israeli War

The YouTube discussion can be found on

Friday, June 16, 2023

Biden’s contrasting styles and priorities - The Biden administration has concentrated virtually all its efforts on keeping China from rising, to no avail

I celebrated my 85th birthday by writing this piece for Asia Times. For weeks, US President Joe Biden publicly demanded that the issue of raising the debt ceiling was a done deal and not negotiable. As the prospects of national default loomed, the Biden White House quietly began negotiations with Republican House Speaker Kevin McCarthy, and arrived at a compromise in the nick of time so as to avert default. It seems Biden understood, after all, that avoiding the disaster of a default and the mortal pain on the American economy was more important than sticking by his guns. However, he apparently does not understand that the outcome of his negotiations with China is equally crucial to America’s future; his approach has been steadily unyielding, unfriendly and unhelpful. Biden’s China team has adopted a strategy of saying one thing and then doing just the opposite. Every one of his cabinet officers would declare that he or she wishes to meet with their Chinese counterparts to discuss cooperation and collaboration – but always on the US terms, meaning that the US reserves the right to discuss the issues it wants to discuss, but will continue to criticize, attack and sanction China on others. This is the way an imperious hegemonic power acts toward a subordinate country and expects obeisance and compliance. Except China no longer sees itself as a lesser power to the US. China has simply ignored the many White House requests. The latest example came at the Shangri-La security forum in Singapore. The US had asked for a meeting between Defense Secretary Lloyd Austin and his counterpart Li Shangfu on the sidelines of the forum. China refused. The US promptly accused China of irresponsible behavior endangering the bilateral relations by not keeping the lines of communication open. US wants to meet with China for what purpose? Of course, communicating and agreeing to face-to-face meetings are two separate matters. China expects prospects of a useful outcome to justify arranging in-person meetings. For possible constructive results, China wants to see serious and sincere gestures from the US. All too frequently in previous meetings, the American officials viewed them as opportunities to crow about China giving in to American demands, whether actually true or not. That Biden did not even bother to lift the personal sanction imposed on Li Shangfu during Donald Trump’s administration and still expects to have a summit meeting of military leaders seems stupid and arrogant. Mind you, Li was sanctioned for purchasing fighter jets from Russia on behalf of China as part of his duty at the time in charge of procurement for the People’s Liberation Army (PLA). What right does the US have to sanction an official of another country for doing his job? India buys arms from Russia; Turkey buys arms from Russia, apparently with no sanctions. This is just one example of Secretary of State Antony Blinken’s “rules-based international order.” That order is arbitrary and is whatever the US says it is. Blinken was hankering for an invitation to meet in Beijing. Then the wandering weather balloon from China gave him the excuse to cancel the visit on an invitation that never came. Not only that, he reaped a PR dividend by blaming China for the debacle. Examples of hypocrisy and deception abound. Biden warmly embraced Xi Jinping in Bali and swore by the one-China principle and that Taiwan is part of China. Then he openly sells arms to Taiwan and impose complete sanctions of export semiconductor technology to China. Treasury Secretary Janet Yellen goes out of her way to ask China for support of the US treasury debt and then goes to Africa to warn African nations to beware of China’s debt-trap diplomacy. Commerce Secretary Gina Raimondo asked for a meeting with her counterpart to discuss increasing bilateral trade. What she actually meant was she wanted China to buy more but did absolutely nothing to reduce the tariffs imposed on Chinese imports by the Trump administration that might actually raise the volume of bilateral trade. US on the path of self-destruction Decoupling from China is not his intention, Biden claims, but then every action by his team is just the opposite. Every prospective bilateral outcome has to be on US terms, or else. What the Biden White House does not appreciate is that it has embarked on a path of self-destruction for America. The damaging blowback from Biden’s China policy may not be as obvious as not raising the debt ceiling, but there is a strong element of cutting off Uncle Sam’s nose to spite his face that the leaders in Washington seem oblivious to. Just a few examples follow. When Biden first came to office, if he had intended to resume a constructive relationship with China, he could have eliminated the tariffs levied by Trump on Chinese imports. Instead, he retained the tariffs despite hurting the American consumer much more severely than China’s manufacturers. The desire to inflict pain on China far outweighed protecting Americans from even greater pain. Whether it’s assembling new subway cars with Chinese components, installing the world’s most cost-effective port-handling cranes, or surveillance cameras made in China, Washington let its paranoia run wild and turned away the cost savings from buying superior products from China. The sanction of Huawei is an extreme case. Huawei has developed the world’s most advanced fifth-generation (5G) telecommunication system, which has received acceptance around the world. Because of US fear of being spied upon, Washington not only has refused to buy from Huawei but pressured many of its allies to rip out billions of dollars’ worth of Huawei equipment already installed. After enduring the US sanctions for three years, Huawei has just announced the complete replacement of operating software based on Western technology. It will now sell to the world without any constraints, while the United States’ allies suffer hundreds of billions of dollars from the teardown of already installed Huawei equipment and the huge opportunity costs 0f not having a state-of-the-art telecommunication system. China has also surpassed the US in EVs Of course, telecom is not the only technology where China has surpassed the US. Among others, China’s emergence as the world’s leading producer of electric vehicles and owner of leading technology for the batteries that go into the EVs has taken the West by surprise. China has become the No 1 exporter of EVs around the world. Ford and Tesla, among many automakers in the West, would like CATL to build an advanced battery plant next to their EV plants in the US. (CATL is abbreviation for Contemporary Amperex Technology Ltd headquartered in Ningde, China, and is an acknowledged leader in EV battery technology.) The potential deals raise interesting questions. Will Beijing forbid CATL’s transfer of battery technology to the US along the same logic as Washington’s semiconductor sanction on China? Or will some senator, such as a Marco Rubio, raise the specter of Chinese batteries in EVs forming a terrifying network for spying on America? Biden thought he had cleverly jumpstarted the US semiconductor industry by snatching a leading-edge operation from Taiwan Semiconductor Manufacturing Co to Phoenix, Arizona. Now the TSMC management has discovered that they are not able to hire enough people from an American workforce that are qualified and/or willing to work in the rigors of a Taiwanese operation. In the meantime, the people of Taiwan are feeling increasing betrayed by America’s ham-fisted ways. This is a classic lose-lose outcome in the making. Another is Defense Secretary Austin’s insistence on playing the “freedom of navigation” game in waters around China and flying surveillance planes off coastal China. Since Nancy Pelosi’s visit to Taipei last year, China has emphasized its territorial claim over Taiwan and has been increasingly aggressive in responding to American intrusions in Beijing’s back yard. Just last Saturday, a US destroyer along with a trailing Canadian frigate attempted to sail through the Taiwan Strait, which China regards as its territorial waters. In response to this provocation, a Chinese destroyer intercepted the American warship and forced it to change course. Obviously, the PLA is increasingly willing for a showdown over whether China’s territorial waters can continue to be treated as America’s international waters. The firepower and technology of the PLA warships have surpassed the Americans’, and the Chinese appear confident and ready to put it to a test. If the US Navy should succeed in provoking the PLA into a firefight, it is certain that both parties would be losers. China has more friends than US has allies Geopolitically, the US continues to count on the Group of Seven and a handful of other countries to be its allies. Biden’s stipulation is to insist on strict compliance of his foreign policy even at the expense of each ally’s own national interest. Consequently, France is becoming a doubting Thomas about the wisdom of going along with the US, South Korea is trying to wriggle out of not losing China’s sales, as is ASML of the Netherlands. Germany and Australia in their own ways are holding on to their trade relations with China. In sum, the American alliance is increasingly questioning the shakiness of US leadership. Concurrent to American hectoring over its version of “rule-based” order, 19 countries have expressed interest in joining BRICS (Brazil, Russia, India, China and South Africa) purely for the economic advantages of being a body that requires no military allegiance. Saudi Arabia along with other oil-producing countries becoming members of BRICS+ will change the global alignment. The body will be far more populous and economically powerful than the US-aligned G7+. And, by the way, a top agenda item for the new BRICS is to discuss a plan to introduce a new currency to replace the need to settle trade accounts in US dollars. This move is in direct response to Biden weaponizing the dollar and denying dollar access to countries he doesn’t like, such as Russia. The Regional Comprehensive Economic Partnership (RCEP) has just come into full force. Members of the partnership consist of the 10 ASEAN countries plus China, Japan, South Korea, Australia and New Zealand. They will enjoy booming, tariff-free trade among themselves. The US is on the outside looking in. Since China initiated the Belt and Road Initiative 10 years ago, around 150 countries have become beneficiaries of projects and investments through BRI. At reasonable financing terms, China supplies their expertise to build infrastructure such as ports, railroad, highways, bridges, airports and many others to enhance the economic development of the recipient country. By far, BRI has been China’s most effective tool for making friends around the world. The US? It stands impotently on the sidelines and watches with envy, and occasionally throws stones by calling these BRI projects debt traps. Despite Washington’s mighty effort to suppress and obstruct China’s rise, China has become relatively impervious to American sanctions and restrictions. Just like Huawei, China’s semiconductor industry will find ways around the ban. At the same time, China has become the foremost trading partner to virtually every country in the world. China’s economy remains strong and technological innovations will continue, hardly affected by actions from Washington. The Biden administration has concentrated virtually all its efforts on keeping China from rising, to no avail. At the same time, the administration has not done anything concrete to lift the competitiveness of the American economy. In a long line of mediocre leadership, Biden may prove the be the worst.

Monday, May 1, 2023

What does it mean when India overtakes China? There is more to becoming a world power than sheer numbers

First posted on Asia Times. As India is about to overtake China to become the most populous in the world, The New York Times promises a future series of articles speculating on how India might change the world as China has in the last 40-plus years. I am certain that India being the largest democracy in the world will be mentioned ad nauseam, but other considerations might be overlooked. I would like to provide a broader framework in the interest of a comprehensive discussion. As my teacher and good friend Martin Jacques has repeatedly argued, China is a civilization state unlike any nation as defined by the West. India can also be considered a civilization state, but with major differences. In the 3rd century BCE, China had a brutal and cruel leader with a vision that united all seven warring states. Qin Shi Huang became China’s first emperor. He standardized the spoken and written language, the currency, the weight and other measures and even the width of the wagon axles on the roads. He wanted to live forever, but at least his legacy survived. A national identity Most important, the first emperor established a national identity for all the ethnic peoples living in China. In time, these people responded to the Chinese culture and assimilated into the Chinese way of life, gradually discarding their own original heritage. Today, we say China is made up of nearly 92% ethnic Han, the remainder being 50-some other identifiable minorities. Actually, the Han Chinese are made up of a mixed gene pool of many other tribes that have faded into history. There is no “purebred Chinese” per se. Missing in India’s history is that one strong unifying figure to rally the disparate groups of people and establish a national identify. India still recognizes 16 official languages along with other unofficial ones, and people many cannot communicate with another. Contrary to popular impression, only 10% of the population can speak English. The closest to a national identity is the one imposed by the British rule on the Indian subcontinent for nearly 100 years between the 19th and 20th centuries. The Brits, of course, were not there to construct an Indian identity. They were there to exploit, colonize and enslave the indigenous people. Consequently, Indians today have a much weaker sense of who they are as compared with the Chinese. It’s harder for them to know their ethnicity, other than the idea of attaining the mythical stature of a white Aryan as nirvana. India continues to be hobbled by the caste system, a legacy of its culture. This means that by virtue of their parentage, more than 300 million Indians will be socially stigmatized and economically marginalized with no hope of realizing their potential. Their children and grandchildren suffer the same fate. Caste system is India’s worst obstacle Another reflection from the mindset of the caste system is that India’s elite schools are reserved for the privileged few. Quality of the non-elite universities is not high. Most, especially women, cannot get into India’s better schools for lack of seats. China has about four times as many universities as India, and some have been placed among the world’s top 100 institutions of higher learning. Functional literacy is over 90% in China and about 60% in India. In Chinese culture, education is life’s highest priority. The difference in the two countries’ systems of government is one the West loves to extol. India is the world’s largest democracy, while China is not a (Western style) democracy. What is that supposed to mean? From my perspective, India is constrained by all the limitations of a Western democracy. The government talks a lot but does not get much done. Corruption is rife at every level. The poor are condemned to stay poor. Come to think of it, it reminds me of another democracy, the United States. However, given its huge population, India can boast about its relatively small group of brilliant and talented people, those who are fortunate enough to have realized their full potential. One obvious example is the corps of business executives originally from India who are dominating corporate America. For India to realize its full potential as a nation, it needs to stop seeing itself as an Anglo-Saxon country, and join the Global South to contribute to the wealth and well-being of the coalition of people of color. India needs to raise the quality of higher education and open access to every citizen. Only by allowing every person the opportunity to realize his or her full potential can India become another emerging pillar of technology and industry. To create jobs for the growing body of educated youth, India needs to attract foreign investment. This means less red tape and a total absence of corruption, and, of course, prompt completion of infrastructure projects. Lessons from China Contrary to the Western idea that conflict is the way to peace, India should proactively approach China to resolve their border dispute. So silly to argue over a Line of Control drawn by a Brit more than a century ago (the McMahon Line). For India truly to overtake China and become a new emerging world leader, it would need to learn two essential lessons from China. One lesson, relatively easy to do, is to greatly improve the quality of education and boost the quantity of the workforce. The government then would have to eliminate corruption at every level and bureaucratic red tape to make foreign direct investment easy and attractive. FDI creates jobs and raises GDP. The second lesson, much more challenging, is to launch a cultural revolution on a scale that surpasses even the one in China, but with a constructive end-point rather than a destructive one. The objective of an Indian revolution is to truly eliminate caste, liberate women, and give all the opportunity to realize their potential.

Thursday, April 6, 2023

China's version of democracy

As told by mayors of four cities in China. Hi All, My friend and colleague, K.J. Noh has introduced us to how China governs vs. the US system. The program from China interviewed mayors of 4 cities located in central China, coastal city in south China, northeast of China and Tibet. I have added an annotation for each city. I am passing this around because our government is spending millions of dollars to spread false information on China for no other reason than to justify making an enemy out of China. Please share this bi-lingual YouTube program to your circle of friends and neighbors. We can do our little bit to reverse the anti-China sentiment. Best, George On Tue, Apr 4, 2023 at 11:38 PM kiji noh wrote: This fascinating, inspiring documentary about Chinese mayors gives us insight into Chinese governance, public policy, accountability and what it means to "serve the people". (1:46:00) Watch this film and you can see why China is constantly getting better. Why the Government has 90+% popularity. It's the quality of its leadership and the mechanisms for making it better. The documentary takes us to 4 different cities/prefectures: Hefei, Yanbian, Zhangzhou, Nagqu, and then has a synoptic discussion about China's whole process democracy. Along the way, we see people, policies, economies, as well as the beautiful nature and the distinct indigenous cultures of each region (At 35:20 you can see the sacrifices) If you prefer to watch in shorter episodes: Ep1: Hefei City, Anhui: Innovation, Environment, Employment (19:26) The city invests in innovation and the environment for the betterment of the peoples' livelihood. The political leaders dispenses fund to help the city and do not need to collect funds for their political campaigns. Ep2: Yanbian Korean Autonomous Prefecture, Jilin: Soccer, Farming, Farmer's dance (14:30) This city promotes local sports participation, people vote for officials that have done the most for the people, Ethnic Korean mayor took a salary cut to enter local politics and he actively promotes preservation of Korean culture and dance Ep3: Zhangzhou City, Fujian: Buildings, Business, Beaches (25:35) Mayor helps residents preserve and restore world heritage & famous roundhouses; 87 year old Taiwanese owner of major tea company won't retire, being successful is too much fun, facilitated by the mayor ensuring that the Taiwanese investors are pleased to be in Zhangzhou. (A majority of Taiwanese ancestors originated from Zhangzhou.) Ep4: Nagqu, Tibet Autonomous Region: Caring for Vulnerable Nature & People (25:57) Young Tibetan mayor modestly admits he's very much learning on the job. Ep5: Chinese Democracy vs. American Democracy: "promises vs performance" (12:32) This episode is pretty much self explanatory. As one mayor explained, we are products of democracy every step along the way, who has ever heard of someone getting elected to a high level office without showing any proven experience at every lower level of office? Promotion is based on past performances. In every city in China,12345 is the direct line to the mayor's office. Ep6: Delivering Democracy: people oriented democracy (4:34) Trailer:

Contrasting styles of global leadership

A shorter version of this commentary was first posted in Asia Times. Early this January, I opined in Asia Times that “2023 bodes poorly for US international relations” under US President Joe Biden. I based my conclusion on China’s impressive success in making new friends vs. the Biden administration’s inability to make any. In less than three months since then, developments around the world have been seismic and spectacular and have made a prophet out of me, if I do say so myself. In January, I reported that China President Xi Jinping received the red-carpet treatment from Saudi Arabia, concluded a $25 billion deal for oil and met with the six Middle East nations that make up the Gulf Cooperation Council. Hosted by Saudi, they talked about China buying energy and helping them build their infrastructure. Two years earlier, China entered a 25-year strategic cooperation agreement with Iran. Thus, China has become friends of both major sects of Islam that have been historically bitter rivals. (To be honest, I did not expect anything earthshaking out of all this.) Then earlier this March, China announced that after four days of meeting and discussion in Beijing, Saudi Arabia and Iran have agree to resume diplomatic relations. A peace deal for the ages This was a big deal and caught the world by surprise. Heretofore, Saudi representing the Sunnis while Iran the Shiites have been bitter sectarian foes for centuries. Yet, China was able to play the role of an honest broker and brought the two sides together. China has the right set of credentials to be a mediator for peace. China is the second strongest global power, but does not try to bully any lesser countries and seeks to get along with everyone. China emphasizes three principles in their international relations: respect the national sovereignty of the other, does not interfere with the internal affairs of the other, and seek joint development based on common interests and mutual benefits. A few days later, Xi called on his “good friend,” Russia President Vladimir Putin in Moscow and brought with him a 12-point peace plan to resolve the conflict between Ukraine and Russia. The west promptly labeled the peace plan as vague, ambiguous and did not include terms that would revert Russian occupied territories back to Ukraine. But the west missed the point that was clear to everybody else in the world. Namely, a true mediation for peace does not begin by stipulating what the outcome should look like. That is up to the outcome of negotiations by the two principals. Zelensky would like China to step in But as pointed out in Asia Times, Ukraine President Volodymyr Zelensky may find China’s peace proposal an acceptable starting point. He is facing western allies getting weary of supporting the war. Without such support, Zelensky knows his goose is cooked. While Japan’s prime minister, Fumio Kishida was visiting Kiev acting as Washington’s envoy to encourage keeping the war going, Zelensky publicly welcomed China’s participation to broker a peace deal. He obviously found comfort in China’s ability to bring peace between Saudi Arabia and Iran. While Xi Jinping is enhancing his stature as a world leader that is proactive for peace, what has happened to Joe Biden during the same period? History will show that blowback from two of Biden’s worst decisions ever made has come to haunt him in the first quarter of 2023. In 2022, Biden imposed economic sanctions and confiscated all the Russian dollar holdings held in the US in an attempt to bring Russia to its knees. But it didn’t work. Russia’s economy turned out to be far more resilient than Washington expected. Weaponizing the dollar is a big blunder Barred from trade with the EU and others in the west, Russia turned to trade with China, India, East Asia and global south. Trade with China will surpass $200 billion this year and Russia has agreed to accept China’s renminbi to settle their transactions. As Russia earn a bounty of yuan from energy sales to China, other countries see the advantage of accepting the yuan from Russia for their trade, thus avoiding the extra cost of having to convert their own currency into dollars. Since China is likely to be their most important trading partner, yuan from Russia can simply be used when they do business with China. Brazil is the latest major trading nation to announce acceptance of the yuan to settle their accounts with China. These developments are not sufficient to dislodge the dollar as the global reserve currency but do indicate that other nations are eager to by-pass the dollar. By weaponizing the dollar, Biden has succeeded in planting the idea in other central banks that the dollar is no longer a reliable reserve currency. Recently, ASEAN countries held a meeting to discuss ways to avoid using the dollar, euro or yen to settle their trade accounts. If not those, what then? Probably China’s yuan and their own currencies. Indeed, China and even Japan have been reducing their dollar holdings. In recent months, China and Russia have been the major buyers of gold, no doubt with the dollars they held. The recent collapse of the Silicon Valley Bank is an indicator that the US economy is caught between the rock and a hard place. To tamp down inflation, the Fed has to raise the interest rate. Rising interest rate means a decreasing value of the long-term treasury bonds that the bank bought that pay lower interest rates. Thus, the decline in the value of the collateral asset owned by SVB made the bank vulnerable to a bank run. Most American banks operated in much the same way as SVB but were more fortunate because the Treasury department quickly stepped in and injected liquidity to reassure depositors that their banks won’t go the way of SVB. American economy needs China’s help To use a Chinese expression, Treasure Secretary Janet Yellen and Commerce Secretary Gina Raimondo have been acting like ants running around a hot griddle, wanting and waiting for an invitation to visit Beijing. Why? Because Yellen wants to urge China to continue buying American IOUs and Raimondo would like to raise the level of bilateral trade, which would help keep the US economy going. Somehow, these Biden cabinet officers do not know how to ask nicely nor diplomatically. They seem to assume that a public announcement of their wish is good enough for Beijing to express mail an invitation to their offices. It has not occurred to them that Beijing needs to know what’s in it for China to meet with them. The Biden administration has the arrogance to presume that they can pick and choose the economic sectors that they can decouple from China and which to select for collaboration with China. Apparently, Biden does not understand that China does not see itself as a vassal state but has its own priorities. Decouple is a two-way street. Both Testa and Ford have asked Contemporary Amperex Technology Ltd. to build a battery plant in the US. CATL is the world leader in lithium battery technology and dominant supplier to makers of electric vehicles. China may well deny CATL an export license to locate a plant in the US for fear that the US would commandeer its world leading, proprietary technology, just as Biden has done in shipping advanced fab belonging to Taiwan Semiconductor Manufacturing from Taiwan to Arizona. Obviously there exists a huge deficit of trust between the US and China. Nothing Biden has done is in the direction of healing the rift. Blowing up Nord Stream is the other blunder The revelation by Pulitzer Prize–winning journalist Seymour Hersh that Biden ordered the destruction of the Nord Stream pipelines has further emphasized that Biden is an unethical and ruthless national leader that cannot be trusted. Biden has shown that he has no qualms in committing a war crime by severing the key economic linkage between Russia and the EU. Cutting off cheap energy from Russia has wreaked economic turmoil on his European allies. That Biden would do this to his own allies will shake EU allies’ trust and confidence in the US for years to come. As matters stand now, Xi Jinping represents a proactive world leader that will use his influence and prestige to work for world peace. Despite all the slander heaped on him and the blackening of China by Washington and the western media, a long queue of world leaders are jostling to meet with him in Beijing to discuss economic cooperation and collaboration on world peace. At the other end of the world is Joe Biden, a world leader that is dishonest and unethical and has earned the wary distrust of virtually every national leader in the world. He gives lip service to peace while creating conflict and intimidating smaller countries to join the US military alliance and prepare to “volunteer” in Washington’s proxy wars. Even his closest ally has to watch its back lest it’s abruptly discarded when it no longer figures in the US national interest. If, nay when the world majority chooses peace over war, then there would be no need for any country to depend on American military protection for security—a protection often promised but seldom delivered.

Tuesday, April 4, 2023

Trust deficit of US has been self-inflicted

First published in China Daily. In the United States, we have a popular saying: "You can't have your cake and eat it too", which is another way of saying that you cannot have it both ways. Yet this is exactly what President Joe Biden's administration is trying to do with China. It treats China like a bitter adversary. The Biden administration even has hundreds of millions of dollars allocated to encourage Western media to blacken China's reputation at every opportunity, even resorting to distortion and fabrication to achieve their objective. Yet when they need China's help, Biden expects Beijing to comply and act as a willing supporter. Some recent examples come to mind. At the G20 Summit in Bali in October, Biden reaffirmed the one-China principle and said he would do nothing to interfere with Taiwan as part of China. Of course, right after he left Bali, he ordered advanced weapons for Taiwan and commandeered part of Taiwan Semiconductor Co from the island's city of Hsinchu to the US state of Arizona. US Treasury Secretary Janet Yellen flew to Switzerland specifically to intercept China's then vice-premier Liu He on his way to Davos. She asked for China's support for the dollar by continuing to buy US Treasury IOUs. She then flew on to Africa to warn African nations of China's so-called debt-trap diplomacy — without any evidence whatsoever. On the sidelines of the Munich Security Conference in February, US Secretary of State Antony Blinken met with Chinese senior diplomat Wang Yi, boasting later that he gave a stern warning that China must not give weapons to Russia, or it would face dire consequences. Wang, who is now a member of the Political Bureau of the Communist Party of China Central Committee and director of the Office of the Foreign Affairs Commission of the CPC Central Committee, let it be known that the shooting down by the US of a weather balloon that wandered into US airspace was a hysterical response. Hysteria and paranoid logic run wild in Washington. Kits for new subway cars provided by China and assembled in the US were feared to be a vehicle for spying. The ubiquitous TikTok may be thrown out of the US because it is owned by a Chinese entrepreneur. The US has concluded that the best way to deal with its rotting infrastructure, proliferating number of homeless people, drug overdoses and mass shootings is to kick the can down the road and let the next round of politicians face the challenges. In the meantime, rather than confronting the real challenges at home, they work on blaming everything on China. At the beginning of his administration, Biden could have reset relations with China, but he doubled down instead. Blinken and others have gone around promising positive relations with every country, only to stab them in the back. This has been especially true with their dealings with China. Right now, Biden desperately needs to meet with President Xi Jinping to get China's support for the US debt, but he thinks he can get that support while trashing China and freezing China from access to semiconductor technology. Under his leadership, the US has become a nation that inflicts self-harm by a thousand cuts. By unilaterally destroying Iraq and Libya, the US instilled fear in others. By unilaterally confiscating foreign reserves belonging to Afghanistan and Russia, Biden behaved like the mafia. All the world can now see that holding on to the dollar and keeping it in the US is fraught with danger. Under these circumstances, why would China want to buy more Treasury bills? That would only enable the Federal Reserve to print more dollars and run up the deficit. In fact, China is converting extra dollars into gold and spending the remainder as rapidly as possible. China is also working with Saudi Arabia and other oil-producing states to accept the renminbi instead of the petrodollar. More than 100 countries that trade with China are already willing to hold renminbi as part of their reserve currency. All are motivated to avoid owning dollars. The US under Biden's leadership now suffers a huge credibility gap and trust deficit with the rest of the world. The US economy and therefore American taxpayers will pay dearly from the debt trap of Biden's own making. The author, a US citizen of Chinese ancestry and a retired international business adviser, wrote this commentary especially for China Daily.

Saturday, March 25, 2023

My comment on role of China as a world peacemaker

George Koo on the Historic Significance of the Xi-Putin Summit & impact on changing New World Order Video cast on Activist News Network.

Saturday, February 18, 2023

Nord Stream Explosions Hard to Cover-Up, Award-winning journalist Seymour Hersh has exposed the Biden administration’s role in sabotaging the pipelines

First posted on Asia Times. The report “How America Took Out the Nord Stream Pipeline” by Pulitzer Prize–winning journalist Seymour Hersh states beyond any reasonable doubt that US President Joe Biden ordered the sabotage of the Nord Stream pipelines. Thus if it wasn’t clear before, it is emphatically clear now that the US will impose its proprietary version of “rules-based international order” by any means possible including committing a crime against humanity. The Nord Stream 1 and 2 pipelines are jointly owned by the Russian energy corporation Gazprom and four European energy companies. Nord Stream 1 had been providing low-cost natural gas from Russia to Germany, which redistributed some of it to other parts of Europe. Nord Stream 2 was in the process of coming on stream and would have doubled the supply to Europe. The explosions that took place on September 26, 2022, stopped the flow of Russian gas, and left hundreds of millions of Europeans facing the prospects of a cold winter. The economic consequences of the Nord Stream sabotage were the quadrupling of energy costs and triggering rampant inflation in Europe the likes of which hadn’t been seen for decades. President Biden wanted to make sure that Germany would strongly support Ukraine in its conflict with Russia. Blowing up the pipelines would ensure that Russia could no longer supply cheap energy to Europe and Germany wouldn’t have natural gas from Russia as a source of distraction from its support for Ukraine. Biden had absolutely no justification for destroying property that did not belong to the US. Doing so would be naked aggression, an act of war, devoid of concern that the people and economies of friendly allies would suffer. He wouldn’t care that to achieve his sense of security for the US required committing a war crime. Heretofore, we Americans have been telling the world that the United States of America is the citadel on top of the hill, a shining beacon of integrity and an example of what a freedom-loving democracy should be. Other nations are supposed to admire what we stand for and aspire to be just like us. Shining beacon no more Now, the world sees that Fortress America is corrupt, dishonest and shameless. The US suppresses other countries by force, intimidation or sanctions or a mixture of the above. Other nations comply with our demands not because they admire us but because they fear us. If the US did indeed destroy the pipelines as Hersh reports, some in the inner circle of the Biden administration might try to defend its action by claiming that it was a reprisal for Russia’s illegal invasion of Ukraine. In fact, according to Hersh, planning to blow up the pipelines was under way months before the Russian invasion began. He further explained that the government of Norway was enlisted to help with the execution of the sabotage. One of the reasons for recruiting Norway was that it knew the shallow waters of the Baltic Sea better than anyone. “On September 26, 2022, a Norwegian Navy P8 surveillance plane made a seemingly routine flight and dropped a sonar buoy,” Hersh reports. “The signal spread underwater, initially to Nord Stream 2 and then on to Nord Stream 1. A few hours later, the high-powered C4 explosives were triggered and three of the four pipelines were put out of commission.” Norway’s participation is full of irony. The annual winner of the Nobel Peace Prize is selected by a committee appointed by the Norwegian parliament. One year, they rushed to give Peace Prize to incoming American president Barack Obama even before he assumed office. History will credit Obama as the president who first popularized the use of drones as deadly killing machines, cold-blooded and indiscriminate. They were deployed in Afghanistan and Iraq. In hindsight, these were not exactly the kind of credentials consistent with those of a Peace Prize laureate. In a podcast interview subsequent to his exposé of the Nord Stream explosion, Hersh said that putting the story together was not difficult. Any reasonably competent investigative reporter could have followed the trail of telltale clues leading directly to the White House. For months before the invasion of Ukraine and the explosion of the pipelines, President Biden and his foreign-policy team – national security adviser Jake Sullivan, Secretary of State Tony Blinken, and Victoria Nuland, the undersecretary of state for policy – had been vocal and consistent in their hostility to the two pipelines. Biden gave the secret away Biden and Nuland even publicly hinted to the media that the pipelines would “go away.” At the press briefing that followed German Chancellor Olaf Scholz’ visit to Washington in February last year, Biden said, “If Russia invades … there will no longer be a Nord Stream 2. We will bring an end to it.” Undersecretary Nuland also said at a State Department briefing, lightly covered by the media, “I want to be very clear to you today. If Russia invades Ukraine, one way or another Nord Stream 2 will not move forward.” The reason the mainstream media did not bother to ask the obvious question as to who blew up the pipelines and why was either being lazy and uninquisitive or because they knew the answer and did not want to embarrass the Biden White House. Even after the publication of Hersh’s report, mainstream media outlets such as The Washington Post and The New York Times did not even bother to contact him and interview him. By deliberately ignoring this story, they are not living up to their obligation as members of the fourth estate and protecting their integrity. In other words, they have betrayed public trust and sold out to the White House. The US has always acted above the laws of other sovereign nations, even ignoring the laws of the United Nations. With compliant and docile media, the Biden team can go wild and run roughshod over anyone without a tinge of concern. The worldwide disrespect for the US will grow. In time, The US will find itself alone and friendless in a unipolar world of its own lonesome.

Monday, February 6, 2023

Much ado about a well-timed balloon. Aside from a propaganda boon for the US, the incident got Antony Blinken off the hook

First posted in Asia Times. A huge white balloon equivalent in size to three buses drifted from China over Alaska and Canada, and then over Montana and across the US continent before reaching the Carolinas coast. At that point, the Pentagon deemed it safe to send a couple of jet fighters supported by a fuel tanker to bring down the errant balloon and let the remnants fall into the Atlantic Ocean. After firing missiles at the target, the mission was completed and deemed a triumphant success. And the brave pilots returned to home base safely. The Biden White House first knew about the balloon on January 28 and shot it down a week later. In between, Washington expressed outrage, fear and anxiety over the “invasion” of a spy balloon from China. Beijing’s official response was that it was a civilian balloon for weather surveillance that went off course and hardly warranted the extreme response of a missile attack. Beijing did not feel it necessary to point out that high-flying balloons cannot gather intelligence as effectively as satellites or aircraft. The Pentagon certainly knows this better than anyone. It has been flying surveillance planes off the coast of China for years – though no balloons that we know of. Needless to say, a highly visible white finish is hardly appropriate for a spy balloon that would logically want to be stealthy. But it is, on the other hand, a well-known fact that thousands of weather balloons are released annually by many countries for the purpose of forecasting weather. Once in a while, a balloon will drift off course because of atmospheric conditions, which is not surprising and should not trigger any outpouring of emotional trauma. Aside from the fact that the wandering balloon gave Washington the opportunity to make a mountain of propaganda against China’s “aggressiveness” molehill, otherwise known as xiaotidazhuo (小题大做), the incident also got Secretary of State Antony Blinken off the hook. For weeks, Blinken has publicly announced his intention to visit Beijing. Then he got specific and set the dates of his visit as February 5 and 6. This presented China’s Foreign Ministry with a thorny problem. Aside from not having extended a formal invitation, the Chinese didn’t know what to talk to Blinken about. China has experienced a litany of the US saying one thing and doing just the opposite. A trust deficit exists that can’t be papered over. At the Group of Twenty Summit in Bali in November, US President Joe Biden promised to abide by the one-China principle, and then promptly enacted a bill to provide $10 billion worth of advanced weapons to Taiwan and celebrated the hijacking of a TSMC fab to Arizona. Treasury Secretary Janet Yellen flew to Switzerland to meet with Vice-Premier Liu He, China’s economic czar, to ask for China’s support of American debt and not to divest US Treasury notes and bills that China was holding. Then she flew to Africa to badmouth China and warn Africans of Chinese “debt trap” diplomacy. Since Blinken’s ill-fated first meeting with Chinese leaders in charge of foreign policy, in Anchorage, Alaska, in March 2021, he has not altered his style of diplomacy. It’s “here are my list of demands and expectations in advance and now let’s talk.” China’s style of diplomacy is more nuanced, and telling Blinken to go hell or even to go Tianjin is just not its way. Instead, an innocently wandering balloon gives Blinken a face-saving way to postpone the self-invited visit to China. Note, he didn’t say he is canceling the visit, just postponing the trip. Despite his harsh, blunt approach, he does understand that the US desperately needs China’s willing collaboration. With China, he needs to act like he understands it can’t be all take and no give. A note added after the post: Should a real war break out between the U.S. and China, we can expect an armada of ten thousand weather balloons menacing the American sky.

Thursday, February 2, 2023

Fatal flaws with the idea of decoupling

A shorter version of this post first appeared in Asia times. Recent issue of Bloomberg/Businessweek said, “Despite the heated national security rhetoric in Washington and talk of “decoupling” in policy circles, the world’s top two economies remain firmly intertwined.” The article goes on the say that the bilateral trade for year ending 2022 is likely to be the highest ever recorded. The failure to decouple is likely good news for China but even better news for the American public. However, anyone with a dollop of common sense would realize that the talk about decoupling was just so much balderdash. For the sake of introducing clarity to what and how decoupling might actually mean, let us recruit a team of Indians to address the many facets of this “elephant” in the room. Decouple would mean the opposite of economic integration. Each would have nothing to do with the other. This means Americans would have to stop buying manufactured goods from China. But this is contrary to actual bilateral trade data, wherein despite the added import tariff to the retail price, the American public can’t buy enough products Made in China. That’s the reality to date. In order for the US not to buy from China, we would have to make these products in America. Former President Donald Trump struck on the brilliant idea of bringing manufacturing back to America. He ordered, cajoled and dangled sweet deals to entice American companies back to the US. Americans don’t know how anymore The idea basically flopped for a host of reasons. The making of widgets left the U.S. decades ago, first to the four tigers such as Taiwan and Hongkong and then to mainland China. The basic skill sets needed on the production line hasn’t been seen in America for many decades and could not be replaced overnight on demand. Some lament that Washington is at fault for not having the vision to craft an industrial policy that would encourage retention of the manufacturing of run of the mill products, such as toys, television, personal computers or mobile phones. Our political leaders, busy getting elected, did not envisiage that making widgets was a necessary precursor step to making increasingly higher valued goods, as China has done. Actually, most the blame belongs to America’s abiding faith in Capitalism as executed by Wall Street. Not for nothing that Corporate America are known as “multinationals.” Multinationals (MNCs) go to where the production costs are the lowest and sell to where the profit is highest. “National interest” does not figure in their board room discussions. As Trump’s successor, President Joe Biden lacked the courage to remove the tariffs on imports from China, which could have only benefitted the American consumer. Washington along with the compliant mainstream media has so thoroughly demonized China in the minds of American public that Biden dare not risk even an appearance of apparently acting soft on China. However, Biden apparently understands that bringing manufacturing back is not quite as simple as a Trumpian clarion call. For one thing, the American wage scale would raise the cost of production, perhaps by as much as 50% according to Morris Chang, founder of Taiwan Semiconductor, for semiconductors. In the case of highend products, production also needs a complete supply chain of parts and components, which would also need to be transplanted from somewhere. Biden wins at the expense of Europeans So, instead of counting on American MNCs to make America great again, Biden is dangling subsidies to appeal to foreign MNCs, any company except from China, to move their plants to the US. European companies find the prospects tempting. Their economy at home faces shortages and inflation thanks to the Ukrainian war and they find America’s stability and market appealing. Just like their American counterparts, European companies owe their allegiance to their shareholders. But enticing European MNCs to the US means taking jobs away from their home country, which is making the European leaders very unhappy, hardly a way to treat America’s allies. Biden’s another approach is to outright hijack Taiwan Semiconductor (TSMC) plant from Taiwan and transplant it to Phoenix Arizona. The first group of TSMC staff came willingly and accompanied the equipment disassembled from Taiwan. They were convinced by their own government that invasion from China was imminent and this was the opportunity to get out. Mere weeks later, some troubling signs are developing. The staff from Taiwan are used to working 10-12 hour shifts and they were promised that they do not have to work night shifts. Well, their American colleagues don’t want to work night shifts either and 8 hours per day is their normal stint. The difference between the Taiwan based wage scale and the US based also creates tension and resentment. Presumably, the difference would eventually be harmonized but the manufacturing cost would go up. The question will be whether the TSMC customers, such as Apple et al., would pay for this higher price chips for the sake of national interest or just keep buying from the TSMC plant remaining in Taiwan. Want to hazard a guess? When the Soviet Union sent aloft the first manmade satellite in 1957, America woke up in shock, and promptly rallied national energy and resources to respond. Twelve years later we sent man to the moon. That was America’s first Sputnik moment. When China showed that they have caught up or even surpassed the US in certain critical 21st century technogies, that was another Sputnik moment. Demonize easier than compete But this time, our leaders in Washington must have decided that rather than compete head on, it was cheaper to allocate a few hundreds of million dollars to the media and ask them to continue to mislead the American public and demonize China as a human rights violator incapable of innovation and technological advances. Of course, Pentagon has yet to explain how an undersea mountain “ran” into the nose of our most advanced nuclear submarine off southern China coast in 2021 and forcing the sub to surface and run to safety. That’s a juicy mystery still waiting for the mainstream media to investigate and report. Unconfirmed rumor is that a Chinese drone sub wreaked havoc on the USS Connecticut. When the US has been going around the world promoting armed conflicts in the name of imposing “rule based, international order,” death and destruction inevitably followed. The world witnessed the repeated scenario in Afghanistan, Iraq, Libya, Syria and Yemen to name a few hot spots set ablazed by Uncle Sam. Rather than feeling secured under the American military umbrella, the rest of the world fear and distrust American rhetoric and intentions. In the meantime, China makes the rounds offering Belt and Road Initiative to underdeveloped and developing countries. The basics of BRI is that the host country will consult with China and select the infrastructure projects that need China’s assistance and financing. Infrastructure projects, such as port, rail, highway, airport, power and others, upon completion would give the host an economic shot in the arm. Raising the gross domestic product could come from increase in export and participation of global trade, improved yield on the farm based on Chinese technical assistance and creation of new jobs in the cities. BRI becomes a form of incoming tide that raises all boats. Over 150 countries around the world have signed BRI deals with China. Over time, we can expect to see increasing number of countries grow in economical strength. As more countries manage to keep their own people employed at home, the world will see fewer refugees and migrants, an overall benefit you will not hear reported by the western media. China has friends, the US fear and loathing The success of BRI has raised alarm from the western media and American diplomats are going around Africa and Latin America warning them of China’s “debt-trap diplomacy.” China’s BRI financing is normally around half of the going rate, sometimes even at zero interest, and some loans were outright forgiven. These third world countries should be offended that the West believes they are too stupid to tell the difference between centuries of colonial exploitation they suffered in the hands of the western imperial powers and China’s straightforward business propositions. If the much talked about decoupling were to suddenly occur tomorrow, the US would pay a much dearer price than would China. China would continue to be the most important trading partner to every country except for perhaps the US. China has long term, yuan based, energy contracts with Saudi, Iran, Qatar and other Gulf states along with Russia. Furthermore, thanks to the US aggressive actions pushing China and Russia into tighter collaboration, they can roll up their sleeves and concentrate on developing and realizing the vast potential of Siberia. On the other hand, the US is suffering from a deep deficit of trust by allies and rest of the world alike. The world has seen American unilateralism at work as the US confiscated the foreign reserve of the Taliban government in Afghanistan and later the Russian holdings, national and personal. The threat of sanctions and actual sanctions imposed has been the US favorite tool of diplomacy. As many have observed, sanctions have unanticipated consequences and blowback. As one recent article concluded, “Western sanctions led Russia to greatly increase trade with Asia, while devastating Europe’s economy. The US tech war against China is damaging its own industry.” Washington can act arbitrarily, capriciously and unilaterally. That’s why Japan, even as an ally, and China being the two largest foreign holders of US debt are in a rush to divest their holdings as quickly as possible. In the case of China, they face the challenge of trade surplus accumulating faster than they can divest their dollars. Indeed, friend and foe alike, most countries’ reserve now include increasing portion of China’s yuan while lessening the portion in dollars. Russia has even announced the ultimate goal of holding 60% renminbi and 40% gold as their foreign exchange reserve. Ironically, in middle of last month, Treasury Secretary Janet Yellen flew to Europe just to intercept China’s vice premier Liu He as he was on his way to the Davos summit. Apparently, the gist of their three-hour meeting was for Yellen to pitch the importance of China holding onto the dollars and continuing to buy US debt as vital to supporting the American economy. Most likely decoupling was not part of their conversation.

Thursday, January 19, 2023

2023 bodes poorly for US international relations

First posted On Asia Times. America’s top diplomat Antony Blinken’s most important task for the new year is to secure a summit meeting between US President Joe Biden and China’s leader, Xi Jinping. The odds of Blinken coming up empty and failing to arrange this meeting are exceedingly high. The reason is that China is growing weary of repeated cycles of Biden saying one thing and doing just the opposite. As Chinese Foreign Minister Wang Yi is alleged to have said in a telephone conversation with Blinken, “This business of warmly embracing while getting stabbed in the back is getting tiresome.” As reported by Asia Times from Bali, Biden committed not to interfere with China’s governing structure, not to wage a new cold war with China, not to recruit allies to align against China, and not to promote or support Taiwan independence, nor reject the principle of one China. He also pledged that the US does not intend to initiate military conflict, wage economic warfare, decouple the two economies or hinder China’s economic development. Any unbiased observer could be forgiven for thinking that after the warm and fuzzy three-hour meeting, Biden would seize the opportunity to take steps to relax the bilateral tension. He could have rescinded the foolish tariff war initiated by former president Donald Trump and carried on by his own administration. The trade war has worked against American interests, as the trade deficit has continued to grow in China’s favor while tariff-added prices on Chinese imports increased inflationary pressure for the American consumer. But Biden did not. He could have backed off on the draconian semiconductor embargo he imposed on China, as a gesture of goodwill. He did not. Biden didn’t mean what he said Instead, Biden signed the National Defense Authorization Act (NDAA), which included $10 billion in military aid to Taiwan. This aid is actually in the form of a loan. At $2 billion per year, Biden has placed orders on behalf of Taiwan with America’s weapons makers and has already sent the bill for the interest charges to the Taipei government. Typical of Washington chicanery, Taipei pays first for a possible future delivery of advanced weapons. Based on past records, Taipei holding an empty bag is not beyond the realm. After the new year dawned, Washington is also said to be ready to send “observers” to sit in offices inside the Taiwanese government for a stint of up to two years. Of course, observers have a way of becoming advisers and eventually becoming a take-charge shadow government, turning President Tsai Ing-wen’s government into zombies. Biden has also sent word to Taipei that the period of four-month active duty for conscripted soldiers is too short. President Tsai dutifully ordered a revision of the statute to 12 months commencing in 2024. Critics in Taiwan jeered at this alleged toughening of military preparedness. They opined that the 12-month training will qualify the young soldiers to carry and fire a rifle but stand no chance in face of advanced firepower, if the People’s Liberation Army were to invade. Getting these young people killed in action, however, would satisfy Washington in getting Taiwan to stand as proxy versus China, just like Ukraine in the proxy war with Russia. Of course, all the developments related to Taiwan directly contradict the solemn pledges Biden made at the Group of Twenty summit in Bali. There are two takeaways for the world. One is that what American leaders say can’t be trusted; their promises do not equate obligations. Second, the US will act only in itss own self-interest and care not a whit about its allies. Treating Taiwan as a pathetic vassal is just one example. America’s European allies have already seen the cost of joining the US in supporting the proxy war in Ukraine. While Ukrainians and Russians were expected to be the big losers in the conflict, the Europeans did not expect to become victims of runaway inflation. The rise of inflation was due to the American sanctions on Russia, which retaliated by stopping the flow of gas and oil to the European Union. The pain of being an American ally As French President Emmanuel Macron bitterly observed, the Europeans were offered relief with liquefied natural gas (LNG) from the US, but at four times the domestic American prices. Thus while the EU paid through the nose for their energy, the Americans reaped obscene profit. Hardly an ethical or honorable way to treat an ally. German Chancellor Olaf Scholz also saw through the American duplicity and he quickly organized an 11-hour visit to Beijing to meet with Xi Jinping in early November, before the G20. He took along a delegation of senior CEOs to reaffirm and cement the bilateral economic relationship with Germany’s largest trading partner – especially crucial as Europe has to confront rampant, ongoing inflation. Macron also sees the urgency of building France’s economic ties with China and is busily arranging for a visit by him to be formally added to Xi’s official calendar. It’s hard to know where he is in the queue. Heads of state of Italy, Australia and New Zealand are also jockeying to meet with Xi. They all see economic tie-ups with China in one form or another as a top-priority item on their national agendas. However, the first to meet Xi in the new year is Philippine President Ferdinand Marcos Jr. He arrived in Beijing on Tuesday for a three-day visit. As Asia Times reports, the Philippines is in desperate need for foreign capital investment and just the kind of help with infrastructure building that China’s Belt and Road Initiative (BRI) is known for. Unqualified success of BRI First proposed by Xi in 2013, the BRI has become China’s signature tool of diplomacy. Close to 150 countries had signed up to become members of the BRI by the end of 2022. Many of the BRI projects involved building transportation corridors via trains or highways and ports and harbors. Such infrastructure projects enabled the host country to join or expand its participation in world trade. Other projects involved hospitals, libraries and schools. All were designed to help the economy of the host country. The projects are financed by China at below-market interest rates and even at zero interest in some cases. Chinese companies provide the leadership, management and technology to implement each project. In the early years, China bore the slings and arrows of criticism from the Western media and from Washington politicians. Now, with hundreds of projects going on around the world, the BRI has become well accepted in much of the developing world. Any Westerner still warning about China’s “debt trap” diplomacy is treated with derision and contempt. China’s message is easy to understand. It is in favor of open trade and mutually beneficial collaboration. It does not require geopolitical pledges of allegiance or alignment. And it does not wish to argue over who has the correct definition of human rights or democracy, or insist on who is right. After the 25th People’s Congress in late October, Xi began to meet with other national leaders. Vietnam’s Communist Party chief Nguyen Phu Trong became the first foreign leader to visit Beijing, quickly followed by Germany’s Scholz. World leaders eager to meet with Xi Xi then left Beijing for the G20 summit in Bali and the Asia-Pacific Economic Cooperation (APEC) summit in Thailand. Leaders lined up to meet with Xi on the sidelines of both summits, eager to re-establish bilateral relations and explore economic cooperation with the world’s largest trading nation. President Xi later went on a three-day state visit to Saudi Arabia. In Riyadh, China concluded a US$25 billion deal for oil. The Saudis also hosted an inaugural China-Arab states summit during Xi’s visit, and a meeting with the Gulf Cooperation Council, which comprises Saudi Arabia, Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates. On top of China’s 25-year strategic partnership with Iran, China can now claim to being friends with 1.8 billion people of the Islamic world, be they Sunnis or Shiites. Before the end of calendar year 2022, China also entered a free-trade deal with Ecuador, the fourth such deal in America’s back yard, in addition to Chile, Costa Rica and Peru. Contrary to what the wise old men of the West are telling Washington, world trade and globalization are far from dead but more popular than ever with the countries that are not members of Group of Seven. For the year of 2023, there are two earth-shaking developments that might catch the US by surprise. One is the possible routine use of the petro-renminbi as means of payment for energy from the Middle East. The internationalization of the yuan has been a gradual process and Washington could easily be caught off guard, like a frog in a steamer. The total replacement of the petrodollar is not likely in 2023 but the renminbi inroad could give Washington a real nightmare to worry about. A grand collaboration in Siberia A doozy of a deal in the offing is the ongoing discussion between Russia and China for a grand collaboration involving Siberia. As discussed in Asia Times, American sanctions and pressure on Russia have forced President Vladimir Putin to deepen his alliance and dependence on China. Historically, Russia has always been leery of opening Siberia for Chinese investment for fear of losing control of the territory owing to the potential of an overflowing Chinese population that could flood the frozen tundra region. Now Putin is in desperate need to realize the full potential of 40% of the landmass currently in permafrost hibernation. According to Russia media, the deal on the table would involve China investing $160 billion on 79 projects. The projects would not just include extracting oil, gas and minerals but would also cover infrastructure, agriculture, automotive, machinery and communications. China has the money, technology, know-how and most crucially, the hardy and hard-working people to make it happen. Russia needs the economic development that comes from industries. Now, figuratively speaking, while Blinken is sitting in the reception room waiting to be summoned to discuss another Biden-Xi summit, he has to be prepared to answer two likely questions from Qin Gang, the newly appointed Chinese foreign minister. What’s the point of another summit? What is there to talk about? Virtually all national leaders have been invited to meet with Xi in Beijing. A subtle snub would be for Xi to offer to meet with Biden in Xiamen. Other than not being Beijing, Xiamen has a lot of subtle symbolism. From Xiamen, one can see Kinmen, an island that belongs to the Taipei government. Xiamen is warm and scenic and maybe Biden won’t care. He might think he has been transported to the Caribbean. Of course, Biden could also return the compliment and offer to host the return summit in Taipei. After all, the US already owns that city and the government there. Critical_Hour_1142_seg_3.mp3