Wednesday, November 17, 2021

Webinars on US China relations

Part 1 - Early U.S. China Ties; One shining moment: Burlingame Treaty of 1868, given on Novembere 3, 2021 Part 2 - How did our China relations turn so sour? The future of our young generations are at stake, given on November 10, 2021 The above 2 part webinars were 7th and 8th in a 9 part series organized and sponsored by Coalition Peace Initiative. Presented at the Schiller Institute Conference. The Survival of Our World Depends on U.S. and China Getting Along.

Sunday, November 7, 2021

Chip industry’s virtuous circle made vicious by Biden’s policy- Forcing chip foundries to turn over internal files is a lose-lose proposition

First posted in Asia Times. A report of this posted appeared in China Daily. Chinese version posted in Sing Tao Daily. I commented on this subject in China Economic Net. Same piece also appeared in China Daily. Some years ago, before my retirement, I offered the observation that the semiconductor industry had become a remarkably virtuous circle across the world. As everyone knows, in a virtuous circle, all participants win. True enough, semiconductor technology was discovered and developed in California’s Santa Clara county, south of San Francisco, which is how it became known to the world as “Silicon Valley.” There Intel Corporation pioneered the advances in its microprocessor technology and created the mega personal-computer industry. Other entrepreneurs in the valley soon followed Intel, either to compete with better circuit designs or to develop complementary integrated circuits to expand the use of semiconductors in a multiplicity of applications. Thus the role of semiconductors proliferated into everyday use, and they now serve many essential functions not conceived by the original inventors. A recent example is the dependence on microchips to execute many functions in automobiles. A worldwide shortage of chips for cars has brought the manufacture of autos to a near standstill. The severe economic consequences of this stoppage have given US President Joe Biden’s administration the excuse to take unprecedented action; more on that later in this article. As the industry evolved, the mantra was to design and make every generation of chips faster, cheaper and smaller. The complexity of each generation raised the cost of making them exponentially. Today, the cost of fabricating (the industry’s term for producing chips) the most advanced devices is in the billions of dollars. Soon, companies in the US dropped out of making their own chips because of the escalating capital investment required to keep up. The techno-entrepreneurs concentrated on designing new devices for new applications. All that required was some computer-aided design stations and a group of smart circuit designers. TSMC fills a need Taiwan Semiconductor Manufacturing Company saw this developing industry trend and decided to concentrate on fabrication technology and kept committing the capital investments needed to keep up with the advances in process technology. TSMC’s strategy was to serve as everybody’s foundry and offer semiconductor fabrication as a service for a fee. To be credible, it promised strict confidentiality, to protect the client’s trade secrets and never to make its own devices to compete with its customers. The “fabless” companies rushed to Taiwan to take advantage of this win-win business arrangement. As a matter of self-interest, these companies willingly shared their know-how with TSMC to improve the manufacturing process so that TSMC steadily improved its fabrication techniques. The fabless companies received their proprietary chips at reasonable cost in a timely manner without a heavy capital commitment. Very quickly, TSMC became the world’s leading semiconductor foundry service company. Others followed suit and copied the TSMC model, but the Taiwanese company captured more than 50% of world’s chip-foundry business and maintained its grip as the leader of semiconductor manufacturing technology. Companies that have enjoyed great success taking advantage of the TSMC business model include Apple, Nvidia and Huawei. Apple designed proprietary chips for all of its product lines across the board and has them made in third-party foundries, mostly by TSMC. Nvidia is the world leader in designing chips for complex computational tasks such as in computer games, machine learning and artificial-intelligence applications and even for mining cryptocurrencies. TSMC is a major supplier of Nvidia’s chipsets. Huawei relied on TSMC’s advanced fabrication technology to make the Chinese company’s proprietary chips for its smartphones and, of course, for its fifth-generation (5G) telecommunication equipment. US, Taiwan and China form a virtuous circle For a while, this was a virtuous arrangement. Apple took its designs to Taiwan and assembled its chipsets into iPhones, iPads and computers in China and sold them worldwide. Nvidia had its chip designs made in Taiwan and also enjoyed worldwide sales. But then Huawei got too successful and became the world leader in 5G and a major supplier of smartphones. The former Donald Trump administration in the US thought the one way to stop Huawei was to deny it access to TSMC’s foundry services and also to any American-owned semiconductor technology. Trump’s successor Joe Biden has gone a step further by becoming the Godfather of the worldwide semiconductor industry and make an offer the foundries cannot refuse: Turn over your confidential files to the US Department of Commerce (DOC) or else we will stop you from operating. The foundries were given 45 days to comply after the September announcement, and it appears that the leaders, TSMC and Samsung, will comply and others will follow suit. Neither Taipei nor Seoul can stand up to Washington and fight this strong-armed unethical outrage. The US has long envied China’s ability to set industry policies in accordance to national priorities. Apparently, the latest DOC edict is Biden’s attempt to mimic Beijing and favor domestic industry, namely Intel, with policy and financial subsidy. TSMC will lose TSMC’s position in the industry will no doubt be diminished. It will not able to collaborate in the manner it was used to and now will only be able to serve its customers in China with great difficulty, if at all. Its covenants with its customer is in tatters. If TSMC relocates some of its facilities to the US to please Washington, it will face the same set of comparative disadvantages of having to operate in America that caused Intel to fall generations behind. Cutting off China will force that country to accelerate the development of indigenous semiconductor technology. It will be stymied for an interim period but in the end, China will have its own semiconductor production and market. As TSMC loses its luster, skilled management and technical personnel will seek opportunities elsewhere. Some might migrate to the US but more are likely to look for jobs in China, where they will not be penalized for language or cultural disconnect. It’s not at all certain that Intel can catch up to TSMC thanks to Washington’s assistance. Besides policy and financial subsidy, doing so will also require people with motivation and skillsets. In that respect, China far outnumbers the US. Washington seems to think its is playing a win-lose game. It doesn’t seem to appreciate that by cutting China off, American companies will be deprived of access to the largest market in the world. When the world’s semiconductor market is split into two, the halves will be less than the whole. Thus a virtuous circle will become dysfunctional, and everybody will lose.

Saturday, October 2, 2021

What do you think about China? By an Egyptian writer

Updated July 4, 2021 Alright, listen up. I'm going to give you a summary of my entire impression of China as an Egyptian observer. I've been studying the country intensely for the past year — its government, society, history, and transformation — and over the past 3 months I've spoken to hundreds of Chinese and China-haters on this site and heard everything they had to say. By now I’ve learned roughly as much about China as anyone can learn without knowing the language or living in the country, and I've reached my conclusion. You might think I'm crazy. That's OK with me. I've seen the facts and my opinion of the truth has become rock-solid. And China attracts a lot of haters, know-nothings and armchair experts. The truth is that China is the greatest country on the face of the earth. It makes all other countries look insignificant and contemptible. It is the most brilliant, most industrious, most ambitious, most educated, meritocratic and technocratic, most modern, sophisticated, and civilized, and best-governed country in the world of our time, by far. It is the first nonwhite, non-Western country to reach this status since the 1600s. The determination of this country is indescribable. Supernatural. There is no force that can stop it from accomplishing anything it wants to do. It can set a goal that seems completely outlandish, drug-induced, hallucinatory — and it can make it happen. That's precisely what it's been doing. Forty years ago a flush toilet in China was a luxury. Today it has its own indigenously built Chinese Space Station. Believe me when I tell you that that is a tiny example of China's capabilities. I am a patriotic Egyptian and Middle Easterner. Yet I freely admit that compared to the Chinese, we are simply monkeys. A race of dumb animals. It doesn't matter who we are. Egyptians, Syrians, Pakistanis, Indians, Africans, even Americans. Next to the Chinese, we are pathetic. We can't do what they do. We would have a mountain, an Everest of changes to make, and we would whine and bicker and fail at every one of them. China's story since the 1980s has been one of an almost divine metamorphosis. Next to China the entire Western world from Alaska to New Zealand has stagnated. Next to China the entire developing world from Brazil to Madagascar has progressed only at a crawl. China, my friends, is the mother of all gargantuan bullet trains. Every day it manages to create something new and astonishing. And unlike the United States, unlike the British Empire, unlike the French, Dutch, Germans, Spanish, Portuguese or any other Western nation that had its turn at being a superpower in the past four centuries, China doesn't need to run anybody over or take something from somebody else, to rise majestically. China is also standing up to the Western world all by herself. The West hates and fears that China is shooting up to the top. They can't believe their four-hundred-year-old global supremacy is being challenged. They hoped that the more China developed, the more it would submit to their influence, interests, and leadership. That didn't happen. So now they will do anything possible, short of a nuclear war, to make China end. Their goal is to destroy this country. That's why, although the United States has killed several million people and turned several regions of the earth into hellscapes in the past thirty years, your TV, newspapers, Google newsfeed, and social media are all cursing, condemning and pandering panic and hatred of China 24 / 7. China is the worst fear of our planet's Western masters. They want you to despise and dread a country that's done nothing to you, that hasn't invaded anyone, bombed or sanctioned anyone, that hasn't overthrown any foreign government, or used its military on anything since 1979. You'll hate China and pray for its collapse, so that the West can continue to do what it's done since the age of Hernán Cortés and Francisco Pizarro — rape and pillage the earth from Latin America to Southeast Asia, and disguise its blood-spattered imperialism in the soft power and propaganda of “Western civilization" and world leadership. China is the only major country in the nonwhite developing world, to stand up to the West. To look it in the eye when challenged or threatened, and say, No, I'm not afraid of you. Do your worst. I'm just as big as you are. All other countries in the Global South are simply Western puppets who submitted long ago. Even the most powerful ones. Saudi Arabia, Brazil, India — their leaders are busy listening to the United States, pen and paper in hand, writing down all its demands and going, Yes sir, Mr. Yankee sir. Let me get on that right away for you. The 1500s—1000s BC were Egypt's time. Antiquity belonged to the Greeks and Romans. The 1700s belonged to France, and the 1800s to Britain. From 1945 to the present, the world has been under American overlordship. And they call it the Pax Americana but believe me, there isn't much Pax in it. There's plenty of Pax if you're in Europe or Australia. But the Middle East? Afghanistan, Iraq, Libya, Syria, Iran and Yemen in the past 20 years. Latin America? They've destroyed that part of the world beyond any hope of recovery. Africa? It's only been spared because of disinterest. The US sees Africa as nothing. The whole West does. But in the twenty-first century, we are witnessing the rise of China. We are decades away from China becoming the greatest power on earth. This will be China's time, and there's nothing anyone can do about it. Attack China all you want, curse her and monger rumours and hysteria — but the truth is that none of your accusations are backed up by evidence, because you are a stooge of the Western press which is under the thumb of Western governments that want to stay on top of the world for all eternity. And the truth is that China is not affected by the noise and maneuvers of her enemies. What's going on now, this stupid new Cold War, is nothing. For her first thirty years, from 1949 to 1979, China was basically blockaded and isolated economically and politically by the West. It didn't even have a seat in the UN General Assembly. And it was dirt-poor in those days, barely a speck of the global economy, a tiny fraction of Japan's or Germany's GDP — not even able to prevent famine. And it still didn't submit to pressure or take any orders. Why on earth would it do that now? China will be the next global power. There's nothing that can be done about that. The first stage is that its economy only needs to grow at 4.7 percent per year to become the world's largest by 2035. That means the usual, historical bare-minimum of 6 percent is already overkill. The US can build as many bases as it wants, slap as many sanctions as it wants, recognize whatever bogus genocides it wants. That's what it's been doing all along. Has any of it made a difference? China can adapt to any situation. It took China a mere ten years to go from being barred by the US Congress from participating in the “International" Space Station, to building its own Space Station from the zero. See, the US has an $800-billion war budget, 800 military bases, 13,000 aircraft, 500 warships, 6,000 nukes — but it doesn't have what China has: invincible national resolve. It takes the US about 5 years to renovate a bridge, and it takes China 43 hours. There's simply no competing with that. China doesn't need to be a military superpower or empire. That was never part of the plan. US troops, God bless their souls, will continue sitting in their bases, scratching their balls, costing their government $800 billion a year to do nothing. Meanwhile, China will continue to actually develop. That's the part of the equation that America totally missed, because it has barely developed since Reagan's day. China is a better place to live today than at any time in its previous 5,000 years; Americans saw their highest standard of living in the 1960s and those days will never come back. So yes, China will be the next global power, and the Chinese are vastly superior to us in every way. This is a fact that everyone can attack but that nobody can change, like the theory of evolution. The difference between me and other people is that I ask, Why is this a problem? Why is this something to be afraid of? Why doesn't it mean — that the world will finally get better? Look at you silly buggers, talking about China like it's going to be the next Nazi Germany. Even many Middle Easterners I know fit in this foolish category. Did you notice when the US invaded or overthrew the governments of 20 countries in the past 32 years (my lifetime)? Did you even know? You think just because you're ready to forget all that because of Beyoncé and Game of Thrones and Snapchat and other US cultural exports, it didn't happen and isn't still happening? But but, I’m scared! China's big and bad! Because the US is feeding me terror-bytes about Hong Kong, Taiwan, Tibet, Tiananmen Square, Great Leap Forward! I don't see any dead bodies, I can't show you one invasion or one example of Chinese regime change, I can't even find Hong Kong on a map or tell you one factual detail about Tiananmen Square, but the US State Department and all its media are telling me CHINA BAD! Wa, wa! Even in the nonwhite non-West, so many millions people have no real knowledge of any kind about the Western terror-bytes that have given them such an apprehensive feeling about China. So imagine how blank the typical Westerner is. Blankness doesn't stop prejudice and gullibility. That’s what most China-haters are. As gullible as children getting told about the boogeyman to procure their obedience. Aren't you at least curious to see what a world with a nonwhite, non-Western leader might look like, after 400 years? Because God knows that leader won't be us. It won't be Brazil or Africa, or the Middle East or India or Indonesia or Nigeria or Pakistan. We're a mess. China was a mess too. But we remain a mess many decades after we achieved independence, and the Chinese went their own way, disentangled their mess and created their destiny. We’re not made of what the Chinese are made of. We might be one day, if we stop taking orders and cozying up to Western puppet-masters. I'm not holding my breath for that to happen. Where's your concept of innocent until proven guilty? You turn a blind eye to the country that gave you dozens of destroyed nations and millions of corpses to see as proof of its brutality, because it also gave you some amazing sitcoms! While a country you don't have the slightest objective knowledge of, is already Nazi Germany to you because its adversaries, who are also your historical and present-day oppressors, tell you so? Come on. Let's wait to see one dead body, one invasion, one regime-change operation from the Chinese, before we fly into rage and hysterics about them! Is that so crazy? We've seen centuries of horror from the US and we're still giving 'Murica the benefit of the doubt, even when the brutal truth is crystal-clear. For myself, I see China as hope. Hope that a colonized, brutalized, primitive and humiliated country, can rise above its past — refuse to be weak any longer — rebuild itself from nothing, with iron resolve, and become too strong to be overrun by the West again! Hope that a nonwhite, non-Western country can look deep within itself and find its own solutions to its problems — proving that (foolishly) trusting the West to guide us isn't necessary! Proof that if we can do what the Chinese did, there will be no limits for us. Imagine a world where the US, France, Britain, Australia, are no more important than Uzbekistan or Paraguay. A world where the World Court might be headquartered in Kuala Lumpur, the World Bank in New Delhi, the United Nations in Jakarta, the IMF in Cairo. A world liberated from the US banking system and the dollar as its reserve currency, so that Washington can no longer tell 200 other countries who they can and can't trade with. A world where an American can be tried for war crimes at the Hague, not just an Iraqi or Liberian or Serb. A world where we don't hear about a non-Western-made vaccine and grunt to ourselves, Oh, it must be poison. A world where we don't have to immigrate to the same countries that turned ours into hellholes, to work as sales clerks or taxi drivers, or even if we're brilliantly employed — to drain our brains from our homelands in the best of cases, and use them to reinforce Western riches and supremacy in exchange for a fat paycheck, instead of using them to make our own countries semi-habitable. When I hear that China has built its own Space Station, landed a rover on Mars, ended extreme poverty, built the Earth's biggest city, dam, telescope, 5G network, highway, air purifier, or whatever the heck it is that will come tomorrow — I feel the same pride as if I were Chinese. It's not happening for all of us, but it's happening for one of us and that's a start. There's got to be such a thing as developing-country nationalism — a common nationalism for all the countries that were colonized and plundered, and remain economically and politically captured by their ex-rulers. A nationalism for the Global South. We are too divided, too brainwashed, too fooled and weak — most of us still worship the countries that destroyed us, are non-Western on the outside and Western on the inside, are hating and fearing and buying all the lies about the only one of us that's made it, and are leaving our countries in droves to let them burn while we “make a better life for ourselves" in the West. Do you want to live on a Western-dominated Earth for another 400 years? If you do, keep doing what you're doing. But I don't! You know what'll happen for all of us if America's sick wishes come true and its global thuggery does make China collapse? Nothing. Eternal repetition of the status quo. More enslavement, hijacking of our resources and weak corrupt governments, neo-colonialism, invasion, regime change, sanctions, MISERY. Haven't we already seen this? Libya, Cuba, Venezuela, Yugoslavia, Belarus, Iraq, Iran, Vietnam, the Soviet Union. Rest in peace. Even FRANCE and JAPAN for God's sake. What does the United States do when any other country says NO, or simply becomes too powerful, too good at honest competition? IT CRUSHES IT LIKE A BUG. Japan was a Western-style democracy crawling with US troops, with a US-authored pacifist constitution and almost no military and an extremely pro-US government and populace, and it STILL got crushed when it looked like it would become the #1 economy in the 80s. Do Indians really believe that if China goes down, India will be allowed to become a great power? Do they not see that a strong or wealthy India would immediately fall victim to the same despicable US tactics? Don't make me laugh. I remember 10–15 years ago when China was still relatively poor and impotent, and Bush and Obama would talk about China as sweetly as swans. Obama happily had dinner with Xi Jinping in late 2015, called China a crucial partner of the United States, and said the US welcomed China's rise; it was all horseshit. Today Biden, who was there with Obama in late 2015 as Vice-President, angrily rebukes a reporter who merely said that Biden and Xi were old friends. America has taken off its mask. China made it, it wasn't supposed to make it, so now it must die. What a difference 5 years can make. China went from “crucial partner" to “number one threat.” We should be helping and supporting China to keep climbing to the top, and giving her some serious solidarity as she withstands the new Cold War of Western imperialism. It’s been a long 400 years. China is the first non-Western country to even come close to reaching a status of ultimate global importance. She is akin to the the first member of an impoverished family to go to university. That is our family of nations. And when China gets to the top, believe me, it won't be a repeat of the French, British, or American Empire. Not a single developing country will be worse-off because of China becoming #1. There will be something good in this for all of us, so let's wake up and let's go!

Lessons from Meng Wanzhou case for Joe Biden - The US president should now see the folly of following his predecessor Trump's footsteps on China policy

This was first posted in Asia Times and a Chinese translation appeared in SingTao USA. The sudden release of Meng Wanzhou caught many people by surprise, and a flurry of analysis and speculations has followed since her uneventful arrival in Shenzhen, China. For residents of Sleepy Hollow and others who might wonder what the excitement was all about, it’s time for a refresher review. Shenzhen is the home base for Huawei, China’s and the world’s leading telecommunications company. Meng is the chief financial officer of this giant company and she also happens to be the daughter of Ren Zhengfei, the founder and chairman of Huawei. More than thousand days ago, Meng was detained by the Royal Canadian Mounted Police while in transit at the international airport of Vancouver, British Columbia. The arrest was made at the request of the US Department of Justice, when Donald Trump was president of the United States. The US alleged that Meng had misrepresented Huawei’s business dealings with Iran to HSBC, thus causing the bank to violate US sanctions imposed on Iran. In 2015, the five members of the UN Security Council (China, France, Russia, UK and US) plus Germany had struck a long-term deal with Iran on its nuclear program. The deal was created after much effort by all parties to ensure stability in the Middle East. When Trump became president, he flatly opposed anything Barack Obama, his predecessor, had stood for. Thus he unilaterally reneged on the agreement known as Joint Comprehensive Plan of Action and imposed sanctions on Iran on the pretext that he could get a better deal than the JCPOA. Trump, of course, did not bother to consult with the other five nations that had co-signed the original agreement with Iran. Meng detained on flimsy charges As I summarized the Meng affair nearly a year ago, Washington cobbled together a flimsy set of charges to justify her arrest. Basically, a Chinese citizen doing business with a British bank was accused of violating American sanctions on Iran that neither China nor the UK had anything to do with. Subsequent examination revealed that even those accusations were on shaky grounds. Trump had conned Justin Trudeau, the prime minister of Canada, into caving into Washington’s wishes to make the arrest. By taking Ren’s daughter hostage, Trump had hoped to blackmail Ren in some way that only Trump could have dreamed up. Two years after the arrest, it became increasingly obvious that America’s long arm of extraterritorial reach was becoming a source of embarrassment for Washington and Ottawa. The US DOJ then resorted to its usual trick and offered to release Meng if she would plead guilty to a lesser charge. She stood fast and refused. Historically, the American scale of justice has always been tilted in favor of the government. Even when the DOJ is clearly in the wrong, as it was in the case of Wen Ho Lee, he had to plead guilty to computer downloading in violation of laboratory rules in exchange for time served, which was a harsh 10 months of solitary confinement. Recent history is replete with examples of miscarriages of justice meted out by the DOJ against Chinese-Americans. The US government has virtually infinite resources to wear down the hapless accused. But it didn’t work against Meng because she was not American and she had the resources of Huawei and China to back her stance. Biden missed doing the right thing Then Joe Biden became the US president. He could have immediately ordered dropping the American request to extradite Meng and get Trudeau off the hook, and Canada from being the country caught awkwardly in the middle. But Biden did not. He was under the influence of his China team. Whether it was China’s first meeting with Secretary of State Antony Blinken in Anchorage, Alaska, or subsequently with visiting Deputy State Secretary Wendy Sherman or with special envoy John Kerry, Beijing’s message remained the same: China would not let the US pick and choose which issues to cooperate on and which issues to compete and confront China on. From Beijing’s point of view, the Biden administration cannot go around the world lying about China’s conduct and recruiting allies to oppose China as if engaged in another cold war, and still expect collaboration on selected global issues. Without mutual respect, there will be no trust nor confidence in each other on doing the right thing. Beijing handed each visiting American envoy a list of demands to be met if Washington wished to repair bilateral relations. Interestingly, as the South China Morning Post reported, John Thornton was a visitor in China for six weeks shortly before the release of Meng. Thornton has a deep China background. He is a professor at Tsinghua University and the chairman of the board of trustees at the Brookings Institution, where the China Center is named after him. Unlike the official envoys from Washington who were not invited to visit Beijing, Thornton met with Vice-Premier Han Zheng in the national capital. They discussed what it would take to resume bilateral talks, and then Thornton was allowed to visit Xinjiang for a week. It’s hard to know the exact role Thornton played in triggering the release of Meng and whether the release represents a real first step toward normalizing relations and the abandonment of Trump’s confrontation with China. The face-saving deal that allowed the DOJ to cancel the extradition request and secure Meng’s release was a device called a deferred prosecution agreement. The agreement did not require any admission of guilt by Meng. Within an hour of Meng’s final release by the Canadian court, she got on a Chinese airliner and flew home to Shenzhen. As a show of the lack of trust and to avoid unpleasant surprises (in case Washington suffered seller’s remorse), the airliner skirted around Alaska airspace when it flew over the Arctic circle. Since Washington insisted on designating China as an adversary, only the Biden White House can decide when and if China should no longer be considered an adversary but a powerful collaborator that the US could work with to resolve all the challenges facing the world. Perhaps a trusted intermediary like Thornton could help persuade Biden that following Trump on China policy has been a road to disaster.

Wednesday, September 29, 2021

America has much to learn from China

Two recent stories hardly mentioned in the mainstream western media illustrate the major differences between China’s way of doing things versus the American way and suggest that the U.S. has much to gain by learning from China. The first story has to be with evacuation from Kabul at the end of the forever war in Afghanistan. China’s embassy notified their citizens in latter part of June to prepare to evacuate from Afghanistan. In mid-July, a charter plane from China picked up over 200 of their citizens and flew them to Wuhan. These passengers disembarked and were held in quarantine for two weeks for observation before being allowed to depart for their final destination. Thus, Chinese citizens living in Afghanistan avoided the chaotic, panic driven departure that the world witnessed at the end of August. True, China has much fewer people to evacuate than the U.S. but the orderly way China managed the evacuation raises a critical question. China anticipated Taliban’s takeover How was it possible that China could anticipate the Taliban’s return to power and control while the US failed to do so? The Americans had advisors working with the Afghan government, thousands of troops on the ground and a network of intelligence gatherers and informers. Yet, the US did not see the impending chaos and if an orderly exit was planned, it was incompetently implemented. One possible explanation, though not necessarily the only explanation, is that China was not in the country as an occupier but as a friendly potential investor. The Chinese did not order anyone around and they tried to get along with everyone. They talked to the local Afghans as peers. In so doing, they understood the local conditions much better than the occupying forces of the western powers. It’s difficult for the West to understand that China does not have a history of resorting to conquest and occupation to have their way. In the early 15th century, China’s naval fleet was the mightiest in the world. Led by Admiral Zheng He, his flotilla of several hundred ships docked and interacted with over 40 rulers and states from present day Indonesia to India to the east coast of Africa. Each of the seven voyages took over two years to make a round trip as the Chinese sailors had to rest on land and wait for favorable seasonal winds before they can resume sailing. The sailors would settle on shore and live among the local people in peace and exchanged knowhow in farming techniques and crops to plant that would be useful for their journey onwards. The Chinese traded goods with the people everywhere they landed. Even though Admiral Zheng’s armada carried a formidable fighting force, they did not seek conflict but extended diplomacy and friendship on behalf of the Emperor from Beijing. Some local royalty went on board at Zheng’s invitation and embarked on the journey to visit the imperial court in Beijing. Throughout China’s history, the middle kingdom was recognized as a great civilization and the seat of culture. People far and wide came to China to study and learn. Every so often, parts or all of China were overrun and occupied by martial nomadic people such as the Xiangbeis, Khitans, Mongols and the Manchus. In every case, the invaders soon adopted the Chinese language, values and traditions. Within a few generations, they were assimilated and lost traces of their own ethnic origin. To assume the inevitability of the so-called Thucydides trap between a rising China and the reigning America is to fail to appreciate that China is not derived from the foundation of western civilization, a civilization that depended on conquest and enslaving its neighbors. From its history, China has learned the value of peace and harmony over war and conflict and avoid zero sum outcomes. Another story not reported is how Laos has so far avoided the Covid epidemic. Laos being among the economically least developed nations has no access to vaccines. What they have is deep respect and belief in traditional Chinese medicine, TCM. Laos saved from Covid by Chinese medicine Laos invited a noted TCM authority, Professor Duan Guangping from China to lead the effort to develop a protocol to prevent the spread of Covid and a treatment for those that become ill from the coronavirus. Duan and his team of Laotian TCM experts studied the 3000 herbal plants indigenous to Laos. Drawing from twelve ancient Chinese recipes for anti-epidemic and for treatment of serious illness, Duan’s team selected likely potions of herbs that would do the job. Within one month, Duan’s team had finalized the recipe that proved 100% effective in preventing the patient from contracting Covid. Thus, the Laotian government called the formulation the “Chinese vaccine.” The government launched a massive effort to search and collect the necessary herbs, and a factory was built to manufacture billions of doses of the herbal vaccine. From the beginning of research to production took three months. The Laotian population was quickly given the herbal medication and rendered safe from the virus. Foreigners entering Laos were also given the medication as a preventive measure. A handful of foreigners entered Laos with Covid symptoms and were treated with the Chinese herbal medication. Their fever was down in 24 hours and all the symptoms gone in three days. Since the herbal formulation was based on locally available plants, that were widely available and inexpensive, Laos was saved from the ravages of Covid at very little cost. The country also did not experience any interruption of normal economic activities associated with the Covid epidemic. A grateful Laos president Bounnhang thanked China for sending Dr. Duan and declared that one expert in Chinese medicine drawing on the unique efficacy of TCM had saved the entire country. Dr. Duan has given the honorific title as the Sun of Laos. In recent days US president Joe Biden is reported to have called China’s president Xi Jinping and proposed a face-to-face summit meeting. Xi’s reply was “no,” at which point the White House denied that the telephone conversation ever took place. Biden does not understand China That Biden called Xi is a clear indication that Biden is beginning to realize that his decision to follow the strategy to confront China established by his predecessor Donald Trump is not working to the US advantage, but he still does not understand China. Whether it was China’s first meeting with Secretary Antony Blinken in Anchorage or subsequently with visiting Deputy State Secretary Wendy Sherman or with Special envoy John Kerry, Beijing’s message remained the same. Namely, China will not let the US pick and choose the issues to cooperate and other issues to compete and confront with China. The Biden administration cannot go around the world blackening China’s reputation and recruiting allies to counter China’s influence as if in another cold war and expect collaboration on other global issues. Without mutual respect, there would be no trust and no point of any summit conference because nothing productive can come forth from such a meeting. Since Washington insist on designating China an adversary, only the Biden White House can decide when and if China should no longer be considered an adversary but a powerful collaborator to resolve all the challenges the world has to face together.

Tuesday, August 24, 2021

Is China ready to bail out the US in Afghanistan?

First posted in Asia Times. The appalling images of desperate Afghans losing their grip and falling to their death as planes take off from Kabul Airport evokes the memories of the panic evacuation from the rooftop of the American embassy in Saigon some 46 years earlier. This is yet another stain on America’s reputation. To lessen the trauma of the humiliating rush for the emergency exit as seen by world opinion, it will be crucial for President Joe Biden’s administration to arrange for the orderly departure of the Americans remaining in Afghanistan and not leave them stranded. And, just as important, there are tens of thousands of Afghans who have provided loyal services to the Americans forces and have been promised visas to emigrate to the US, and are now waiting for safe passage out of Afghanistan. Not all wishing to depart are gathered in Kabul or at the international airport. Many are simply caught unprepared by the sudden collapse of the US-backed government. Obviously, only with the consent and willing cooperation of the Taliban, now in control of the country, can the remaining Afghans and Americans be assembled and safely conveyed to departing planes. It has been reported that US Secretary of State Tony Blinken contacted his counterparts in Russia and China as the debacle at the Kabul airport was unfolding. What Blinken said to Sergey Lavrov, Russia’s foreign minister, and Wang Yi, foreign minister for China, has not been made public. But if Blinken was hoping to salvage the reputation of the Biden administration, he probably would have had to swallow some of the American hubris and ask for assistance in intervening with the Taliban on America’s behalf. China as intermediary for the US Both China and Russia have kept open their embassies in Afghanistan and maintained diplomatic relations with the Taliban. Just recently, the Taliban even sent a delegation to Beijing to shore up their bilateral relations. The message was that the Taliban would like Afghanistan to become a part of the Belt and Road Initiative and welcome Chinese investments. In turn, China has expressed interest in enlarging its presence but needs to see a secured country and the assurance of the safety of Chinese nationals working in Afghanistan. And, of course, the Taliban should not permit the use of Afghanistan as a staging ground for the East Turkestan Islamic Movement and allow the mostly ethnic Uighur terrorists to enter China and wreak havoc there. It’s no small irony that the world’s mightiest military power cannot exert its will on a tribal Islamic militant group and must rely on a third party to intercede on America’s behalf. Arguably, China is in the best position to persuade the Taliban to ensure safe passage for the people wishing to leave, and thus save Uncle Sam from the lingering embarrassment of a panic-stricken retreat. The war in Afghanistan over 20 years has cost Washington the average of US$300 million per day. Perhaps China might suggest to the Biden administration that the US transfer the savings of some of that daily expenditure to the Taliban as a form of “departure head tax” to facilitate smooth exits. Surely, Afghanistan is merely the latest evidence that the American mission of nation-building around the world and replicating democracies after its own image is nothing more than a fool’s errand and a pipe dream. Follies of nation building Even if the denizens inside the Washington Beltway fail to see the folly of decades of futility, the rest of world is increasingly aware of the risks of signing on to be a US ally. When Washington’s next bumbling leads to another crisis, the American assurance that Uncle Sam has their back will be shown as meaningless. Yet the latest US secretary of the air force, Frank Kendall, wants to refocus American weapons using advanced technology to “scare” China. Can’t even beat the Taliban but still wants to scare China. What is he smoking? In previous commentaries in Asia Times, I have unabashedly promoted the idea that the US needs to find ways to work with China rather seeking to win the unwinnable zero-sum rivalry. Perhaps the folks in Washington are just too focused on building military might and can’t think of any other approach with China. First, it’s important to recognize that China does not want to compete with the US, especially in the development of weapons. Each advance the US makes, China is obliged to match and develop an effective counter. Each effective counter gives the US justification to invest in the next state-of-the-art weapon to kill and destroy. This is an endless march to disaster. Rather than sending soldiers, China sends construction engineers to help countries on the Belt and Road build their infrastructure. The US does not have the resources to compete and should not. China makes friends with its BRI but not at the expense of America. Economic development in the countries that China assist is good for everybody. Afghanistan is just one situation where collaboration with China is beneficial. There are many other global challenges on which the US needs to work with China such as climate change, stopping the Covid epidemic, cyber hacking, counterterrorism, drug and human trafficking and many others. Without mutual trust, the two countries cannot work effectively together. Steps to collaboration with China I would like to propose some sensible steps in the direction of getting along with China. American business leaders have been clamoring for the Biden administration to restart trade negotiations with Beijing and remove the tariffs on imports from China. Biden should begin in all due haste and stop the open wound to American farmers and consumers caused by the tariff war. The detention of Huawei executive Meng Wanzhou in Vancouver has been an embarrassment for Canada and an unwarranted source of tension between China and the US along with Canada. Biden should take the initiative and promptly remove the request for extradition before the presiding Canadian judge dismisses the case. This good-faith gesture would do wonders for the relations among the three countries. Basically, former president Donald Trump’s MAGA (Make America Great Again) foreign policy has been an unmitigated disaster to America’s credibility and prestige. Rather than blindly following the policies of his predecessor, Biden needs to order a thorough review and think deeply on what’s really good for America. Rather than trying to persuade the rest of the world to be more like us Americans, we badly need to fix our seriously flawed democracy. We allow politicians to turn vaccinations and wearing a facial mask, which should be a public health issue, into a political issue. Some politicians, including ex-president Trump, treat the US constitution as nothing more than a doormat for their muddy shoes. Are these characteristics of a model democracy worthy of worldwide adoration and respect?

Saturday, August 21, 2021

Huogai – Anti-Vaxxers get what they deserve

Only in the United States, world’s greatest power, can a handful voices exercise their individual rights to negate greater public interest and even challenge the validity of President Joe Biden’s wish for everybody to be vaccinated against the Covid coronavirus. Incredibly, a public health issue can become a political issue. Those on the political right believe religion trumps science and getting vaccinated is tantamount to blasphemy. Furthermore, the need to wear a mask in public is regarded as infringement of the right of personal freedom. Science tells us that when enough of us are vaccinated, the virus can find no new victims as host and that’s when the virus dies. There are some southern states where the extent of vaccination is well under 50%, and the unvaccinated population are waiting for the virus invasion. No doubt, they place their faith in God to keep them from the disease. The latest Delta variant is deadlier and more contagious. So far, over 99% of those that have died in the US from this variant were unvaccinated. As of end of July, grossly unvaccinated Florida has three times the national average that contracted the virus. As patients entering the hospital struggling to breath, they begged for a jab of vaccine, much too late of course. When the full force of this variant hits the under vaccinated states, those that preached the gospel against vaccination will bear a heavy responsibility for the unnecessary deaths. Particularly prominent among the antivaxxers has been Robert F. Kennedy Jr. His name gave him added credibility. I wept when his father was assassinated in the hotel kitchen in Los Angeles but I won’t shed tears if the son is struck down by the virus. Huogai is the Chinese term for “you get what you deserve.” Unfortunately, their just deserts does not end with their death but keeps the virus alive to strike the innocents around them. The same goes for the governors of Florida and Texas, who have insisted that wearing a mask and getting a vaccination is up to individual decision and cannot be mandated from top down. Most Americans do not appreciate how fortunate they are, living in a wealthy country and thus among the first to have access to Covid vaccination. Poor countries, such as those in Africa, can’t get access to the needed vaccine and their rate of vaccination is less than 1%. It goes without saying that future mutations of the virus are incubating in those places just waiting to strike along with the Delta variant. The sentiment against vaccination is not only harmful to the interest of the American public but to the world. Unless massive vaccination takes place worldwide, the virus will persist. It should be obvious to anyone that the two greatest economies of the world, China and the US, must work together in order to eradicate this virus in its present form and prevent future mutations. In that respect, the US has a lot to learn from China. China started its domestic vaccination later than the US but has already exceeded 1.6 billion jabs, covering the cities and most of the surrounding areas. Rural areas will take more time. Recently when the city of Guangzhou detected an imported case of Covid, instant mass testing was initiated. My Chinese American friend who lives near Dongguan, a city of 10 million adjacent to Guangzhou, reported that everybody in the city got tested for Covid in one day. He got tested at 3 PM and received his test results by midnight. Needless to say, if the one case had spread, it would have been detected and arrested. China’s model relies on organization, discipline, corps of instantly available volunteers and a culture where cooperation for the greater good of the society is more important than the individual right to go against the grain.

Sunday, July 18, 2021

Rules of ‘international order’ as defined by Blinken - The answer is obvious: International order is whatever Uncle Sam wants it to be

First posted on Asia Times. What a difference a few months can make in the rocky relations between the US and China. At the meeting in March in Anchorage, Alaska, Secretary of State Antony Blinken gave a blistering lecture in front of the Western media to the Chinese delegation that Beijing needs to behave in a way consistent with the rules of international order. China’s most senior diplomat at this summit was Yang Jiechi. He basically responded by telling Blinken to mind his manners and, not incidentally, asked what he was talking about. Since that meeting, Blinken has gone around the world recruiting allies to oppose China on the basis that it does not follow the rules of international order. Some Western countries grudgingly yielded to the pressure and signed on with Blinken, but they were befuddled by what he means by “international order.” After all, it has been China that works within the confines of the United Nations while the US has often acted unilaterally. Apparently, for China to expand its economy and threaten to overtake the US is in violation of “international order.” For China to install fifth-generation (5G) telecommunication technology around the world while the US has to import 4G technology is not acceptable behavior in accordance with “international order.” For China to take more than 800 million of its citizens out of poverty and “brainwash” more than 90% of the Chinese people into approving and accepting one-party rule is not consistent with “international order.” Instead, keeping its poor people poor, as the US does, is consistent. China’s Belt and Road Initiative helping countries in Latin America and Africa finance and build their infrastructure is clearly outside the strictures of “international order.” The Taliban are inviting China to Afghanistan to help build its infrastructure and revitalize the economy. China has expressed interest in bringing Afghanistan into its BRI and, incidentally, thumb its nose at the “international order.” Installing missile batteries onshore in China and offshore in the South China Sea to threaten US naval flotillas exercising their freedom of navigation off the coast of China is clearly outside the “international order.” America’s Western allies may well be confused by all this, and wondering: “What is international order?” The answer is obvious: International order is whatever Uncle Sam wants it to be. Ever since the end of World War II, the unwritten rule has been for Uncle Sam to say to the world: “Don’t do what I do but do what I tell you.” Australia obeys Australia has been one of the most faithful followers of America’s version of international order. No sooner than Scott Morrison was elected prime minister in August 2018, he became Donald Trump’s lead attack dog against China. Morrison attacks China on unfair trade practices, on human-rights abuse, and on South China Sea tensions, and he even initiated the charge to reopen the investigation on the origin of the virus that causes Covid-19. China had been Australia’s leading trading partner, accounting for more than one-third of Australia’s exports. Not surprisingly, a displeased China has stopped buying from Down Under. Morrison promptly cried foul. Apparently, China is supposed to absorb the nasty rhetoric, act like nothing has changed and keep doing business as usual. At the recent Group of Seven summit, Morrison went around seeking reassurance from the allies for their support for confronting China. The US gave him an “attaboy” but is happy to sell coal, wheat and lobsters to China in place of Australia. France did likewise and is happy to supply China’s red-wine market. Unlike Morrison, the premier of Western Australia has questioned the current situation with China. Mark McGowan asked last October, “How is it in our interests to be reckless with trading relationships that fund and drive our prosperity and our nation forward?” Can we talk? US President Joe Biden may also be having second thoughts. He has quietly let it be known that he would be interested in a summit meeting with Chinese President Xi Jinping. Blinken has been trying to get Foreign Minister Wang Yi to return his phone calls to discuss such a summit and for permission by lower-ranking officials to visit Beijing to plan for it. If the White House expected Beijing to shout hooray and act grateful for the prospects of making nice, it must be disappointed. The official response from Beijing has been that there is no rush to meet, especially if the Americans are only interested in more opportunities to harangue. If Washington is interested in renewing friendship, then sure we can talk, says Beijing. This week, the South China Morning Post reported that Deputy Secretary of State Wendy Sherman will meet with her counterpart, Vice-Foreign Minister Xie Feng, in Tianjin. They are supposed to explore a possible meeting between Blinken and Wang Yi, presumably behind closed doors without the presence of media. Sherman has been quoted as saying that the bilateral relationship is about mutual respect. She seems to presage a less confrontational meeting than the one led by her boss in Anchorage. If and when the two parties were to reach rapprochement, it would leave Australia embarrassingly lonesome. If one of the smartest former American presidents were to visit Australia again, he surely would remind Morrison, “It’s the economy, stupid.”

Friday, June 4, 2021

Biden’s China obsession could be the undoing of America - Collaboration with China has been good for the US and its people in the past, and should be again

First posted in Asia Times. Abbreviated version in Putonghua can be found on YouTube and here. A translated version was posted in the Sing Tao Daily. It’s hard to tell if US President Joe Biden’s position on China is his true conviction or he’s just going along with the heavy anti-China sentiment in Washington, but his China team has made it official now: no more engagement with China, just competition from here on. The nature of competition the Biden team has in mind, mind you, is not your gentlemanly sort of sporting contest where my one-upping you will incentivize your one-upping me, and we both in the end are better for competing. No, all indications point to all-out, below-the-belt, eye-gouging, anything-goes tactics to attack the other party, namely China. Two ongoing developments point to this conclusion. Winding its way through the US Congress is the so-called Strategic Competition Act of 2021. It has not been enacted as yet, so we don’t quite know all the provisions. My understanding is that as much as $300 million has been allocated to blacken China’s image around the world. In this era of fake news, assassination of one’s character (or a country’s reputation) via innuendo, exaggeration and even outright lies is easy to do. August members of the US mainstream media, such as The New York Times or The Washington Post, are not above purveying or contributing misinformation, sometimes with malice of aforethought and sometimes simply being too lazy to authenticate questionable sources. Consistent with all this is Biden’s recent call to reopen an investigation into whether the virus that causes Covid-19 could have originated in a research lab in Wuhan, China. The task force was given 90 days to report its findings. Biden to revisit origin of Covid A definitive investigation leading to conclusive understanding of the origin of Covid-19 is a good thing, important to protecting the future health of the world. Provided, of course, that the work is above-board, science-based and conducted by a scientifically qualified team of people of impeccable honesty and integrity. A team of investigators that includes the likes of a Peter Navarro or Mike Pompeo would not pass the smell test. Furthermore, to be completely comprehensive, some of the other speculations besides the Wuhan lab theory deserve to be included in the investigation. For instance, the biological laboratories at Fort Detrick in Maryland were shut down by the US Centers for Disease Control and Prevention for violations of safe practices more than six months before the outbreak in Wuhan. Around that time there were unexplained deaths caused by respiratory failures. A full account was never made public, but the issue was swept under the carpet by blaming the fatalities on excessive vaping, that is, inhalation of fruit-flavored smoke. There were also reports in cyberspace that there was evidence of the coronavirus being found in European sewage systems, again months before the Wuhan outbreak. What happened to all those rumors? If the Biden task force is not just for the purpose of pinning the blame on China, but to perform a thorough and credible investigation, 90 days may not be enough. Secretary of State Tony Blinken’s approach to competing with China is to recruit and reorganize former allies to band together against China. These former allies were offended and turned off by former president Donald Trump and his go-it-alone approach. But what does Blinken have to offer to entice the allies to join the fray? A recent tally indicates that 165 countries now consider China their No 1 trading partner, as compared with 13 countries that regard the US as their No 1 trading partner. More than 100 countries are participants of China’s Belt and Road Initiative in more than 2,600 projects with a total value of US$3.7 trillion. As his only counter, Blinken goes around the world warning the countries to beware of debt traps. Obviously, the US does not have the ability to compete with China when it comes to doing business via trade or provide assistance in erecting infrastructure. Countries are asked to choose sides with no clear idea of the benefits of aligning with the US. The only alternative is to slander China and turn world opinion against Beijing. The US as ‘model of democracy’ Thus Blinken has to trot out the usual tropes, that China is not democratic, has no human rights etc, ad nauseam. All of the prospective allies are urged to be freedom-loving democracies like America. So how does the US stack up as a “model” democracy? Let’s count the ways. The losing candidate of the last presidential election, Donald Trump, still claims to have won. Members of his political party, the Republicans, have gone to great lengths to shield him from going to jail, even for violating the statutes of the US constitution. As part of the debacle, the Republican Party at the state level is busy devising ways to deny certain citizens the right to vote. In its view, democracy is not for everybody in America and winning by hook or crook is everything. Mass shootings in America have become a nearly daily occurrence. In America, the right to carry an assault weapon is an human right more important than a human life. The US with just 4.4% of the world’s population has 22% of world’s prison population, far and away the most of any country. China with about 4.5 times the US population has fewer people incarcerated, and yet we Americans accuse China of abusing human rights. Furthermore, the US prisons house a disproportionate share of black and brown people. Young children torn away from their refugee parents at the southern border, and still unaccounted for, is yet another blot on our human-rights record. Because of concerted efforts by the central and local governments, China has lifted all of its people out of poverty. In America, conditions in the ghettos have not changed much and they are still mostly populated by black and brown people. One out of eight Americans lives below the poverty line. Government officials in China are given rotating assignments and graded on their performance. They get promoted if they show they are capable of taking on increasing responsibility. In the US, the most important requirement for those aspiring to public office is to be able to raise a lot of money, or be already wealthy. By any objective measure, would any potential allies find the US a worthy model of democracy to follow? Blinken has a tough sell ahead of him. The Biden administration is also planning to compete with China by investing in and subsidizing the development of new technologies. The Endless Frontier Act, surprisingly enough, has bipartisan support for dedicating $120 billion to focus on artificial intelligence, superconductors and robotics. Biden bets $52 billion on semiconductors Supposedly, Biden will throw $52 billion at the American semiconductor industry to build new manufacturing facilities in the US, known as fabs. I am doubtful that this will work. The US used to be the world’s leading maker of semiconductor chips. But as the design of the chips became more complex, the cost of the fabs increased geometrically, and soon Silicon Valley companies gave up manufacturing and just concentrated on designing proprietary chips, relying largely on Taiwan Semiconductor Manufacturing Corporation to make them. Today, Intel is the only US company that still owns fabs, and it has publicly admitted that they are two to three generations behind TSMC’s. Morris Chang, founding chairman of TSMC, has openly questioned whether US companies would still have engineers with the experience and skills needed to run a state-of-the-art fab. China also does not own state-of-the-art fabs because the US will not allow the sale of advanced manufacturing equipment to China. Therefore, regardless of whether the $52 billion will be well spent, China will not catch up for some time. But if Beijing needs skilled engineers to run an advanced fab, it can always recruit from Taiwan to supplement its own staff. Many are already working in China. To attain the most advanced fab, China will need to buy lithographic machines from ASML, based in Netherlands. Already, Peter Wennink, chief executive of ASML, is fretting that the US export control measures will prevent his company from selling the most advanced machines to China, each with a $1 billion+ price tag. The loss of the China market would mean the loss of more than one-third of ASML’s revenue, and therefore funds for further research and development, necessary in order to maintain the company’s technological lead. Wennink is worried that the export restriction will force China to develop its own technology and soon not only ASML will lose a major customer but will face a new competitor. You’d have to wonder how long the European company will go along with the Washington ban on exports to China. Another aspect of disengaging China is to discourage the enrollment of STEM (science, technology, engineering and mathematics) graduates from that country in US universities. US Senator Tom Cotton, for one, thinks Chinese students are here just to steal American knowhow. But without the infusion of the best and brightest international students – and students from China make up more than one-third of them – elite schools such as the Massachusetts Institute of Technology (MIT) would wither and shrivel if they had only America’s own graduates, trained by a faltering K-12 system, to draw from. One anecdotal story will illustrate my point. At a recent international math competition among high-school students, the US team beat the team from China for first place. But the “upset” win can be attributed to the fact that every member of the US team was ethnic Chinese, students whose parents had immigrated to the US from China. The quality of China’s universities is improving; many are already among the world’s top 50 schools. China’s elite schools may not yet on par with their US counterparts but Beijing believes in investing in human capital. If its graduate students can’t come to the US, they can go elsewhere, or simply stay home and learn from the best professors recruited from around the world. The loser in the long run would be the US. Engagement has been good for America All along, we Americans have been acting like the 40+ years of engagement has been a one-way boon for China at our expense. That’s hardly the case. Collaboration enabled Apple to “design in California and assemble in China,” a strategy so successful that the company is now worth more than $2 trillion. Had Apple designed and assembled in the US, the high costs would have limited its sales and stunted the profitability and growth of the company. With much fanfare, Trump announced that Foxconn, which had been the principal assembler of Apple products, would build a big plant in Wisconsin. He chalked that win up to his “persuasive” personality. Yet the plant has not materialized because the labor rates of China are just too far apart from those of the US. Even Trump can’t wring water out of a rock. And that was at the high end. On the low end of the economy, low-cost imports filled the shelves of Walmart and American consumers continued to enjoy their standard of living and not face rising prices. As much as 60% of China’s trade surplus with the US was due to goods made by American companies in China. Because China’s economy grew at a remarkable rate, doubling every eight to 10 years, American companies that initially went there to source their products began to expand their investments in order to participate in the Asian country’s growing middle class as the size of China’s market became comparable to their home market. America’s leading technology companies soon saw the wisdom of designing in China for the world. They set up R&D centers to take advantage of the technical talents in China, which produces eight times the number of STEM university graduates as the US. Sadly, our leaders in Washington only know that might makes right and we have the strongest military in the world. They are banking on the premise that we can outcompete with China on the basis that we can wreak more death and destruction. Otherwise, disengaging and competing with China will be at best a mutually diminishing outcome. It won’t help Washington solve our deteriorating infrastructure, failing school system, deaths by random shootings, and widening gap in income between the super-rich and the have-nots. We need leaders with the vision and political courage to see and tell the American people what’s good for America and that competing with China is not the way. In fact, as we continue on the Biden trajectory, we could be on a downward spiral that spells the end of the American empire.

Monday, May 3, 2021

One man’s view of an ‘Upside-Down World’- Review of book by Clyde Prestowitz

First posted in Asia Times. Clyde Prestowitz’ The World Turned Upside Down is the first major book on US-China relations to be published in 2021. The book, as stated by the subtitle, is about “America, China, and the Struggle for Global Leadership.” For the author’s response to this review, click here. Prestowitz’ first book was Trading Places, published in 1988, about how America ceded its future to Japan and how to reclaim it. He has written quite a few books since then, but in a sense, his latest book is Trading Places redux, except that China has taken the place of Japan. More than 30 years ago, Japan was “stealing” manufacturing jobs from America. The author proposed certain strategies for the US government to negotiate with Japan and thus rectify the trade imbalance and bring manufacturing back. Japan was a much-feared juggernaut back then. The venture capital community in Silicon Valley was so intimidated by Godzilla, they always asked, “Can Japan steal our ideas and make the widget better and cheaper?” The venture capitalists basically stopped investing in electronic hardware ideas and emphasized the software side of technology. This mindset led to the emergence of fabless giants such as Nvidia, a company that has no manufacturing capability but is worth much more than Intel, which has billions invested in semiconductor manufacturing. Before Washington could adopt some of Prestowitz’ ideas and move against Japan, Japan’s bubble economy popped. One could probably predict that this was inevitable when the Tokyo Palace grounds became more valuable than the total real estate of the entire US state of California. But manufacturing did not come back to America. Japan hung on for as long as possible, gradually losing production to South Korea and some to Taiwan and eventually to China. Prestowitz blamed China’s entry to the World Trade Organization, after which it gamed the system and took unfair advantage of favorable terms to build its manufacturing base. Before presenting my disagreements Prestowitz’ new book, I need to acknowledge that this is a valuable work, comprehensively researched, written with clarity, and full of teachable content. Reliance on mercantilism In the book, Prestowitz accuses China of rampant theft of intellectual property as an essential component of its economic rise. But he is fair-minded in that he outlines how every developing economy, including Japan, South Korea and Taiwan, “borrowed” ideas, design and technology from others to boost economic development. Most interesting, at least to me, is how the United States under the leadership of Alexander Hamilton relied on systematic theft of technology from Europe, and the practice of mercantilism to protect the infant industries at home until the domestic manufacturers could compete with its foreign competitors. Thanks in a large part to these mercantile policies, the US was to experience unprecedented economic growth. The book notes, “Between 1820 and 1870, the US GDP growth was, like China’s today, the wonder of the world.” I have not read anywhere else as thorough explanation of what mercantilism is and how such practice can benefit the practitioner. Heretofore, I thought of “mercantilism” as a swear word to sling at another country if we don’t like its trade policy. But Prestowitz makes a convincing case that mercantilist policies are important to nurture infant domestic industries. However, I have trouble with the two basic assumptions the author used to make his case against China. First of all, Prestowitz appears to echo the zero-sum view of US-China relations popular among the denizens inside the Washington Beltway. Regardless whether American politics is from the right or left, they all assume that China is out to push the US aside and take over as the global hegemon. US can’t stand being overtaken by China The prospect that China’s economy will overtake the US seems to drive these Americans to distraction. To them, size really does matter and China’s growing economy causes a deep-seated sense of insecurity and an inferiority complex. While they stew in paranoia of their own making, they find no comfort in the fact that per capita income in China will take decades to catch up, if ever. Depending on who’s counting, we Americans have around 800 to 1,000 military bases encircling the globe and we get upset and alarmed because China may have two. China’s first in Djibouti on the Horn of Africa was established to support the PLA Navy in its anti-piracy patrols. I don’t even know where the second is supposed to be, but how dare China challenge us with two international harbors? Then in recent years, China has had the temerity to militarize atolls in the South China Sea. How are we supposed to exercise the freedom of navigation in that body of “international” water and not feel threatened by the menacing missile batteries? Our naval vessels sail with the best of peaceful intentions, but the Chinese guns pointing at the ships clearly do not. Overlooked in such recriminations is that China simply does not play by the same rules as the US. China has never acted on or expressed the desire to become the world’s No 1 military power. Its most powerful diplomatic tool is the Belt and Road Initiative to help other countries build their infrastructure. To his credit, the author does not smear China by calling the BRI a debt trap or another form of colonial exploitation. While many in the mainstream media do step over the line and without any basis accuse China of gross misconduct, at least Prestowitz refrains from doing so. Rather, he thinks it was clever of China to come up with the idea. “It broke no international rules, attacked no one, and alienated no one while attracting bevies of supporters and partners. At a stroke it made China into a major world power whose influence in some ways surpassed that of the US.” In fact, China’s frequently repeated mantra is “win-win.” The best example of its practicing of what it preaches can be seen in a documentary from Singapore on Uzbekistan as the “buckle” of the BRI. BRI offers growth prospects The excitement in Uzbekistan is palpable as China build high-speed rail to connect the double-landlocked country to the sea and to the rest of the world. Uzbek officials now talk about the prospects of an economic boom that could replicate what happened to Japan and China. China offers access to its huge market and its inbound investments create massive employment opportunities. The Chinese in Uzbekistan and the Uzbeks are open and cordial with each other. Both sides win and there is no recrimination or talk of mercantilism. The second reason that Prestowitz considers China a bad actor is that the country is run by a one-party system, and what’s worse, a Communist Party at that. This is true. China calls it a socialist party with Chinese characteristics. Apparently, the author does not like that label, preferring to call it a Leninist party. I am not sure what that means, but I am certain it’s not good. Prestowitz accuses the Communist Party of China of oppressing the people, denying them personal freedom and certainly freedom of speech. Ever since China “conned” its way into the WTO, it has made tremendous economic advances. But from the author’s point of view, all the benefits went to the CPC and very few to the people of China. When the folks in Washington call out “communist” China, it says it all. This epithet justifies all the bad things we can ascribe to that country – even when China has systematically lifted millions out of poverty every year until can now claim that no one is left behind. The author lists Hong Kong, Tibet and Uighurs in Xinjiang as evidence of human-rights abuses in China. My disagreement is too complicated – and enormous – to go into except to say that he is unduly influenced by a small handful of vocal dissidents given a huge megaphone by the mainstream media and actively supported behind the scenes by the National Endowment for Democracy. (I gave one example of deliberate distortion by the mainstream media in a recent Asia Times article.) The book is critical of China for the lack of freedom of speech, an accusation that is more off than on the mark. The Internet-savvy generations in China exercise plenty of free speech criticizing policies they do not like and posting videos of misbehavior by corrupt officials. Government officials monitor the Internet carefully because that’s a critical source of public opinion that they have to listen to. ‘Inferiority’ of China’s one-party system It’s true that China does not let free speech run wild like in the US. Not a day goes by here without some politicians spouting nonsense. The media have lost their integrity in order to survive financially and can’t help the public distinguish the real from the fake news. It’s also not clear that China’s one-party system of government is inferior to our two-party system. Party members in China on track to become officials are graded and measured every step along the way, from the local to city to provincial to national level. They have to prove themselves capable of discharging their duties before they can move up. What do we Americans use as meritocracy to select our leaders? Would-be politicians need to be rich or have access to wealthy donors. Money trumps – excuse the expression – competence, rhetoric and public persona outrank one’s track record, experience or accomplishments. Each political party is more interested in suppressing the other than getting anything done for the public good. In the case of the US competing with Japan, Prestowitz’ proposal was for a proactive federal government to take counter measures and negotiate limits for Japanese economic expansion into the US. To counter China’s rise, he proposes that the US lead the formation of a “democratic globalization organization.” Conceptually, the idea of a DGO is to replace the WTO, rewrite the rules and gang up on China. This is perhaps appealing to functionaries in Washington but is neither realistic nor practical. Thanks to the success of the BRI, many of the countries that would need to align with the US have already developed deep economic ties with China and would not want to be part of such alliances. Tom Friedman of The New York Times wrote after attending the Beijing Olympics in 2008, “When you see how much modern infrastructure has been built in China since 2001, under the banner of the Olympics, and you see how much infrastructure has been postponed in America since 2001, under the banner of the war on terrorism, it’s clear that the next seven years need to be devoted to nation-building in America.” By the title of the book, Prestowitz implies that having the US on top is the natural order while being surpassed by China is not. It has been more than a decade since Friedman made his observation and we in the US have only gone backward on rebuilding our infrastructure. Isn’t it high time we started dealing with our internal challenges rather than thinking of ways to keep China down in order to stay “up”?

Friday, April 9, 2021

Will the U.S. learn from history to avoid catastrophe?

This post first appeared in Asia Times. On a recent visit to the Pearl Harbor Memorial in Honolulu, I was struck by a statement on the museum wall. It read: “Conflict is brewing in Asia. The old world order is changing. Two new powers, the United States and Japan, are rising to take leading roles on the world stage. Both seek to further their own national interests. Both hope to avoid war. Both have embarked on courses of action that will collide at Pearl Harbor.” The wall was referring to the collision that culminated in the surprise attack by waves of Japanese warplanes on December 7, 1941. The statement caught my attention because by exchanging “China” for “Japan,” it could easily apply to the bilateral tension that’s simmering today between the US and China. Sadly, we Americans seem to be heading for another collision, having learned nothing from history. After World War II, the Chinese fought the Americans to a draw in Korea despite owning vastly inferior weapons and firepower compared with those available to our troops and other UN forces. Next, we made up a bogus Gulf of Tonkin incident to justify charging into Vietnam. Despite wanton use of napalm, Agent Orange, cluster bombs and other innovations to deadly effect, we lost the war and had to get out in disgrace. Then for one brief brilliant moment in recent history, our Cold War adversary, the former Soviet Union, imploded. For the first time, we won a war without having to fire a shot. We became the only shining kingdom on top of the hill. We began to hope that a peace dividend would make possible the realization of the American dream. But that flicker of optimism was quashed by a group in the Washington establishment who called themselves neoconservatives. They began to agitate and promote the idea that the opportunity was nigh for the US to become the sole surviving superpower and seize the mantle to rule the world. To show pointed disdain, I proposed calling the proponents of these ideas neoconservative nincompoops, abbreviated as “neoconpoops.” I was disappointed that the handle did not gain popularity. To add insult to injury, these diehard neoconpoops moved from the fringe to the center of power when George W Bush was elected president of the United States. 9/11 became a sad legacy Then came September 11, 2001. With the help of his neoconpoop advisers, W promptly launched a Global War on Terror (GWOT). We invaded Afghanistan because Osama bin Laden was supposed to be hiding there. We did not find him in Afghanistan, but our troops are still there more than two decades later. We got at twofer by invading Iraq at about the same time. The pretext was to accuse Saddam Hussein of owning weapons of mass destruction. We did not find any WMD but we “shocked and awed” the Iraqis, found Saddam and lynched him. And, by the way, our troops are still in Iraq. With our heavy presence in the Middle East, we assumed that we could influence many admiring countries in the region to emulate what we called democracy. The Arab Spring that ensued seemed to justify our expectation that authoritarian leaders would be toppled. But except for possibly Tunisia, the movement did not succeed other than causing death and destruction. With the help of our military, the Libyan dictator Muammar Gaddafi was defeated and torn to pieces by a street mob. For sure Gaddafi was not a supporter of democracy, but his rule provided education, health care and housing for the Libyan people and raised per capita income to more than US$11,000. What has happened to Libya since Gaddafi? Just a constant state of civil war and misery for civilians. Safe to say that democratic reform and free elections are far from the minds of the people hoping just to survive another day. Somehow, we got away cheap on this one. We got rid of the bad guy and lost just one ambassador and three other American casualties, and then we got out. We didn’t get our hands on Libyan oil but we didn’t leave any boots on the ground, either. We also got smarter at fighting proxy wars and not putting our soldiers at risk. Under president Barack Obama, we started to use killer drones to rub out presumed al-Qaeda bad guys. Civilians who got killed were simply treated as collateral damage without so much as an expression of regret – such as, sorry you got in the way. President Donald Trump elevated the use of drones to another level by assassinating Qasem Soleimani, an Iranian war hero and second only to Iran’s Supreme Leader in prominence. He was killed at Baghdad airport along with other Iraqis and some Iranian nationals. The mission was carried out remotely and did not put any American at risk. We haven’t even mentioned the disturbances in Syria, Yemen, Egypt and other countries in that part of the world. Suffice to say that wherever we go, we have been very good at creating instability and causing mayhem. Our intentions were always lofty, to promote democracy, but the consequences invariably took a toll on innocent lives – and worldwide refugee crises. It’s true that a decade after 9/11 we finally found bin Laden hiding in Pakistan and killed him. However, he had the satisfaction of seeing our over-the-top response and self-inflicted cost of lives and property exceed his wildest expectations. This has been a long but I feel necessary review of recent history to bring into context the current status of international relations with China under President Joe Biden’s administration. Trend set by Anchorage summit The first summit meeting of the Biden administration’s top diplomats with those of China held in Anchorage, Alaska, last month was a strong indicator that nothing has changed in the way we Americans think about China. It’s almost as if our secretary of state, Tony Blinken, retrieved some notes from the trashcan discarded by outgoing secretary Mike Pompeo and carried on from there. Our Mr Blinken dispensed with the customary diplomatic niceties and proceeded straight to accusing China of human-rights offenses in Xinjiang, Hong Kong and Taiwan, cyberattacks and economic coercion among other offenses. Yang Jiechi, China’s leading foreign-policy official and a member of the Politburo, replied in kind. Yang said the US was not in a position to criticize China. America has a history of genocide from the eradication of native Americans to the persecution and lynching of black Americans. When he mentioned the Black Lives Matter movement, we were reminded of the white police officer slowly squeezing the life out of George Floyd with his knee on Floyd’s neck. We have to admit that Yang had a valid point. Since China began its economic reform, it has been working steadily on poverty alleviation regardless of the ethnicity of the people being helped. The only government “bias” was to assist the most accessible first and the more remote ones later when roads and the Internet were put in place. Today, China proudly claims that it has no one living below the poverty line. Many developing countries envy China’s success and are seeking to emulate its model of helping their rural poor and raising their standard of living. So far as I know, we haven’t alleviated poverty for anyone in the US. The top 1% have improved their lot and grown wealthier, but the bottom 50% have suffered reduced circumstances. Since most people in the ghettos are people of color, America’s economic divide has made them a lot worse off. More than 90% of the people in China approve of their government, support its policies and express optimism for their future. The surveys backing this are done by reputable third parties, such as Pew Research, and are not paid for or coerced by an authoritarian government. In the US, any time the sitting federal government gets 50% popular approval it is considered to be doing well. Our model of democracy says the right to carry a gun, to wear a mask in public places or to receive vaccinations against Covid-19 are important political issues and not matters of public health. Further, the most urgent issue at hand right now is how legally to deny certain Americans the right to vote. Biden’s China team seems oblivious to the fact that much has changed between the US and China since the financial crisis of 2008 caused by fraudulent financing of mortgage swaps by Wall Street. China’s disenchantment began in 2008 China’s disappointment in the US and loss of confidence in Wall Street have meant a loss of faith in the American dollar. In lieu of quantitative easing American-style, China invested heavily in its infrastructure, resulting in superhighways and the world’s largest network of high-speed rail. China then applied its experience and expertise in building infrastructure to a world-girding Belt and Road Initiative. At last count, China has started 2,800 projects in about 100 countries helping them build and improve their infrastructure. Given the total estimated investment value of $3.7 trillion, the participating nations could not hope to see new roads, railways, ports or airports without China’s help in financing and project-management expertise. The best we in the US can do in response is to warn these countries to beware that China is promoting debt traps. Along with economic cooperation on infrastructure projects, China has also promoted open global trade. Before Biden was sworn in to the White House, China concluded the biggest free-trade agreement with the ASEAN+5 (China, Japan, South Korea, Australia and New Zealand) bloc, and a Comprehensive Agreement on Investment with the European Union. As I said in my January Asia Times commentary, “The community of nations has moved on while, thanks to Trump, the US has been left at the station. It’s unrealistic to expect that the US under the new Biden administration can simply pick up from where the US was before the Trump debacle.” Unfortunately, the Biden administration seems to think that all we need to do is to rally our old allies to counter China’s rise. To justify our continuing attacks on China, it’s not beneath our officials, abetted by our mainstream media, to resort to lies and fabrications – another Gulf of Tonkin in the making. The most popular topic recently is to accuse China of committing genocide against Uighurs in Xinjiang, despite the fact that the population of Uighurs in China has been increasing and not declining. However, it is a fact that economically Uighurs have done poorly as an ethnic group. Part of the effort to help them out of poverty was for the Chinese government to offer vocational training and to encourage young women from large multiple-sibling families to accept factory jobs elsewhere in China. The idea was to broaden a woman’s view of the world and raise her life expectations, in addition to earning a better income. The prospect of leaving her family for some faraway city is likely a wrenching and traumatic experience for a young girl whose culture indoctrinates her from birth to prepare for marrying young, having babies and toiling on the family farm for the rest of her life. Often, the factory recruiter would bring along an older Uighur woman who could describe her experiences in a factory and how her savings enabled her to help her parents enjoy better lives and even move into a Chinese city to live with her. Chinese documentary becomes a BBC exposé Beijing-based broadcaster CGTN made a documentary on the process of recruiting Uighur women for factory jobs elsewhere in China. By judiciously omitting certain parts of the video footage, the British Broadcasting Corporation transformed the documentary into an exposé of China forcing young Uighur women into slave labor. Thanks to “Numuves,” who produced a YouTube video comparing the original Chinese version and the adulterated BBC version, we can see the BBC’s adroit skill in misrepresenting the truth. Readers can view both versions and see how the BBC can shamelessly stoop to distort and fabricate in order to demonize China. Unfortunately, the BBC is hardly the only member of mainstream media to help the Western governments blacken China’s reputation and enhance our superior-than-thou stance. YouTube is replete with accusations of The New York Times and other “reputable” members of the media being guilty of slanting reports to reinforce the anti-China bias. Thus Biden, with bipartisan support and the coordinated distortion from the mainstream media, can confidently declare that China’s rise to become a world superpower will not happen on his watch. In reality, China’s rise to becoming the most powerful economy is inexorable and only a matter of time. Whether it will happen during Biden’s watch really depends on how long he expects to be the US president. We hardly have a knee on China’s neck. The day after the frosty and contentious meeting in Anchorage, Foreign Minister Wang Yi met with his Russian counterpart, Sergey Lavrov, in Guilin, China. They expressed solidarity in their views and oppose the “unilateral bullying” by Washington. Wang Yi then went on to Tehran to sign a 25-year agreement with Iran worth $400 billion. China’s cash infusion to Iran will relieve the pressure of American sanctions and in exchange, oil from Iran will enhance China’s energy security. The China-Russia-Iran alliance certainly should give us pause. We gave up trying to beat the Taliban in Afghanistan after 20 years, and that certainly shouldn’t give us confidence to take on the triumvirate. Nevertheless, the Biden team seems determined to follow Trump’s script for confrontation with China. No issue is as sensitive and fraught with danger as Taiwan. Yet we seem determined to raise the tension over the waters around Taiwan and dare China to step over the red line. God help us if we succeed in triggering a collision with China. Most of us won’t likely be around to see how the collision ends. Hear my discussion of this piece on national podcast commencing at about 28 minute mark,

Thursday, January 28, 2021

Biden needs China to help improve Americans’ lives - Donald Trump did next to nothing for the bottom 90%, and his anti-China policy was a major reason for his failure

First posted on Asia Times. In a recent interview on National Public Radio, Jake Sullivan, the national security adviser-designate for the incoming Biden administration, said US foreign policy must serve domestic policy. In other words, “the work that we do abroad fundamentally has to connect to making the lives of working people better, safer, fairer.” So far, so good. The preceding regime under Donald Trump did next to zero for the bottom 90% of the American people. Indeed, improving the lives of the huge middle class has to be the highest priority for the Biden presidency. In fact, Sullivan said, “What Joe Biden is proposing, and what I am reinforcing as the national security adviser, is that every element of what we do in our foreign policy and national security ultimately has to be measured by the impact it has on working families, middle-class people, ordinary Americans here in the United States.” He pretty much repeated his talking points in his subsequent interview with Fareed Zakaria of CNN. Unfortunately, he then talked about changing the foreign policy with respect to China, in which he envisaged an approach that differed only slightly from Trump’s zero-sum confrontation. It’s almost as if Sullivan is slowing down the train heading toward the precipice from 100 miles per hour to 50 but is not getting off the track that’s leading to disaster. Fresh approach needed Rather than looking backward and relying on past grievances, legitimate or otherwise, as the starting point to rebuilding a relation with China, Sullivan should advise President Joe Biden to face the real world that exists today and find a fresh approach that will look to the future and give boost to his domestic agenda. Thanks to four years of Trump’s “America first and nobody else matters,” the US he represented has earned the disdain and disrespect of world opinion. This is not to say that China has taken over, but we can say that the world has moved away from a unipolar world dominated by the US and is moving increasingly to a multipolar world. The China-EU Comprehensive Agreement on Investment (CAI) just concluded before year-end 2020 is a strong confirmation of such a multipolar world. This agreement had been under discussion for seven years, and Biden asking the European Union to delay concluding the pact would seem reasonable and consistent with the pre-Trump relations between the US and Europe. However, in a world altered by Trump, China and the EU rushed to conclude the deal and presented Biden a fait accompli before he takes office. This is a clear message that the EU is now more interested in protecting its own self-interest than merely following America’s lead. In November, the ASEAN + 5 (China, Japan, South Korea, Australia and New Zealand) bloc concluded the Regional Comprehensive Economic Partnership Agreement, representing the biggest free-trade pact in the world. The US could have been a member of RCEP, but Trump withdrew from the negotiations before the agreement was concluded. When it comes to understanding the significance of free trade, Trump is a woeful country bumpkin. The community of nations has moved on while, thanks to Trump, the US has been left at the station. It’s unrealistic to expect that the US under the new Biden administration can simply pick up from where the US was before the Trump debacle. Sullivan has no middle way As the new national security adviser, Sullivan faces a choice of which direction to take. He can continue to engage China in an ideological confrontation along the lines of condemning alleged human-rights abuses, intellectual-property theft, unfair trade practices, etc, etc, or he can find ways to collaborate with China that would boost the recovery of the US economy and inject much-needed help for the 90% he talked about. He can’t do both. To bring the Covid-19 pandemic under control, the US will have to work with China. Using older, conventional technology, China has developed several vaccines that do not require deep refrigeration and are more affordable for developing countries. Worldwide herd immunity will be possible only if most of the world is inoculated. Just protecting the wealthy nations won’t do. Similarly, China understood the damaging implications of climate change to its economy long before a clueless Donald Trump walked away from the Paris Accord. China has declared its national goal to be carbon-neutral by 2060 – and this is one country that has a habit of meeting its national objectives on or before its stated goal. The US has some catching up to do, and Biden will have his hands full convincing the American people that continuing emission of greenhouse gases is bad for their personal net worth (due to fire, hurricanes and tornadoes) and not just for their health. As the world’s top two emitters, the US and China have to collaborate to set the example for the rest to follow. Trying to collaborate as a pair of frenemies just won’t be as effective or convincing than if the US and China can act in a true partnership on a common mission. Hypocrisy and China’s human rights A favorite talking point of American politicians and mainstream media alike is to attack China for its alleged human-rights abuses. Amazingly enough, these accusations spew from American mouths without the slightest discomfort or sense of embarrassment. This is despite the fact that the US with just 4.4% of the world’s population has 22% of world’s prison population. Furthermore, American prison labor has been inhumanly exploited, with inmates paid slave wages for the benefit of government officials in cahoots with contractors that profit from their output. A typical wage paid for 12 hours of hard labor is US$2.25, for the day not per hour, according to NPR. After deducting for sundries and overhead, the net take-home is a pathetic pittance. Such extreme cruelty speaks for itself and needs no embellishments. It’s not even a case of the pot calling the kettle black. The pot stands alone in a class of its own. Yet when American critics throw their sucker punch at China, they are unrestrained with their fabrications to drive home their arguments. Most recently, they have argued that millions of Uighurs are kept in labor camps and forced to grow cotton, turned into cotton textiles and made into fashion garments for export to the West. None of this has been corroborated by international visitors who went to Xinjiang to see for themselves. On the other hand, China by trial and experimentation has devised a methodology that lifted hundreds of millions out of poverty. As the saying goes, rather than give the poor man a fish to eat, teach him to catch fish so that he will never go hungry. In other words, the poor were taught new skills to improve their livelihood, and that’s irrespective of their ethnicity. To China’s central government, every life matters, and other countries are beginning to take notice. African countries among many are now studying China’s approach to poverty alleviation and seeking China’s advice on how to apply similar measures in their home country. The total eradication of extreme poverty has been unprecedented and is China’s greatest achievement in protecting the rights of its people. Rather than lambasting China for human-rights violations, Sullivan may want to study China’s poverty alleviation programs for ideas on how to use them in America. China’s national policy treats its people far more fairly than in an America that’s rife with racial inequality and xenophobic tension, to say nothing of inequality in education, in opportunity, in income and in protection under law. Bringing manufacturing back In his NPR interview, Sullivan also said the US needs to bring manufacturing back home. Trump thought he could accomplish that goal by raising tariffs on goods made in China. It didn’t work, because American manufacturers moved offshore to avoid the high cost of domestic labor. Imposing import duty does not change the economics of manufacturing at home. The other reason American companies moved to China was to participate in what is now the world’s largest and most booming consumer economy. For many companies, the revenue they have made there during the pandemic more than made up for the losses in the US. However, there is one way for Sullivan to bring manufacturing back to America, just not American manufacturing. He should devise a strategy to attract and welcome more Chinese companies to invest in the US. As China’s economy grows, Chinese companies need to develop a global presence to serve their worldwide customer base. Haier, China’s leading white-goods and home-appliance company, is one classic example of the positive synergy of a Chinese investment in the US. In 2000, the company started with a modest manufacturing operation in South Carolina making wine coolers and small refrigerators popular with college dormitories. By 2016, Haier was successful and financially strong enough to acquire the appliance division from General Electric for $5.6 billion. GE wanted to get out of the consumer-appliance business and Haier saw the purchase as an opportunity to become a world market leader. At the time no one in Washington objected that Haier was a Chinese state-owned enterprise (SOE). Perhaps saving the payroll for 12,000 employees made it easier for the politicians to swallow their pride. As I have previously reported, other Chinese investments that predated outgoing Secretary of State Mike Pompeo’s China-bashing hysteria have greatly benefited the US economy. For example, China’s CRRC Corporation has established two plants to assemble subway cars for major US cities. The cars are state-of-the-art, cost 20% less than any competition, have more than 60% local content, and created 150 jobs at each of the two locations. In addition, the US cities saved hundreds of millions while replacing their dilapidated old metro cars. And about 10 years ago, China Construction of America rebuilt the Alexander Hamilton Bridge in northern Manhattan, doubling the four lanes to eight, and completed the project ahead of schedule and on budget. It was the largest single construction project, at $407 million, ever awarded by the State of New York. It was under joint Chinese and American management but with an American workforce. More recently, Huawei could have materially helped the installation of nationwide fifth-generation (5G) telecommunications network, much sooner and at significantly lower cost than the current situation. But techno-ignorance and irrational fear of Washington threw Huawei under the bus. Huawei, unlike Haier, wasn’t even an SOE. Its sin seemed to be that its chief executive was at one time in the People’s Liberation Army. Torrent of FDI awaits Foreign direct investments nearly always benefit the recipient country because such investment creates employment. Is there any doubt that Chinese investments would accomplish the same? The obvious task facing Sullivan is to reverse the knee-jerk, anti-China bias in Washington and greatly reduce the red tape in the Committee on Foreign Investment in the United States (CFIUS) and turn it into a committee that welcomes rather than rejecting Chinese companies. If Sullivan decides to explore collaboration with China for mutual economic benefit, much of the necessary foundational work has already been done. The China-EU CAI contains provisions of no forced transfer of technology, no hidden subsidies for SOEs, a level playing field for market access to China’s consumer market, and elimination of equity caps or joint-venture obligations. The provisions seem to cover most the complaints and concerns raised by American companies, and therefore China’s deal with the EU should make it easier for the US to hitch a ride and strike a comparable agreement. Certainly, getting along, building trust and benefiting from bilateral investment and trade would be considerably more tolerable than raising tension and hostility.