Archive for the ‘China and trade’ category

FULL MEASURE: October 22, 2017 – South China Sea

October 24, 2017

FULL MEASURE: October 22, 2017 – South China Sea, via YouTube, October 23, 2017

The blurb beneath the video notes,

U.S. Navy ships are stepping up patrols in the South China Sea. So what’s our interest in a place more than 8000 miles away? It’s one of the busiest and most important trade routes in the world. What happens there affects prices on store shelves here. For the last few years, China has been taking control, building bases, asserting territorial claims. Sharyl Attkisson traveled to Southeast Asia and in the Philippine capital, Manila, found one man who took China on, and won.

President Trump JUST Drops Executive Order NOW Kim Jong Un Is Panicking(VIDEO)!!!

September 26, 2017

President Trump JUST Drops Executive Order NOW Kim Jong Un Is Panicking(VIDEO)!!!, Global News via YouTube, September 26, 2017

(The title seems excessively dramatic, but Dear Leader Kim will feel the new sanctions China claims to support.  The more interesting segments of the video deal with our military options. — DM)

The blurb beneath the video states,

President Trump drops executive order now Kim Jong Un is panicking. President Trump signed an executive order targeting North Korea’s trading partners, calling it a powerful new tool aimed at isolating the regime. Foreign banks will face a clear choice. Do business with the United States or facilitate trade with the lawless regime in North Korea.

Trump’s ‘America First’ vs. McCain’s ‘America Last’

July 29, 2017

Trump’s ‘America First’ vs. McCain’s ‘America Last’, PJ MediaDavid P. Goldman, July 28, 2017

Europeans suspect that the U.S. wants to sabotage Russian natural gas deliveries to Europe and replace them with LNG exports from the United States. Neither the Trump administration nor its opponents in Congress entertain such a Machiavellian agenda. On the contrary, the Trump administration initially supported sanctions against Russia as a bargaining chip, to be played to extract concessions from Moscow over the Ukraine, Iran and other matters of contention. The House and Senate bills in their present form effectively tie the president’s hands, turning what was a bargaining chip into a declaration of trade war. This would not be the first war to begin when what was intended as a feint was interpreted after the fact as a threat.

America won the Cold War by driving a wedge between Russia and China, and by persuading a frightened Western Europe to point medium-range missiles at the Russian heartland. Russia sought to compensate for its economic inefficiency by turning Europe into an economic colony, and the most dangerous operations of the Cold War were undertaken to prevent this. Now, for narrow political reasons, Trump’s enemies propose to undo the whole structure of relationships that won the Cold War and drive Europe into the arms of the Russians and Chinese. I do not believe for a moment that McCain and Schumer have a clue about this—they are like the “sleepwalkers” in Christopher Clark’s brilliant history of the outbreak of the First World War—but if I were a Russian operative, I would try to invent someone like John McCain, if McCain did not already exist.

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Not the supposed protectionist Donald Trump, but the “free trade” wing of the Republican Party has taken the United States into a trade war that it can only lose. New sanctions against Russia passed by the House and Senate last week force Europe into a de facto alliance with Russia against the United States, and by extension with China as well. It is the dumbest and most self-destructive act of economic self-harm since the United States de-linked the dollar from gold on August 15, 1971, and it will have devastating consequences. The charade in the House and Senate may embarrass Trump, but it also poses a threat to European energy supplies as well as an extraterritorial intrusion into European governance. Berlin, Paris and Rome will conspire with Moscow to circumvent the sanctions while attacking the United States at the World Trade Organization and other international fora.

Sen. John McCain (R-AZ), Sen. Charles Schumer (D-NY), and their counterparts in the House of Representatives allowed their dudgeon against a sometimes provocative president to overwhelm their sense of self-preservation. The sanctions will hurt Russia, but not nearly as much as they will hurt the United States over the long term. The White House envisioned sanctions as a bargaining chip, to be used to persuade Moscow to behave in the Ukraine and to limit the ambitions of its Iranian ally of convenience. In their present form, however, the president will have no authority to remove sanctions imposed by Congress. That turns a feint into a threat. Wars have been started over less.

The Democrats along with the McCain Republicans, it will be remembered, accused Trump of undermining the Atlantic Alliance, of isolating the United States, and of handing a diplomatic victory to Russia. Not Trump, but his detractors have given Moscow a degree of leverage over Western Europe to which it has not aspired since the height of the Cold War in 1983, when Soviet premier Yuri Andropov considered a pre-emptive Russian attack in response to Western plans to deploy medium-range missiles in Germany.

Supposedly it was Trump who ignored the exigencies of international relations in favor of domestic political theater. Yet it is the Establishment wing of the Republican Party and its Democratic allies who combined to embarrass the president, without a moment’s consideration of the consequences of their actions. Among Washington’s elite, Trump Derangement Syndrome has nothing to do with ideology. It is about jobs and patronage. This is not hypocrisy. It is chutzpah.

Trump humiliated the Democrats and the Establishment rump of the Republican Party last November. The losers now face the prospect of permanent exile from political life. Writing in the Times Literary Supplement July 25, historian Edward Luttwak predicted a Trump dynasty lasting sixteen years, in which Ivanka Trump Kushner would succeed her father. “No wonder that leading Democrats and non-Trumpers continue to act hysterically even eight months after the election. President Trump’s plan threatens to exclude them all from office until long past their retirement age,” Luttwak wrote. The hopes of high office of the defeated Establishment can be realized only by stifling the Trump administration in its cradle.

That is the motivation behind the Black Legend of Russian collusion that continues to occupy the waking hours of the American media while putting most Americans to sleep. As Sen. McCain said after the Senate vote July 27, the sanctions “respond to Russia’s attack on American democracy….We will not tolerate attacks on our democracy. That’s what this bill is all about. We must take our own side in this fight, not as Republicans, not as Democrats, but as Americans.”

The notion that Russian machinations explain Trump’s electoral victory is fanciful, although Russia’s intelligence services no doubt sought targets of opportunity in the American electoral scramble. McCain’s outrage over the violation of America’s political virginity, though, rings rather hollow. Some of his friends, for example National Endowment for Democracy President Carl Gershman, publicly advocate regime change in Moscow, a topic that has been a matter of on-and-off public debate in Washington for years. A 2016 Defense Intelligence Agency document reported that Russia believes that the United States favors regime change. The U.S. supported the 2014 Maidan coup in Ukraine, which threatened Russia’s access to its Crimean warm-water port. America’s capacity to influence political events in and around Russia is vastly greater than Russia’s.

After the fall of Communism, the dominant strain of American thinking held that the march of liberal democracy was unstoppable, and that it would transform the Muslim world as well as Moscow. I played a bit part in this project; in 1992, then Ambassador to Moscow Robert Strauss arranged for me to advise President Boris Yeltsin’s finance minister, Yegor Gaidar. Strauss did so at the behest of private equity investor Theodore Forstmann, who had funded a proposed study of the Russian economy. As it turned out I had little advice to give to the Yeltsin government, which was acting as a family office for various Russian oligarchs who divided up the Russian economy. The free-for-all of theft left the economy in ruins. One needed a large shopping bag full of currency to do ordinary shopping. A few hundred meters from the Kremlin, old people sold used clothing to buy food, and World War II veterans wore their medals to beg in the streets. No-one who had first-hand experience with Russia’s brief experience with democracy was surprised at Vladimir Putin’s subsequent popularity. The oligarchs continued to steal, but in a measured and organized fashion that allows ordinary life to proceed without catastrophic disruption. Putin rules Russia by means I sometimes find abhorrent, but his is a land where people don’t talk of Ivan the Reasonable.

An ideological residue of the utopian attitudes of the 1990s colors the Republican Establishment’s attitude towards Trump, but it does not really inform them. This is not about the U.S. elections, or Putin’s nastiness, or freedom and democracy. It’s about privilege and the pecking order in the Washington swamp. McCain and Schumer want to destroy Trump because a successful Trump administration would destroy them, and destroy the reputation of an entire generation of diplomats, intelligence officers, academics and military officers who achieved rank by promoting the export of democracy, nation building, counterinsurgency, and so forth.

The trouble is that the Schumer-McCain combination has taken aim at Russia but inflicted collateral damage on the Europeans. The sanctions legislation in its present form allows the United States to impose heavy fines on European companies involved in energy infrastructure with Russia, and threatens several major projects now in progress, including the Nord Stream II natural gas pipeline, the Baltic Liquefied Natural Gas Project, and the Russia-Turkey Blue Stream pipeline, among others. EC Commission chief Klaus Juncker warned July 27, “The U.S. bill could have unintended unilateral effects that impact the EU’s energy security interests. If our concerns are not taken into account sufficiently, we stand ready to act appropriately within a matter of days. ‘America First’ cannot mean that Europe’s interests come last.”

The Trump administration has annoyed America’s trading partners previously by complaining about the exchange rate of the euro and about Germany’s trade surplus with the U.S. But those were cosmetic issues compared to sanctions which the Europeans see as a threat to essential economic interests. The French and German foreign ministries denounced the sanctions as a “violation of international law” and national governments as well as the European Commission are preparing as yet unspecified countermeasures.

Europeans suspect that the U.S. wants to sabotage Russian natural gas deliveries to Europe and replace them with LNG exports from the United States. Neither the Trump administration nor its opponents in Congress entertain such a Machiavellian agenda. On the contrary, the Trump administration initially supported sanctions against Russia as a bargaining chip, to be played to extract concessions from Moscow over the Ukraine, Iran and other matters of contention. The House and Senate bills in their present form effectively tie the president’s hands, turning what was a bargaining chip into a declaration of trade war. This would not be the first war to begin when what was intended as a feint was interpreted after the fact as a threat.

Not Trump, but his domestic opponents have set in motion an unprecedented disturbance in Atlantic relations, and effectively put Berlin, Paris and Rome in the same camp with Moscow in opposing American policy. European governments are already consulting with Moscow about mechanisms to get around the sanctions. Russia has responded by expelling a large number of diplomats from the embassy in Moscow, but that is merely a symbolic gesture. There are more disagreeable measures that Moscow might take, such as providing advanced weapons to Iran, giving close air support to Iranian-controlled militias in Syria, and increasing military cooperation with China. Russia and China, as I have reported elsewhere, already back Iran’s international brigades of Shi’ites as a counter-toxin to Sunni jihadists shaken loose by America’s blunders in Iraq.

America won the Cold War by driving a wedge between Russia and China, and by persuading a frightened Western Europe to point medium-range missiles at the Russian heartland. Russia sought to compensate for its economic inefficiency by turning Europe into an economic colony, and the most dangerous operations of the Cold War were undertaken to prevent this. Now, for narrow political reasons, Trump’s enemies propose to undo the whole structure of relationships that won the Cold War and drive Europe into the arms of the Russians and Chinese. I do not believe for a moment that McCain and Schumer have a clue about this—they are like the “sleepwalkers” in Christopher Clark’s brilliant history of the outbreak of the First World War—but if I were a Russian operative, I would try to invent someone like John McCain, if McCain did not already exist.

Uncertain Futures: China, Trump and the Two Koreas

February 10, 2017

Uncertain Futures: China, Trump and the Two Koreas, 38 North, February 9, 2017

(Kim Jong-un may be insane. Or, like his predecessors, he may pretend to be insane to make predictions about his behavior very difficult and often impossible. China’s leaders are not insane, they are merely devious. Dealing with them has been, and will continue to be, very difficult. — DM)

China waving flag on bad day

China waving flag on bad day

At the beginning of the Trump administration, the situation on the Korean peninsula is highly uncertain and potentially volatile. During a late January research trip to Beijing, “uncertainty” and “concerns” were the keywords that best characterized how Chinese scholars and officials are feeling about Trump and the two Koreas. During his presidential campaign, Trump suggested that he would be willing to negotiate with North Korea directly. However, that scenario has become more uncertain in recent months, especially given the hawkish instincts of President Trump and his national security team. Chinese analysts nonetheless expect the US to enlist Beijing’s support on the North Korea issue and are anxiously waiting for Washington to engage so that China can bargain for its preferred outcomes. The prolonged silence from the administration is making Beijing increasingly uncertain and uncomfortable, and complicating its plans to reduce the threat that the United States and its network of alliances in Northeast Asia poses to Chinese security and strategic influence.

Between 2013 and 2016, China tested an alternative alignment strategy on the Korean peninsula. Frustrated with North Korea’s brinkmanship continuously damaging Chinese security interests, President Xi Jinping placed his hope on South Korean President Park Geun-hye to improve China’s strategic position. At the heart of this scheme was an effort to turn South Korea into China’s “pivotal” state in Northeast Asia, thereby undermining the US alliance system in the region and diminishing its threat to China. As a result of Sino-ROK rapprochement, senior-level visits soared, bilateral economic ties strengthened and many South Koreans questioned the utility and future of the US-ROK alliance. In an ideal scenario, China’s new realignment strategy would defeat the US-orchestrated “Northeast Asia NATO” based on America’s alliances with Japan and Korea, and counter the US-Japan alliance with an alignment between China and both Koreas. From the Chinese point of view, this would not only reduce China’s vulnerability vis-à-vis the US, but also lay a firm foundation for Chinese regional predominance.

However, events after the fourth North Korean nuclear test in January 2016 entirely derailed China’s scheme. Overestimating its presumed influence over Seoul, Beijing refused to adequately address South Korea’s legitimate security concerns, which eventually led to Seoul’s decision to deploy the Terminal High Altitude Area Defense (THAAD) system. China sees the THAAD deployment as a threat to strategic stability with the United States and an obstacle to its desired regional blueprint. As such, Chinese policy toward the Korean peninsula has evolved significantly in the last year, reflecting the realization that undermining the US-ROK alliance and turning South Korea into a Chinese strategic asset were both improbable in the near future and raising the prospect that Beijing might not have a choice between the two Koreas after all.

Nonetheless, while China’s ambitious efforts to transform geopolitical alignments on the Korean peninsula did not come to fruition, it still has two other key priorities. First, Beijing has not completely given up its efforts to defeat the THAAD deployment. At a minimum, it hopes that a victory for progressive forces in the upcoming South Korean presidential election, such as the Minjoo Party, could alter Seoul’s deployment plans for the system. While acknowledging that a complete reversal of the deployment decision is unlikely, Beijing hopes that a new South Korean government might delay the initial deployment or reduce the number of deployed units. China sees the propensity of the progressives to engage North Korea, to improve relations with China and to limit the scope of the US-ROK alliance as aligned with its overall strategic agenda. Although China’s ability to sway a South Korean domestic election is limited—for example, by maintaining the implicit sanctions China has imposed on South Korean companies, products and industries for the THAAD deployment—its preference and influence are expected to have an impact.

Second, China hopes to mitigate the impact that any future North Korean intercontinental ballistic missile (ICBM) test might have on its strategic position and influence on the peninsula. The conventional wisdom is that North Korea will not want to conduct the test immediately after Trump’s inauguration, as it will almost certainly block the chance for dialogue with the new US administration and boost the popularity of the conservatives in the South Korean election. However, based on North Korea’s previous pattern of behavior, Chinese experts expect to see provocations in the coming months if Trump chooses to follow Obama’s policy of strategic patience. At the same time, Chinese analysts are inclined to downplay the significance of such an ICBM test, citing the immaturity of North Korea’s long-range missile technology and its likely failure. Still, Beijing will oppose any preemptive strike by the US on the launch site, although it does not fully believe that the US would take such a risky move and jeopardize South Korean security—a fundamental assumption embedded in China’s assessment of the prospects for conflict on the Korean peninsula.

Beijing has always insisted that North Korea’s nuclear development is motivated by Pyongyang’s vulnerability and insecurity, and argued that only the US and North Korea can resolve the stalemate through a peace negotiation. Selfless as it may sound, there is a certain level of hypocrisy in that position. As it has become clear to American officials and experts that strategic patience failed to address the North Korean nuclear threat, there have been more vocal calls to resume US-DPRK dialogue in return for a decision by Pyongyang to suspend its nuclear and missile tests. For China, the danger lies in the unpredictable consequences of such a bilateral negotiation. If the United States and North Korea decide to move ahead with a deal, the improvement of relations between them and the shifting balance of power on the Korean peninsula will diminish what China perceives as its leverage and strategic influence. Therefore, if the Trump administration unilaterally initiates bilateral talks with North Korea, it will be met with suspicion rather than enthusiasm from Beijing.

China’s potential reaction to a North Korean ICBM test all comes down to one question: What does Beijing want? One thing is clear: China wishes to see denuclearization and peace dialogues, but also wants to be an indispensable party in these dialogues to monitor and influence their direction. Beijing believes that the “dual-track” approach (parallel negotiations on denuclearization and a peace treaty) it proposed in 2016 offers the best hopes for achieving its strategic and security goals. Although the Obama administration largely rejected this approach, Beijing sees a new opportunity to try it again with the Trump administration. Trump should understand, however, that China’s position on the Korean peninsula is neither objective nor neutral and that it will view all solutions primarily through the lens of its strategic competition with the United States. As a result, it is important for all the concerned parties to have realistic expectations about a grand bargain with China over North Korea and treat it with extreme caution.

The US-China relationship under Trump is undoubtedly the largest uncertainty in China’s relations with both North and South Korea. If the Trump administration, as appears to be the case, chooses a more confrontational approach towards China, soliciting Beijing’s support and assistance in pressuring North Korea will be exceedingly difficult. A more hawkish stance from the United States will make Beijing instinctively seek more policy leverage, and provocative North Korea behavior that goes unpunished militarily by the United States offers tremendous opportunities for Beijing to be wooed by Americans to rein in Pyongyang. Past experience, including the Cheonan incident, the shelling of Yeonpyeong Island and South Korea’s THAAD deployment, have demonstrated the high level of leniency Beijing will afford Pyongyang when the United States applies greater pressure on China in response to such provocations.

The application of US secondary sanctions on China, which some American officials and experts have discussed, is likely to make China less rather than more cooperative on North Korea. It is unlikely that effective sanctions could be imposed on these entities without poisoning bilateral relations and adversely affecting China’s willingness to cooperate with the US on North Korea. China opposes unilateral sanctions as a general principle, and in particular condemns those that affect Chinese companies or interests. Beijing’s cooperation on the Iran nuclear deal was not incentivized by US sanctions on the Chinese Bank of Kunlun and Zhuhai Zhenrong, but by the opportunities offered for expanding Chinese influence in the Middle East and leveraging its cooperation in overall relations with Washington. In the Chinese view, the North Korea nuclear program, unlike the Iranian case, is much more complicated and sensitive because it directly affects China’s national security, and therefore requires more comprehensive and political solutions.

If the Trump administration’s primary goal is to confront China and thwart Beijing’s regional ambitions, the most effective policy (and the worst nightmare for China) would be a unilateral improvement of relations with North Korea. Whether that is politically possible depends on how far the administration is willing to pursue diplomacy and negotiations to defuse the North Korean threat. On the contrary, pressuring China is unlikely to make it cooperate. Beijing wants a grand bargain over the future of the Korean peninsula conducive to China’s interests. Without a proper endgame to incentivize the Chinese and a policy of dialogue that allows Beijing a key seat at the table, neither pressure nor solicitation will succeed.

Don’t Fall for China’s Global Baloney

January 25, 2017

Don’t Fall for China’s Global Baloney, Washington Free Beacon, January 25, 2017

Chinese President Xi Jinping speaks before reporters after a two-day summit of the Group of 20 major economies in the Chinese city of Hangzhou on Sept. 5, 2016. (Kyodo) ==Kyodo

Chinese President Xi Jinping speaks before reporters after a two-day summit of the Group of 20 major economies in the Chinese city of Hangzhou on Sept. 5, 2016. (Kyodo)
==Kyodo

Reading the gushing coverage of this dictator’s turgid and clichéd speech, I can’t help thinking of the last time America’s liberal elite went gaga over China. “One-party autocracy certainly has its drawbacks,” Tom Friedman wrote in 2009. “But when it is led by a reasonably enlightened group of people, as China is today, it can also have great advantages.” Chief among those advantages, according to Friedman, is the Chinese Politburo’s ability to “just impose the politically difficult but critically important policies needed to move a society forward in the 21st century.” Spoken like a true apparatchik. Six months later, on Meet the Press, Friedman confessed his fantasy: “What if we could just be China for a day?”

They are therefore more sympathetic to the world Xi Jinping wants to preserve than the world Donald Trump wants to create. That democracy or self-rule plays a far larger part in Trump’s world than in Xi’s should not be forgotten, however. Least of all by people who think of themselves as liberal or progressive.

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It’s rather sickening to watch self-described liberals embrace China as a responsible power. The headline on the cover of this week’s Economist, which I now read solely to find out what is not the case, is “China: the global grown-up.” The Washington Post purports to explain “Why China will be able to sell itself as the last liberal great power.” These articles, besides being wrong, have the distinction of following the line set by Beijing itself: “China may lead globalization movement,” says propaganda outlet CCTV.

How one can argue that a Communist oligarchy that practices mercantilism and industrial and diplomatic espionage, builds islands in contravention of international law, disappears lawyers and writers critical of the regime, feeds its people a steady diet of ethno-nationalist propaganda, threatens America’s allies, enables the North Korean psycho-state, recently sailed its aircraft carrier through the Taiwan Strait, massively censors the Internet, and has some of the worst air pollution in the world is “liberal” in any sense of the term is beyond me. Ironic, isn’t it, that the same press that examines every utterance of Donald Trump with Talmudic scrutiny is utterly credulous when Chinese leader Xi Jinping, who is quite self-consciously modeling himself after Mao Zedong, tells the elite assembled at Davos that he will defend free trade and—I had to laugh—immigration. How many Syrian refugees are there in China?

Credit to Xi, though, for putting one over on self-described globalists and others so eager to embrace foreign critics of Donald Trump that they are more than happy to check their belief in human rights at the door. It ought to be obvious that China’s commitment to liberalism does not exist; Xi’s rhetoric is a veneer overlaying the deeply illiberal principles that animate his regime. And that regime, it seems to me, is on the defensive for the first time in 20 years. Surprised like so many at Trump’s victory, Xi understands the danger a nationalist and protectionist America poses to Chinese stability. America’s trade deficit fuels the economic growth that (barely) contains Chinese dissent. So his appeal to the Davos crowd was defensive, an attempt to rally favor among the men and women who have benefited personally from the economic arrangements of the post-Cold War era. It worked.

Makes you wonder, though. If China is invested so heavily in the status quo, perhaps Donald Trump has something of a point when he says that that status quo hasn’t benefited the average American. I know this isn’t a zero-sum world. But Xi seems to think it is, and so does Trump, and so do the millions of U.S. voters who feel that international trade agreements privilege Chinese oligarchs over American workers. A world in which the Chinese autocracy is fat and happy is not exactly a world conducive to liberty, at least not to the traditional liberty of non-dominated peoples. The Economist might have another definition in mind.

Reading the gushing coverage of this dictator’s turgid and clichéd speech, I can’t help thinking of the last time America’s liberal elite went gaga over China. “One-party autocracy certainly has its drawbacks,” Tom Friedman wrote in 2009. “But when it is led by a reasonably enlightened group of people, as China is today, it can also have great advantages.” Chief among those advantages, according to Friedman, is the Chinese Politburo’s ability to “just impose the politically difficult but critically important policies needed to move a society forward in the 21st century.” Spoken like a true apparatchik. Six months later, on Meet the Press, Friedman confessed his fantasy: “What if we could just be China for a day?”

It’s a confusing world. Many are puzzled at the international aspect of the new nationalism, the collaboration and commonalities between nation-state populists across North America and Europe. I’m not puzzled, because the nation-state populists are reacting against elites who are internationalized as well. The Frenchman and American applauding Xi at Davos have more in common with each other than they do the mass of their countrymen, especially those who live outside the major metropolitan areas. I think they share a common understanding of liberalism as well. They take it to mean the system of privileges and prerogatives that enriches and empowers meritocratic knowledge-workers like themselves. They are therefore more sympathetic to the world Xi Jinping wants to preserve than the world Donald Trump wants to create. That democracy or self-rule plays a far larger part in Trump’s world than in Xi’s should not be forgotten, however. Least of all by people who think of themselves as liberal or progressive.