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Trump, Tariffs and How to Start a War

The best way to deal with Donald Trump, especially if you are a foreign government negotiating trade issues, is to give him a little win. It doesn’t have to be big and important; he’s mainly interested in declaring a triumph, and he’ll supply the hot air to inflate your little concession into an allegedly major defeat free of charge. Just remember to look crest-fallen, and you’re home and dry.

Thus, for example, Trump’s recent ‘triumph’ over Mexico. He threatens escalating tariffs against Mexico, the Mexicans cave in after ten days, and the border problem is solved (until the next time he needs it). Only the nerds notice that the Mexican ‘concessions’ are almost all actions that Mexico had already promised to take in quiet, orderly discussions with the United States between December and March.

The Canadians did even better when renegotiating the North American Free Trade Agreement (NAFTA). Trump called it the “the worst deal ever signed,” but several clauses in the old treaty that Ottawa disliked were dropped. The only Canadian concession was to give U.S. dairy producers access to 10% of the Canadian milk market (that’s just 3 million people) – if they can persuade those Canadians to buy their bovine growth hormone-treated milk.

A very small price to pay, but nobody in Canada was so foolish as to crow out loud that they had seen the Americans off. The Canadian negotiators looked suitably hangdog and defeated, and Trump claimed the credit for a “great deal” and a “historic transaction”. Game, set and match to Ottawa.

And so to the grand drama of Trump’s tariff war with China. This one ought to be a no-brainer, because China is in an extremely vulnerable position. Its exports to America are worth almost three times as much as US exports to China, so it really cannot afford to lose the U.S. market. Chinese President Xi Jinping should just give Trump enough to make him happy – he’s easily pleased – and move on to the next problem.

To the extent that Donald Trump calculates his moves beforehand, this would have been his calculation, and it is logically correct. But it didn’t work out that way: after a year of escalation and counter-escalation, the two countries are nearing the point where they will have imposed 25% tariffs on all of each other’s exports. What went wrong?

Trump issued his usual threats and was the first to escalate at every step of the dance, but if the Mexicans and the Canadians can work around his histrionics, why can’t the Chinese?

Maybe it’s just pride: Xi simply can’t abide the vision of Trump capering with joy as he celebrates his victory over the Chinese. Or maybe it’s fear: letting Trump have a victory (and a real one, this time) would so humiliate Xi in the eyes of his own colleagues and rivals that his own position would be in danger.

It’s probably the latter. The negotiations seemed to be going well, with Trump predicting an “epic” deal and praising his dear friend Xi. Then suddenly in early May the White House complained that China was trying to re-negotiate points previously agreed, and the whole thing fell apart. It feels like Xi lost an argument at home – which would imply that he is considerably less secure in power than everybody assumed.

In either case, Xi is making a big mistake. The Chinese economy is not doing well. Factory output is declining, and new car sales fell last year for the first time since 1990. China’s total debt, even on untrustworthy official figures, is nearing three times annual GDP, which is the level where panic usually sets in. In fact, it’s the level at which Japan’s three-decade economic depression began in 1991.

Strip out all the unproductive investment and creative accountancy, and Chinese GDP grew last year by less than 2%. Employment is stagnant, retail sales are falling, the stock market dropped by a quarter last year. This is not an economy in good shape to withstand a prolonged trade war.

The great fear of the Chinese Communist Party is that people will turn against the regime if the economy stalls and living standards stop rising. They certainly don’t love the regime. Why else would they obey it? This theory may be tested to destruction in the next few years.

So if Xi is not free to do a trade deal with the US and the Chinese economy tanks, what must he do to save Communist rule and his own power? He will need a foreign war, or at least the threat of one, in order to get nationalism on his side. Not war with the United States, of course. That would be crazy. But Taiwan would do nicely.

And this is one that you really can’t blame on Trump.
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To shorten to 675 words, omit paragraphs 3 and 4. (“The Canadians…Ottawa”)

Gwynne Dyer’s new book is ‘Growing Pains: The Future of Democracy (and Work)’.

Xinjiang – The Silence of the Muslims

Muslim governments were not silent when Burma murdered thousands of Rohingya, its Muslim minority, and expelled 700,000 of them across the border into Bangladesh. They were unanimous in their anger when the Trump administration moved the US embassy in Israel from Tel Aviv to Jerusalem. But they are almost silent on China’s attempt to suppress Islam in its far western province, Xinjiang.

It is the most brazen frontal assault on Muslims in modern history. Up to a million Chinese citizens have been sent to concentration camps in Xinjiang for the non-crime of being Muslim. They are also guilty of the non-crime of being a ten-million-strong ethnic minority, mostly Uighurs but including a million and a half Kazakhs, who do not feel sufficiently ‘Chinese’, but Islam is the focus of the state’s anger.

And in the face of this repression, the 49 Muslim-majority countries of the world have said almost nothing. Malaysia refused to send a dozen Uighur refugees back to China last year, four members of Kuwait’s parliament made a public protest in January, and Turkey loudly condemned China’s behaviour last month, but the other 46 governments have assiduously avoided the issue. It is very strange.

When Turkey finally did cut loose, foreign ministry spokesman Hami Aksoy said: “It is no longer a secret that more than a million Uighur Turks exposed to arbitrary arrests are subjected to torture and political brainwashing” in Chinese prisons….“The reintroduction of concentration camps in the 21st century and the systematic assimilation policy of Chinese authorities against the Uighur Turks is a great embarrassment for humanity.”

But even then, other Muslim countries remained silent. With the honourable exception of Al-Jazeera, the issue is rarely even mentioned in the Arab media, and popular awareness of what is happening is minimal in big Muslim countries like Iran, Pakistan and Indonesia. Why?

It’s true that the mass repression of the Uighurs and other Muslims in China only became known abroad in the past year, although it was already state policy at least two years ago.

It’s true, too, that a lot of the evidence is circumstantial. While there are plenty of first-person reports of the brutal treatment of the Uighurs, for example, the estimates of how many are actually imprisoned – “up to a million”, which would be one-tenth of all the Muslims in Xinjiang – are really estimates of how many the camps could hold, based on satellite observations of their size.

China denies both the scale and the purpose of the repression. These camps, it says, are ‘vocational training centres’ that tackle ‘extremism’ through ‘thought transformation’ (what used to be called ‘brainwashing’, an old political tradition in Communist China).

The detainees are held indefinitely – there are no formal charges or sentences, but hardly anybody has been released in the past couple of years – and are allegedly volunteers. They are ‘trainees’, said the top Chinese official in Xinjiang, Shohrat Zakir, last October, who are grateful for the opportunity to “reflect on their mistakes.”

Shohrat Zakir is obviously a Muslim name: as always, there are collaborators and careerists among the oppressed. But it is a classic late colonial situation, with a Communist twist.

The population of Xinjiang was over 90% Muslim and Turkic-speaking when the new Communist regime in China reconquered the region in 1949. Beijing’s original solution, as in Tibet to the south, was to drown the native population in Han Chinese immigrants: Muslims are now only 45% of the population.

When the inevitable push-back came – anti-Chinese race riots and some terrorist attacks – the Chinese regime responded with intense surveillance and repression of the native population. Part of the package was an attempt to curb Islamic observance and the use of the local Turkic language. And when that wasn’t producing the desired result, Beijing began expanding the ‘re-education centres’ that now hold up to a tenth of the Muslim population.

There is nothing surprising in all this. Assimilation to the Han Chinese norm was the policy of all Chinese governments even before the Communist takeover. What is surprising is the response – or rather, the lack of response – of Muslim governments elsewhere.

Why are they silent? Mainly because China is lavishing loans and grants on them: $20 billion in loans to Arab countries, a rumoured $6 billion to Pakistan, even more to the nearby Muslim countries of Central Asia ($27 billion in joint industrial projects in Kazakhstan alone). They need the money, so they shut up. So do their tame media.

When the de facto dictator of Saudi Arabia, Prince Mohammed bin Salman, visited
China recently, he endorsed China’s right to take “anti-terrorism” and “de-extremism” measures in Xinjiang. Of course, he needs China’s support in fighting off the accusations that he ordered the murder of Jamal Khashoggi even more than he needs the money.

Xinjiang’s Muslims have been abandoned by the ‘umma’, the world community of Muslims. They are on their own, and they are suffering.

To shorten to 725 words, omit paragraphs 9, 10 and 15. (“The detainees…twist”; and “When…money”)

Gwynne Dyer’s new book is ‘Growing Pains: The Future of Democracy (and Work)’.

Target: Taiwan

3 January 2019

“Independence for Taiwan would only bring profound disaster to Taiwan,” said China’s President Xi Jinping in Beijing on Wednesday, and he ought to know. He is the one who would make sure the disaster happened.

Speaking on the 40th anniversary of US diplomatic recognition of the Chinese People’s Republic, Xi said that Taiwan was “sacred territory” for Beijing. He would never tolerate “separatist activities” there: “We make no promise to renounce the use of force and reserve the option of taking all necessary means.”

Well now, that would be exciting, wouldn’t it? Start with Chinese air and missile strikes on Taiwan, presumably reciprocated by the Taiwanese forces. Probably no nukes, although China does have them, but the first major sea battle since the Second World War, followed by a Chinese assault landing on Taiwan involving several hundred thousand troops. Quite a lot of death and destruction, in fact.

No? That’s not what he meant? Okay, then, what did Xi mean by “all necessary means”? Harsh words and a trade embargo? Then why not say so? Is the Trump thing catching?

There is a peculiar ambiguity to Beijing’s official statements on Taiwan. On the one hand, nobody in the Communist regime is in a great rush to gather Taiwan back into the fold. It will happen eventually, they believe, and they can wait.

On the other hand, the regime’s credibility (such as it is) comes from only two sources: its nationalist posturing, and its ability to deliver rising living standards. With the latter asset rapidly depreciating – the Chinese economy is heading south – the nationalism becomes more important, so a bit of chest-beating is inevitable.

Many people will therefore discount Xi’s words as mere rhetoric that the Chinese Communist leader was obliged to use on a significant anniversary, but not a real threat to invade. After all, the deal made 40 years ago pretty much ruled out the use of force.

The US agreed in 1979 that there is only one China, and that it includes Taiwan. There just happened to be two rival Chinese governments at the time: the Communist one in Beijing that won the civil war in 1949 and has controlled mainland China ever since, and the previous Nationalist government that retreated to the island of Taiwan when it lost the war.

Both of these governments agree that there is only one China. In practice, the one in Taipei can never regain control of the mainland, but it claims to be the legitimate government of China, not of Taiwan. Almost everybody else, including the United States, agrees that there is only ‘one China’ and recognises the Communist regime in Beijing as legitimate.

The 1979 deal assumed that this conflict would be resolved peacefully at some unspecified future time, and Beijing made some helpful comments about how Taiwan could enjoy a special status if it reunited with the motherland: democracy, a free press, the rule of law – the same promises made to Hong Kong when Britain returned it to China in 1997. Then everybody settled down to wait for time to pass and the generations to roll over.

Beijing assumed that the Taiwanese would eventually see the light and rejoin the mainland. The Taiwanese assumed that Communist rule on the mainland would eventually either mellow or just collapse. Either way, we’ll all just get on with our lives in the meantime. It was a very sensible, moderate deal – but those assumptions proved to be wrong.

Communist rule in China has not collapsed, and Xi is the most powerful and authoritarian leader since Mao. Taiwan has not grown resigned to reunion with the ‘motherland’; on the contrary, a separatist Taiwanese nationalism has grown stronger with the years. At the moment, in fact, the party in power in Taipei is separatist, though it is careful not to say so explicitly.

It can never happen: China has 1.3 billion people, Taiwan has 23 million. Taiwan’s President Tsai Ing-wen takes positions that appeal to the local nationalist/separatists, but she’s never going to declare independence. Xi Jin-ping threatens bloody murder if she declares independence, but he knows that she will never actually do that.

What Xi is really trying to do with his fierce talk is to reinforce the anxiety many Taiwan voters feel about defying China too openly. They don’t want reunification, but they do want a quiet life. And his strategy is working: Tsai’s party lost badly in the recent local elections, and may be voted out of power in the national elections next year.

It’s just a game, most of the time, and each player plays his or her allotted role safe in the knowledge that the script has not changed for decades. The status quo is more secure than it looks. But let just one player deviate from the script, and everybody would suddenly be in a new and very frightening world.

It probably won’t happen, but it could.
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To shorten to 725 words, omit paragraphs 3 and 4. (“Well…catching”)

Climate: Some Progress in Poland

Global warming is physics and chemistry, and you can’t negotiate with science for more time to solve the problem: more emissions mean a hotter planet. Dealing with the problem, however, requires an international negotiation involving almost 200 countries. In big gatherings of that sort, the convoy always moves at the speed of the slowest ships.

That’s why the reporting on the UN Climate Change Conference in Poland that ended on Saturday, two days later than planned, has been so downbeat. It didn’t produce bold new commitments to cut greenhouse gas emissions. It saw the usual attempts by the biggest fossil fuel producers, the United States, Russia and Saudi Arabia, to stall the process. And in the end it just produced a ‘rulebook’.

But that’s all it was supposed to do, and it’s not ‘just’ a rulebook. The great breakthrough at the Paris conference in Paris three years ago saw every country finally agree to adopt a plan for emission reductions, but the Paris accord was a mere sketch, only 27 pages long.

Fleshing it out – what the plans should cover, how often they should be updated, how countries should measure and report their emissions, how much leeway should be given to poor countries with bad data – was left until later. Later is now, and in the end they did come up with a 256-page rulebook that fills in most of those blanks.

“We have a system of transparency, we have a system of reporting, we have rules to measure our emissions, we have a system to measure the impacts of our policies compared to what science recommends,” said the European Union’s Climate Commissioner, Miguel Arias Canete. It was an excruciating process, and it still leaves a few things out, but it settled a thousand details about how the Paris deal will really work.

Oh, and one big thing. China abandoned its claim that as a ‘developing country’ it should not be bound by the same rules as rich countries like the United States. There will only be one set of rules for both rich and poor countries, although the really poor ones will get a lot of financial and technical help in meeting their commitments.

This year’s conference dealt with the details at ministerial level. Next year UN Secretary-General Antonio Guterres will host a summit of the biggest emitters to lay the groundwork for the key 2020 meeting. That’s when countries will report if they have kept their 2015 promises on emissions cuts, and hopefully promise much bigger cuts for the next five years.

The rise of populist nationalists like Donald Trump and Brazil’s Jair Bolsonaro, both climate change deniers, will make future negotiations even harder. It’s all moving far too slowly, but the human factor keeps getting in the way. For example, Bolsonaro wants Brazil to get extra carbon credits for protecting the Amazonian rain-forest, even as he plans to carve the forest up with big new roads and cut a lot of it down.

The Paris deal is important, but it has come far too late to stop the average global temperature from rising to the never-exceed target of +2 degrees Celsius that was adopted many years ago, let alone the lower target of +1.5 C that scientists now believe is necessary.

We are already at +1 C, and current promises of emission cuts will take us up past +3 C. At the moment emissions are still going up (by 3% this year). Even if countries make further major commitments to cut emissions in 2020, it’s hard to believe that we can avoid devastating heat waves, droughts, floods and sea-level rise, and a sharp fall in global food production.

So while we are cutting emissions, we also need to be working on ways to remove some of the carbon dioxide and other greenhouse gases we have already put into the atmosphere. Various ideas for doing that are being worked on, but they will probably become available on a large scale too late to keep the temperature rise below +2 C.

So geo-engineering – direct intervention in the atmosphere to hold the temperature down while we work on getting emissions down – will probably be needed as well. Nobody really wants to do ‘solar radiation management’, but cutting the amount of sunlight reaching the planet’s surface by just a small amount is technically feasible. It could temporarily halt the warming and give us the extra time we are probably going to need.

We are getting into very deep water here, but we may have no other options. If we had started cutting our emissions 20 years ago (when we already knew where they would eventually take us), such drastic measures would not be necessary. But that’s not the human way, and so we’ll have to take the risks or pay the price.

To shorten to 700 words, omit paragraphs 6 and 8. (“Oh…emissions”; and “The rise…down”)