Posts Tagged China
WHO WILL DONALD TRUMP HAND-OFF THE MOST DANGEROUS PROBLEM CONFRONTING THE WORLD TODAY? NORTH KOREA! WILL IT BE R. C. McMASTER, OR STEVE BANNON?
North Korea’s nuclear arms have advanced beyond the primitive state. Supreme Leader Kim Jong-Un now has real nukes, and he is in the process of improving the range and accuracy of his missiles, while continuing to miniaturize the warheads to extend the range. And then, he will be ready to build an arsenal!
China does not want to place anymore political pressure on its failed neighbor; because, that would cause millions of destitute North Koreans to stream across its border, and Beijing would then have to care for the refugees. Additionally, an invasion would also set-up a potentially disastrous confrontation with the United States.
In a webcast discussion, between Robert Litwak, Vice President at the Wilson Center, and one of the world’s foremost authorities on North Korea, and NY Times National Security Correspondent David Sanger, the topic was “Preventing North Korea’s Nuclear Break-Out.” The proximity of U. S. Forces, both in South Korea and nearby Japan, along with our allies, turns a potential confrontation with China into a powder keg.
Mr. Litwak suggested, during the discussion, that the likely options—all bad ones—are: “bomb, negotiate, or acquiesce… “ Bombing, which would usually be followed by a ground attack, would merely anger China, and would draw them into the war. Beijing certainly doesn’t want the U. S. Military just across their border, nor would we want theirs! That would leave two intolerable situations: facing an unlimited Chinese force, virtually in their backyard; or going nuclear. Either way, we would not want to see that scenario play out!
Acquiescence is also a terrible option. North Korea’s Supreme Leader, 33 year-old Kim Jong-Un runs a dynastic dictatorship and, judging by the living conditions that his people must endure, he seems to care little about them.
So, if we merely allow Mr. Kim to maintain the status quo, he will surely begin considering his next move—going even more bellicose. The North Korean “Leader” is unstable, and cannot be trusted. And don’t count on regime change; because, Kim has already eliminated the prior military leaders, and replaced them with his generals.
This leaves us with the only one acceptable option: to negotiate some sort of Iran-like Nuclear Agreement—along with, say, South Korea, Japan, China and Russia. Similar to the Iran Deal, North Korea must be required to: dismantle its nuclear program and ship, say 95% of the plutonium and centrifuges out of the country, perhaps to China, before the negotiations even begin.
There must be a slight easing of restrictions initially, mostly for humanitarian purposes, and the IAEA must be able to make unannounced inspections. The negotiating team, and perhaps others, must provide North Korea with increasingly necessary supplies. The DMZ, between North and South Korea, should be widened, from two and a-half. to 20 miles. At least, that will eliminate offensive broadcasts and sniper fire, back and forth, between the two korean armies.
The one immediate question that comes to mind is: would Donald Trump agree to an Agreement similar to the one that President Obama, and five other nations, entered into with Iran? So far, Trump has appeared to be intent on eliminating anything that Obama had accomplished. Yesterday, Secretary of State Rex Tellerson said that the U. S. might consider a pre-emptive attack on Pyongyang, rather than a retaliatory attack. That concerns me!
I believe that National Security Advisor, R. C. McMaster, and Secretary of Defense, James Mattis, might agree to the merits of a Nuclear Agreement, similar to the one with Iran. Secretary Tellerson, however, the former CEO of Exxon-Mobil, is a veritable novice when it comes to National Security. So far, Donald Trump has been more willing to hand-off the most important problems to the loyalists among his Regime Staff. Steve Bannon? OMG!
China’s economic growth, over the past 35 years, has enabled its Economy, by measure of the Gross Domestic Product, to rise to be second only to that of the U. S. Ironically, many of the other nations of East and Southeast Asia have also done so, by similarly educating the girls, as well as the boys. Educating females doubles the labor force and, as the economy grows, the Chinese People advance into higher pay-scale jobs. The larger workforce also enables country to move-up, into more-advance ed industries, as we as increases the Nation’; several standard-of-living.
China, like India, is held back, however, by its extremely large 1.35 billion population. Unfortunately, China has been slow to expand beyond its initial economic explosion. Currently, only 25% of Chinese workers are employed in the Industrial Sector, while the remaining 75% are still less-educated, and work mostly on small family farms, or repair and retail shops. China should hardly be considered a fully-developed economy.
During the early years, following the Chinese Communist Revolution, babies were encouraged, and the birth rate per woman of child-bearing age rose to around six. In 1956, Premier Zhou Enlai encouraged women to voluntarily curb the number of babies they had, but that didn’t work. So finally, Chairman Deng Xiaoping established a One-Child Policy in 1980, which carried harsh penalties for non-compliance. Over time, the Chinese birth rate per woman declined from 4.4 to 1.64, which is now far too low to sustain a stable work force.
Such Social Engineering has been a considerable hindrance in maintaining a reliable labor pool, where one generation replaces another. Currently, only one-quarter of China’s population has high-paying jobs in the cities, while the large majority of Chinese are still living and toiling in small, inefficient jobs, and barely existing above subsistence levels. China also has some questionable policies, which seem intended to keep city dwellers tied to their home provinces. (But, that is beyond the scope of this post.)
There are three main problems, that I see, with the One-Child Policy: it has disrupted the natural rotation of generations into the labor pool, as a large portion of the current workforce is approaching retirement; although there were multiple exceptions to the One-Child Policy, they were not disseminated by regional and local officials; and parts of the policy—especially the Forced-Abortions—have caused anger and frustration on the part of many young couples.
Just last year, the Telegraph (UK) newspaper posted the linked article about a Chinese woman, who was eight-months pregnant, being forced by government officials to have an abortion, in order to save her husband’s job: http://www.telegraph.co.uk/women/womens-life/11858723/China-Forced-abortion-late-term-to-avoid-one-child-policy.html.
Additionally, consider the effect that forced-abortions, mostly involving girls, has had on the boy-girl ratio. When the babies born today reach age 20, consider the potential side-effects of many frustrated men looking for wives.
Yes, China has pulled-off an economic miracle; but, it has also created a social disaster. Educate the girls: yes, by all means! But, leave the social engineering to Mother Nature. Here’s my rough outline of what China needs to do: build infrastructure out to the rural areas, including lower and medium-level factories; emphasize consumer spending in order to increase domestic consumption; totally eliminate the One-Child Policy: and pay bonuses to move young women, from one region to another, in order to massage the deficiency of women in some regions–or even consider recruiting some from other countries, such as Malaysia, Singapore or Taiwan. China needs to clean-up its mess!
THERE SHOULD BE A TRANS-PACIFIC SECURITY AND DEFENSE ORGANIZATION, PATTERNED ON NATO, BUT MODIFIED FOR THE REGION!
During World War II, the Axis Powers—Japan and Nazi Germany—rolled-over their neighbors in Asia and Europe, respectively. At first, America did not join the War, due to its Isolationist Policies. Afterward, the North Atlantic Treaty Organization was formed—including Europe and North America—with a stated goal to: “…safeguard the freedom and security of the member nations, through political and military means.”
China and Russia—the two current powers in their respective regions—have each stepped-up their aggressive behavior against their neighbors. The Asia-Pacific Region does not have an equivalent security treaty, similar to NATO. At the same time, with the splintering of the European Union, and the uncertainty over what a Trump Presidency might bring, the Atlantic Alliance needs to be re-invigorated, as it is showing signs of diminishing strength.
Neither of the two Socialist Leaders—Xi Jinping, of China, or Vladimir Putin, of Russia—are particularly friendly toward one another. But given their common political philosophy, each seems to believer in the old military strategy: Divide and Conquer! That’s why both nations are either befriending or intimidating their neighbors, one-by-one, as each pursues it particular agenda.
Let’s look at NATO first. Once the United Kingdom signaled its intention to leave the European Union last June, heads began to turn, questioning which nation(s) would be next? And although the E. U. is primarily a trade union, its potentially diminishing membership might cause some–including Russia–to question Europe’s cohesiveness.
The Southeast Asian Treaty Organization was formed in the mid-1950s; however, it lacked wide regional participation, and it accomplished very little. And so, SEATO was disbanded in 1976. There still needs to be some form of security organization, however, in the Pacific Region. And similar to NATO, Canada and the U. S. should be included.
It’s still too early to consider how a Donald Trump Administration might change the U. S. participation in the various international organizations—UN, WHO, IMF, World Bank, NATO, etc. Hopefully, America will continue to participate, and to contribute according to our level of ability. Since the Republican Party seems to favor International Trade, such as the TPP: hopefully, they will convince Donald Trump to remain in NATO, and to help establish a counterpart organization in the Pacific.
NOTE: The linked article, from “Foreign Policy”, by James Stavridis, is provided because it makes a good case for our continued support for NATO. Admiral Stavridis is the Dean of the Fletcher School of Law and Diplomacy, Tufts University, and had served as the NATO Supreme Allied Commander. The article is linked as follows: http://fletcher.tufts.edu/News-and-Media/2016/11/10/Dean-Stavridis-Foreign-Policy-Audit-NATO.
Last March, Donald Trump had suggested that we should bring our troops back from Japan and South Korea if those countries don’t pay more for our presence there. Then, he went on to suggest that we should help those two nations develop nuclear weapons themselves. Now, does Trump have a clue as to what he is talking about? Probably not! The NY Times article, describing his comments, is linked, as follows: http://www.nytimes.com/2016/03/29/world/asia/donald-trump-arms-race.html?_r=0.
Consider the following: Japan and South Korea already help fund our Military Presence in their countries, to the tune of $2 billion and $885 million, respectively; it is vital to the U. S. Defense Strategy to have our forces in close proximity to potential global hot spots, like China and Russia; and nuclear arming of two more nations in East Asia is more Cold War Thinking than pursuant to our current Nonproliferation Strategy.
The Korean Peninsula juts out of China’s eastern land area, and North Korea, the Hermit Kingdom, which already has primitive nuclear weapons, is ruled by the lunatic Kim Jong-Un. So, arming Japan and/or South Korea would merely be providing the spark that could ignite the powder keg that already exists on the Peninsula. Additionally, neither of our two allies there want nukes, and Japan doesn’t even have a Military, just a Self-Defense Force. And, why would we want to provoke China in its backyard, while causing concerns among our many Asian allies?
Last Monday evening, at the First Presidential Debate, Donald Trump even displayed more of his ignorance about National Security, when he said: “China should solve that problem for us. China should go into North Korea. China is totally powerful as it relates to North Korea.” The link, from a Washington Post article, is as follows: https://www.washingtonpost.com/news/worldviews/wp/2016/09/27/did-trump-really-just-suggest-that-china-should-invade-north-korea/?tid=hybrid_collaborative_1_na.
That brainstorm appears to have been conceived in a vacuum. Doesn’t Trump believe that past American Presidents, as well as China and other neighboring countries, have considered possible solutions before? Was Donald Trump really suggesting that two of the world’s nuclear-armed superpowers confront each other on the Korean Peninsula?
China prefers having North Korea serve as a buffer between it and a South Korea, which is backed by an American presence of some 28,000 troops. At the same time, China doesn’t want North Korea to implode; and thus, causing tens of thousands of starving Koreans to flood across its border. Perhaps, Donald Trump doesn’t understand this, because he doesn’t read—he just tweets.
Currently, the two Koreas go about their daily business, just separated by a de facto border—the Demilitarized Zone—which is just two and a half miles (four km.) wide. If China were to take over the North, the U. S. would then have to move its forces up to the DMZ, and reinforce them considerably. And, let’s not assume that Russian President Vladimir Putin wouldn’t accelerate his aggressive objectives in Europe while the U. S. is distracted in Asia.
NO, DONALD, YOU CERTAINLY ARE NOT PREPARED TO BE PRESIDENT!
WHEN CHINA PROVIDES FINANCIAL ASSISTANCE, IT’S USUALLY IN ITS OWN BEST INTEREST. HERE ARE TWO EXAMPLES FROM THE AMERICAS.
China’s Gross Domestic Product, the measure of all goods and services combined, has dropped from 10.3% in 2010, to 7.6% today. That GDP is still much higher than most industrialized nations, however, the fact that the world’s second-largest economy has slumped by 3.3% has created serious concern for the whole global economy.
In my last two blog posts (linked below), I discussed some of the problems that China has from a macro-economic—or government—standpoint. This post, however, approaches how Chinese corporations do business, citing two dismal failures—one in the Caribbean and the other in South America. They are discussed in the linked article from the Miami Herald: http://www.miamiherald.com/news/nation-world/world/article42280230.html.
Several years ago, a Chinese corporation began construction on what was to be the ultra-chic Bahia Maria Resort on a prime beachfront property in Nassau, Bahamas. The $3.5 billion project was designed to build four world-class luxury hotels, and include 40 restaurants. In fact, it was expected to open last March. So far, it is 97% complete; however, it now has a chain-linked fence around it, and the 2,000 employees have been laid-off. The developer is reportedly to currently be deciding between filing for bankruptcy or hoping for a “white knight” to buy the resort project for (perhaps) fifty cents on the dollar.
Local Nassau business people are concerned that, the longer that the project remains unfinished and unmaintained, it will fall further into disrepair, and become an even bigger blight on the local prime beachfront area. Dionisio D’Aguilar, a former member of the Bahia Mar Board said that: “Everybody is finding out what we already knew: That dealing with a Chinese bank that is state-owned, government-controlled, is not an easy undertaking.”
Over in South America, the Hong Kong Nicaragua Canal Development Group was awarded the rights to construct and develop a wider and deeper alternative to the Panama Canal, with an agreement to manage it for 50 years. The Chairman of the HKND, Mr. Wang Jing runs a number of different corporations; however, it appears that his main focus is the (Beijing) Xinwei Telecom Enterprise Group. Several government-owned Chinese Corporations are among the project’s partners.
Although the funding for the Canal Project, as well as construction, was to have begun in 2015, neither have happened, as I write this in early 2016. The whole $50 billion Nicaragua Canal Project was kept hush-hush, and there were a number of very serious environmental concerns expressed. But, the President of Nicaragua, Daniel Ortega, generally doesn’t ask anyone for permission.
Additionally, due to the market gyrations in the Chinese stock market back in August, Mr. Wang’s Net Worth appears to have dropped, from $10 billion to $3 billion, and maybe even more over the past couple of weeks. Currently, this canal project also seems dead in the water, perhaps for lack of funding, as well as lack of conviction. Its important to know that the development group was only formed in 2012.
Although the government of China claims to have no involvement with the operation and ownership of most Chinese corporations, it seems that it has created the environment in which many have been formed. Most Chinese overseas projects appear to be government-financed, and the key owners seem to have close ties to the Elites within the Communist Central Party. Without government connections, how else would someone like Mr. Wang have control of some twenty different corporations, and within so many different industries?
Now, perhaps with the millions of dollars that were floating around in China, when these projects were concocted, basic economic principals and common sense were not considered. But, here are a few questions that I would like to ask:
Nassau Bahia Mar Resort: Was any consideration given to the weak economies in the assumed target tourist market, Europe and the Americas? How about the extremely high construction costs in the Bahamas, since all building supplies and materials must be shipped-in from the Mainland? How about the impact of water and sewage requirements? And, wouldn’t the lender(s) have inquired as to what the alternative repayment plans were, if the project wasn’t completed properly—and on time?
Nicaragua Canal Project: Since construction hadn’t begun, there is no eulogy to give; but, had consideration been given regarding: the displacement of whole villages; building in the jungles; the expense of carting removed soil away or extreme environmental problems? Lastly, was an analysis performed as to why building a 173 mile (245 km) canal would be cost-effective, when the nearby and soon-to-be widened and deepened Panama Canal runs just 48 miles (78 km)? And that competitor has been in successful operation for 100 years.
NOTE: These are the last two blog posts, which discuss China’s situation from a macro-economic—or government—perspective:
In my last post, I raised the question of whether China is truly worthy of being considered a major economy, and can it be trusted. That post is linked as follows: https://thetruthoncommonsense.com/2016/01/05/is-china-truly-in-the-big-leagues-and-can-it-be-trusted/. Frankly, I do believe that it cannot be trusted on many fronts; but, it seems like its primary problem—when it comes to the financial turbulence that it has now created twice in the past five months—is that its financial leadership is highly incompetent. Keep in mind, however, that China is still a nascent economy, having only been thrust into the major ranks quite recently.
Last week, the U. S. stock market dropped between six percent (Dow Jones Industrial Average and the Standard and Poor’s 500) and with the tech-heavy NASDAQ falling by seven percent. The technology sector has been one of the best-performing sectors over the past several years, and “Growth” companies tend to be more volatile, as compared to the more mature “Value” stocks. So, it’s only natural that a faster-growing sector could be targeted to drop more, perhaps due to profit-taking.
The slump in Europe was comparatively similar; however, the Asian markets were hurt even more, following China’s market decline of 11.6%. Other developing markets and economies that are heavily dependent on the export of commodities (i.e., oil, copper, soy beans, etc.) were especially damaged.
A key problem with China is that the Party’s hierarchy, the Communist Central Party, controls literally everything, including: the monetary policy; the financial markets; the media; the birth rate; the military; many banks and corporations; and infrastructure projects. So, part of their incompetence is that the Party seeks control; but, oftentimes, it does so, based on its own agenda, rather than on market-based interests, or common sense.
China has recently ascended to a number of diplomatic and economic roles: a permanent member of the U. N. Security Council; the World Trade Organization; the Group of Twenty major economies and, most recently, its currency, the Renmimbi will become a “Reserve Currency”, on October 1. But, let’s not forget that its growth to become the second largest economy is, perhaps, mostly due to its 1.36 billion population.
Since last August, the Chinese Renmimbi has declined by five percent versus the U. S. Dollar. Was that China’s wrong-headed attempt to prop-up its economy, to devalue its currency rather than continue to provide jobs building infrastructure projects, and to diversify its economy–beyond low-paying jobs that are oriented toward export, rather than domestic consumption?
And no one—not even the Chinese people—believe the accuracy of any of the reports published by either China or even Chinese corporations. So why did we place so much trust in the foremost emerging Asian Tiger? Is that China’s fault?
We can regard China as a global financial power; however, we should also keep in mind that its economy is certainly not based on real-world market dynamics. Rather, it is a creation of the Communist Central Committee. Yes, China does import $2 trillion of goods—albeit mostly commodities—from abroad; however, that is only a small piece of the overall $60 trillion global economy.
Last August, global financial markets plummeted when China devalued its currency by two percent; but, they quickly bounced back. So, why did we fall into that same abyss once again? China’s Gross Domestic Product, the total value of goods and services produced, has been declining, from 10.6% in 2010, to the current 7.3%. Rut, remember that, when China began its economic boom, some two decades ago, it was starting from literally nothing. So, shouldn’t we have expected an eventual slow-down by now. Well, its here! So, why didn’t we see it coming?
Sure, China has the second largest economy, ranked by Gross Domestic Product, the primary measure of all economic activity within a country. That measure, however, is mostly due to the country’s 1.36 billion population. When qualitative measures are considered, such as Per Capita GDP and Average Annual Income, China ranks somewhat lower, than other, more advanced nations.
The International Monetary Fund had recently announced that the Chinese Renmimbi (RMB) would become a “Reserve Currency,” beginning on October 1, 2016. It will then join the U. S. Dollar, Euro, Japanese Yen and British Pound as “freely exchangeable” currencies. However, China had only recently stopped “pegging” the RMB (tying it) to the Dollar, and there have been numerous past occurrences of government interference with it’s trading in the open market. Can its stability be readily expected?
China has across-the-board problems—not just in its export-oriented markets and its currency—but also with its manipulation of the stock and bond markets. Additionally, examples of China’s dishonesty include: its cherry-picking of supposedly nationwide high school standardized test results from just Shanghai, its best-performing school district; it has enabled on-going disregard for established international copyright law with regard to intellectual property; and under-reporting past pollution results, just to name a few.
Admittedly, China has been made a permanent member of the UN Security Council, joined the World Trade Organization and the Group of 20 major economies. And, due to its economic achievements, it will have a larger role in both the IMF and the World Bank in the near future. But, due to its top-down economic manipulation, human rights violations and its deviant past actions, I maintain that it is still a House of Cards.
Although the government hierarchy speaks of democratic principals and market-based economics, truly everything is managed by the Communist Central Committee, the Party’s governing body. For instance, the One-Child Policy, which limited families (with few exceptions) to have just one child; however, that will be modified this year. But, recent surveys suggest that many Chinese women of child-bearing age have little interest in having another child. Furthermore, it would be some twenty years before today’s newborns will be ready to join the workforce.
That instance of Social Engineering is truly one that has backfired on the CCP. Currently, China’s workforce is aging rapidly, and the question is: where will the new workers come from? The government-manipulated economy has never diversified toward more domestic consumption and a higher-end, professional workforce. Such an economy might have enticed today’s older workers to work longer; but, now that appears to be too late.
This is a dilemma that authoritarian socialist governments have been failing to recognize for the better part of the past century. But will they ever understand the risks at hand? And, in the case of the Chinese government, it seems to believe that it is superior to the invisible hand of the marketplace and, over the past 35 years, even to nature.
NOTE: There are a number of posts on this blog regarding China’s many and varied problems. Just click on the China tag on the right and a list of those posts will appear.