Tag: China

The Chinese Know

The recent article in Global Times makes it pretty clear that both the Chinese and the Russians are very well aware of who was responsible for the assassination attempt on the Slovak Prime Minister:

The prime minister is known for his ability to reinvent his political career in the face of major setbacks. Last October, Fico and his Smer-SD party won Slovakia’s parliamentary election after campaigning on a pro-Russian and anti-American message, marking the start of his fourth term as Slovakia’s prime minister. He has consistently advocated for peace between Russia and Ukraine, and promised to stop sending weapons to Ukraine, to block Kiev’s potential NATO membership and to oppose sanctions on Russia. When discussing the situation in Ukraine, he emphasized, “We share the same opinion with China on the impossibility of solving the conflict in Ukraine by military means and we support all meaningful peace plans that will not be phantasmagories but will be based on reality.” This stance positioned him outside the European mainstream. He has become the target of criticism by the opposition party and liberal media.

The assassination attempt against Fico sounds the alarm for increasing political violence in Europe. Russian President Vladimir Putin stated, “There can be no justification for this monstrous crime.” The chaos in European politics and society is worthy of serious consideration.

Whereas Ukraine was a proxy battleground between NATO and Russia, it increasingly appears that there will be multiple fronts in the increasingly open war between Clown World and the sovereign nations.

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The Empire’s Economic Death Spiral

Apparently the foreign elite ruling the imperial USA are under the impression that the only way out of its Ukrainian debacle is through. Unfortunately, this concept doesn’t work when the rapidly approaching object is not a cloud, but the ground:

The House passed a foreign aid package on Saturday as well as what’s called the REPO Act that will allow the Biden administration to confiscate billions of dollars’ worth of Russian assets sitting in U.S. banks and transfer them to Ukraine for reconstruction.

“By delivering urgently needed aid to Ukraine, the United States has reasserted itself as the leader of the free world and as a reliable partner to its allies,” said Rep. Ritchie Torres, D-N.Y. “The US has a singular obligation to help freedom fighters fight for their freedom, and nowhere more so than in Ukraine, whose self-defense against Putin’s aggression must prevail.”

The REPO Act, which would authorize Biden to confiscate the frozen Russian assets in U.S. banks and transfer them to a special fund for Ukraine, is part of the foreign aid package that was stalled for months in the House. More than $6 billion of the $300 billion in frozen Russian assets are sitting in U.S. banks. Most of the $300 billion are in Germany, France and Belgium.

On Wednesday, Speaker of the House Mike Johnson released the package which would include tens of billions of dollars in aid for Ukraine, Israel, and Taiwan.

McFaul, whose been lobbying for the REPO Act for months, clapped back at Caldwell’s assertion and said the use of Russian assets for Ukraine would send an important message to autocratic nations around the world. “There are those that say, ‘Well, this will hurt the dollar. It’s bad for our reputation.’ I have a pushback to that. I don’t want criminals investing in American Treasury bonds,” McFaul said.

Keep three things in mind here. First, Russia has a similar amount in European funds frozen that it will seize in return if the Russian funds are stolen, as well as considerably more foreign assets that can be easily nationalized. As with the previous sanctions, this act will strengthen the Russian economy at the expense of the European economies.

Second, China is already being sanctioned and is the second-largest holder of US Treasury bonds, at $800 billion. This is 40 percent lower than it was 11 years ago and is a 14-year low. This is one reason why the USA has been unable to export inflation the way it used to, and if China were to follow Russia’s lead in dumping the dollar entirely, US inflation would probably double from where it is today. Since the BRICSIA nations are already in the process of developing their own trading currency, this is a very high probability event within the next three years and will probably precede the opening of the Asian front.

And third, the central banks are, quite literally, criminal organizations, as are most of the large multinational corporations. If criminals weren’t investing in US Treasury bonds, no one would be. Furthermore, the seizure of foreign assets without full compensation would obviously be nothing less than theft by the U.S. Congress.

I suspect there may be some serious unintended consequences for the global banking system if the bill actually becomes a law and is translated into action. Because how can anyone possibly trust their financial assets to a banking system so easily suborned to a government’s whims?

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The Answer is “No”

It’s mildly amusing how the global media keeps trying to push the “conference on peace” that will be missing the only party whose opinion matters if peace is going to be obtained. But China isn’t having any of it, if you understand Chinese diplomacy-speak:

AFP: Yesterday German Chancellor Olaf Scholz and President Xi Jinping discussed the high-level conference on peace to be hosted by Switzerland in June, which will not be attended by Russia. Chancellor Scholz noted that China’s word carries weight in Russia. Can you elaborate on China’s expectation for the high-level conference in Switzerland? Is China urging Russia to attend the conference?

Lin Jian: During his meeting with German Chancellor Olaf Scholz yesterday, President Xi Jinping said China encourages and supports all efforts that are conducive to the peaceful resolution of the crisis, and supports the holding in due course of an international peace conference that is recognized by both Russia and Ukraine and ensures the equal participation of all parties and fair discussions on all peace plans. China will maintain close communication with all parties concerned, including Germany, on this matter. China believes that ultimately, any conflict will have to be resolved through diplomatic channels and political negotiation. On Ukraine, the only way out is to go back to the negotiation table. We’ve learned that the relevant conference is still under preparation and a lot of work remains to be done. China is ready to maintain communication with relevant parties. 

In other words, China will not support a one-sided conference being hosted by a non-neutral party, but it will support one that is genuinely neutral and acceptable to the two primary belligerents. If Switzerland still wants to play a role in peacemaking in the future, it has no choice but to stop taking sides and refrain from sanctioning anyone for anything.

This really isn’t that hard. Because it’s perfectly clear that none of the major powers are going to accept self-serving word games and contorted rationalizations as a substitute for genuine neutrality.

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What Leverage is That?

Clown World’s strategists appear to be increasingly deluded concerning the arts of the possible with regards to the NATO-Russian war:

The war is not trending toward a stable stalemate, but toward Ukraine’s eventual collapse.  Russia has corrected many of the problems that plagued its forces during the first year of fighting and adopted an attrition strategy that is gradually exhausting Ukraine’s forces, draining American military stocks, and sapping the West’s political resolve. Sanctions have not crippled Russia’s war effort, and the West cannot fix Ukraine’s acute manpower problems absent direct intervention in the war.  Ukraine’s best hope lies in a negotiated settlement that protects its security, minimizes the risks of renewed attacks or escalation, and promotes broader stability in Europe and the world.   

Skeptics counter that Russia has no incentive to make meaningful concessions in a war it is increasingly winning.  But this belief underestimates the gap between what Russia can accomplish through its own military efforts and what it needs to ensure its broader security and economic prosperity over the longer term.  Russia can probably achieve some of its war aims by force, including blocking Ukraine’s membership in NATO and capturing much of the territory it regards as historically and culturally Russian.  But Russia cannot conquer, let alone govern, the majority of Ukraine, nor can Russia secure itself against the ongoing threats of Ukrainian sabotage or potential NATO strikes absent a costly permanent military buildup that would undermine its civilian economy. Reducing the deep dependence on China created by the invasion will also sooner or later require Russia to seek some form of détente with the West.  

As a result, the United States has significant leverage for bringing Russia to the table and forging verifiable agreements to end the fighting.  

As Andrei Martyanov points out, this particular analyst is talking out of both sides of his mouth. If, as he correctly says, Ukraine is on an inevitable path toward collapse, then Russia obviously can conquer, and if it chooses, occupy the entirety of the terrain over which the Kremlin ruled for eight decades. It’s obvious that Putin has no desire to do so, but it’s equally obvious that he will do so if Clown World continues to use the poor Ukrainians as an increasingly battered sword against a resurgent Russia.

And while the Chinese alliance is important to Russia, it is not why Russia has survived the economic attack on it nor have the Chinese provided any substantial material military support to Russia. Russia is serving as China’s proxy on the military front, except that unlike NATO’s Ukrainian proxy, Russia doesn’t need any assistance because when it comes to military technology and expertise, it is the Russians who are the senior partner.

In fact, it is the alliance of Russian military technology and expertise with Chinese economic power and industrial capacity that indicates the high probability of Clown World’s eventual defeat. Throw in the massive quantities of natural resources in Russia and the other BRICS nations, and one would be tempted to declare the conflict as over before it even starts, were it not for the vagaries of history that render any such preliminary verdict foolish.

After all, who foresaw the withdrawal of the Turks from the gates of Vienna, or the sudden retreat of the Mongol hordes from Europe and Russia upon the unexpected death of the Khan? We don’t know if either Putin or Xi have competent successors selected and prepared to step up and complete their national missions, just as we don’t know how much longer the USA and the European nations can withstand the centrifugal demographics that have been inserted into their rapidly degenerating societies.

But it is clear that the current phase is quickly approaching its endgame. Whether that will be via a reasonable surrender and settlement or by a classic Zhukovian Manchurian mega-offensive cannot be known, except that to say that the longer the former is delayed, the more likely the latter becomes. Either way, the war will not end in Ukraine.

We are not approaching the end, only the end of the beginning.

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The Return of National Economics

While the Chinese have lower per capita income than US citizens do, the lack of debt and their median household wealth combined with their lower degree of income inequality means that the Chinese economy is much more economically stable than its US counterpart.

I’ll post more about this next week, but one of the reasons Western macroeconomic metrics don’t work to analyze the Chinese economy is because the Chinese are observably following the principles described by Richard Werner in his excellent Princes of the Yen, which chronicles the way Japan successfully maintained its centralized wartime economy to develop its economy and literally buy a significant percentage of the global assets from 1945 through 1990.

That relentless period of economic advancement came to an end in 1998 with the final triumph of the private Bank of Japan, which served as Clown World’s proxy, over the Okurasho, Japan’s Ministry of Finance, and the subsequent shift to the same sort of financialized unproductive economy featuring private credit creation that has systematically weakened the West for the last century.

As part of its policy of unrestricted warfare, China has methodically applied the lessons of Japan’s post-WWII economy and maintained control of its own credit creation, thereby boosting its productive capacity to historically unprecedented levels and providing it with the monetary resources to buy up foreign assets everywhere from Angola to the USA. By publicly breaking with Clown World in 2015, and setting up BRICS as an alternative to the various Clown World institutions, China is offering the rest of the world an observably viable and historically superior economic model to the corrupt and deceptive one that was holding the elites of the various nations enthralled.

This is why Janet Yellen, the US Secretary of the Treasury, was in China this week begging the Chinese to “reduce their overcapacity”. And it’s not an accident that China has applied Japan’s historical policies of a) government credit creation to fund b) productive industrial exports while minimizing the use of credit to fund domestic consumption. This is a proven means of enhancing national power and prestige at the expense of global competitors.

The economic assumptions of the Smith-Keynesian era have gradually been proven over time to be entirely false. This is a difficult lesson for even economic iconoclasts like me to accept, but it is inarguable at this point. From David Ricardo to Paul Samuelson, from free trade to the rational actor, everything about neoclassical economics is intrinsically and observably incorrect, which is why those nations whose economic policies are based on traditional neoclassical economics will inevitably fall behind, both in terms of societal wealth and military power.

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China is Not the Problem

It seems more than a little strange that we’re supposed to worry about China utilizing the intrusive automotive technologies that are increasingly being mandated, but not the very governments that forced those technologies upon drivers:

Tens of thousands of Chinese cars will be sold in Britain this year. This doesn’t just create an economic bonanza for Beijing, it gives it a geopolitical advantage too. For modern electric cars are computers on wheels. To function properly, they must be constantly connected to the internet, so that they can receive, gather and share data on their performance and surroundings.

This is a recipe for mayhem. Hackers demonstrated years ago how easy it was to remotely disable a single vehicle. With the full weight of a state cyber-warfare agency behind it, such attacks would be far more devastating and widespread.

If this is a recipe for mayhem, doesn’t it make considerably more sense to simply ban the connection of cars to the Internet rather than trying to ban the import of Chinese cars while assuming that the Chinese won’t be able to figure out how to hack the Internet-connected US- and Japanese-made cars?

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Time is Running Out on NATO

Tom Luongo explains why it’s time for the USA to extricate itself from NATO and let it collapse:

NATO cannot and should not survive these stresses if its intended victims, Russia/China/Iran, fight even remotely competently. And they are. They all understand that this is a race against a political and economic clock in the West that is quickly counting down to zero. All Russia has to do is keep grinding out territorial gains in Ukraine, Iran to not over-react to Israel’s provocations, and China to ignore the yapping over tariffs and Taiwan.

And all the Americans who are tired of this have to do is keep the money spigot to NATO and Ukraine closed off as much as is politically possible. The cost/benefit analysis for the US, especially in an election year, just doesn’t add up. And there is zero real leverage Europe can apply to the US other than through their bought and paid-for politicos in D.C. for more money.

The heart simply isn’t willing anymore. Why? For all the reasons I’ve been talking about for six years here, the memories of WWII are fading. The generations of Americans imprinted with the post-WWII Pax Americana lie are dying off (Boomers) or no longer care, if they ever did (Gen X).

The Millennials and ‘Zoomers’ aren’t invested in this mythology. They know their heads are on the chopping block. They can see that none of this is in their best interests.

As we’ve seen in the growing number and intensity of provocations, Clown World is desperate to escalate to direct conflict because it is being systematically defeated by the unrestricted warfare that its opponents are patiently waging against it. Just as Russia is not responding to the terrorist attacks on its civilian population and Iran is not responding to the Israeli attacks on its consulate, China is not going to take the bait on Taiwan.

They have no need to take the risk of engaging in military operations even though they have sound reason to assume that they could comprehensively defeat NATO and the remnants of SEATO; all war involves some degree of risk and there simply isn’t any need to accept any risk when time is quite clearly working in their favor.

Once Ukraine collapses, Clown World will be forced to stop its provocations and focus on retaining as many of its former satrapies and captive allies as it can. And it’s at that point that I expect the diplomatic efforts on the part of the BRICSIA nations to begin in earnest, and we’ll start seeing nations like Hungary, Serbia, Vietnam, and perhaps even Japan and Mexico turning against their current masters.

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Signs of Impending Demise

Neither the Chinese nor other Asians appear to be much impressed with NATO’s attempt to transform itself into the Global Atlantic-Pacific Treaty Organization in this interview of John Pang, a former Malaysian government official and a senior research fellow at Perak Academy, Malaysia, by Global Times.

GT: Western politicians like to say that NATO is “stronger than ever.” How would you describe the 75-year-old NATO?

Pang: I think NATO sounds more threatening and incoherent than ever. If that’s what they mean by “strong,” I guess they’re right in that respect. But it is also showing real signs of impending demise.

It is well past its shelf date. It was formed in the 1940s in response to the Soviet bloc, before the Warsaw Pact. The Warsaw Pact was created as a defense treaty against NATO. With the dissolution of the Soviet Union and the Warsaw Pact, NATO should have disbanded too. Instead it took on a new, expansionary role in securing US global supremacy. It is an aggressive, overextended organization adrift from its founding aims and attached now to the fantastical aim of “making the world safe for democracy,” that is to say, to attacking whoever the US deems the enemy of the day.

Devoid of its charter purpose, it’s been an organization in search of enemies and increased defense procurement. It’s made Russia, once again, the enemy. It has overextended itself on this venture in a way that has blighted Europe’s future and threatens its own survival. It now frames China, on the other side of the planet, as the security challenge. That’s where it is after 75 years.

GT: Reports say that the US government is making arrangements for trilateral talks with the leaders of Japan and South Korea in July at the NATO summit in Washington. What do you think that means? 

Pang: This will complete the consolidation of the worldwide set of US vassals, outposts and 800 military bases under NATO, Quad, AUKUS and this trilateral pact into a streamlined global threat posture also known as the West. There have even been moves to make Israel part of a Quad Plus, along with New Zealand. 

Meanwhile, we have Europe as an example of what “Natofied’ Japan and South Korea can look forward to: further loss vassalization not just in foreign policy but also in trade and industrial policy, technology, media and, crucially, culture, since post 1991 NATO is motivated by an expansionary liberalism that thrives on the destruction of cultural boundaries as much as national borders.

GT: What do you think of the prospect of “NATO’s Asia-Pacificization” or the establishment of an “Asian NATO”?

Pang: This is another one of those announcements that will go down in history like President Joe Biden’s Build Back Better World, the Indo-Pacific Economic Framework for Prosperity, and other grand ideas for bifurcating the world that lead nowhere.

The biggest of them is, of course, the Rules-Based Order, whose moral, legal and political legitimacy is now absolutely collapsed. It will go down in history identified with its signature achievement, the genocidal destruction of Gaza.

Its purpose is to threaten, but it’s also empty. What is NATO anymore, as an aggressive pact, far from Europe? What is the military capability of this set of countries beyond the US? What is brought to the existing issues in East Asia, around the South China Sea, for example, by having this set of 32 nations participate, who are collectively outclassed by Russian military industrial capability in Ukraine? Having set Europe on fire with its aggressive enlargement, they propose to bring their formula to Asia, against a far more powerful opponent. It’s an imbecile proposition.

Wherever possible, Asian NATO should be ignored or bypassed by the countries in the region. Their presence in the region would be so incoherent that it’s not clear what there is to engage with. NATO is a treaty organization for the North Atlantic, a noticeable distance away. They are militarily irrelevant here. We get the spectacle of the German and Dutch navies sailing into the region to sabre-rattle, and have symbolic exercises with the Japanese, for example, and perhaps next with the Philippines.

This entertains the Western elite for a couple days with an appearance of a grand alliance of the “democracies” against China, at a time when, as their citizens will tell you, actual democracy has been hollowed out by oligarchic rule at home. They aim to encircle and divide but have nothing to encircle or divide with. They will add nothing but a layer of live action Euro role playing on top of the existing, and material, US threat posture.

Instead, NATO in Asia is really about what the US and its military industrial complex will do to its own members. In its expanded form, it will tighten the US’ extractive grip on Europe and Japan and South Korea more than it threatens China. It will mandate purchases of US military equipment and more money from member states, especially that standby piggy bank, Japan. It will de-industrialize Japan as it has Germany, in favor of the US. It will demand more political and cultural conformity, further militarize Japan and South Korea, and alienate them from the economic and cultural vitality of their home region.

Europe, Japan and South Korea can say goodbye to any notion of strategic, political, economic or cultural autonomy. Remember that this is happening while actual freedom is breaking out among sovereign nations in the multipolar world of an expanding BRICS.

It’s hard to believe that either the Europeans, the Japanese, or the Koreans genuinely want to be a part of a rapidly declining and increasingly impoverished Clown World, but it’s not as if they’re being offered a genuine choice by what has been transformed into the military arm of the imperial USA.

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A Warning to Taipei

It appears geoweaponry has been unleashed on Taiwan amidst rumors that the island province is working steadily toward a reunification agreement with the mainland.

A major earthquake struck Taiwan during the morning rush hour on Wednesday, collapsing buildings and triggering tsunami warnings in Japan and the Philippines. At least seven people were reported dead, officials said. More than 700 were missing, The Associated Press reported.

The quake hit near the eastern city of Hualien at 7:58am local time (2358 GMT) and had a magnitude of 7.4, according to the U.S. Geological Survey, making it the strongest quake to hit since 1999. The depth was about 35 kilometers (22 miles), which is considered shallow. Taiwan’s earthquake monitoring agency gave the magnitude as 7.2.

Strong shaking was felt in Taipei, the capital, some 100 miles away, with aftershocks continued for roughly two hours. And there were reports in China that people as far away as Shanghai, about 500 miles to the north, could feel the earthquake.

According to Taiwan media, the last earthquake of a magnitude 7 or greater to hit the island was the Sept. 21, 1999, “Jiji” earthquake that measured 7.3, which destroyed thousands of buildings and killed more than 2,400 people.

Sure, it could be a coincidence that this happened as US troops are being stationed on Taiwan, Japan and Vietnam are being pressed to join some new form of SEATO, and the US has largely prioritized its conflict with China over the current war in Ukraine.

But there are no coincidences and we know that geothermal weapons exist. This is no more an act of nature than the recent Maui and Texas fires were, or than a tidal wave that just happened to hit Manhattan would be one.

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Sounds Like an Affirmative

The Chinese Foreign Ministry elects not to deny that the Chinese military will be ready to encourage the reuinification of Taiwand Island with the mainstream by 2027:

Bloomberg: According to US Admiral John Aquilino who is the leader of the Indo-Pacific Command in the address or speech given to the US House Armed Services Committee on Wednesday, China is building its military and nuclear arsenal on a scale not seen since World War II, and all signs suggest that China is sticking to its ambitions to be ready to invade Taiwan by 2027. Does the Foreign Ministry have any comment on this US Admiral’s testimony?

Lin Jian: The Asia-Pacific region is a pacesetter of peace and development, not an arena for geopolitical games. It is the US, not China, that stokes confrontation and creates division in the Asia-Pacific. My solemn message to the US side: Taiwan is part of China and the Taiwan question is China’s internal affair. Resolving the Taiwan question is a matter for the Chinese ourselves and brooks no foreign interference. Our policy is quite clear—we will continue to strive for peaceful reunification with greatest sincerity. Our bottom line is also quite clear—we will never allow Taiwan to be separated from the motherland. Some in the US are attempting to play up the so-called “China threat”, heighten the tension across the Taiwan Strait and stoke confrontation. China firmly opposes this. To ensure cross-Strait peace, it is essential to unequivocally uphold the one-China principle and oppose “Taiwan independence”. No one should underestimate the determination, resolve and capability of the Chinese people in safeguarding our sovereignty and territorial integrity.

I think it’s interesting that there is still no mention of the reports that US Army Green Berets from the 1st Special Forces Group are now being stationed on Taiwan. The longer China remains quiet about such an obvious military provocation, the more likely it appears that China will not see any need to wait until 2027.

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