Tag: China

The Chinese Have Already Cemented Obama’s Legacy

 

521886277FL00047_U_S_PresidTuesday’s State of the Union address could easily be summarized as President Obama making one last rhetorical defense of his presidency to an unconvinced American people who possess no tangible signs of his success. We have to be constantly reminded of the things President Obama has “accomplished” because they have simply created little to no immediate value for the American people. The Affordable Care Act, for example, is increasing health insurance premiums and decreasing the quality of coverage. Defenders of the president will quickly point out that many of his signature policies, like the Iranian Nuclear Deal with the major powers including China or the climate agreement with China specifically, likely won’t bear fruit for many years and are simply investments for the future. This may be the case and it would be naive to expect immediate positive results from these major policy changes.

The only thing more naive is to trust that the Chinese government will adhere to the terms of long-term international agreements.

Obama’s signature achievements, to be polite, on foreign policy and climate/energy run through Beijing. First, the Chinese must be willing to punish their not too distant neighbor and soon-to-be major trading partner, including oil supplier, should the Iranians decide to build a nuclear weapon. This would be a tall order regardless of Beijing’s reputation. China is currently bordered by four known nuclear-armed states, including North Korea and Pakistan, and has a major weapons program itself. It’s hard to imagine they care as deeply about nutjobs with nukes as much as we do given the circumstances. China is also supposedly committed to begin reducing its carbon emissions by, according to official White House language, “around 2030.”

China is Going to Get Wealthier: That’s a Good Thing

 

File:Chinese flag (Beijing) - IMG 1104.jpgChina may be having a hiccup in the economic rise it has been experiencing over the past decades. But should China wind up as comparable in economic status to the United States, it might be a good thing all around.

China has had it rough economically for a long time. It was defeated in the two Opium Wars with Great Britain and split between the Spheres of Influence of the Great Powers. The disastrous Taiping Rebellion further disgraced the Qing Empire in the Victorian Era. It was immediately followed by China’s humiliating loss of Korea to the Japanese Empire in the First Sino-Japanese War. This led to the collapse of the Qing Empire, the creation of a republic, and the outbreak of civil war between forces loyal to the Kuomintang-led government and forces loyal to the Communist Party of China. Meanwhile, decades-long Japanese imperial policies matured, prompting Japan to instigate the Second Sino-Japanese War in 1937 and hastening the onset of World War II. The Communists won the Civil War and Mao Zedong came to power, a series of catastrophes in itself.

This century-long period of political depravity clearly doomed the Chinese economy. But following Mao’s demise, China began to slowly to thaw. It began experimenting with free markets in such arenas as farming and businesses, leading to the expansion of its private sector economy. The Party didn’t interfere so long as it didn’t threaten the state sector. Ronald Coase and Ning Wang tell the story of China’s economic transformation in an essay based on their book, How China Became Capitalist.

The Fed Should Let Middle-Class Workers Prosper

 

shutterstock_276430670The Dow Jones lost over 1,000 points this week. It’s down 9 percent over the past year. The broader S&P 500 also got clobbered, and is down 7 percent in the past year.

What’s going on? Is the world coming to an end? Is it 2008 all over again? Will the US import recession from a falling Chinese yuan? Are hard-working middle-class wage earners about to drive up the inflation rate?

No, no, no, and no.

Donald Trump’s Out-of-Date, Misguided Obsession with China’s Currency

 

RTX216SF_trump-e1452197476773This from New York Times reporter Maggie Haberman: “Donald J. Trump said he would favor a 45 percent tariff on Chinese exports to the United States, proposing the idea during a wide-ranging meeting with members of the editorial board of The New York Times.”

At the heart of Trump’s reasoning is that China is a massive currency manipulator. A cheater. Stop the cheating, and the American worker will again be great. Or something like that.

But is it so clear that China’s currency is terribly undervalued, if at all, versus the US dollar? Last year the International Monetary Fund said the yuan was no longer undervalued, as did the Peterson Institute of Economics. Likewise the Wall Street Journal pointed to a report from the Boston Consulting Group that said “manufacturing costs in China had risen so much they were within 5% below those in the U.S.; and it went on to predict that by 2018 manufacturing will be a bit cheaper in the U.S.”

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Chinese stock markets were only open a short time over night and then closed after another 7% move down. U.S. markets are falling in sympathy with index futures for the S&P 400, 500, NDX 100, and Russell 2000 all down more than 2.25%. DJIA Futures are down 387 points. All as of 0525 Central Time. […]

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Is Barack Obama a Grand Strategist of the Very First Rank?

 

Barack_Obama_takes_one_last_look_in_the_mirror_before_going_out_to_take_oath_Jan._20_2009-960x686In The American Conservative, Alfred W. McCoy — Harrington Professor of History at the University of Wisconsin-Madison, author of Torture and Impunity: The U.S. Doctrine of Coercive Interrogation, and co-editor of Endless Empire: Europe’s Eclipse, Spain’s Retreat, America’s Declineargues that this is so, and this is how he begins:

In ways that have eluded Washington pundits and policymakers, President Barack Obama is deploying a subtle geopolitical strategy that, if successful, might give Washington a fighting chance to extend its global hegemony deep into the 21st century. After six years of silent, sometimes secret preparations, the Obama White House has recently unveiled some bold diplomatic initiatives whose sum is nothing less than a tri-continental strategy to check Beijing’s rise. As these moves unfold, Obama is revealing himself as one of those rare grandmasters who appear every generation or two with an ability to go beyond mere foreign policy and play that ruthless global game called geopolitics.

Since he took office in 2009, Obama has faced an unremitting chorus of criticism, left and right, domestic and foreign, dismissing him as hapless, even hopeless. “He’s a poor ignoramus; he should read and study a little to understand reality,” said Venezuela’s leftist president Hugo Chavez, just months after Obama’s inauguration. “I think he has projected a position of weakness and… a lack of leadership,” claimed Republican Sen. John McCain in 2012. “After six years,” opined a commentator from the conservative Heritage Foundation last April, “he still displays a troubling misunderstanding of power and the leadership role the United States plays in the international system.” Even former Democratic President Jimmy Carter recently dismissed Obama’s foreign policy achievements as “minimal.” Voicing the views of many Americans, Donald Trump derided his global vision this way: “We have a president who doesn’t have a clue.”

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My son is a game designer. He has the usual twenty-something disinterest in politics. I doubt he knows the name of any elected official except the president. But he was so freaked out by China’s new “social credit system” and its political implications, that he brought it to my attention. The fear? The new system will gamify […]

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Cyber Security at the Speed of Bureaucracy

 

mediumThe Office of Personnel Management’s (OPM) security clearance files were hacked 20 months ago. It is just now notifying the people whose personal identification information was stolen.

Two friends of mine, one a naval officer and the other a defense contractor, received letters from OPM today telling them that their Social Security Numbers had been stolen. All of the information submitted in their SF-86s (the official form for a security clearance application) may have been compromised as well, but OPM does not know for sure what else was taken.

That information would include the applicant’s name, address, date of birth, educational and employment history, foreign travel history, and fingerprints. It would include personal information about his or her immediate family and colleagues, personal references, and “other information used to adjudicate your background information.”

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Why are progressives so unable to process facts properly? The common explanation is that ideological blinders distort their vision. However, there is another, subtler dynamic at play, which is even more dangerous. The late, great foreign policy guru Fouad Ajami was on to this. For example, since September of 2014 there have been numerous reports […]

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This summer, I finally started working through The Good Earth, by Pearl S. Buck. I’d always wanted to read her work, because she had an interesting background: child of missionaries to China, and, as I found from the bio last night, resident of China as an adult because of her husband’s job. Has anybody else […]

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Central Asia, the -stan countries that speak Turkic or Persian languages and use the Cyrillic alphabet, was a prominent and strategic region of the world in the past–think Tamerlane and his Mughal scions. This article makes the case that it is returning to strategic importance. It has a kind of blame-the-west tone, but touches on […]

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China: Harbinger of a Brave New World

 

shutterstock_275764925Totalitarianism is a function of technology. Prior to recent times, governments might claim to be absolute, but they did not have the record-keeping, administrative capacity to make good on that claim. Now they can do so far more easily than ever before — without hiring armies of spies. All that they have to do is follow the population on the Internet and use computers to collect and analyze the data. What Google can do, governments can do — and in Xi Jinping’s China that is what they are going to do. As The Weekly Standard reports,

China’s Communist government is rolling out a plan to assign everyone in the country “citizenship scores.” According to the ACLU, “China appears to be leveraging all the tools of the information age—electronic purchasing data, social networks, algorithmic sorting—to construct the ultimate tool of social control. It is, as one commentator put it, ‘authoritarianism, gamified.’ ” In the system, everyone is measured by a score ranging from 350 to 950, and that score is linked to a national ID card. In addition to measuring your financial credit, it will also measure political compliance. Expressing the wrong opinion—or merely having friends who express the wrong opinion—will hurt your score. The higher your score, the more privileges the government will grant you.

To do this, of course, the Chinese government needs help, and that is where private enterprise comes in. Alibaba and Tencent are set to administer the plan; and, if you hold stock in Yahoo, you are party to this as well.

President Obama’s Downsized Foreign Policy – Is It Conservative?

 

Obama & Abe Review Troops.Speaking ten years after the conclusion of the calamitous Crimean War, Conservative Prime Minister Lord Derby cautioned that foreign policy should avoid “quixotic action – inimical to the welfare of the country.” Six years later, in 1872, Conservative Party leader of the opposition and former Prime Minister Benjamin Disraeli spoke, “though so momentous are the consequences of the mismanagement of our foreign relations, no one thinks of them till the mischief occurs, and then it is found how the most vital consequences have been occasioned by the mere inadvertence.” With these statements in mind, one might question whether President Obama may have been channeling conservatives when he allegedly uttered his rule of foreign policy, “Don’t do stupid [expletive].”

Traditionally, conservatism has not valued bellicose talk nor attempted to find the next “Munich” behind every negotiation. All conflict was not seen as equal – and all agreements were not as tough as some may suggest. Instead, conservatives tried to see the bigger picture. Conservative foreign policy acknowledges power is precious and ephemeral and, thus, best applied sparingly, primarily to protect the nation’s sovereignty. Righteous, courageous, humanitarian, or moral crusades might have merit, but outlay must always adhere to dominion.

Prior to the 20th century, American foreign policy was by and large a bipartisan affair centered on nationalism, placing American interests first. It was one of realism; i.e., the belief that all states desire power and expansion for self-preservation. The United States foreign policy focused on preserving itself as it negotiated, intrigued, and fought its way westward. Teddy Roosevelt promoted the idea that national security is enhanced when power is distributed or balanced, and believed America must be a world power to ensure security. In 1919, Woodrow Wilson took a different approach advocating morals are universally valid and democracies quell the instinct for power (war), therefore the promotion of democracy and international conventions were the best tonics for peace. Conservatives looked askance at Wilson’s internationalist approach, claiming it would threaten American sovereignty and interests with entanglement. Realism, not internationalism, was their view.

Contextualizing America’s Screwdriver

 

SuzhouThis post addresses the second entry in Dr. Berlinski’s list of noteworthy news items posted yesterday, August 31, 2015. The full list can be found here.

Allow me to introduce you to my keyboard. My keyboard is a Logitech K330. It was built in Suzhou, a city in China about the size of Chicago. Suzhou was founded over 2,500 years ago and has been an important center of Chinese culture since before Christ. With elegant pagodas overlooking beautiful bridges spanning peaceful canals, Suzhou’s is often called the Venice of the East.

But despite its rich history and unique beauty, modern Suzhou is known for only one thing: rock-bottom labor prices. If you are looking for a corrupt local government ready to facilitate the mass hiring of unskilled labor for a fraction of the American minimum wage, look no further than lovely, rotten, historic, polluted, elegant, miserable Suzhou.

What’s Driving China’s US Treasury Sell-Off?

 

financial-crisisIt’s natural that some Americans see in the market’s recent convulsions evidence of a deliberate Chinese plan to crash the US economy. Economic warfare was, after all, a favored and often successful tactic of the Soviet Union. But the Soviets always calculated their risks and took logical measures: They moved when they had more to gain than lose. I’m thus more inclined to see in China’s precipitous stock-market decline the folly of attempting to circumvent the laws of economics.

In the past decade, alarmists have warned that China was poised to overtake the US. These warnings are reminiscent of those about Japan in the 1980s and 1990s. Some now believe China owns the US by virtue of its $4 trillion-plus foreign debt holdings. They survey China’s apparently rapid economic growth and conclude that China’s a major, unstoppable economic force.

China had logical economic reasons for accumulating US Treasuries. Despite the destructive economic policies of successive US governments, particularly this one, US Treasuries are still considered the world’s best credit risk. Although the dollar is a sorrowful currency investment, American debt instruments carry little-to-no risk of default. For nations such as China, which during the 1990s was barely credit-worthy and seeking to undertake major development projects with few cash reserves, leverage is the only viable alternative. But obtaining foreign capital investment requires collateral. China had none, save weapons; like the former Soviet Union, it relied upon arms sales to prop up its annual income. Creditors need to know that their investments are reasonably guaranteed in the event of insolvency. A loan backed by US Treasuries is a relatively secure investment.

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It’s a late summer Saturday night, I’m at the bottom of a fine bottle of primitivo negroamaro and the mind wanders to the fantastical. So let’s set aside our Monday night view of the Obama Doctrine, which tells us that the world is made a better and more harmonious place when the United States is […]

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