ronwagn

China's Dreams of World Leadership are Fading

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https://www.scmp.com/comment/opinion/article/3048762/chinas-dreams-world-leadership-are-fading-its-belt-and-road

China’s dreams of world leadership are fading as its belt and road projects start to sour

  • The Belt and Road Initiative, hailed for promoting development, is coming under fire as debt burdens grow, reflecting a growing wariness of Beijing’s posturing as a global leader-in-waiting on an international stage that seeks to promote debate rather than censor it
Daniel Wagner
 
Daniel Wagner

Published: 3:00am, 5 Feb, 2020

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Heard China cut $75B on USA tariffs, today or yesterday.  It is amazing to witnesss Trump kill one of USA’s only adversaries (easily, without firing a single shot).  Going to enjoy watching China crawl to trump over the next 8-1000000000000000 years. 🥰 

suck it China! 

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10 hours ago, ronwagn said:

https://www.scmp.com/comment/opinion/article/3048762/chinas-dreams-world-leadership-are-fading-its-belt-and-road

China’s dreams of world leadership are fading as its belt and road projects start to sour

  • The Belt and Road Initiative, hailed for promoting development, is coming under fire as debt burdens grow, reflecting a growing wariness of Beijing’s posturing as a global leader-in-waiting on an international stage that seeks to promote debate rather than censor it
Daniel Wagner
 
Daniel Wagner

Published: 3:00am, 5 Feb, 2020

LOVE the tweet (or whatever it was) from the creators of Southpark!  Laughed my ass off!  Well, not really, butt you know what I mean.

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10 hours ago, ronwagn said:

Excerpt from the South China Morning Post newspaper article above:

... Beijing is now being criticised by the very same countries supposed to be praising China for promoting development via belt and road projects. Host governments are more carefully scrutinising belt and road projects and associated costs. Beijing has learned it cannot simply dictate the terms of engagement for bilateral relations or cross-border trade and investment.

At gatherings of world leaders, President Xi Jinping has become accustomed to casting himself and China as natural heirs to the leadership of the global system. But is a country that regularly violates global norms, standards and laws really the right country to lead the world?  ...

 

... Much of the rest of the world does not trust the Chinese government nor wants to be like it.  

Unfortunately for Xi, the international stage on which he wants China to play a central role already hosts actors steeped in scepticism, irony, irreverence, debate and the critical interplay of ideas – all of which are forbidden in Chinese public discourse.

This hits at the heart of the Communist Party’s concern that liberalisation at home may create instability and jeopardise its rule. How can a ruling body afraid of its own shadow expect the world to be interested in emulating its governing style, or believe it is prepared to assume leadership in a world seeking to embrace debate, rather than make it illegal?  ...

 

... Say what you will about the slippery slope the US government has been on since Donald Trump came to power, it has a rich history of promoting creative thought, running headfirst into particularly uncomfortable subjects, and encouraging robust debate internally and among its allies and partners.  ...

 

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It is far beyond just not being trusted and the lack of open discussion being possible, it is not as if one can criticize in Europe nor even quote facts without risk of prosecution. The pretense of freedom and open discussion in the EU is long gone. They can't actually use EU based economic and geopolitical advisers because the Administrative Class that makes up the transeuropean governance layer in both governments and corporations and is the core of the EC staff, is capable of getting you fired from any publication or financial organizations or will just arrest you for criticizing the EU. The EU governments and the central EC organization are far more comfortable dealing with China. They understand and accept what the CCP is doing. They are trying to do that in their own countries and Europe as a whole too. 

The actual problem is that Europe can not function through the Euro. While it is used in wages, retail transactions and government payments, upstream from wholesale distribution and production, not to speak of imports and exports, the Euro is not used, but the dollar is in much of the clearing, particularly interstate but often even internally. The transition to Euro came to an abrupt halt after the Cyprus and Iceland bank crises when they suspended deposit insurance costing large depositors upwards of 30% of their cash and did not recapitalize banks sufficiently, then drained their balance sheets through NIRP. The Eurodollar system has stronger offshore subsidiaries than the parent banks and operating through the UK are "bankruptcy remote" such that the subsidiaries can neither take down the parent nor the parent take down the subsidiary. 

Surely if the Euro couldn't even monopolize Europe, how is China's on again off again "open" capital markets and total disregard of trade agreements and having no legal infrastructure independent of CCP expediency, going to obtain the trust of the world's governments and commercial organizations? Its campaign of bribery and bullying through the international organizations and within countries puts the old Chase Bank and Standard Oil shenanigans of the early 20th century seem outright saintly.  

Again the conceit of the CCP that because they reached economic statistical goals that put their physical economy as greater in size than any other, earned them any position in the global financial system, not to speak of any degree of trust, is surprising. They appear to believe their own dialectic "reasoning" that bullying is friendship, and theft is commerce, and many multiples of the economy in debt and no external assets to speak of are not weaknesses. It is the same kind of expectation the detached CCP leadership had when they tried to open their capital markets for foreign capital, just to discover their own people and capital rushing out of the country in a torrent. Just imagine, say, Marks and Spencer in London preparing for a great reopening of their newly refurbished store, and happily open the doors to the small crowd in front just to find the staff and vendors carrying their merchandise rushing out of the store. 

The US was defacto the go to financial system post WWI with the collapse of the English gold standard and German hyperinflation. Since 1925, trade settlement transitioned to the US, as had much of the credit system. Switzerland was too small to handle it all. Even after its own default on internal gold liabilities, the US remained open to the rest of the world. It was the defacto reserve and clearing system and legal international contracting jurisdiction long before WWII and Bretton Woods system of dollar reserves clearing and GATT trading system. .Meaning that it was tested for 20 years by both governments and capital and commerce BEFORE it got to be the official hegemon. And it happened AFTER it was the sole remaining superpower with a real army and navy. China looks like perhaps the US after reconstruction and the fast growth that followed. It set the US to POTENTIALLY become a superpower. It didn't make it into one.

China is orders of magnitude looser in credit and far beyond just malinvestment. It is a sinkhole of capital that has got its entrepreneurs and their capital to flee the country if they were small enough to go undetected. The scale of their "Errors and Omissions" in the BOP reports is greater than any of the other components but for the official trade surplus. It is capital flight, and it was $650 Billion last year alone. 

In contrast, by the time the US joined  WWII, it was sitting on 80% of the world's monetary gold. Its bubble leverage from the capital flight into it during the 1920s had been whittled away and it had assets in every country but the Soviet Union.

China had no place to expect a position at the head of the table. Having failed to be a partner in anything to the other members of the system, it should not expect to even have a seat left there, not to speak of leading it. It may work that way in the politburo, but not anywhere else. . 

Edited by 0R0
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(edited)

1
I think it is good that some sort of equitability in relations of China with all these small countries is being achieved. After first hype the countries start to count what is and what is not within their means and also start to bargain for better deals. 
Sierra Leone probably does not need this airport or such AirPort as it costs 10% of their GDP,

the same with port in Tanzania,

Myanmar decreased the cost of vital Indian Ocean port by over 5 billion dollars - China needs this port for strategic reasons China foot the bill.

Depth better research is lacking in these articles.

2

I also think that recent opening of Chinese citizens to the outside world through job opportunities in BRI projects but most of all massive foreign leisure trips is a 2 way street, it also changes Chinese not only outside world.

3 On governance

People in developing countries just shrug off when faced with Western accusations of bad governance in infrastructure projects.

There is new railway or expressway or dam that changed the fate of millions of poor people, often whole countries.

And suddenly Mike Pence comes with his 5,000 dollar suit on board of his 1 billion dollar 747 and tells them that it is all wrong.
It is so out of touch with reality.

Where were you the last 70 years before Chinese came ?

They would just show him middle finger, if not afraid about major US business: defence industry.

Edited by Marcin2
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On 2/7/2020 at 1:49 PM, 0R0 said:

It is far beyond just not being trusted and the lack of open discussion being possible, it is not as if one can criticize in Europe nor even quote facts without risk of prosecution. The pretense of freedom and open discussion in the EU is long gone. They can't actually use EU based economic and geopolitical advisers because they Administrative Class that makes up the transeuropean governance layer in both governments and corporations and is the core of the EC staff, is capable of getting you fired from any publication or financial organizations or will just arrest you for criticizing the EU. The EU governments and the central EC organization are far more comfortable dealing with China. They understand and accept what the CCP is doing. They are trying to do that in their own countries and Europe as a whole too. 

The actual problem is that Europe can not function through the Euro. While it is used in wages, retail transactions and government payments, upstream from wholesale distribution and production, not to speak of imports and exports, the Euro is not used, but the dollar is in much of the clearing, particularly interstate but often even internally. The transition to Euro came to an abrupt halt after the Cyprus and Iceland bank crises when they suspended deposit insurance costing large depositors upwards of 30% of their cash and did not recapitalize banks sufficiently, then drained their balance sheets through NIRP. The Eurodollar system has stronger offshore subsidiaries than the parent banks and operating through the UK are "bankruptcy removed" such that the subsidiaries can neither take down the parent nor the parent take down the subsidiary. 

Surely if the Euro couldn't even monopolize Europe, how is China's on again off again "open" capital markets and total disregard of trade agreements and having no legal infrastructure independent of CCP expediency, going to obtain the trust of the world's governments and commercial organizations? Its campaign of bribery and bullying through the international organizations and within countries puts the old Chase Bank and Standard Oil shenanigans of the early 20th century seem outright saintly.  

Again the conceit of the CCP that because they reached economic statistical goals that put their physical economy as greater in size than any other, earned them any position in the global financial system, not to speak of any degree of trust, is surprising. They appear to believe their own dialectic "reasoning" that bullying is friendship, and theft is commerce, and many multiples of the economy in debt and no external assets to speak of are not weaknesses. It is the same kind of expectation the detached CCP leadership had when they tried to open their capital markets for foreign capital, just to discover their own people and capital rushing out of the country in a torrent. Just imagine, say, Marks and Spencer in London preparing for a great reopening of their newly refurbished store, and happily open the doors to the small crowd in front just to find the staff and vendors carrying their merchandise rushing out of the store. 

The US was defacto the go to financial system post WWI with the collapse of the English gold standard and German hyperinflation. Since 1925, trade settlement transitioned to the US, as had much of the credit system. Switzerland was too small to handle it all. Even after its own default on internal gold liabilities, the US remained open to the rest of the world. It was the defacto reserve and clearing system and legal international contracting jurisdiction long before WWII and Bretton Woods system of dollar reserves clearing and GATT trading system. .Meaning that it was tested for 20 years by both governments and capital and commerce BEFORE it got to be the official hegemon. And it happened AFTER it was the sole remaining superpower with a real army and navy. China looks like perhaps the US after reconstruction and the fast growth that followed. It set the US to POTENTIALLY become a superpower. It didn't make it into one.

China is orders of magnitude looser in credit and far beyond just malinvestment. It is a sinkhole of capital that has got its entrepreneurs and their capital to flee the country if they were small enough to go undetected. The scale of their "Errors and Omissions" in the BOP reports is greater than any of the other components but for the official trade surplus. It is capital flight, and it was $650 Billion last year alone. 

In contrast, by the time the US joined  WWII, it was sitting on 80% of the world's monetary gold. Its bubble leverage from the capital flight into it during the 1920s had been whittled away and it had assets in every country but the Soviet Union.

China had no place to expect a position at the head of the table. Having failed to be a partner in anything to the other members of the system, it should not expect to even have a seat left there, not to speak of leading it. It may work that way in the politburo, but not anywhere else. . 

Fantastic "comment", if one could belittle it to just call it a comment!  You should publish, man.  Normally I can find questionable details in such a body of text, but I did not see anything except a precise presentation of historical facts, laid out in great intricate detail, while not cluttering the story with the unnecessary.  Well done, sir!

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2 hours ago, Dan Warnick said:

Fantastic "comment", if one could belittle it to just call it a comment!  You should publish, man.  Normally I can find questionable details in such a body of text, but I did not see anything except a precise presentation of historical facts, laid out in great intricate detail, while not cluttering the story with the unnecessary.  Well done, sir!

Definitely WaPo or Foreign Policy would be just ecstatic, just like you, too publish this laudation of US.

I beg you pardon, but debate within Europe and EU is more open, in my opinion than anything you read at US msm, or discuss with Americans, believe me I have first hand experience here, at oilprice forum. You know media in Europe are not owned by a narrow group of people that could all together travel in the same Cadillac. There are 27 countries, a lot of opinions, a lot of different experiences.

We happen to live on the same continent as Russia, China, actually 75% of global population lives in Eurasia.

We are not isolated on the distant continent of North America so cannot choose so freely with whom to cooperate and with whom not.

Edited by Marcin2
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Yes China is a dictatorship, but also 18% of global population.

Together with Russia and Central Asia countries they form specific area of economic and military community, under the dictate of China and Russia. It is 30 million square kilometers, 55% of Eurasia, how we can just ignore them ?

A lot of „scholars” in the field of economy, like Gordon Chang or Michael Pettis made their job predicting near collapse of Chinese dictatorship led by CCP. They are succesfully writing bestsellers on the subject for 30 years. And just like each broken clock is right twice each 24h, they would probably watch at least 1 recession or depression in China during their lifetimes.

Maybe even this year if epidemic would be difficult to contain. But long term I think that current Chinese economic model is flexible enough to survive.

Try to observe how Chinese society is changing, very rapidly towards democratization. It is very different from Soviet Union or any other autarcic and isolated past dictatorships. 160 million Chinese left their country in 2018, the largest spenders in tourism industry. And they returned After vacations.

People to people contacts US-China and EU-China are massive and I think they are the best defence against CCP or US going rogue during hegemonic conflict.

China is still a poor, developing country, nobody would notice it, if it have not been populated by 1.4 billion people.

I do not think China is ready or willing for any leadership like US at the moment.

It is US that is pressing EU and China to co-operate more closely, cause US is most of all hegemon, 100% concentrated on early containment of Chinese development before it is too strong. Chinese major fault is , it has 4 times US population.

You may have not noticed but during last 2-3 years US weaponized all aspects of its earlier benevolent global position:

like US dollar reserve currency status together with SWIFT, its technology supremacy in some high-tech areas like IC, its top position at IMF and World Bank.

Unfortunately EU and China have to hedge together against this behaviour, even that EU is nominally an ally, but more vassal organization under US military rule.

US domination After WW2 was mainly caused by destruction of Europe, China and the rest of Eurasia during a series of devastating wars in 1870-1950 period.

As I said people to people contacts are the only guarantee that relative demise of US would not cause WW3.

And nuclear weapons, it is really good that we have MAD, cause only this makes US equal in vulnerability caused by war and acts as a deterrent for this country.

For all other Eurasian countries conventional arms are deterrent in itself cause future wars would be fought on their territories.

Edited by Marcin2
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There is opinion here at oilprice that it is China that is more aggresive towards the world and US particular, than US against China.

People in EU do not share this view. Why ?

Because we are also the victims of US hegemonic wrath in the form of blackmail and sanctions if do not toe US foreign policies, if EU wants to be independent in its foreign policy.

And also at simple PR level probably mainly US and Japan citizens, each because of different reason believe that US tariffs , sanctions and recently embargos are just benevolent contra actions.

And I think that US is squandering the real Opportunity to co-operate with EU on the pressing problem how to deal with Chinese giant.

Even that US and EU views differ substantially, we are bedfellows and need to have common front against China or be dominated, at least in economic terms.

But EU perception is US are treating us as a junior partner, not equal, I really watch in astonishment how „exceptional” US recently became.

Edited by Marcin2
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1 hour ago, Marcin2 said:

There is opinion here at oilprice that it is China that is more aggresive towards the world and US particular, than US against China.

People in EU do not share this view. Why ?

Because we are also the victims of US hegemonic wrath in the form of blackmail and sanctions if do not toe US foreign policies, if EU wants to be independent in its foreign policy.

And also at simple PR level probably mainly US and Japan citizens, each because of different reason believe that US tariffs , sanctions and recently embargos are just benevolent contra actions.

And I think that US is squandering the real Opportunity to co-operate with EU on the pressing problem how to deal with Chinese giant.

Even that US and EU views differ substantially, we are bedfellows and need to have common front against China or be dominated, at least in economic terms.

But EU perception is US are treating us as a junior partner, not equal, I really watch in astonishment how „exceptional” US recently became.

I understand what you are saying, and the US definitely has become more aggressive in the use of SWIFT and sanctions regimes. But it was Europeans that worked with Obama on the Know Your Customer rules to make the knotty SWIFT correspondent bank pipes traceable to individuals and countries. That was an OECD tool for "tax harmonization" so that countries can find the monetary assets and determine the cash flows of their citizens and corporations. But as a dollar clearing and payments system, the US claims global jurisdiction over it and the Swiss based system agreed to go along. The EU countries are complaining about a system they deliberately turned into a weapon without ever being able to exert control over it. So far, Trump is doing no more than his predecessor.

I do agree that EU should join forces with the US to contain China. But I don't expect China to get to where you are expecting. Though I don't really expect that China positively will fall apart after its inevitable financial crisis the way Peter Zeihan does, I do expect it to have a financial crash similar to that of 1995-6, just deeper, bigger and with no chance of exporting their way out of it even if the Yuan goes to parity with the Ruble. After which it can recover if it reforms structurally to get out of the subsidized growth and financial non performance SOE models, otherwise it will recover sort of the way Greece has. I doubt they would allow 40% unemployment to develop, but it is where their finances are pointing to. 

Straight lining forecasts for a parabolic growth economy is a terrible mistake. The hard rule is that they either crash financially and plateau economically and zombify, or crash both financially and economically and depending on the strength of the reform they recover quickly or slowly. Japan grew powerfully for 30 years, they were far more conservative financially than China has been, but they did turn their demographics negative and immediately crashed their finances. China's demographics are negative already. The economy is growing an order of magnitude more slowly than credit, and the gap continues to grow. Using Prof. Xiang's numbers, the 12% credit expansion rate is producing only 0-1.7% growth in economic output. 

China has too low a margin in its economy. In its industries (local and export), the PPI is precisely correlated to the commodities indexes, meaning that it acts as a fixed markup (fee) based economy. Where the product market does not have its own supply and demand dynamic, but is dictated by the input market. Thus only volume growth drives economic growth. That is why emperor Xi talks about going up the value chain. He expects to leave the low margin commodity product markets in favor of high margins from technology. But without legal protections for IP and proprietary processes and materials (meaning maintaining secrecy from everyone including the CCP), anything the Chinese model touches becomes a commodity with low margins. 

But it is not a technological barrier, but a productivity and quality of work and management problem. Without the basics, the technology is only enough to get you a royalty. Not something you can run a 1.4 billion strong population on. But something you can run a smaller country like Japan or Switzerland on, or an individual state in the US like CA. China does not really have a cost advantage in high tech talent, at senior levels (what matters) they cost just as much as US or European techies do. Today, as they are still able to roll losses into the unpayable debt pile, they can afford to maintain them and even invite foreign experts to live lavishly on research grants, armies of semi slave labor grad students, and palatial laboratories. That does not continue past the crisis. The figure that comes to mind is that what they can pay post crisis is 40% less than they are right now, and it can get much worse than that. 

Why would the EU and its members expect to be treated as equals? You don't even know who to speak to. If you want to see what the EU looks like to US military and diplomatic folks, then look for George Friedman's presentations and writing on the matter. At some point he likens it to making a military force out of cats. 

Second, the EU is not considered a united states of Europe, by anyone other than the EC staff. To Americans, they are a subcategory of the UN, and its member states as subsovereigns. That they get treated as such is no surprise. Let them act as individual states or let the EC act as a single entity and you are fine. The constant in between state leaves everyone outside guessing at who they should negotiate with.  

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6 hours ago, Marcin2 said:

Try to observe how Chinese society is changing, very rapidly towards democratization. It is very different from Soviet Union or any other autarcic and isolated past dictatorships. 160 million Chinese left their country in 2018, the largest spenders in tourism industry. And they returned After vacations.

People to people contacts US-China and EU-China are massive and I think they are the best defence against CCP or US going rogue during hegemonic conflict.

Yes, absolutely. It is worrying the CCP and they are looking for external distractions to keep their people from democratizing, either government or the CCP structure. They don't allow any discussion to go public, and keep people in fear of "fighting city hall". 

The tension between the social expectations and the CCP goals keeps growing. Yet the CCP keeps trying to live on both sides of the fence. Be globally engaged and placate their people with growing economic benefits yet maintain ever tighter control of their people.

 

The comment about the dam and VP Pence was very good.

Unfortunately, these projects are not financially viable for the most part, which is why the World Bank and IMF wouldn't fund or back them up. They end up costing China forex that they are working hard to retain, as the repossessed projects still don't produce cash flows to cover the debt (particularly in dollars) that was incurred. So while I am with you on such development projects having at times even great results in their countries, they were not intended as charity. Unlike World Bank or development banks of the West, that must be sustainable financially, the Chinese initiatives are not sustainable as there is less payback than expenditure.  

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“Even that US and EU views differ substantially, we are bedfellows and need to have common front against China or be dominated, at least in economic terms.”

What you say is correct. The problem is that the EU has never taken a serious stand against China and their trade practices. For that matter, prior to Trump the US had not either.

Now that Trump is aggressively tackling the issue, the EU should lend support - but they have not. They will wait and see how the tariffs and other measures work for the US before they take action. 
 

Much of this is due to Trump’s stand on issues such as ‘climate change’, funding NATO and participation in the failed UN experiment. A form of diplomatic blackmail on the part of the EU.

We’ll see how this all works out, but with the UK leaving the EU, the state of the European economy and the issues with uncontrolled immigration...things are suddenly looking shaky in Europe.

 

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57 minutes ago, Tom Kirkman said:

The way Politico summed this up: China has strong analytical teams that analyze each country is true. But United States also does this. It is a basic element of foreign policy of each country.

So what is the difference in Chinese actions that Pompeo mentioned in his speech, but was not able to articulate some of its aspects clearly ( no politician in US can) as it a taboo:

- Chinese analytical teams are just stronger. I believe they are watching US politicians at the following level of granulation: federal level: every federal Congressmen, every member of Trump administration that has contacts with President or can influence him, operatives of both major parties, anybody that counts, also in judiciary; state level: down to major factions in state legislatures, prominent individual members. I think they also should watch every other stakeholders (US is oligarchy): media, think-tanks, lobbying groups etc.

- Chinese just follow the campaign money, as following the money is the crux of influence over US politics. US enables Chinese actions by fraudulent system of lobbying which are just political bribes.

- On the other hand US has no influence over Chinese CCP officials. Simply being malleable will land any CCP official in jail, for a long, long time. Here US cannot ask for reciprocity.

You cannot expect to have a system of sanctioned official political bribes (lobbying) and just expect politicians to be able to take dirty money just from all non-Chinese sources. Every big corporation executive that have vital interests in China, and has share based payment scheme will be automatically Chinese lobbyist, you cannot prevent this. You can amend the rigged system so that taking political bribes from ANYBODY becomes felony.

 

Edited by Marcin2
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6 hours ago, 0R0 said:

Second, the EU is not considered a united states of Europe, by anyone other than the EC staff. To Americans, they are a subcategory of the UN, and its member states as subsovereigns. 

I tend to agree on the analysis. But I disagree on the conclusion. I tend to think that the US really does not want a unified EU, but rather a week lapdog that should spend more money on the US defence industry. 

I tend to think that this is the core of @Marcin2s analysis - the US cannot sustain being hegemon much longer, but instead need to cooperate. Cooperation necessarily means compromises from all parties. 

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In 1823 the Monroe doctrine looked completely ridiculous. How could America claim control over the entire South American Continent?  We had no real navy and very little in the way of an Army. America was less than 40 years away from one of the most devastating civil wars in history, a prelude to the mechanical carnage of WWI. The U.S. was a resource rich backwater with just one real asset... our future was wide open. We were not penned in by history, established systems or aristocratic competition. 

A short 150 years later we were the world's greatest economic and military super power. 

--------------

Africa IS resources. Africa IS manpower. Africa IS cheap labor just like South America was in 1823. No one is going to fight for Africa against China just like no one was going to fight the U.S. for South America in 1823. What does China have? Resources. What is their one real asset... their future is wide open. 

So, feel free to take an op-ed piece about a 5 minute problem and pound your chests. Your grandchildren won't be pounding theirs. As soon as Trump leaves office the continued sale of America to China will continue. The discussion IS the trend. The fact that we are even talking about China as a competitor is the Trend. Not 10 years from now. 20... 50... 100. Not that you have any control over it. It has to do with both raw resources and the ability to focus the direction of a society over generations.  The U.S. had that ability in the 1820s - the 1950s. Now we are just a nation of salesmen. 

 

monroe-doctrine-political-cartoon-analysis-8-728.jpg

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10 hours ago, 0R0 said:

Though I don't really expect that China positively will fall apart after its inevitable financial crisis the way Peter Zeihan does

I'm curious, why not? Mr. Zeihan makes a very good case for it, as does Kyle Bass. And that was before the virus. 

If evidence shows that this was a genetically engineered virus meant to be used as a bioweapon, then China will lose its status as a supply-line to the world, its economy will sink, a revolution will occur, and China will then fall apart. 

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1 hour ago, Gerry Maddoux said:

I'm curious, why not? Mr. Zeihan makes a very good case for it, as does Kyle Bass. And that was before the virus. 

If evidence shows that this was a genetically engineered virus meant to be used as a bioweapon, then China will lose its status as a supply-line to the world, its economy will sink, a revolution will occur, and China will then fall apart. 

Guys, why you wish the most populous country to fall apart, after revolution ?

It would cause immense suffering, millions of casualties. What is the reason, forget about ethics for a moment, what is the reason of such a wish (it was formulated before at this fourm, in many different ways by a lot of other commenters) ?

Are you afraid that otherwise China would be too strong ? Do you envision this as a way to get rid of : "the major danger for our planet" as major US politicians inform us, daily ?

Do you want to "liberate" 1.4 billion of Chinese from dictatorship oppression ?

I understand that 500 million hungry Chinese people and 10 million dead Chinese are the means that are justified by  the noble goal.

This is actually the major line of rift between United States and the European Union relating to the topic: 'How to engage rising China?"

As a citizen of EU country I believe in my naivety that EU+US and China can co-exist peacefully together.

I do not have significant doubts (and this is not my wish, I am actually afraid of the rise of China) that China, maybe with some hiccups, will continue its rise, until it will achieve developed country status. There are just too many indicators showing that the things are generally done well in economic terms in China.

I think that it is impossible for US citizen to live in the world in which United States is number 2, that Chinese GDP could be 200% of US GDP. You simply cease to be exceptional at this very moment.

I would like US and EU and some other countries to gang up economically to counter the China.

But my red line of maximum pressure is access to our market.

Embargos, global sanctions and shooting war is out of my arsenal of means of China containment.

For US (at least politicians) it is not that easy, I think and I am afraid that US would start real shooting war if any other means of China containment will not work.

That is why I want strong and independent EU and that is  why US wants weak, partitioned EU.

I do not want Chinese hegemony, but much more I do not want war in Eurasia.

Please ask yourself, if you are American how far are you gonna go to protect your hegemony ?

Edited by Marcin2
typo

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3 minutes ago, Marcin2 said:

Guys, why you wish the most populous country to fall apart, after revolution ?

I don't. I have no idea about the exact nature or origin of this coronarvirus. It cropped up awfully close to the level 4 lab. It also cropped up just two months after a big seminar at Johns Hopkins. The seminar was named Event 201. The Bill and Melinda Gates Foundation sponsored it, along with the Global Economic Forum. They had a pandemic tabletop discussion. The whole seminar was modeled on a coronavirus. They estimated the global death toll to be 65 million. 

Since I was a pup in a virus lab in 1966 people have worried about a zoonotic virus becoming mean. Either through an intermediary, or simply by a random jump to humans. We were VERY careful to keep our laboratory hosts widely separated. But in these wildlife (wet) markets, civets are parked on top of bat cages beside snakes and pangolins--from reports by others. That brings together lots of diverse animals that would not ordinarily come together in nature, which makes it many times more likely that a virus becomes zoonotic--jumps from say the African fruit bat into a snake's DNA, onto a pig and finally a human. There's that, which is quite enough--and if China truly wants to further its position in the world community it has to stop these wet markets, forthwith. 

But on top of that is always the sinister specter of someone farting around with the virus--maybe doing something nice, like trying to produce a vaccine. Or in an evil world there's always an evil bastard who knows a lot of genetics and says why the hell not, I can splice the genome and change the glycoprotein spikes on this little guy and come up with the virus straight from the inner circle of hell. 

What I said, to paraphrase in the simplest terms I can muster, is that if someone did that (messed with the virus to weaponize it), and the truth eventually leaks out, then China is done in the community of countries that matter, and they will lose their supply-line status to the world, and the folks will revolt and the economy will go in the crapper, and the country will crash. And by God, I stand by that, and I really wish you wouldn't try to get too cute and screw around with my words. Capiche?

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1 hour ago, Gerry Maddoux said:

I'm curious, why not? Mr. Zeihan makes a very good case for it, as does Kyle Bass. And that was before the virus. 

If evidence shows that this was a genetically engineered virus meant to be used as a bioweapon, then China will lose its status as a supply-line to the world, its economy will sink, a revolution will occur, and China will then fall apart. 

The basic premise in this is the economic imbalance between the interior provinces and the North, and the industrial coastal regions and especially the South (HK and Shenzen) which have easy sea lane access to trade huge production for food, so they don't need the interior at all now that the flow of cheap labor from it has slowed to a trickle. The coasts are NICs and on the cusp of being in the "developed" economy range once they incorporate the remaining uneducated folks.  The interior is more difficult to develop, more low labor productivity agriculture (land productivity is best in the world - but because so many people are working on it), it has to use higher cost rail transport than international waterway transported agriculture and heavy industry, and on balance is a burden on the coastal regions. So the centrifugal economic forces are indeed there, and are the reason China has only been unified under foreign rule just as the CCP is acting like the Mongol emperor's courts. The CCP has the longest track record of keeping the country unified without major civil war. 

But there is an underlying cultural unity that has formed under the CCP and the departure from traditions that were thoroughly destroyed by Mao and his red brigades so that regional differences are small. That is a big difference from historical China. It is similar to the German states forming a unified Germany. Once the German political infrastructure was formed it is hard to imagine Germany being split up again despite the same centrifugal forces being at play as they were throughout history.

Chinese nationalism has been the rallying cry of the central party, despite the structural regionalism of the country - down to the Red Army's regional structure and the "passport" system that keeps you locked into your birth province pretty much for life. [Note that people trying to return to their industrial city apartments from their holidays with family in their birthplaces are being refused entry into their own property by the power of the regional passport system.] Also, tax collection and planning is regionally centralized but not pan-Chinese, that can be cooperative and centrally directed out of the CCP HQ, The party implements policy through the regional governments. Zeihan likes to point out that internal cohesion is artificially enforced by periodic raids on regional political power centers to squash separatist leaders that have credible high political profiles. That was what the "anti-corruption" campaign was about. To remove regionally powerful leaders that can lead a separated province into independence. The Xi cult of personality campaign is equally a part of this drive to keep the country unified. 

The possible fall of the CCP from power would mean that the central government would be doing the heavy work of unifying the country. Something that was deliberately prevented from happening by the party as it took upon itself the power to separately control the regional politics and the central government from behind the scenes. So the mechanics of keeping China unified are within the CCP apparatus. If the CCP is discredited and sidelined, there is no central governance structure unless the regional governments are pressured into it by the people. 

So the bottom line is that the popular forces that keep China together may be sufficient to prevent economic centrifugal forces from splitting it apart. 

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27 minutes ago, Marcin2 said:

I think that it is impossible for US citizen to live in the world in which United States is number 2, that Chinese GDP could be 200% of US GDP. You simply cease to be exceptional at this very moment.

You really misread Americans. They would like to believe there is no one greater, but quite frankly they don't give a hoot. Americans are not Russians. They don't feel an affinity to the power of the central government in international affairs. It is not even a political issue in national elections, not to speak of State and local ones. The US is uniformly ambivalent on the issue of international engagement. Couldn't care less about an ascendant China if it were not so obvious that so much of what is stocked on their shelves comes from China and so many of the jobs  they once had are held by folks at the industrial outskirts of Shanghai or Guangzhou. Other than that, so long as China isn't really threatening the US with nuclear annihilation, Americans don't care. 

Americans distinctly want out of peacekeeping Europe and the middle east. It is only at the top end of business and politics that US' international role matters. It is entirely different from the natural issue of Europe's position on a huge interconnected continent and a Warsaw resident's natural concern with what Italians might be up to in their EC negotiations if Cicciolina gets a ministry portfolio in a newly elected Italian government. 

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21 minutes ago, Gerry Maddoux said:

What I said, to paraphrase in the simplest terms I can muster, is that if someone did that (messed with the virus to weaponize it), and the truth eventually leaks out, then China is done in the community of countries that matter, and they will lose their supply-line status to the world, and the folks will revolt and the economy will go in the crapper, and the country will crash. And by God, I stand by that, and I really wish you wouldn't try to get too cute and screw around with my words. Capiche?

My question was more general, and I explained that in my comment, it was based on opinions here wishing the fall of CCP followed by partition of China:

Please ask yourself, if you are American how far are you gonna go to protect your hegemony ?

1- tariffs,

2- global sanctions for business with some entities

3- across the board high-technology embargo,

4- full economic conflict and global sanctions like with Iran

5- resources embargo, navy blockade,

6- shooting conventional war

7- nuclear war

We are now at 3,

4 is 30% possibility of armed conflict,

5 is 100% possibility of armed conflict. Please answer.

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48 minutes ago, Marcin2 said:

Guys, why you wish the most populous country to fall apart, after revolution ?

We don't WANT it to happen. We fear that it does and brings chaos to the energy economy and trade. Unlike most Americans, those on this forum are aware of the rest of the world and how prices and capital are global and matter internally for the US, especially for energy.

From my own perspective it is what I call the diseconomy of scale. That beyond a particular size, any organization becomes too complex to manage and further increases in scale Balkanize it into an incoherent mess that can not be financially coordinated. Mystery cash drains and surprise management issues (corruption) pop out of seemingly nowhere. China, to the extent that it is centrally managed, has definitely gone well past the scale in which a single organization can actually run it. The 50-60% of the economy that was private is unplanned but for a handful of the year's most favored industries sucking in free capital from the provinces or big four CCP controlled banks. It is a truly wild vicious capitalism that we rarely see in the West. It is very short term oriented and flits capital from one endeavor to another just as fast as Shenzhen listed stocks go into speculative manias and then burn up into a crash. The fact is that China is beyond unmanageable as a single unit, unless it is a loose confederation. So it may be better off disbanded. I believe that if history is a guide, then that is why China was rarely unified. 

But "us guys" don't have a wish for China going either way. Those here on the energy side want to avoid disruption of their demand. 

Unlike most Americans, we also fear China's attempts to bend other countries economically into the shape of its contorted self. 

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21 minutes ago, 0R0 said:

You really misread Americans. They would like to believe there is no one greater, but quite frankly they don't give a hoot. Americans are not Russians. They don't feel an affinity to the power of the central government in international affairs. It is not even a political issue in national elections, not to speak of State and local ones. The US is uniformly ambivalent on the issue of international engagement. Couldn't care less about an ascendant China if it were not so obvious that so much of what is stocked on their shelves comes from China and so many of the jobs  they once had are held by folks at the industrial outskirts of Shanghai or Guangzhou. Other than that, so long as China isn't really threatening the US with nuclear annihilation, Americans don't care. 

Americans distinctly want out of peacekeeping Europe and the middle east. It is only at the top end of business and politics that US' international role matters. It is entirely different from the natural issue of Europe's position on a huge interconnected continent and a Warsaw resident's natural concern with what Italians might be up to in their EC negotiations if Cicciolina gets a ministry portfolio in a newly elected Italian government. 

You say, you are perfectly OK living in the world in which China is the global power, with GDP 200% of US GDP ?

You know that with economic domination, comes also technology domination and later also military.

I mean US would be able to defend North America, but would not be able to project power around Eurasia.

Eurasia would be Chinese continent, North and South America would stay to be US continent.

I think for a lot of US citizens this would be very tough to choke.

I mean US spends a lot of money, nearly  1 trillion US dollars each year to have control over hydrocarbons.

A lot of people were killed by Americans for the purpose of control over hydrocarbons.

I think I do not believe, that you believe what you write.

 

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