Tag Archives: China

Winnie the Pooh’s Adventures In Fairyland, by MN Gordon

Posted on October 1, 2021 | Leave a comment

Have the Chinese found a secret sauce that enables them to transcend economic reality, or have the merely blown up enormous bubbles across their economy with debt? From MN Gordon at economicprism.com:

Up until the Evergrande Group began stiffing creditors, Xi Jinping had it made.  But being a communist dictator is serious business.  And when the Ponzi finance structure underlying your country’s second largest property developer begins cascading down it’s no laughing matter.

One of the gravest moments for any communist dictator is when his nation’s fortunes deviate from the course of the five year plans put in place to rule over it.  Playing god to 1.4 billion people only halfway works, so long as the people’s reality somewhat parallels the official communist party line.  Otherwise, force and fear are required to maintain the lies.

“A man’s heart deviseth his way: but the Lord directeth his steps,” noted King Solomon (Proverbs 16:9).  The good Lord, in heaven above and on the earth beneath, has a keen sense of humor; particularly, when serving up a slice of humble pie.

Xi Jinping, through happy accident, timed his entry into the world stage most perfectly.  A 20 year economic boom had taken the People’s Republic of China to a new place of global prominence.  Yet rather than basking in the glory of his predecessors successes, Xi took to flexing his muscles abroad, and censoring and surveilling his citizens at home.

This summer Xi and the Chinese Communist Party (CCP) initiated a regulatory onslaught against Chinese technology companies like Alibaba, Tencent, and Didi Global.  Now property developers are suffering the CCP’s wrath, with the imposition of new debt limitations – called “three red lines”.

Evergrande is one of many leveraged developers in China.  But it happens to be the most overstretched, and the first to have its cash flow come up short of its debt obligations.  More developers will follow.

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If We Fight a New Cold War, Who Are We Fighting It With? By Ted Snider

Posted on September 30, 2021 | Leave a comment

The US would have a tough time winning a Cold War against China. How does it fight against China and all its Eurasian friends, like Russia and Iran? From Ted Snider at antiwar.com:

President Biden’s words were hollow. The content had been cored because the words were empty of any real world content. On September 21, 2021, he told the UN General Assembly that the US is “not seeking a new Cold War or a world divided into rigid blocks.” UN Secretary-General Antonio Gueterres disagreed, warning against the new Cold War and referring to the US and China as “superpowers.”

With whom would a new Cold War be fought? Biden hinted at who the Cold War would be fought with right after saying that the Cold War wouldn’t be fought: “the United States turns our focus to the priorities and the regions of the world, like the Indo-Pacific, that are most consequential today and tomorrow.”

Biden denied that the war with China is a war of aggression. White House press secretary Jen Psaki clarified that “Our relationship with China is one not of conflict but of competition.” Biden referred to “a new era of relentless diplomacy.” Again, words cored of content. The diplomacy is a diplomacy of provocation in Taiwan punctuated by military provocation. And diplomacy is not characterized by the US enticing Australia to cancel its order of conventional submarines that, according to Frank von Hippel, senior research physicist at Princeton University and a specialist in nuclear power, nuclear energy and nuclear arms control and proliferation, are completely adequate if your purpose is defending your maritime property against invading navies, for nuclear-powered submarines that are only preferable if your purpose is offensive attack. That’s sending a message to China, but it’s not diplomacy.

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Posted in Eurasian Axis, Foreign Policy, Geopolitics, Governments, History, Military, War

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More Than Half Of China’s Provinces Are Now ‘Rationing’ Electricity, Governors Demand More Coal Imports To Resolve Crisis, by Tyler Durden

Posted on September 29, 2021 | Leave a comment

Europe and China are both in the throes of energy shortages and it’s not yet winter. From Tyler Durden at zerohedge.com:

At least 20 Chinese provinces and regions making up more than 66% of the country’s GDP have announced some form of power cuts. Guangdong province, the southern industrial hub, is cutting ~10% of its peak power demand…

And as the severe power crunch hits major industrial hubs in China’s northeastern heartland, top political leaders face mounting pressure from businesses and citizens to solve the crisis through increasing coal imports to keep the lights on and factories humming. 

Reuters spoke with Han Jun, governor of the northeastern province of Jilin, who said new coal suppliers are needed from Russia, Mongolia, and Indonesia. He added the province would also need to acquire coal mining contracts in the neighboring region of Inner Mongolia to ensure adequate supply.

Jilin is one of the ten provinces that have been hit hard by the power crunch. The government has rationed power to energy-intensive heavy industries like steel, cement, and aluminum plants to solve the problem, but that has yet to work. Power plants are also facing a surge in thermal coal prices and are unwilling to pass on to consumers.

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AUKUS Security Alliance Exposes EU’s Fecklessness, by Soeren Kern

Posted on September 29, 2021 | Leave a comment

The AUKUS countries—Australia, the UK, and the US—bypassed a lot of European countries who have demonstrated very little commitment to their own or anyone else’s defense. From Soeren Kern at gatestoneinstitute.org:

  • If an authoritarian nation, such as China, displaces America as the dominant global power, then democracies all over the world will feel the consequences.” — Gideon Rachman, columnist, Financial Times.
  • “Too many European elites still do not want to admit that democracies are in a systemic rivalry with autocracies. Refusing to acknowledge reality is convenient for them since it justifies their inaction. But we need to do the opposite and double down in our defense of democracies.” — Andreas Fulda, China expert, University of Nottingham.
  • “The US thinks about how to contain China. And Australia too is in the position of thinking about how one contains, as opposed to how one accommodates; that’s the fundamental difference with France. As a consequence, the US looks like the better partner.” — Richard Whitman, professor of politics and international relations, University of Kent.
  • “I think it was the only option for Australia because the French were not going to annoy or unnecessarily irritate Beijing. They wanted trade, economic, and investment relations. Now, Australia will have the capability to sink the Chinese navy in 72 hours; that’s what this is all about. The Chinese know they have been outmaneuvered, and they’re very angry. In a very short period of time, Australia has gone from a doormat to something very considerable — it’s an extraordinary development.” — Joseph Siracusa, geopolitical analyst, Sky News Australia.
  • “The lesson of the past few weeks is that the world does not run on Brussels time, with its long periods for consultation, courteous attention to the electoral cycles of 27 countries, and sacrosanct weekends, evenings, and lunch breaks.” — Edward Lucas, Europe analyst, Center for European Policy Analysis.
  • “France underestimated how China’s naked military ambition, chronic disregard for international order, and barely concealed aspirations to control the deep Pacific and Antarctica pushed Australia to make tough decisions about the future.” — Craig Hooper, geopolitical analyst, Forbes.
  • “It is hard to overstate the importance of the so-called Aukus alliance between the US, the UK and Australia — and the implicit geopolitical disaster for the EU.” — Wolfgang Münchau, commentator, The Spectator.

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Posted in Eurasian Axis, Foreign Policy, Geopolitics, Governments, Military, Politics

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The China Cold War Will Unstick America’s Glue, by Alastair Crooke

Posted on September 28, 2021 | Leave a comment

America doesn’t have what it would take to wage a new cold war against China. From Alastair Crooke at strategic-culture.org:

Can an America that off-shored much of its manufacturing capacity to China, for short-term profit, afford the de-coupling?

Washington isn’t quite sure what to do after the chaotic end to America’s ‘forever’ war. Some in Washington bitterly regret exiting from Afghanistan at all, and advocate for an immediate return; some just want to move on – to the China ‘Cold War’, that is. The cries from the initial Establishment ‘melt down’ and its articulation of pain over the Kabul withdrawal débacle, however, indicates the extent to which the almost obsessive focus on ‘Hobbling China’ nevertheless seems like an humiliating retreat to U.S. hawks, habituated to more global, and unlimited interventions.

It is a retreat. ‘Rome’ is relegating its ‘distant provinces’ to their own devices, and even its abutting loyalist inner circle is being downgraded to ‘benign’ indifference. It is a drawing-in towards the ‘hub’, a ‘circling of wagons’ – the better to muster energies for a lunge out at China.

There are the acquiescent regions that Americans occupied after WW II (the psychologically-seared Japan and Germany), and then there is the American world empire, which exists chimerically wherever U.S. commercial and cultural power reaches, and more practically in its patchwork of client states and military installations. This third empire is regarded by many Americans as its most remarkable achievement – a triumph of the ‘City of Light’.

The post 9/11 era’s final ‘Mad Hatter’s Tea Party’ dénouement scene at Kabul Airport did however, clearly convey a strong end-of-the-Roman Empire feel. Yes, failure in Afghanistan may have taken place far from Rome itself, yet something more profound today hangs in the air: a Change of Era.

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Posted in Economics, Economy, Eurasian Axis, Foreign Policy, Geopolitics, Governments, History

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“The Endgame Of Communist Rule Has Begun”: Evergrande’s Fall Shows How Xi Has Created A China Crisis, by Niall Ferguson

Posted on September 28, 2021 | Leave a comment

Is Evergrande illustrating the shaky foundations of a society and economy built on debt and repression? From Niall Ferguson at Bloomberg via zerohedge.com:

The developer’s collapse isn’t leading to global contagion, but China’s looming economic disaster might…

A major mistake of the Cold War was the tendency of Western observers to overestimate the Soviet Union. I have often wondered if the same mistake is being repeated with the People’s Republic of China. Then again, for every article over the last 10 years that predicted China’s economy would overtake that of the U.S., there were at least two prophesying a “China crisis.”

“The endgame of Chinese communist rule has now begun,” wrote David Shambaugh in 2015.

Wisely, he added: “Its demise is likely to be protracted.”

That same year, Jim Chanos of Kynikos Associates warned, “We’re getting inexorably to a tipping point in China.”

Last week began with yet another China tipping point. The impending collapse of the giant property developer China Evergrande Group, we were warned, could be China’s “Lehman Moment.” For 24 hours, global stock markets retreated by a couple of percentage points. By Tuesday morning, however, the story appeared to be over. The jitters subsided and investors got back to parsing the utterances of U.S. Federal Reserve Chair Jay Powell to make sure that nothing he said was surprising.

So if the China crisis never happens — no matter how many times China permabears like Chanos predict it — does China eventually overtake the U.S.? Thus far, it has done so only in terms of gross domestic product adjusted on the basis of “purchasing power parity,” which allows for the fact that a meal in Chongqing is quite a bit cheaper than one in Chicago. On a current dollar basis, China’s GDP last year was still just 72% of U.S. GDP, even with Hong Kong included.

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Posted in Banking, Business, Collapse, Debt, Economics, Economy, Eurasian Axis, Geopolitics, Governments, History

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Escobar: A New World Order Takes Shape, Part 2 – Eurasian Consolidation Ends The US Unipolar Moment

Posted on September 28, 2021 | Leave a comment

The world, particularly the Eurasian land mass, is being reordered and there’s not much the US government can do about it. From Pepe Escobar at The Asia Times via zerohedge.com:

Authored by Pepe Escobar via The Asia Times,

Read Part 1: How The SCO Just Flipped The World Order here…

Shanghai Cooperation Organization’s 20th-anniversary summit heralded the beginning of a new geopolitical and geo-economic order…

The 20th anniversary summit of the Shanghai Cooperation Organization (SCO) in Dushanbe, Tajikistan, enshrined no less than a new geopolitical paradigm.

Iran, now a full SCO member, was restored to its traditionally prominent Eurasian role, following the recent $400 billion-worth trade and development deal struck with China. Afghanistan was the main topic – with all players agreeing on the path ahead, as detailed in the Dushanbe Declaration. And all Eurasian integration paths are now converging, in unison, towards the new geopolitical – and geoeconomic – paradigm.

Call it a multipolar development dynamic in synergy with the Belt and Road Initiative (BRI).

The Dushanbe Declaration was quite explicit on what Eurasian players are aiming at: “a more representative, democratic, just and multipolar world order based on universally recognized principles of international law, cultural and civilizational diversity, mutually beneficial and equal cooperation of states under the central coordinating role of the UN.”

For all the immense challenges inherent to the Afghan jigsaw puzzle, hopeful signs emerged this Tuesday, when Hamid Karzai and Abdullah Abdullah met in Kabul with the Russian presidential envoy Zamir Kabulov, China’s special envoy Yue Xiaoyong, and Pakistan’s special envoy Mohammad Sadiq Khan.

This troika – Russia, China, Pakistan – is at the diplomatic forefront. The SCO reached a consensus that Islamabad will be coordinating with the Taliban the formation of a government also including Tajiks, Uzbeks and Hazaras.

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The Problem Is Not Just Xi Jinping; It Is Communism, by David Flint

Posted on September 26, 2021 | 1 comment

Freedom and truth are not compatible with communism, no matter who’s running the show. From David Flint at The Epoch Times via zerohedge.com:

To communists and their ilk, the truth is whatever line the party is now promulgating – that is, until it is superseded by a new line.

This is the theme of George Orwell’s great novel, 1984. The protagonist, Winston Smith, works at the Ministry of Truth, constantly amending historical records to be consistent with whatever is the current party line. In particular, those liquidated are made non-persons, just as though they never existed.

The truth has been packaged precisely this way in Communist China continuously and consistently since 1949, just as it was from the birth to the collapse of the USSR. Accordingly, when Joseph Stalin’s secret police chief, Lavrentiy Pavlovich Beria, was executed by his successors, subscribers to the Great Soviet Encyclopaedia would receive instructions to replace pages eulogising Beria with additional material on the Behring Sea. Beria was made a non-person.

But the fact is that the enemy of each and every communist regime is truth itself, as are the other values and principles of civilised society, especially the proposition at the very core of the Declaration of Independence. This is not just American. According to Winston Churchill, following the Magna Carta and the English Bill of Rights, the Declaration is the third great title deed on which the liberties of the English-speaking people, the core of the West, are founded.

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The Great Game moves on, by Alasdair Macleod

Posted on September 26, 2021 | 1 comment

The West can no longer stop China and Russia from dominating the Eurasian land mass. At best, they can shift policy and try to keep them confined there via naval power. From Alasdair Macleod at goldmoney.com:

Following America’s withdrawal from Afghanistan, her focus has switched to the Pacific with the establishment of a joint Australian and UK naval partnership.

The founder of modern geopolitical theory, Halford Mackinder, had something to say about this in his last paper, written for the Council on Foreign Relations in 1943. Mackinder anticipated this development, though the actors and their roles at that time were different. In particular, he foresaw the economic emergence of China and India and the importance of the Pacific region.

This article discusses the current situation in Mackinder’s context, taking in the consequences of green energy, the importance of trade in the Pacific region, and China’s current deflationary strategy relative to that of declining western powers aggressively pursuing asset inflation.

There is little doubt that the world is rebalancing as Mackinder described nearly eighty years ago. To appreciate it we must look beyond the West’s current economic and monetary difficulties and the loss of its hegemony over Asia, and particularly note the improving conditions of the Asia’s most populous nations.

Introduction

Following NATO’s defeat in the heart of Asia, and with Afghanistan now under the Taliban’s rule, the Chinese/Russian axis now controls the Asian continental mass. Asian nations not directly related to its joint hegemony (not being members, associates, or dialog partners of the Shanghai Cooperation Organisation) are increasingly dependent upon it for trade and technology. Sub-Saharan Africa is in its sphere of influence. The reality for America is that the total population in or associated with the SCO is 57% of the world population. And America’s grip on its European allies is slipping.

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Why The West Can’t Ban Bitcoin The Way China Did, by Mark Jeftovic

Posted on September 25, 2021 | Leave a comment

While they’re headed that direction, the West’s governments are not yet dictatorships like China’s. They’d have to convert themselves to full-fledged totalitarian states to do what China did to Bitcoin. From Mark Jeftovic at bombthrower.com:

Only a complete “dictatorship of the proletariat” can kill Bitcoin

Evergrande is being called China’s “Lehman moment” and overnight the PBC closed the loop on their clampdown on crypto with a total ban on virtual currency transactions.

For those paying attention, however, China isn’t just moving against crypto, they’ve been bringing their entire technology sector to heel. They also stated that it is time to redistribute wealth from the top tier of the nations wealth holders to the rest of the peasant class.

This isn’t a return to their Communist roots as much as it is a move of self-preservation against rising internal powers. In the words of my friend Charles Hugh Smith via some correspondence we’ve been having this week “Xi has set out to crush the Network State”.

I said in my earlier Network State Primer about the coming tension between Nation States and Network States: the former will go down swinging.

The power structures of the nation states won’t go gently into the dustbin of history. They will go down swinging, over a transitional era that may span decades or longer, similar to the centuries long tensions between monarchs and the Papacy that shaped the transition from the Middle Ages into the Renaissance.

China has decided to make their last stand of the Nation State, now. Here at this moment in time. They will not bail out Evergrande, they will allow their side of the Everything Bubble to pop, and they will use the economic crash to make a final sweep of consolidation of their power. They will make sure their Big Tech knows who is in charge and that it is not them.

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