Chinese Foreign Minister Wang Yi (L) meets with U.S. Secretary of State John Kerry in Munich, Germany, Feb. 12, 2016 [Xinhua]
Chinese Foreign Minister Wang Yi on Friday reacted strongly to South Korea-US talks on possible deployment of an advanced US missile defense system.
Wang said this “would complicate the regional stability situation”.
Meeting with US Secretary of State John Kerry on the sidelines of the Munich Security Conference, Wang made clear China’s opposition to the possible deployment of the Terminal High Altitude Area Defence (THAAD) system in South Korea.
The United States and South Korea have begun negotiations on the deployment of THAAD. The Pentagon made the announcement hours after North Korea’s recent rocket launch.
As one of the most advanced missile defense systems in the world, THAAD can intercept and destroy ballistic missiles inside or just outside the atmosphere during their final phase of flight.
Despite claims by Washington and Seoul that the missile shield would be focused solely on North Korea, Beijing says the US deployment would pose considerable threat to neighboring countries.
In an interview with Reuters on the sidelines of the Munich meeting, Wang said he was concerned by the possible deployment of the sophisticated anti-missile system in South Korea.
“The deployment of the THAAD system by the United States … goes far beyond the defense needs of the Korean Peninsula and the coverage would mean it will reach deep into the Asian continent,” Wang said.
“It directly affects the strategic security interests of China and other Asian countries,” he added.
The Chinese foreign minister urged the US side to act cautiously, not to undermine China’s security interests or add new complications to regional peace and stability.
Regarding the DPRK’s recent nuclear test and rocket launch, Wang said both moves violated UN resolutions and pose serious challenges to the global non-proliferation regime.
China and the United States have agreed to speed up the consultation process at the UN Security Council to reach a new resolution and take strong and effective measures to deter further development of nuclear and missile programs by North Korea, Wang noted in his meeting with Kerry.
Reiterating China’s stance on sanctions against North Korea, he said “it remains to be our common goal to work together and find a way to bring the Korean Peninsula nuclear issue back to the right track of dialogue and negotiations, which is fully in line with the interests of all parties, including China and the United States.”
In the interview with Reuters, Wang said China insists that there should be no nuclear weapons on the peninsula, no matter whether they were possessed by the north or the south side, and no matter whether they were developed locally or introduced from the outside.
China, a neighboring country of the Korean Peninsula and a major stakeholder in regional stability, also maintains that the Korean Peninsula denuclearization should be achieved via dialogue, not war, and that China’s national security interests should be guaranteed, he added.
Russia has also expressed concern about the potential deployment of THAAD, saying it could trigger an arms race in Northeast Asia.
On Wednesday, South Korea suspended operations at the Kaesong industrial zone as punishment for the rocket launch and nuclear test.
An emergency meeting of the United Nations Security Council early Monday has “strongly condemned” North Korea’s launch of a satellite into space, but China and the US differed on the type of response debated among world powers.
North Korea says the satellite launch was for peaceful and scientific research purposes, but global powers fear that the launch was a part of Pyongyang’s development of its ballistic missile program.
United States ambassador Samantha Powers called for robust responses to “violations” committed by the North Koreans.
It is likely the Security Council will draft a number of measures to increase and deepen economic sanctions already in place on North Korea.
However, North Korea’s only ally in the Security Council – China – fears that too severe a sanctions regimen will destabilize North Korea and the region.
It is likely that Washington will lean on Beijing to exert all its diplomatic efforts to rein in its weapons programs.
In the meantime, South Korea and the US said they will hold talks to possibly deploy an anti-missile defense system called Terminal High Altitude Area Defense (THAAD) on the peninsula – a move that Beijing says will harm regional peace.
While China summoned North Korea’s ambassador to protest Pyongyang’s satellite launch on Sunday, it also summoned the South Korean ambassador to protest THAAD’s deployment.
“China holds a consistent and clear stance on the anti-missile issue,” Chinese Foreign Ministry spokesperson Hua Chunying said on Monday.
“When pursuing its own security, one country should not impair the security interests of others,” Hua added.
China says that the deployment of such advanced anti-missile weaponry will not help in deescalating tensions in the Korean peninsula.
Our analysis of the international response to North Korea’s test of a hydrogen bomb directs our attention to China’s position and US-China debates about “what to do and who to blame.”
First, let’s look to the statement by Xinhua news agency on January 8. On the one hand, North Korea’s actions have been condemned, on the other hand, it was pointed out that “it was Washington’s antagonistic approach that pushed Pyongyang to carry on the development of nuclear weapons.” “The US military approach put Pyongyang in an acutely insecure position and encouraged the country to ignore the restrictions on non-proliferation of nuclear weapons. The DPRK, balancing on the brink of a nuclear war, really deserves international condemnation, as it seriously undermines the regional stability and peace in the world, might resort to desperate attempts of the country to improve its position in the fight against the USA.“
At the same time, according to anonymous sources of Yonhap news agency in diplomatic circles, Beijing is said to be very angry with the nuclear test, which came unexpectedly, especially given Pyongyang’s active attempts to improve bilateral relations. Official Spokesman of the Chinese Foreign Ministry Hua Chunying came up with a sharp condemnation of the tests and virtually admitted that Beijing had not been informed of the planned tests.
A number of statements from US diplomats and politicians are of interest, stating that the main villain of the place is the PRC and that China should have applied maximum efforts to “solve the problem.” Its policy and intention to continue the course to the six-party negotiations are said to have resulted in appeasement of Pyongyang. As US Secretary of State John Kerry said, “China had a particular approach to the DPRK, and Beijing partners in the six-party negotiations – Russia, the USA, South Korea and Japan – agreed to abide by this policy. The idea was to “give space” to China for cooperation with Pyongyang for the purpose of denuclearization of the Korean space… But now it is clear it did not work.”
In other words, since 2003 China has been promoting the idea of six-party talks as the solution of the Korean Peninsula nuclear problem with political and diplomatic means, but its actions did not lead to denuclearization. And it is necessary to increase pressure on North Korea and expand sanctions. Or actualize them so that they have the desired effect, whereas much depends on China, its main cross-border trade partner.
Donald Trump, a controversial US presidential candidate, also stated on January 10 that China should solve the problem; otherwise it will suffer from loosening its trade connections with the USA. China is believed to have total control over Pyongyang, so the USA must find a way to force Beijing to address this issue using as much economic pressure as possible. Some westerners even expressed the idea of a “Chinese-sponsored DPRK nuclear project.”
However, we can also note the fact that both experts on bilateral relations and representatives of the PRC disagree. The Chinese often mention that they have no special relations with North Korea, but “no special relations” may mean a lot depending on the situation: “we have no favorable attitude”, “we do not have the leverage”, and “our capabilities to put pressure on North Korea are limited.” It is partly so, because the ideological influence is gradually reduced, however it should be noted that even before Pyongyang listened to Beijing only formally, especially on the nuclear issue. China’s weakening influence is due to the fact that North Korea is building relationships with other countries, primarily with Russia.
China clearly sees how America and its allies use the pretext of the North Korean threat to accumulate force aimed not against North Korea and in this situation try to blame China, although it is well known, whose non-constructive position blocked the negotiation process at least in the same degree as the intransigence of the DPRK. There are many examples here (enough for a series of articles on the emergence of the Korean Peninsula nuclear problem and ways to resolve it), as the joint draft solution dated 2005 developed by the parties, and the USA and Japan having done everything in their power to stall it.
Moreover, China’s military preparations are quite obvious. On January 13, in his address to the people of the South Korea, President Park Geun-hye did not exclude the possibility of considering placing American THAAD anti-missile complexes in South Korea. This provoked a sharp reaction from Beijing, which objected the deployment of THAAD, considering that the radars can be aimed at China.
Therefore, The Global Times responded to Kerry’s accusations possibly even tougher than Xinhua : “The origins and causes of the North Korean nuclear issue are very complicated. On the one hand, the North Korean regime has taken the wrong way to ensure its security, and on the other, the USA consistently chose a hostile approach to North Korea.” And “until the USA, South Korea and Japan change their approach to Pyongyang, there can be no hope to solve the DPRK nuclear issue.” It also implies that the hope for Beijing to solve everything for everyone and make the North abandon its nuclear ambitions is “an illusion.”
Commenting on Seoul’s propaganda resumption and the raid of the US strategic bomber to South Korea, the PCR Foreign Ministry spokesman stressed that “ALL parties should make joint efforts to avoid further escalation. We hope that the parties will take careful steps to maintain peace and stability in Northeast Asia.” In short, “we did everything we could, but what have YOU done to ease up the problem except for sharpening it?”
However, displeasure towards the North also is demonstrated. According to the South Korean media (or rather the memorable Chosun Ilbo) with reference to its sources in the area of China-North Korean border, the Chinese authorities have tightened border controsl with Korea. As well as the passage through the bridge over the Tumen River is said to be closed, some cooperation projects canceled, and goods at customs and border points inspected by the Chinese more carefully. There is no information on the full-fledged sanctions from the authorities of China, but at least they started to do everything “strictly according to the rules” that previously were not always respected.
What does this mean? From the viewpoint of the author (as repeatedly mentioned) the PCR policy on the Korean Peninsula is slowly beginning to resemble the Russian one in terms of its so-called “multidirectional character.” At the same time, China is making use of the differences between the two Koreas and the balance of power. The North Korean issue is considered in the context of having a system of loyal regimes across the border (in this context, unauthorized DPRK actions are annoying) and in the context of potentially growing confrontation with the USA (whereas the DPRK is an ally, albeit difficult). The balance of these factors will determine ensuing actions.
Konstantin Asmolov, Ph.D, Chief Research Fellow of the Center for Korean Studies, Institute of Far Eastern Studies, Russian Academy of Sciences.
While a sharp drop in commodity prices is hitting resource-based economies hard, analysts suggest China has arguably become the biggest beneficiary.
Last year, China became the world’s top buyer of crude oil and nearly every other commodity. According to calculations by Kenneth Courtis, former Asia vice chairman at Goldman Sachs Group, the world’s second biggest economy saves $320 billion on cheaper oil, and another $140 billion in metals, coal and agricultural produce.
This has allowed China to cut or keep steady prices of everything from utility bills and petrol prices to the cost of raw materials at plants, Bloomberg reports.
Keeping the money within the economy has also given Beijing a chance to continue the transformation from an industrial to a consumer-driven economy.
“It’s shown up in low consumer-price inflation and more stuff that households have been able to buy,” Louis Kuijs, the head of Asia economics at Oxford Economics in Hong Kong and a former World Bank economist told Bloomberg. “Manufacturing companies would have had even worse profit developments if it had not been for those low commodity prices,” he added.
Besides importing a record volume of oil in 2015, China also had record imports of iron ore, soybeans and copper concentrate. Paying less for the imports, Beijing saw a $594.5 billion trade surplus surge last year, which has softened the consequences of capital outflows.
“China is the great winner from the crash of commodity prices,” said Courtis, the author of the calculations. “A significant portion of that windfall gain is being transferred to the domestic population,” he added.
There has been a concerted campaign to depict the South China Sea as an indispensable artery for commercial shipping and, therefore, a justifiable object of US attention and meddling.
This flagship of this effort is invoking the “$5 trillion dollars” worth of goods that pass through the SCS each year. Reuters, in particular, is addicted to this formula.
Here’s seven Reuters news stories within the last month containing the $5 trillion figure:
What interests me is that these seven articles reflect the work of six reporters and seven editors (seven to six! Glad to see Reuters has a handle on the key ratios!) in five bureaus and they all include the same stock phrase. How’s that work? Does headquarters issue a ukaz that all articles about the South China Sea must include the magic $5 trillion phrase? Does the copyediting program flag every reference to the South China Sea omitting the figure? Or did the reportorial hive mind linking Beijing, Manila, Hanoi, Hong Kong, and Sydney spontaneously and unanimously decided that “$5 trillion” is an indispensable accessory for South China Sea reporting?
I guess it’s understandable. A more accurate characterization of the South China Sea as “a useful but not indispensable waterway for world shipping whose commercial importance, when properly exaggerated, provides a pretext for the United States to meddle in Southeast Asian affairs at the PRC’s expense” is excessively verbose and fails to convey a sense of urgency.
The kicker, of course, is that the lion’s share of the $5 trillion is China trade, and most of the balance passes through the South China Sea by choice and not by necessity. … Full article
Here Are the Lessons of History the Press Ignores
“You cannot hope to bribe or twist – thank God! – the British journalist. But, seeing what the man will do unbribed, there’s no occasion to.”
So wrote the witty early twentieth century British man of letters Humbert Wolfe. His assessment of American journalists isn’t recorded but, where pivotal issues are concerned, they have probably proved even more naïve lately than their British counterparts.
American journalistic naïveté has rarely been more embarrassingly on display than in recent coverage of the Chinese economy.
Here is probably the most successful export economy in world history, yet American journalists have somehow been persuaded that it is in such terrible shape that it needs a devaluation. CNBC, for instance, reported the other day that “most experts” believe the yuan is overvalued by fully 10 percent. This despite the fact that the Chinese currency has already dropped more than 8 percent against the U.S. dollar in the last two years.
True China’s export performance has been lackluster lately – exports were down 3.7 percent in yuan in November, for instance, and the drop was considerably greater in dollars. What is rarely mentioned, however, is that China’s exports are one of the most volatile series in global economics. Short-term setbacks of as much as 20 percent or more are common and bespeak remarkably little about China’s underlying economic health. What matters is the long-term trend, a rate of growth in dollar-denominated export revenues that has averaged more than 17 percent a year in the last fifteen years. That is a truly sensational number and its accuracy is attested by other nations’ imports.
It hardly needs to be said that, pace what the press’s “expert” sources say, the case for devaluation does not stand up to even cursory examination. After all, the point of exchange rates is to ensure that trade is conducted on fair and mutually advantageous terms. Yet for a generation now the yuan has been so undervalued that it has wreaked havoc on what little has remained of America’s once superlative industrial base.
The result as of 2014 was that America’s bilateral trade deficit with China totalled $348 billion. This accounted for the vast bulk of the entire U.S. current account deficit with the world as a whole, which totalled $389 billion (the current account is the widest and most meaningful measure of a nation’s trade). Meanwhile China enjoyed a current account surplus of $220 billion.
Even in the face of figures like this, the press has often put a distinctly negative spin on Chinese economic news. Indeed many journalists have gone so far as to entertain suggestions – emanating ultimately from Sinology’s lunatic fringe – that the Chinese economic miracle is just smoke and mirrors and that in reality China is teetering on the brink of economic or political disaster, or both.
The political consequences are hard to exaggerate. Reports of economic trouble in China not only pander to wishful thinking among ordinary Americans but provide U.S. policymakers with an excuse to procrastinate on long-overdue measures to crack down on China’s trade cheating. Meanwhile the ground is cut from under economic hawks like Donald Trump who want to get tough with China.
In the circumstances the Beijing authorities could hardly be better served and it seems clear that for many years they have been quietly promoting a “bad news” propaganda agenda. (Japan does so as well, but that is a story for another day.)
The root of the press’s problem is a poor choice of sources. Instead of proactively seeking out trustworthy, independent sources, journalists too often sit around passively heeding whomsoever happens to be within earshot. Far too often this means listening to sources artfully placed in prominent positions by the China lobby.
What is clear is that many of the top academic Sinologists seem to be congenitally pro-Beijing. Others are merely ambitious, and know that to land a big job in a future presidential administration, they have to avoid saying things that might discomfit the China lobby. That lobby is largely funded by major U.S. corporations that do much of their manufacturing in China. One of the lobby’s most obvious objectives has been to keep the yuan low, with all that has implied for the future of America’s manufacturing base. As the lobby controls large tranches of China-studies money, it has had little difficulty ensuring that America’s most frequently quoted Sinologists are on message.
As for other key sources, China-watching securities analysts and bank economists are generally even less reliable than university-based Sinologists. They are clearly constrained by a need to please their most profitable and demanding customers, among whom various financial arms of the Chinese system have long taken pride of place. (China is now a vast exporter of capital, which is, of course, great news for those Wall Street firms who find favor in Beijing.)
Of course, some frequently quoted sources undoubtedly do believe what they are saying. In particular there is a minority of far-right China-watchers who love to preach textbook American laissez-faire to an apparently benighted Beijing. This is the “Tea Party” wing of American Sinology. Its members seem to be particularly lacking in the listening skills that are essential to understanding a place like China (basically you have to listen to the unsaid – something that Tea Party types probably consider an oxymoron). Of course, precisely because such Sinologists are so often wrong, they are viewed in Beijing as useful idiots who work wonders in keeping Americans confused and disunited.
While we can rarely say for sure whether any particular China watcher is in Beijing’s pocket, most undoubtedly are. Though they would be horrified to be so identified, their agenda is pretty obvious in the way they censor themselves. Instead of speaking out on China’s trade barriers, intellectual property theft, and the undervalued yuan, they typically tiptoe away from frank discussions of such matters.
Let’s take a closer look at some of Sinology’s more problematic figures. It takes no more than a cursory internet search to turn up countless China watchers who have vainly predicted the Middle Kingdom’s eclipse, if not collapse, over the years. In a moment we’ll look at Gordon Chang, who ranks as the king of the “collapsing China” crowd, but first let’s consider a few pretenders to the throne.
One often quoted source is the Beijing-based professor and analyst Michael Pettis. Though the tenor of Pettis’s comments varies, he has often come across as a super-bear.
Here, for instance, is how he described the Chinese economy to the Associated Press in 2007: “Right now, we’re in a sweet spot. Everything is as good as it can get…. You can make a very plausible case that we have all the conditions for a serious crisis when there’s an adverse shock. There’s a lot more debt out there than we think.”
Any U.S. policymaker who was persuaded by this would have been blindsided by subsequent events. China’s exports, for instance, multiplied more than three-fold in dollar terms in the next seven years.
Among China super-bears, few are more outspoken than Arthur Waldron, a professor at the University of Pennsylvania and a member of the Council on Foreign Relations. As far back as 2002, he claimed that Chinese economic growth was make-believe. Writing in the Washington Post, he backed a madcap theory that instead of growing at about 6 percent, as officially stated, the Chinese economy had actually been contracting for the previous four years. He concluded that China’s industrial policy was “a recipe not for growth but for economic collapse.”
Another Sinologist who has played an outsize role in confusing American opinion is Susan Shirk. As the Ho Miu Lam Professor of China and Pacific Relations at the University of California, San Diego, Shirk remains what she has long been: a notable “friend of China.” An early indication of her style came in 1994 when she published How China Opened Its Door: The Political Success of the PRC’s Foreign Trade and Investment Reform. She went on as Deputy Assistant Secretary of State in the Clinton administration to play a key role in negotiations that led to China receiving Most Favored Nation trade status.
Her claim to fame as a China super-bear is based largely on her 2007 book, China: Fragile Superpower: How China’s Internal Politics Could Derail Its Peaceful Rise. The book postulated a supposedly serious risk that the Chinese regime would be overthrown in a popular revolution. The consequences, she suggested, could be devastating not only for China but for the West. She urged the West not only to accord Chinese leaders exaggerated respect but to adopt an explicit policy of keeping them in power. Among other measures that presumably meant holding back on complaints about China’s trade policies.
Virtually every aspect of her analysis can be debunked but a full rebuttal would require more space than I have here. The first thing to note is that she claimed her analysis was based on conversations with numerous top Chinese leaders. That may well be so – but she evidently didn’t ask herself what was in it for them. After all they have made a fine art of keeping things secret from their own people. Why would they pour their hearts out to a mere gweilo (and a gormless one, by the sound of it)?
For now let’s simply note that for millenia, Chinese leaders have generally shown themselves uncommonly adept at nipping in the bud any signs of incipient revolution. Supreme leader Deng Xiaoping perpetuated the tradition by so brutally breaking up the Tiananmen protests in 1989. Today’s leaders moreover seem more secure than their predecessors in that they are equipped with modern methods of electronic surveillance that can provide a much earlier warning of incipient trouble than in the past.
Now let’s consider David Shambaugh, a political scientist at George Washington University. Long noted for suggestions that the People’s Liberation Army is a paper tiger, he has become outspokenly pessimistic about China’s political system in recent years. One recent essay, published in the National Interest in 2014, was headed “The Illusion of Chinese Power.”
Then in March 2015 he persuaded the editors of the Wall Street Journal to publish a commentary headed “The Coming Chinese Crackup.”
He wrote: “The endgame of Chinese communist rule has now begun, I believe, and it has progressed further than many think.” Referring to Communist Party rule, he added: “Its demise is likely to be protracted, messy and violent. I wouldn’t rule out the possibility that Mr. Xi will be deposed in a power struggle or coup d’état.”
His analysis was so melodramatically worded that it attracted considerable criticism, not least a point-by-point rebuttal from Forbes.com commentator Stephen Harner (who, unlike Shambaugh, can claim to have spent much of his career in China).
Shambaugh’s central point was a surmise that Chinese president Xi Jinping’s efforts to curb corruption had dangerously ruffled the feathers of power rivals.
As a measure of Xi’s allegedly weakening grip, Shambaugh mentioned that on a recent visit to a Chinese campus bookstore, he noticed that a pile of pamphlets by Xi didn’t seem to be moving. This, of course, is broadly as fatuous as an illiterate Chinese visitor judging Hillary Clinton’s presidential prospects from the height of a pile of pamphlets at Columbia University.
Shambaugh also noted that an increasing number of Chinese students have been studying abroad lately. This, he suggested, stemmed mainly from a morbid fear of political instability at home. He did not seem to wonder whether less sensational explanations might suffice. After all, on the latest figures, Koreans are proportionately nearly seven times more likely than the Chinese to study in the United States – and the Taiwanese are more than four times more likely. Are we to believe that the danger of “crackup” is even greater in South Korea and Taiwan than in China? The truth is that East Asian students study abroad for a variety of rather mundane reasons, most notably the chance to improve their English. The trend has been powerfully stimulated not only by East Asia’s increasing wealth but by the same advances in air travel and communications that have been generally promoting globalization.
Perhaps Shambaugh’s most important point was that many super-rich Chinese families have been buying homes overseas. But, as Stephen Harner pointed out, this is hardly news. The Chinese have been doing so for generations. The only difference these days is that they have so much more money to spend. This, of course, attracts notice and even gets written about in the press.
Probably the single most widely publicized member of the “collapsing China” club is Gordon Chang, a Chinese-American lawyer. Since he published The Coming Collapse of China in 2001, he hasn’t had a good word to say about China’s prospects. Yet between 2001 and 2014, China boosted its exports from $267 billion to $2,331 billion – a more than eight-fold rise and a compound annual growth rate of an almost unbelievable 18.1 percent. This signified a rate of sustained productivity growth that few, if any, other nations have ever matched.
Contacted recently, Chang professed to be still a convinced China super-bear. But if China managed to escape economic Armageddon in the wake of his book’s publication fourteen years ago, what’s different today? In its latest reformulation, Chang’s argument is that China is facing devastating new competition from India. Just as a rising China wreaked havoc on the U.S. economy, a rising India supposedly poses a similar threat to the Chinese economy.
To a non-economist, especially one who is not familiar with Asia, this might not seem entirely implausible. In reality Chang’s argument is based on one of the most elementary fallacies in economics, the idea that success is a zero-sum game. His implicit assumption is that for some nations to win, others necessarily have to lose. This is Malthusianism and it overlooks the fact that in normal modern conditions economic growth is an expanding universe. Think, for instance, of the rise of Scandinavia. Though Norway, Sweden and Denmark now rank near or at the top of the world income league, this has hardly on balance posed a problem for a nation like Germany.
What Chang seems to be implying is that India will be accorded carte blanche to use the same super-aggressive methods on the Chinese industrial base that China has used on the American industrial base. He fails to note, however, that Washington has been asleep at the switch, with the result that China has been allowed to get away with the economic equivalent of murder. In particular China has extorted a cornucopia of advanced production technologies from America. U.S. corporations have been told that to sell their products in China they must manufacture there and bring their best technologies. To say the least, such diktats ride roughshod over China’s obligations under international trade agreements. India is unlikely to be permitted to use similar extortion techniques against China.
In truth about the only thing India and China have in common is an Asian address. In economic and political fundamentals, they are chalk and cheese. In trade, for instance, India remains a negligible force, despite many years of bullish econobabble in the West. At last count it was not only being out-exported nine to one by China but China seemed to be lengthening its lead. (Measured since 2006, India’s exports have hardly doubled, whereas China’s have more than quadrupled.)
Crucially the Indian savings rate runs little more than half of China’s. Worse, the Indian authorities seem to lack the authoritarian tools necessary to boost it. (In In the Jaws of the Dragon, a book I published in 2008, I showed how China uses authoritarian controls to suppress consumption, thereby automatically and powerfully boosting the savings rate.)
Another key distinction is that whereas China has run huge current account surpluses for decades, the Indian balance of payments remains stubbornly in the red.
A second strand in Chang’s argument is that capital flight threatens to destroy the Chinese economy. Though this again may impress a non-economist, there is again a lot less here than meets the eye. For a start, China is necessarily a huge capital exporter as a result of its current account surpluses (as a matter of simple arithmetic, every dollar of surplus represents a dollar of capital that will willy-nilly be exported).
To be sure Chinese leaders have often talked as if they are worried about capital flight. The point of such talk, however, would appear to be merely to deflect attention from the People’s Bank of China’s market interventions to keep the yuan undervalued.
What is clear is that if the Beijing authorities can control the internet and the press, a fortiori they can control capital flight (which requires mainly just a firm grip on a mere handful of major banks, most of which are, in China’s case, state-owned). What we know for sure is that historically other nations with a far more liberal tradition – the United Kingdom in the mid-twentieth century, for instance – have had little trouble maintaining effective capital controls. Moreover the investment case for the British getting their money out in those days was far greater than for the Chinese today. After all Britain’s economic performance was persistently anemic, whereas China’s current growth rate, at around 6 percent, remains one of the world’s highest. In the unlikely event that Chinese capital flight really becomes a problem, the authorities have a host of remedies available, not least an Orwellian system of electronic snooping far more intrusive than anything known in the West today, let alone in the United Kingdom of the 1960s.
So what are we left with? It is past time the American press remembered its traditional commitment to balance – and recovered its commonsense. Hearteningly, not all members of the press are incapable of learning from experience.
I will leave the last word to Gideon Rachman of the Financial Times. He cut to the core of the matter in a well-balanced commentary in 2012.
It is clearly true that China has enormous political and economic challenges ahead. Yet future instability is highly unlikely to derail the rise of China. Whatever the wishful thinking of some in the west, we are not suddenly going to wake up and discover that the Chinese miracle was, in fact, a mirage.
“My own scepticism about China is tempered by the knowledge that analysts in the west have been predicting the end of the Chinese boom almost since it began. In the mid-1990s, as the Asia editor of The Economist, I was perpetually running stories about the inherent instability of China – whether it was dire predictions about the fragility of the banking system, or reports of savage infighting at the top of the Communist party. In 2003, I purchased a much-acclaimed book, Gordon Chang’s, The Coming Collapse of China – which predicted that the Chinese miracle had five years to run, at most. So now, when I read that China’s banks are near collapse, that the countryside is in a ferment of unrest, that the cities are on the brink of environmental disaster and that the middle-classes are in revolt, I am tempted to yawn and turn the page. I really have heard it all before.
Eamonn Fingleton reported on East Asian economics and finance from a base in Tokyo for 27 years. He met China’s supreme leader Deng Xiaoping in 1986 and predicted the Japanese stock market and real estate crashes in a major article in Euromoney in September 1987. He is the author of Unsustainable: How Economic Dogma Is Destroying American Prosperity (New York: Nation Books, 2003).
The year 2016 promises to see the deepening of Zimbabwe’s relations with Russia and China, old friends who supported our quest to overthrow colonialism as long ago as the 1950s.
Both Russia and China are stepping up economic investment in Zimbabwe. They are also continuing to oppose the illegal sanctions the West has imposed on us — a blatant attempt to change an elected government by crippling our economy in the hope that the masses would rise up against it.
Yet this hope has proved utterly false, as the people of Zimbabwe refuse to adopt the West’s notions about how to conduct our sovereign affairs.
Russia’s biggest economic commitment to Zimbabwe to date was its agreement in September 2014 to invest $3 billion in what will be Zimbabwe’s largest platinum mine.
What will set this investment apart from those that have been in Zimbabwe for decades is that the project will see the installation of a refinery to add value, thereby creating more employment and secondary industries. The Darwendale operation near our capital of Harare is expected to produce 600,000 ounces of platinum a year when it reaches capacity.
We are confident that this is just the start of a Russia-Zimbabwe economic partnership that will blossom in coming years. Our two countries are discussing other mining deals in addition to energy, agriculture, manufacturing and industrial projects. Russia also continues to assist Zimbabwe in training young Zimbabweans in special-skills areas such as medicine, general engineering, agricultural engineering and many other disciplines.
Groundwork was laid for expanding trade and investment when Zimbabwean President Robert Mugabe met President Vladimir Putin in Moscow in May 2015.
A few months after their meeting in December 2015, Chinese President Xi Jinping visited Zimbabwe, where he announced 10 economic agreements worth billions of dollars.
China is already our largest trading partner outside the continent, and the new investments will have a major impact on our economy.
Of particular importance is a billion-dollar deal that will help Zimbabwe overcome the critical shortage of electricity that prevents us from realizing our full economic potential.
Under the agreement, China will expand the capacity of our largest electric-generating facility at Hwange in western Zimbabwe, while the Chinese-funded Kariba South power extension project — adding 300 MW to the grid — will be commissioned within the next 18 months.
Another deal will involve China financing the installation of fiber-optic cable to help us expand our high-speed Internet system. It is the government’s desire to ensure that every corner of the country has access to modern communication systems, including the Internet. This will facilitate trade and commerce, as the better a country‘s Internet, the greater its chances of boosting its industrial efficiency and developing its own high-tech sector.
China has also agreed to build a pharmaceutical distribution center in Zimbabwe. The facility will assist the government in improving the health delivery system, which has long been burdened by the debilitating illegal sanctions. This will allow us to provide medicine to all hospitals and clinics at affordable prices. But in addition to creating jobs, it will also give us a key piece of infrastructure that we can use to build out the domestic pharmaceutical industry.
China has not only become the biggest investor in Zimbabwe, but in all of Africa in recent years. Alarmed and envious of China’s expanding investment on the continent, the West has tried to portray China as trying to set up its own neocolonialist system in Africa.
Zimbabwe rejects that notion. China has proved a reliable development partner. It has not dictated terms of cooperation with us. Instead the parties have negotiated and agreed to the terms under which economic cooperation is to be consummated. Such agreements take into account the need to empower our own people by accepting that mineral resources are finite.
We highly appreciate both Russia’s and China’s opposition to the West’s efforts to harm our economy through illegal sanctions. They adamantly believe that such sanctions are illegal infringements on sovereignty because they are designed to intimidate a sanctioned country into adopting those policies that the West prefers, as opposed to those that it believes are in its best interest.
But Russia and China have not just talked the talk in opposing sanctions against Zimbabwe. They have walked the walk. In addition to investing in our country in defiance of the sanctions, they vetoed a UN Security Council resolution on July 11, 2008 that sought to impose further sanctions.
The African Union has joined Russia and China in resisting Western efforts to bully Zimbabwe. Its most important show of support was defying the West by naming President Mugabe the chairman of the AU in February 2015. Many Western governments had called publicly for the AU not to give Zimbabwe the chairmanship. These calls, however, fell on deaf ears.
As long as Zimbabwe refuses to dance to the West’s wishes it will remain sanctioned indefinitely. Yet we have already lived under these sanctions for 16 years and believe that the worst is over. Sanctions cannot defeat the human spirit, no matter how hurtful they might be.
We are thankful for the AU’s support and are confident that the illegal sanctions will fail to bring us to our knees as the West so desires.
With the support that Zimbabwe is receiving from China and Russia — two powerful nations — as well as an increasingly progressive mankind, we have entered 2016 with greater hope, optimism and confidence. We look forward to positive changes in the living standards of our people.
We thank everyone who has steadfastly stood with us in 2015 and look forward to their continued support in 2016.
While the current box office hit “The Martian” by director Ridley Scott and starring Matt Damon depicts coordination between the U.S. and Chinese space programs, that’s not the way it’s playing out in the real world.
Secretary of the Air Force Deborah Lee James on Wednesday at the National Press Club responded to a question about the U.S. blocking efforts by Russia and China and over 100 other countries to ensure the disarmament of outer space by alleging that China and Russia are engaging in activities in space that are are “worrisome.”
Sec. James stated “we don’t have weapons in space in the United States.” She then added: “Now what has been very worrisome in recent years is that some other countries around the world, notably China and Russia, are investing and they’re testing in different types of capabilities which could shoot satellites out of orbit, and do other things to our capabilities and the capabilities of allies in space, which is worrisome.” [Question at 54:00, video of event.]
Sec. James’ comments were in response to a question this reporter submitted citing a UN vote last month which was 122 in favor to 4 against disarmament outer space. The U.S. was one of the nations voting against the resolution. [full question and response below.]
John Hughes, the president of the National Press Club and moderator of the event, in his introduction of James, noted that she was recently made “the principle space adviser with expanded responsibilities of all Pentagon space activities.”
Still, Sec. James stated today “I’m not familiar with that vote.”
Alice Slater, who is with Nuclear Age Peace Foundation and the Abolition 2000 coordinating committee and is a leading activist on disarmament said today: “It’s hard to believe that the U.S. Secretary of the Air Force is unaware of the U.S. military program to ‘dominate and control the military use of space’ as set forth in Pentagon documents such as Vision 2020 [PDF] or that the U.S. also has tested anti-satellite weapons in space.”
A summary of the votes in question on Nov. 3 on the UN’s website states: “The text, entitled ‘No first placement of weapons in outer space,’ reaffirmed the importance and urgency of the objective to prevent an outer space arms race and the willingness of States to contribute to that common goal.” The UN summery references a “draft treaty, introduced by China and the Russian Federation. … The draft was approved by a recorded vote of 122 in favour to 4 against (Israel, Ukraine, United States, Georgia), with 47 abstentions.” Yet, James, in her remarks painted Russia and China as the aggressors.
But consider Sec. James’ exact words. While she indicates the U.S.: “we don’t have weapons in space” — she has a different standard when talking about Russia and China: They “are investing and they’re testing in different types of capabilities which could shoot satellites out of orbit” — which the U.S. obviously is doing as well. There is a race to weaponize space though it would seem Russia, China and most other nations are making moves through the UN to stop it and the U.S. government appears to be hindering that.
In addition to Vision 2020, the Project for a New American Century also called for U.S. control of space as one of its goals: “CONTROL THE NEW ‘INTERNATIONAL COMMONS’ OF SPACE AND ‘CYBERSPACE,’ and pave the way for the creation of a new military service — U.S. Space Forces — with the mission of space control.” [archived PDF]
Slater added: “It is common knowledge that when the wall came down in Europe, Gorbachev and Reagan met in Rekjavik and were prepared to negotiate the total elimination of nuclear weapons, except the negotiations were aborted because Reagan refused to give up his dream of a U.S. military shield in space, commonly referred to at the time as Star Wars.
“Less well known, but nevertheless true, is that Putin offered Clinton a deal to cut our arsenals of 16,000 nuclear weapons to a 1,000 weapons each and call all the parties to the table to negotiate for nuclear abolition if the U.S. would cease its plans to put missile bases in Eastern Europe. Clinton refused and Putin backed out of his offer. Shortly thereafter, Bush actually walked out of the 1972 Anti-Balllistic Missile Treaty and put US missiles and bases in Turkey, Romania and Poland. …
“In 2008, Russia and China proposed a draft treaty to ban space weapons which the U.S. blocked from going forward in the consensus bound committee on disarmament in Geneva. This year the U.S. voted to abstain from a Russian proposal to ban weapons in space at the UN First Committee of the General Assembly, joining only Israel and Palau, in not going forward to support the ban.”
In a quest for increased transparency in journalism, here are background material on the piece above.
I asked a couple of other questions about air wars and killer drones which were not asked, though several questions were asked about drones, including one about killing of civilians:
Here were the questions I submitted in writing before the event:
Q: airwars.org estimates that the current bombing campaign in Iraq and Syria over the last 482 days has leveled about 8,600 strikes and killed 682 to 2,104 civilians. Do you have an estimate for the number of civilians killed by U.S. airstrikes?
Q: The Guardian reports on four former drone pilots who recently wrote an impassioned plea to the Obama administration, calling for a rethink of a military tactic that they say has “fueled the feelings of hatred that ignited terrorism and groups like Isis, while also serving as a fundamental recruitment tool similar to Guantánamo Bay … We cannot sit silently by and witness tragedies like the attacks in Paris, knowing the devastating effects the drone program has overseas and at home.” Do you have any information on the long term consequences of the US government’s killer drone program? Can you tell us what countries US drones operate in? How do you respond to their letter from the former drone pilot whistleblowers — these are people who left lucrative careers operating drones because they concluded it was morally contemptible to continue.
Neither was asked, though the moderator, Hughes, did ask a number of questions about drones and raised the issue of civilian deaths in this question:
Q: You talked about the effort to minimize collateral damage, or civilian deaths, in this effort how satisfied are you that you’ve been able to minimize civilian deaths in this campaign? And as you step up this effort now, will the risk of more civilian deaths rise?
Deborah Lee James: I am satisfied that our combined efforts and the way we are approaching this campaign is unprecedented in the history of warfare in terms of the care that we take to do everything possible to try to avoid civilian casualties. Is it 100 percent? No, because there are, from time to time, terrible tragedies. But with the thousands of sorties [a deployment or dispatch of one military unit, be it an aircraft, ship, or troops, from a strongpoint] that have been flown, the fact that there have only been a handful of these incidents, I think, is almost a miracle. So I am convinced we’re doing a good job, I saw some of it in action myself when I was in the CAOC [Combined Air and Space Operations Center] and the CGOC [Company Grade Officer’s Council], and enormous care is taken.
Here’s the full question about weaponization of space:
Q: This questioner says, ‘One month ago at the UN there was a vote for disarmament in space. The vote was 122 for and 4 against, the U.S. was one of the four against. Why is the U.S. against disarmament in space?
Deborah Lee James: “Well, I’m not familiar with that vote, but what I will tell you about space and the proposition of space is this — number one, we don’t have weapons in space in the United States. Number two, we’re very focused on not creating debris in space. So to back up for just a minute, if you go back 20, 30 years there were relatively few countries, and few companies for that matter, who even could get themselves to space, but flash forward to the present day and there are many more countries and many more companies. Plus there is debris in space, there is space junk. So you’ve got thousands of these pieces of material whirling around at 40 or 50 thousand miles per hour and even a small piece of debris can do some serious damage to a billion dollar satellite. So debris is bad and we want to make sure that we minimize that at all costs. Now what has been very worrisome in recent years is that some other countries around the world, notably China and Russia are investing and they’re testing in different types of capabilities which could shoot satellites out of orbit, and do other things to our capabilities and the capabilities of allies in space- which is worrisome. And so what we have said is we need to focus more attention on space, we need to invest more in space, the resiliency of space, and we need to at all times get this point across- –particularly to some of these other countries that are investing and testing in these ways — that debris is bad, that debris hurts all of us.”
Coming on the heels of the terrorist attack in Paris, the mass shooting and siege at the Radisson Blu Hotel in Bamako, the capital of the African nation of Mali, is still further evidence of the escalation of terrorism throughout the world. While there has already been much written about the incident in both western and non-western media, one critical angle on this story has been entirely ignored: the motive.
For although it is true that most people think of terrorism as entirely ideologically driven, with motives being religious or cultural, it is equally true that much of what gets defined as “terrorism” is in fact politically motivated violence that is intended to send a message to the targeted group or nation. So it seems that the attack in Mali could very well have been just such an action as news of the victims has raised very serious questions about just what the motive for this heinous crime might have been.
International media have now confirmed that at least nine of the 27 killed in the attack were Chinese and Russian. While this alone would indeed be curious, it is the identities and positions of those killed that is particularly striking. The three Chinese victims were important figures in China’s China Railway Construction Corporation (CRCC), while the Russians were employees of Russian airline Volga-Dnepr. That it was these individuals who were killed at the very outset of the attack suggests that they were the likely targets of what could perhaps rightly be called a terrorist assassination operation.
But why these men? And why now? To answer these questions, one must have an understanding of the roles of both these companies in Mali and, at the larger level, the activities of China and Russia in Mali. Moreover, the targeted killing should be seen in light of the growing assertiveness of both countries against terrorism in Syria and internationally. Considering the strategic partnership between the two countries – a partnership that is expanding seemingly every day – it seems that the fight against terrorism has become yet another point of convergence between Moscow and Beijing. In addition, it must be recalled that both countries have had their share of terror attacks in recent years, with each having made counter-terrorism a central element in their national security strategies, as well as their foreign policy.
And so, given these basic facts, it becomes clear that the attack in Mali was no random act of terrorism, but a carefully planned and executed operation designed to send a clear message to Russia and China.
The Attack, the Victims, and the Significance
On Friday November 20, 2015 a team of reportedly “heavily armed and well-trained gunmen” attacked a well known international hotel in Bamako, Mali. While the initial reports were somewhat sketchy and contradictory, in the days since the attack and siege that followed, new details have emerged that are undeniably worrying as they provide a potential motive for the terrorists.
It is has since been announced that three Chinese nationals were killed at the outset of the attack: Zhou Tianxiang, Wang Xuanshang, and Chang Xuehui. Aside from the obviously tragic fact that these men were murdered in cold blood, one must examine carefully who they were in order to get a full sense of the importance of their killings. Mr. Zhou was the General Manager of the China Railway Construction Corporation’s (CRCC) international group, Mr. Wang was the Deputy General Manager of CRCC’s international group, and Mr. Chang was General Manager of the CRCC’s West Africa division. The significance should become immediately apparent as these men were the principal liaisons between Beijing and the Malian government in the major railway investments that China has made in Mali. With railway construction being one of the key infrastructure and economic development programs in landlocked Mali, the deaths of these three Chinese nationals is clearly both a symbolic and very tangible attack on China’s partnership with Mali.
In late 2014, Mali’s President Ibrahim Boubacar Keita traveled to China to attend the World Economic Forum in Tianjin. On the sidelines of the forum the Malian president sealed a number of critical development deals with the Chinese government, the most high-profile of which were railway construction and improvement agreements. Chief among the projects is the construction of an $8 billion, 900km railway linking Mali’s capital of Bamako with the Atlantic port and capital of neighboring Guinea, Conakry. The project, seen by many experts as essential for bringing Malian mineral wealth to world markets, is critical to the economic development of the country. Additionally, CRCC was also tapped to renovate the railway connecting Bamako with Senegal’s capital of Dakar, with the project carrying a price tag of nearly $1.5 billion.
These two projects alone were worth nearly $10 billion, while a number of other projects, including road construction throughout the conflict-ridden north of the country, as well as construction of a much needed new bridge in gridlock-plagued Bamako, brought the cumulative worth of the Chinese investments to near (or above) the total GDP for Mali ($12 billion in 2014). Such massive investments in the country were obviously of great significance to the Malian government both because of their economically transformative qualities, and also because they had solidified China as perhaps the single most dominant investor in Mali, a country long since under the post-colonial economic yoke of France, and military yoke of the United States.
It seems highly implausible, to say the least, that a random terror attack solely interested in killing as many civilians as possible would have as its first three victims these three men, perhaps three of the most important men in the country at the time. But the implausible coincidences don’t stop there.
Among the dead are also six Russians, all of whom are said to have been employees of the Russian commercial cargo airline Volga-Dnepr. While at first glance it may seem irrelevant that the Russian victims worked for an airline, it is in fact very telling as it indicates a similar motive to the killing of the Chinese nationals; specifically, Volga-Dnepr is, according to its Wikipedia page, “a world leader in the global market for the movement of oversize, unique and heavy air cargo…[It] serves governmental and commercial organizations, including leading global businesses in the oil and gas, energy, aerospace, agriculture and telecommunications industries as well as the humanitarian and emergency services sectors.” The company has transported everything from gigantic excavators to airplanes, helicopters, mini-factories, and power plants, not to mention heavy machines used in energy extraction.
This fact is significant because it is quite likely, indeed probable, that the airline has been transporting much of the heavy, oversized equipment being used by the Chinese and other developers throughout the country. In effect, the Russian crew was part of the ongoing economic development and foreign investment in the country. And so, their killing, like that of the CRCC executives, is a symbolic strike against Chinese and Russian investment in the country. And perhaps even more importantly, the attack was a symbolic attack upon the very nature of Sino-Russian collaboration and partnership, especially in the context of economic development in Africa and the Global South.
It would be worthwhile to add that Volga-Dnepr has also been involved in military transport services for NATO and the US until at least the beginning of the Ukraine conflict and Crimea’s reunification with Russia. Whether this fact has any bearing on the employees being targeted, that would be pure conjecture. Suffice to say though that Volga-Dnepr was no ordinary airline, but one that was integral to the entire economic development initiative in Mali. And this is really the key point: China and Russia are development partners for the former French colonial possession and US puppet state.
China, Russia, and Mali’s Future
China and, to a lesser extent, Russia have become major trading and development partners for Mali in recent years. Aside from the lucrative railroad and road construction projects mentioned above, China has expanded its partnerships with Mali in many other areas. For instance, in 2014 China gifted Mali a grant of 18 billion CFA (nearly $30 million) and an interest-free loan of 8 billion CFA (nearly $13 million). Additionally, China established a program that offers 600 scholarships to Malian students over the 2015-2017 period. Also, the Chinese government announced the construction of a training and educational center focused on engineering and the construction industry, as well as the completion of the Agricultural Technical Center in the city of Baguineda in Southern Mali, not far from the capital and population center of Bamako.
Of course, these sorts of Chinese offerings are only the tip of the iceberg as Beijing has also expanded its contracts with Mali in the transportation, construction, energy, mining, and other important sectors, including an agreement for China to construct at least 24,000 affordable housing units, making ownership of a decent home possible for many who would otherwise never have such an opportunity. Going further, as African Leadership Magazine reported in 2014:
Mali also relies on China to invest in new power plants to break the electricity crisis that is affecting the country. This is supposed to make available cheaper electricity for the industrial development…A hydroelectric dam will be built in the area of Dire in the North of the country; a hybrid power plant in Kidal in the North-East and another one in Timbuktu, which is in the North as well. Solar power plants will also be created in other parts of the country and all those infrastructures will be connected to the national grid of electricity… A factory of medicine production that is being constructed in the outskirts of the capital will be enlarged to be the largest in West Africa… More than 95 percent of the factory has been completed and it will be operating on January, 2015…Chinese banks that are not yet present in Mali are supposed to contribute to create small-scaled companies and industries.
To be sure, China is not offering such deals to Mali solely out of altruism and in the spirit of generosity; naturally China expects to enrich itself and ensure access to raw materials, resources, and markets in Mali now and in the future. This is the sort of “win-win” partnership forever being touted by China as the cornerstone of its aid and investment throughout Africa. Indeed, in many ways, Mali is a prime example of just how China operates on the continent. Rather than a purely exploitative investment model (the IMF and World Bank examples come to mind), China is engaging in true partnership. And, contrary to what many have argued (that China is merely a rival imperialist power in Africa), China’s activities in Africa are by and large productive for the whole of the countries where China invests, a few egregious bad examples aside.
China is a friend of Africa, and it has demonstrated that repeatedly throughout the last decade. And perhaps it is just this sort of friendship that was under attack in the Radisson Blu Hotel in Bamako.
Likewise Russia has been engaged in Mali, though certainly nowhere near the extent that China has. Russia was one of the principal contributors to the humanitarian relief effort in Mali after the 2012 coup and subsequent war against terror groups affiliated with Al-Qaeda. Russia provided much needed food, clothing, and basic medical aid, while also supplying more advanced, and essential, medical equipment to Malian hospitals desperately trying to cope with the flood of wounded and displaced people.
Additionally, Moscow became one of the major suppliers of weapons and other military materiel to Mali’s government in its war against terrorism in 2013. According Business Insider in 2013, Anatoly Isaikin, head of Russia’s state-owned arms exporter Rosoboronexport, “revealed that Moscow had recent military contacts with the government of Mali… He said small amounts of light weapons were already being delivered to Mali and that new sales were under discussion. ‘We have delivered firearms. Literally two weeks ago another consignment was sent. These are completely legal deliveries… We are in talks about sending more, in small quantities.’”
Finally, Mali has a longstanding cultural connection with Russia through the Soviet Union’s sponsorship of thousands of Malian students who studied in Soviet universities from the early 1960s through the 1980s. As Yevgeny Korendyasov of the Center for Russian-African Relations at the Russian Academy of Sciences explained, “We have had very close ties to Mali throughout recent history… Though overall financial estimates of Soviet aid received by Mali are hard to come by, Moscow’s involvement with the country was all-encompassing.” Indeed, the Soviets educated Malian officials and intelligentsia, as well as their children, developed local infrastructure, and mapped the country’s abundant natural resources. Such long-standing ties, moribund though they may seem today, still have a lasting legacy in the country.
While the world has been transfixed by terrorism from the downing of the Russian airliner in Egypt, to the inhuman attacks in Paris and Beirut, not nearly enough attention has been paid to the attack in Mali. Perhaps one of the reasons the episode has not gotten the necessary scrutiny and investigation is the seemingly endless series of terror attacks that have transfixed news consumers worldwide. Perhaps it is simply good old fashioned racism that sees Africa as little more than a collection of chaotic states constantly in conflict, with violence and death being the norm.
Or maybe the real reason almost no one has shined a light on this episode is because of the global implications of the killings, and the obvious message they sent. While media organizations seem to have deliberately ignored the implication of the attacks of November 20th in Mali, one can rest assured that Beijing and Moscow got the message loud and clear. And one can also rest assured that the Chinese and Russians are well aware of the true motives of the attack. The question remains: how will these countries respond?
Eric Draitser, an independent geopolitical analyst based in New York City, is the founder of StopImperialism.org.
World demand for gas is growing faster than any other energy source, and will grow by a third in the next 25 years, according to Russian President Vladimir Putin.
“The growing demand opens up great opportunities for increasing production and exports of gas. At the same time, it’s a major challenge, because there’s a need to dramatically accelerate the development of new deposits, modernize the refining capacities, expand gas transportation infrastructure, bring into operation additional pipelines and make new LNG routes”, said Putin at a Gas Exporting Countries Forum in Tehran on Monday.
According to Putin, Russia seeks to increase its gas output by 40 percent by 2035, reaching 885 billion cubic meters. One of the biggest tasks ahead of Russia is to boost the supplies of gas to China, India and other Asian countries from the current 6 percent to 30 percent, said Putin. Kremlin also intends to triple the LNG supplies. He added that Russia would be able to deal with all these tasks.
During his visit, Putin is meeting with Iranian leaders. He’s talked to Supreme Leader Ali Khamenei about energy cooperation, Syria and other key issues. Putin’s also meeting Iran’s President Hassan Rouhani.
Turkey has rescinded a contract with a state-owned Chinese manufacturer that would have seen the company build Ankara its first long-range missile defense system.
“The deal was cancelled,” an official from Turkish Prime Minister Ahmet Davutoglu’s office told AFP.
The USD-3.4-billion (EUR-3-billion) contract was clinched with China Precision Machinery Import and Export Corporation (CPMIEC) following talks with the firm in 2013.
The deal originally raised eyebrows among other NATO members, which complained that the defense apparatus would lack the qualities enabling it to work in tandem with other such systems in the Western military alliance.
Turkey has US-manufactured Patriot missiles stationed along its border with Syria.
The Chinese company has been placed under sanctions by Washington allegedly for selling items that are banned under US law to curb the proliferation of weapons of mass destruction.
The Turkish official, whose name was not mentioned in the report, said, “One of the main reasons is that we will launch our own national missile project.”
Prior to the cancellation of the deal, however, Turkish Defense Minister İsmet Yılmaz had emphasized that Ankara’s decision to opt for a Chinese-built system and avoid integration with the existing NATO defense infrastructure was in line with the country’s national defense interests.
Experts had also argued that choosing a Chinese partner would ultimately enable Turkey to own both the system and the technology.
French-Italian consortium Eurosam and US-listed Raytheon Co have also submitted offers to help build the Turkey Long Range Air and Missile Defense System (T-LORAMIDS).
Like millions of Americans, this past week I was sitting on my couch, drinking a cold beer, watching Game 1 of the World Series – professional baseball’s hallowed championship. Suddenly the satellite feed went out, the screen went dark. Naturally, as FOX Sports scrambled to get their live feed fixed, many of my fellow Americans took to twitter to speculate as to what had caused the outage. I was, sadly, unsurprised to see that the most common joke people were making was that China must have hacked the World Series.
On the one hand, it is understandable given the barrage of propaganda about Chinese hackers as a threat to corporate and national security; seemingly every week there is a new news item highlighting the great red cyber-menace. On the other hand, it is a perfect illustration of the hypocrisy and ignorant arrogance of Americans who, despite being citizens of unquestionably the most aggressive nation when it comes to both cyber espionage and surveillance, see fit to cast China as the real villain. It is a testament to the power of both propaganda and imperial triumphalism that a proposition so disconnected from reality, and bordering on Orwellian Doublethink, is not only accepted, but is ipso facto true.
But there is a deeper political and sociological phenomenon at play here, one that begs further exploration. How is it that despite all the revelations of Edward Snowden regarding US intelligence and military snooping capabilities across the globe, Americans still cannot accept the culpability of their own government and corporate interests – the two work hand in hand – in global cyber-espionage? Even if they explicitly or implicitly know about the NSA, CIA, DIA, and Pentagon programs (among many others), their instinctive reaction is to blame China. Why? The answer lies in the complexity and effectiveness of the anti-China propaganda.
In his landmark book Public Opinion, the renowned writer, commentator, and theoretician of propaganda, Walter Lipmann, defined the term “stereotype” in the modern psychological sense as a “distorted picture or image in a person’s mind, not based on personal experience, but derived culturally.” In other words, the stereotype is an image in our mind’s eye, one that is constructed by outside forces; it is information filtered through a particular societal or cultural framework that then creates a picture of how something is to be understood. Lipmann went further, noting that carefully constructed propaganda could be used to shape stereotypes, thereby allowing the powers that be the ability to construct and manipulate information and narratives.
And this is precisely the phenomenon at work here. By repeating it endlessly, the US political and corporate media establishment have successfully convinced Americans that China is the real threat when it comes to cyberspace, playing on the stereotype of Chinese people in general, and the People’s Republic of China specifically. But, I would argue something far different: rather than seeing China as a threat, perhaps Americans, and westerners generally, should shine a light on what their own countries are doing, thereby gaining a broader perspective on the issue. For China’s moves in this field pale in comparison to those of the US, and are clearly a response to them.
China and the US: Comparing the Rap Sheets
The corporate media is replete with stories of Chinese hacking of US institutions. From alleged Chinese hacking of the University of Virginia employees connected with US government programs directed at China, to the infamous breach of the federal government’s Office of Personnel Management which resulted in the theft of the personal information of more than 20 million Americans, such stories help to construct an image of China as the world’s leading hacker-state. This week it is Chinese hackers targeting health care providers, last year it was stealing the secrets of Westinghouse and US Steel, and literally dozens of other such examples.
The purpose of this article is not to deny the veracity of these reports; I’m not a computer expert, nor do I have access to the information that an expert would need in making a determination. Instead, my purpose here is to show the grossly unbalanced, and utterly dishonest, way in which the issue is presented to Americans especially, and to probe why that might be. For any fair and balanced approach to the issue would present the simple fact that the US is the world leader in cyber-warfare, having actually conducted what are to date the only recorded live uses of cyberweapons.
Take for instance the joint US-Israel developed Stuxnet virus, a pair of highly complex and severely destructive, computer viruses launched at Iran’s nuclear facilities. According to a group of independent legal experts assembled at the request of NATO’s Cooperative Cyber Defense Center of Excellence, the Stuxnet cyberattack was “an act of force.” Their report noted that “Acts that kill or injure persons or destroy or damage objects are unambiguously uses of force [and likely violate international law].”
Indeed, the US and its Israeli partners launched the very first true cyberweapon. As cyber security expert Ralph Langer wrote in Foreign Policy in 2013:
Stuxnet is not really one weapon, but two. The vast majority of the attention has been paid to Stuxnet’s smaller and simpler attack routine — the one that changes the speeds of the rotors in a centrifuge, which is used to enrich uranium. But the second and “forgotten” routine is about an order of magnitude more complex and stealthy. It qualifies as a nightmare for those who understand industrial control system security… The “original” payload… attempted to overpressurize Natanz’s centrifuges by sabotaging the system meant to keep the cascades of centrifuges safe.
Essentially, the US and Israel employed the world’s first cyberweapon without even fully knowing the potentially destructive consequences. As the virus migrated out of the Iranian nuclear facility at Natanz and onto the internet, innumerable variables could have come into play, with the potential for disastrous outcomes.
But of course Stuxnet was not alone. The US and Israel also deployed both the Gauss and Flame viruses, two more sophisticated cyberweapons designed to cause major damage to online infrastructure. The Gauss virus, discovered by Kaspersky labs, one of the world’s most highly respected cyber-security firms, was designed to steal sensitive data such as financial records. According to the US officials who spoke with the Washington Post, the Flame virus was a: massive piece of malware [which] secretly mapped and monitored Iran’s computer networks, sending back a steady stream of intelligence to prepare for a cyberwarfare campaign… “This is about preparing the battlefield for another type of covert action… Cyber-collection against the Iranian program is way further down the road than this.” said one former high-ranking U.S. intelligence official, who added that Flame and Stuxnet were elements of a broader assault that continues today.
Clearly the US and Israel were not merely interested in surveillance and information-gathering, but actually having the ability to manipulate and destroy vital computer infrastructure in Iran. Any reasonable reading of international law should hold that such actions are, in fact, an act of war, though of course war with Iran has not come to pass. But just the very use of such sophisticated weapons, far more elaborate, technical, and dangerous than mere hacking by humans, should call into question the weepy-eyed condemnations of China for its alleged stealing of corporate and government information.
And then of course there is the seemingly endless supply of revelations from Edward Snowden regarding the US surveillance infrastructure, how all-encompassing it truly is, how it is used to manipulate political outcomes, how it is used as a weapon against foreign governments, and much more.
Just to name a few of the countless programs and initiatives of the NSA and the surveillance state designed to capture information for political purposes:
PRISM – allows “The National Security Agency and the FBI [to tap] directly into the central servers of nine leading U.S. internet companies, extracting audio and video chats, photographs, emails, documents, and connection logs.”
BLARNEY – “Gathers up metadata from choke points along the backbone of the internet as part of an ongoing collection program the leverages IC (intelligence community) and commercial partnerships to gain access and exploit foreign intelligence obtained from global networks.”
Boundless Informant – “Details and even maps by country the voluminous amount of information it collects from computer and telephone networks.”
US & UK Target G20 Leaders – “The documents suggest that the operation was sanctioned in principle at a senior level in the government.”
US Spied on EU Offices – “America’s National Security Agency (NSA) not only conducted online surveillance of European citizens, but also appears to have specifically targeted buildings housing European Union institutions… in addition to installing bugs in the building in downtown Washington, DC, the European Union representation’s computer network was also infiltrated.”
But of course, the US has also specifically, and successfully, trained its cyber-espionage and cyber-warfare sights on China itself. Thanks to Snowden, we now know that US intelligence repeatedly hacked into Beijing’s Tsinghua University, China’s top education and research institute. As revealed in the South China Morning Post:
The information also showed that the attacks on Tsinghua University were intensive and concerted efforts. In one single day of January, at least 63 computers and servers in Tsinghua University have been hacked by the NSA… The university is home to one of the mainland’s six major backbone networks, the China Education and Research Network (CERNET) from where internet data from millions of Chinese citizens could be mined. The network was the country’s first internet backbone network and has evolved into the world’s largest national research hub.
But it wasn’t only Tsinghua University that was targeted. Snowden also revealed that Chinese University in Hong Kong was the victim of US hacking; the university is home to the Hong Kong Internet Exchange, the city’s central hub for all internet traffic. In addition, it came out that US intelligence has repeatedly hacked into Chinese mobile phone companies, spied on users, and stolen data, including text messages. These are, of course, only what we know about thus far from the Snowden revelations. The scope of US hacking operations against China is not known, but could be safely assumed to be far-reaching.
In fact, the depth of US hacking and other intelligence operations targeting China, including those taking place inside China itself, has been alluded to repeatedly. The New York Times noted in August 2015 that the Obama administration was cautious about any retaliation against China for the breach of the Office of Personnel Management because “Intelligence officials say that any legal case could result in exposing American intelligence operations inside China — including the placement of thousands of implants in Chinese computer networks to warn of impending attacks.”
It is clear that what we do know about US cyberwar programs and tactics is really only the tip of the iceberg. It is likely that Washington has myriad other China-specific hacking programs and initiatives, including the much discussed attempts to subvert the oft referenced “Great Firewall of China.” Put simply, the US is engaged in the most sophisticated forms of hacking and cyber-subversion, and much of it is directed at China (and Russia and Iran). This should now be beyond question.
Keep this information in mind the next time another story about Chinese hackers attacking US interests runs in the corporate media. While the hack may or may not be true, it is the context within which such actions take place that really needs to be understood.
There is a cyberwar going on, of this there can be no doubt. But who’s got the biggest guns? And who fired the first shot?