It was another difficult week for Israel.
In Britain, 700 artists, including many household names, pledged a cultural boycott of Israel, and a leader of the Board of Deputies, the representative body of UK Jews, quit, saying he could no longer abide by its ban on criticising Israel.
Across the Atlantic, the student body of one of the most prestigious US universities, Stanford, voted to withdraw investments from companies implicated in Israel’s occupation, giving a significant boost to the growing international boycott (BDS) movement.
Meanwhile, a CNN poll found that two-thirds of Americans, and three-quarters of those under 50, believed the US foreign policy should be neutral between Israel and Palestine.
This drip-drip of bad news, as American and European popular opinion shifts against Israel, is gradually changing the west’s political culture and forcing Israel to rethink its historic alliances.
The deterioration in relations between Israel and the White House is now impossible to dismiss, as Israeli prime minister Benjamin Netanyahu and President Barack Obama lock horns, this time over negotiations with Iran.
The US was reported last week to be refusing to share with Israel sensitive information on the talks, fearful it will be misused. A senior Israeli official described it as like being evicted from the “deluxe guest suite” in Washington. “Astonishing doesn’t begin to describe it,” he said.
The fall-out is spreading to the US Congress, where for the first time Israel is becoming a partisan issue. A growing number of Democrats have declared they will boycott Netanyahu’s address to the Congress next month, when he is expected to try to undermine the Iran talks.
Things are more precarious still in Europe. Several leading parliaments have called on their governments to recognise Palestinian statehood, and France rocked Israel by backing just such a resolution recently in the UN Security Council.
Europe has also begun punishing Israel for its intransigence towards the Palestinians. It is labelling settlement products and is expected to start demanding compensation for its projects in the occupied territories the Israeli army destroys.
This month 63 members of the European Parliament went further, urging the European Union to suspend its “association agreement”, which allows Israel unrestricted trade and access to special funding.
None of this has gone unnoticed in Israel. A classified report by the foreign ministry leaked last month paints a dark future. It concludes that western support for the Palestinians will increase, the threat of European sanctions will grow, and the US might even refuse to “protect Israel with its veto” at the UN.
Israel is particularly concerned about the economic impact, given that Europe is its largest trading partner. Serious sanctions could ravage the economy.
One might assume that, faced with these drastic calculations, Israel would reconsider its obstructive approach to peace negotiations and Palestinian statehood. Not a bit of it.
Netanyahu’s officials blame the crisis with Washington on Obama, implying that they will wait out his presidency for better times to return.
As for Europe, Netanyahu blames the shift there on what he calls “Islamisation”, suggesting that Europe’s growing Muslim population is holding the region’s politicians to ransom. On this view, the price paid for the recent terror attacks in Paris and Copenhagen is Europe’s support for Israel.
Instead, Netanyahu has begun looking elsewhere for economic – and ultimately political – patrons.
In doing so, he is returning to an early Israeli tradition. The state’s founders were inspired by the collectivist ideals of the Soviet Union, not US individualism. And in return for attacking Egypt in 1956, Israel was secretly helped by Britain and France to build nuclear weapons over stiff US opposition.
In response to recent developments, Netanyahu announced last month that he was courting trade with China, India and Japan – comprising nearly 40 per cent of the planet’s population.
Last year, for the first time, Israel did more trade with these Asian giants than with the US. Much of it focused on the burgeoning arms market, with Israel supplying nearly $4 billion worth of weapons in 2013. A region once implacably hostile to Israel is throwing open its doors.
India, plagued by border tensions with Pakistan and China, is now Israel’s largest arms purchaser – and such trade is expected to expand further following the election last year of Narendra Modi, known for his anti-Muslim views.
He has lifted the veil off India’s growing defence cooperation with Israel, one reason why Moshe Yaalon last week became the first Israeli defence minister to make an official visit.
Ties between Israel and China are deepening rapidly too. Beijing has become Israel’s third largest trading partner, while Israel is China’s second biggest supplier of military technology after Russia.
Last month the two signed a three-year cooperation plan, with China keen to exploit – in addition to Israel’s military hardware – its innovations on solar energy, irrigation and desalination.
Emmanuel Navon, an international relations expert at Tel Aviv University, claims that, despite its poor public image, Israel now enjoys a “global clout” unprecedented in its history.
Israel’s immediate goal is to future-proof itself economically against mounting popular pressure in Europe and the US to act in favour of the Palestinian cause.
But, longer term, Israel hopes to convert Chinese and Indian dependency on Israeli armaments – based on technology it tests and refines on a captive Palestinian population – into diplomatic cover. One day Israel may be relying on a Chinese veto at the UN, not a US one.
As of February 15, only a month and a half into 2015, there have been at least 136 individuals killed by police in the United States since the first of the year.
The frighteningly high number averages out to three killed per day, or someone killed every eight hours. While there is no government-run database, Killed By Police has taken it upon themselves to keep track, and are doing a fantastic job thus far.
Just to put things into perspective, let’s take a look at the rates at which police in other countries kill their citizens.
Let’s look at our immediate neighbors to the north, Canada. The total number of citizens killed by law enforcement officers in the year 2014, was 14; that is 78 times less people than the US.
If we look at the United Kingdom, 1 person was killed by police in 2014 and 0 in 2013. English police reportedly fired guns a total of three times in all of 2013, with zero reported fatalities.
From 2010 through 2014, there were four fatal police shootings in England, which has a population of about 52 million. By contrast, Albuquerque, N.M., with a population 1 percent the size of England’s, had 26 fatal police shootings in that same time period.
China, whose population is 4 and 1/2 times the size of the United States, recorded 12 killings by law enforcement officers in 2014.
Let that sink in. Law enforcement in the US killed 92 times more people than a country with nearly 1.4 billion people.
It doesn’t stop there.
From 2013-2014, German police killed absolutely no one.
In the entire history of Iceland police, they have only killed 1 person ever. After exhausting all non-lethal methods to detain an armed man barricaded in his house who actually shot 2 police officers, police were forced to take the 59-year-old man’s life. The country of Iceland grieved for weeks after having to resort to violence.
Unofficially, it seems that American police kill more than all of the first world nations’ police departments combined!
That’s not the only mind-blowing perspective either. So far this year all cop killers have been other cops. This year the police seem to be far more likely to die as a result of police brutality than at the hand of a violent suspect.
Just last week an officer responding to a domestic disturbance at a North Texas residence, shot and killed off-duty sheriff’s deputy Larry Hostetter, 41, shortly after midnight.
At the end of January, we also reported on a Yonkers police officer who shot a suicidal officer from another precinct, claiming he feared for his safety. We also reported on an undercover Albuquerque police officer who was shot by another officer during a drug bust over $60 worth of meth. The media called it a “tragic accident” while, in reality, it was another example of police shooting someone who poses no threat to them.
There was also John Ballard Gorman who was shot and killed by a fellow officer during a training exercise in Tunica, MS last month. The officer who shot Gorman failed to switch out his weapon for a training weapon and fired a real round into his fellow officer, killing him.
According to the Officer Down Memorial Page, the pro-police site that tracks every officer death, not a single police officer has been killed by a suspect so far this year.
Line of Duty Deaths: 14
Automobile accident: 5
Heart attack: 4
Struck by vehicle: 2
Vehicle pursuit: 1
9/11 related illness: 1
Gunfire (Accidental): 1
In fact, being a police officer isn’t even close to being in the top 10 most dangerous jobs in this country. According to the 2013 report by the Federal Bureau of Labor Statistics on work-related fatal injuries, “Police and sheriff’s patrol deputies” ranked as the 41st most dangerous occupation.
Also, according to an FBI report, Americans are less violent than ever; its the police who have been increasingly violent.
With job related danger so low, there is no excuse for the police to be so trigger happy, acting like they are Batman and every citizen is a violent villain hell bent on their death.
As Liberation News pointed out, a vast majority of those killed by the police in 2015 have again been young African Americans and Latinos. The two youngest were both 17-years-old, Kristiana Coignard of Texas and Jessica Hernandez of Colorado. The oldest was 87-year-old Lewis Becker from rural upstate New York.
Officers who cannot bring 17-year-old girls or 87-year-old men into custody safely have absolutely no business “protecting and serving” anyone. A person who cannot control a situation with a 90 pound high school girl or an elderly gentleman, and “fear for their life” so severely that they need to pull a trigger, is not a hero, they’re a coward.
It is time for the United States to get over its love affair with idolizing the badge.
Li Hui, Ambassador Extraordinary and Plenipotentiary of the People’s Republic of China to Russia (RIA Novosti/Andrey Stenin)
China’s ambassador to Moscow Li Hui says even though the ruble has lost more than 17 percent of its value this year it won’t significantly affect China-Russia trade and cooperation.
“It is understandable that the devaluation and volatility of the ruble have a certain influence on Chinese-Russian trade, especially with the considerable exchange rate risks for export companies that have signed agreements in Russian rubles, but the devaluation of the ruble doesn’t have much effect on the large-scale trade partnership between China and Russia,” Li Hui told RIA Novosti in an interview.
The value of the Russian ruble started to slide again after the Central Bank of Russia decided on Friday to cut the key rate by 200 basis points to 15 percent. The currency was trading at 70 against the US dollar on the Moscow Exchange at 2:00PM MSK Monday.
In 2014, the ruble lost almost a half its value against the dollar due to plummeting oil prices and Western economic sanctions.
According to Li, regardless of the devaluation of the ruble and falling oil prices, Russia and China still believe in “growth despite existing trends.”
“I believe that we can contain and increase the volume of our bilateral trade by using the joint efforts of our government organs and businesses,” Li added.
Russian Deputy Prime Minister Igor Shuvalov suggests that after the dramatic depreciation the Russian currency would start recovering soon.
The Chinese ambassador said that trading in yuan is very forward thinking, and Russian businessmen are ready to trade in the Chinese currency.
In late 2014, Russia and China agreed a national currency swap deal to shore up the depreciating ruble and said they are working to increase the number of mutual payments in rubles and yuan.
China is Russia’s second-biggest trading partner after the EU, which hit a record $59 billion in the first half of 2014. The two countries are planning to increase bilateral trade to $200 billion by 2020.
The World Seen Through a “Progressive” Western Keyhole versus a Panoramic Lens
One of Castro’s closest comrades, the Argentine-born guerilla Che Guevara, had been in Guatemala in 1954 and witnessed the coup against Arbenz. Later he told Castro why it succeeded. He said Arbenz had foolishly tolerated an open society, which the CIA penetrated and subverted, and also preserved the existing army, which the CIA turned into its instrument. Castro agreed that a revolutionary regime in Cuba must avoid those mistakes. Upon taking power, he cracked down on dissent and purged the army. Many Cubans supported his regime and were ready to defend it. (Emphasis, jw)
The stark choice that confronted Castro and Guevara is faced by every nation seeking independence from the U.S., a far more powerful nation with enormous resources in terms of “soft” power, economic power and military power. The more open the society, the more opportunities for CIA-engineered regime change. This was the lesson Arbenz learned in 1954 and Mossadegh before him in 1953, lessons that brought so much pain, death and destruction to their peoples in the decades to follow.
Judged by that outcome, the Castros made the right decision and as a result have presided over a healthy, educated and secure people. The drawback was that the Empire isolated Cuba economically, stifling the possibilities of more development and a higher standard of living. The Empire wants nations charting an independent course to be politically open to the regime change schemes and NGOs of the West but economically closed, shut off from more advanced economies. It is as simple as that.
For some defiant states the sort of regime change operation used against Mossadegh and Arbenz may be the only option which the United States has. This is certainly the case for China and Russia. All out war on these countries is out of reach – although the U.S. is trying to change that. The modus operandi of the Empire for the moment is to put Russia and China on the horns of tried and true dilemma. Open up politically, permit the development of forces that favor regime change – or remain less open and face criticism, especially criticism from Western governments and Western intellectuals, including the “progressive” or liberal intellectuals. This is crucial because “progressives” are the very people who – until Obama – were most likely to oppose imperial warfare – both military and economic. The Democracy Crusade is designed to neutralize them.
This criticism from the West is one lever, and an important one, that is used to force a society to be more open in its governance than its survival permits. Let us be clear. Without a rapacious West at the doorstep, the possibilities of openness and democracy are much greater in scope. Conversely, the more rapacious the West, the more restricted are the possibilities for a besieged nation if it wishes to survive and prosper with its sovereignty intact. Without sovereignty there can be no democracy. Rule conditioned on approval by a foreign source or by a puppet regime is never self-rule. So it is never democracy.
It follows that the best way to crusade for openness and democracy is to work against Western interventionism, whether that interventionism takes the form of armed attack, economic sanctions or the work of NGOs like the NED (National Endowment for Democracy). This is absolutely crucial to understand. A criticism of a besieged country will increase the pressure on that country and hence lead to a decrease in political openness. Paradoxically, this is true even if the criticism is one that calls for more democracy.
The recent events in Hong Kong are but the latest example of this dynamic. There the NED had long been actively involved in promoting “democracy,” along with other U.S. NGOs and the U.S. Consulate, with its staff of 600. These forces recruited very young “activists,” with high school students at the forefront. (A Chinese friend of mine noted with disgust that easily manipulated high school students were also in the forefront of the Cultural Revolution.) The movement sought elimination of the screening of candidates by a committee of 1,200 Hong Kong residents for the next election of the CEO, a position akin to governor. The composition of the committee was open to negotiation. (It went unmentioned in the West that there was no election when Hong Kong was a colony of the UK. The governor was appointed by the Queen – period. It also went unmentioned that there is a similar sort of “screening” of candidates in the U.S., with the major parties serving in the role of screeners. If you do not believe that, ask the Greens or the Libertarians or Ralph Nader.) Most importantly the leaders of the movement and their U.S. backers made no secret of their hope that the disturbances in Hong Kong would spread to the mainland and provoke a movement against the Chinese government. They are advocates of regime change in China as are their mentors at the NED.
What has the current government of China, led by its Communist Party, done for China? It has led China out of colonial domination by the West. It has forged a level of economic development with a rapidity unseen before in all of human history. It has ended poverty for 600 million people and continues on the quest to raise millions more out of poverty. For the world it has meant a power, China, which is sufficiently strong to provide a multipolar world. That in turn means that the countries of the world have an alternative to Western domination, which has been the fate of most of the world for hundreds of years. Russia and Iran, for example, can trade with China when the West slaps sanctions on them. As a result at this moment there is the possibility of genuine decolonization (or de-neocolonization, if you will) – after centuries of the planet’s domination by a small fraction of the world’s population.
In short, the current government of China is the agent of the most stunning defeat of Euro-American colonialism that the world has seen to date. After all the Chinese are almost one-fifth of humanity. One would think that this fact would be part of the evaluation of Western progressives when they looked at the Hong Kong affair. With few exceptions it was not. And this is a big problem. The world is going through a major upheaval as colonialism and neo-colonialism are suffering major defeats. That upheaval, that shift, is a lens through which Western “progressives” should look at the world. They rarely do. In failing to do so, they see the world through the ideological eyes of the West, that is, “the 1%“ at the top of the heap (or at least the 10%) if one may put it that way. China has achieved what the West hates most. It is relatively closed politically to the intrigues and machinations of the West – but economically open. This is the recipe for sovereignty and development.
The difference between the two views is the difference between looking at the world through a panoramic lens, with history in the background, and looking through a keyhole. In the latter case of tunnel vision one may only see a patch of grey through the keyhole, whereas a mighty elephant stands beyond the door.
Afterthoughts: Old China Hand. One “progressive,” and an “Old China Hand” to boot, even charged the minority on the Left with “neocolonialist” attitudes when they criticized him for siding with the NED in Hong Kong. He claimed that the dissidents in Hong Kong were too sophisticated, too “smart,” to be taken in by the NED, NID, U.S. Consulate officials and other detritus with whom they regularly consort.
But what about the cases where we now know that the CIA et al successfully deceived the population – sufficiently to overthrow an anticolonial government, as with Mossadegh or Arbenz or Allende? Does Old China Hand mean to say that the people of Iran or Guatemala or Chile were “stupid”? And is that not neocolonialist arrogance? No, Old China Hand is defending tunnel vision, the view through the keyhole, not the people of Hong Kong. And if ever there were an unwitting agent of neocolonialism, it is sadly the likes of Old China Hand.
John V. Walsh can be reached at firstname.lastname@example.org.
Credit rating agencies are predicting quite a storm for the Russian economy, and they are therefore threatening to lower the country’s status to ‘junk’ level. Just as a weatherman may be incorrect about their storm predictions, so too may a ‘financial meteorologist’, except the latter has ulterior motives in doing so.
S&P has joined Moody’s in launching an attack on the Russian economy, hoping that the threat of lowing Moscow’s credit status will somehow translate into political changes in Eastern Europe. Although such an idea may seem plausible in theory, in practice it’s absolutely disjointed from reality and merely symbolizes the third wave of the economic war on Russia. This coming economic storm, cooked up in the West, is going to come up against the multipolar storm breaker of Russia and China’s own Universal Credit Rating Group (UCRG), expected to become active later this year. When the waves inevitably crash, the West may find that it has unwittingly and irreversibly damaged its own unipolar economic defenses and opened up a flood of multipolarity.
The Third Wave
There have thus far been two major waves of economic warfare waged against Russia, with the third one well on its way. They are as follows:
The US and the EU enacted selective and then generalized sanctions against the Russian economy and certain individuals, apparently under the false belief that Russia is Zimbabwe and can somehow be bullied via these means. They weren’t successful in this attempt and thus decided to escalate the conflict to the next level.
This wave brought about the oil and currency war against Russia, opening up a Pandora’s Box of repercussions that may unintentionally spell the end of fracking in the US (or at least its suspension), among other things. Nonetheless, the main objective here was to destroy what is inaccurately viewed as the lynchpin of Russia’s economy (oil and gas) and create the conditions necessary for a Color Revolution. As with the first wave, the second one also failed to achieve its goals.
Enter the third wave, which is what Russia is on the cusp of experiencing. The strategy here is to use institutional ratings agencies to damage Russia’s international economic reputation in the hopes that this can help ‘isolate’ it from the non-Western markets that it has recently (and quite eagerly) engaged. This plan is dead in its tracks, since Russia’s rating was worse in 2005 but it was consistently growing at around a 7% average during the period 2000-2008, showing the inherently political (and economically ineffective) nature of Western ratings.
The Multipolar Storm Breaker
Shielding Russia and the multipolar world from the West’s politically minded economic ‘ratings’ is the formation of an alternative agency constructed in cooperation with China, the Universal Credit Rating Group (UCRG). This forthcoming buffer, if it can build the necessary trust and objectivity, could realistically help the non-West weather the oncoming ‘financial storm’ that the Western agencies are all hyped up about.
The underlying idea behind this initiative is that the West has a unipolar monopoly on all manners of international ‘ratings’, be it economic, political stability/fragility, or terrorism. Given that there is a realistic and clearly discernable trend towards geopolitical multipolarity, it’s natural that this would eventually transition over into the economic sphere. The BRICS Bank and China’s Asian Infrastructure Investment Bank are examples of this, with the UCRG being the next institutional progression. If the non-West can free itself from the subjective ‘ratings’ and dictates of Western institutions, then it will be at liberty to pursue multipolarity as it sees fit.
When The Waves Finally Crash
The ‘financial meteorologists’ may be in for a surprise when their politically constructed storm hits the multipolar breakers, as the resultant back-splash may reverberate with unintended consequences. Although it is still a relatively far time away in the future, especially considering the rapid and somewhat surprising transformations that have been taking place in all spheres over the past couple years, an increasingly possible scenario is beginning to take shape, and that’s the macro-structural division of the world into entities (not necessarily states) supporting the retention of the unipolar world and those advocating the construction of the multipolar one.
This is seen in all spheres (as was earlier touched upon), and the creation of the UCRG, especially given the current ‘New Cold War’ context, must be understood as being the next logical extension of this. As the world divides itself into either the pro- or anti-multipolar camp, the emerging dichotomy will come to define international relations for the entire century or until one side capitulates. Given this dynamic, it is a very realistic possibility that certain states will ‘switch sides’, just as occurred during the ‘Old Cold War’, either by force (whether covert or overt) or by choice.
Something that may sway various states towards multipolarity could be the creation of regional agencies and institutions to complement inter-regional (‘Greater Multipolarity’) ones, for example, a credit ratings institution specifically for Latin America. Likewise, if the unipolar world continues its political designations of supposedly impartial topics such as the economy and does so in favor of geostrategic on-the-fence states, it could find itself gaining new allies. No matter how things play out, though, it’s evident that a global competition is definitely taking place between the unipolar and multipolar worlds, and that this is being fought on all levels, including the financial institutional one described within this article.
The West is poised to launch the third wave of its asymmetrical economic war against Russia, but it’s predictably bound to fail in inflicting the damage it has in mind. Russia and China, the two anchors of the multipolar world via the Russian-Chinese Strategic Partnership, are taking the initiative in creating an alternative institution to counter the West’s politically motivated economic ratings. This creates more openings for the actualization of full-spectrum multipolarity, whereby this concept makes the leap from the geopolitical to the institutional, with the long-term potential of rivaling (and perhaps unseating) the West’s ‘supremacy’ in the targeted fields. Importantly, however, this entire episode portends the division of the world into two camps, with the unipolar and multipolar worlds slated for their inevitable face-off sometime later this century.
The UK government has refused to reveal whether the National Security Council approved or discussed China’s investment in a proposed £24.5 billion nuclear power plant in the UK, Hinkley Point C, citing “national security.”
Despite a BBC Freedom of Information request for information regarding China’s expected 30-40 percent stake in the new nuclear site in southwest England, the government denied further disclosure.
Cabinet Office official Roger Smethurst told the BBC: “There is a general public interest in disclosure of information and I recognize that openness in government may increase public trust in and engagement with the government. There is a definite public interest in members of the public being able to understand decisions taken on investment in critical national infrastructure.”
“I have weighed these public interests against a very strong public interest in safeguarding national security.”
The National Security Council’s job is to review and debate foreign investment projects and then to approve or deny them.
Derek Smith, head of communications for the NSC, told the BBC: “The government has put in place an approach which enables it to assess the risks associated with foreign investment and develop strategies to manage them.”
“The NSC brings together the economic and security arms of the government and is the forum that ultimately balances the risks and opportunities of inward investment decisions.”
In June last year, the government announced the civil nuclear agreement signed by the UK and China, which could be “worth hundreds of millions of pounds to British companies over several years.” This paved the way for Chinese companies to invest in Hinkley Point C.
Energy and Climate Change Secretary Ed Davey said at the time: “China and the UK stand united in our plans for more collaborative working that will help to achieve long lasting energy security in our own countries.”
The plant would be the first overseas venture for the China General Nuclear Power Corp.
Meanwhile, the French nuclear power developer EDF is expected to sign an investment agreement with Chinese partners for the new reactor at Hinkley Point by the end of March, to secure investment for the project.
According to the World Nuclear Association, the UK has 16 operational reactors generating around 18 percent of the country’s electricity. All but one of these will be retired by 2023.
China is reportedly negotiating plans to build four new reactors in Turkey. One-third of the nuclear reactors currently under construction worldwide are in China.
The nuclear plant is not the only UK energy project that China co-finances. The state-owned China General Nuclear Corporation is reportedly prepared to pay £100 million for an 80 percent stake in three UK wind farms.
China is in the midst of its second ‘cultural revolution’ in a half century. While the first (under Chairman Mao Tse Tung) was intended to ‘revitalize socialism’; the current is directed to ‘moralizing’ capitalism.
The first CR was a frontal attack on the hierarchy of power and privilege inside and outside of the Communist Party, launched from above by Mao Tse Tung, but taken up from below by Red Guards in order to bring about a more egalitarian society.
The current ‘cultural revolution’, launched by President Xi Jinping, is directed at ending widespread corruption, theft and pillage of the Chinese economy and society by high and low officials in government and the capitalist sector.
The two cultural revolutions are linked by Deng Xiaoping, the Chinese leader who officially put closure on the first and set in motion the policies and slogans (“Getting Rich is Good!”), necessitating a second cultural revolution three decades later.
The Socio-Economic Roots of the Cultural Revolution Today
Deng’s call to ‘get rich’ was directed at the Communist Party elite, their family, friends and overseas backers; it was an open invitation to the multi-nationals of the world to freely exploit China’s resources, infrastructure and labor – educated, nurtured and organized through the collective efforts of the preceding Communist regime. Deng ‘liberated’- or privatized – the means of production and rapidly turned public control and appropriation of earnings over to emerging private capitalists. The corollary was the elimination of all social rights, benefits and protections of labor. The dual incentives were designed to maximize private profits in order to attract long-term, large-scale investments and to achieve high growth in the shortest time possible. Deng telescoped a century of growth and exploitation into a few decades.
His strategy succeeded.
Profits soared. By the late 1980’s and early 1990’s millionaires multiplied like mushrooms after a downpour. Then came the billionaires. Aided and abetted by the wholesale privatization of lucrative industries and public lands, a new class of real estate speculators and so-called ‘developers’ emerged , closely linked to corrupt local municipal, regional and national state officials. Millions of peasants were dispossessed and barely (if ever) compensated; hundreds of millions of workers were employed at starvation wages without the free housing, medical care, education, recreational benefits and lifetime employment of the past, socialist system.
China’s GNP exploded at a double-digit rate for three decades – an unprecedented performance. Most of the profits circulated among a narrow elite of party – state officials and capitalists, while a smaller share ‘trickled down’ to middle and low level functionaries. The seizure of public wealth, followed by three decades of intense exploitation of labor and the private land grabbing of farmland and homesteads, spurred the boom in real estate profits and laid the basis for all pervasive and large-scale corruption .The pillage of the public treasury led to large-scale conspicuous consumption – of imported luxury goods, multi-tiered mansions in gated communities, multiple purchases of luxury condos for offspring, mistresses and bribe-takers and givers.
By the mid 2000’s the concentration of wealth, property and privilege had reached astronomical heights: hundreds of billions accrued to the top 2%, millions to the top 10%, and hundreds of thousands to the top 15% – the self-styled ‘middle class’ who thrived on lesser but equally pervasive corruption and theft and who aped the elite and imitated their life style of luxury consumerism.
Beginning in the mid-2000s, hundreds of strikes by exploited factory workers demanded and secured higher wages; millions of households, farmers and peasants fought against municipal party officials, linked to real estate capitalists, who were attempting to ‘grab’ their land, homes and neighborhoods. Hundreds of millions of Chinese in the countryside protested exorbitant medical and educational costs, induced by the privatized health and educational system, which had bankrupted millions of households. They quickly became aware of the luxurious private medical facilities and specialized clinics for the rich -capitalists and corrupt officials. The internal migrant workers, who built the hyper-luxury condos and mansions, lived in paper shacks, far from the twelve-course banquets celebrating the ‘grand openings’ by business swindlers and ‘bought officials’. As wealth grew among the elite, so did the people’s hostility and rejection of the Party and the State, which they personified.
The ever-cautious klepto-capitalists and public pillagers, fearing for their illicit fortunes, smuggled out enormous wealth. Big swindlers, with big fortunes engaged in massive money laundering while publicly demanding the ‘de-regulation” of the financial sector (i.e. to make it easier to launder and hide their fortunes in overseas accounts). Between 2005-2011 China hemorrhaged over $2.83 trillion in illegal overseas financial outflows.
Part II: The Consequences of Corruption, Pillage and Exploitation
The illicit flow of Chinese wealth overseas resulted from the elite’s savage and illegal exploitation of labor (failure to meet minimum official standards concerning pay, work safety, child labor, excessive hours). Wealth from bribes, kickbacks on government contracts, speculation on illicit seizures of land, and making false invoices overpricing imports and underpricing exports, flowed upward and outward. While China was profiting from double-digit growth the regime could ‘tolerate’ corruption and illicit outflows. However, by the beginning of the second decade of the 21st century, when China’s economy de-accelerated to about 7 – 7.5%, the regime became less tolerant of wholesale corruption accompanied by capital flight.
Moreover, the new billionaires, millionaires and affluent middle class indulged in what Thorsten Veblen described as “conspicuous consumption”, the purchase and ostentatious display of superfluous luxury products as status symbols of “success”. According to a Special Report on “Luxury” in the Economist (12/13/14, p.8 -10) “nearly one-third of all personal luxury goods sold worldwide are bought by Chinese consumers.” Since the global crises of 2009, 70 – 80% of global growth in the (luxury) sector has come from China.
China’s emerging private-public ruling class has advanced from concentrating wealth, to consolidating political power to seeking prestige and social status – recognition from their domestic and foreign peers. Ideologically, they are decidedly neo-liberal and pro-Western – as evidenced by the billions they spend in the top-end real estate markets of North America, Europe and Australia as well as the millions they spend on their pampered offspring for ‘elite’ private education. Their children live in half-million dollar condos in Cambridge, Massachusetts, Oxford and Cambridge (England), Toronto and Vancouver (Canada), Sydney and Melbourne Australia. The Chinese oligarchs “make the market” for six-figure Swiss watches, five figure handbags and four digit French cognac.
Corruption, conspicuous consumption and class polarization has delegitimized the ruling Communist Party elite in the eyes of the great mass of the Chinese working class, as well as the professionals and salaried employees who make-up the lower middle class.
The ‘political rot’- the privileged social networks derived from kinship ties-is leading to a relative closed ruling class – excluding the mass of urban workers and rural peasants, with potentially explosive social consequences.
Already thousands of local protests, strikes and other forms of direct action occur every year, even as they are repressed or resolved.
In addition to the social and political dangers resulting from the massive illegal, ‘squandering and theft of wealth’, the illicit outflow of wealth is undermining domestic investment and productive overseas investments, and corruption is preparing the way for stagnation and financial crisis.
The stars are lining up for a ‘perfect political storm’ – which has unfolded in the form of President Xi Jingping’s launch of China’s second cultural revolution (CR).
Xi Jingping’s Cultural Revolution
From the start of the 2nd CR in 2012 to mid-2014, the Chinese Communist Party’s internal corruption body has prosecuted and punished 270,000 cadres. That figure includes both the “tigers” (high officials) and the “flies” (low level functionaries). “Over three dozen officials with ranks of ministers or above, including former security Tsar and Politburo Standing Committee member Zhou Yongkang”, have been arrested and jailed (Financial Times 12/4/14, p. 4). Earlier, the former Railways Minister was arrested and sentenced to death for rigging contracts worth about $26 billion dollars over his seven-year tenure. Hundreds of thousands of private business people, paying bribes, have been arrested and sentenced.
President Xi’s campaign has attacked bribes, ‘gift giving’, frequent ostentatious banquets serving expensive delicacies, and high Party officials’ lodging in five star hotels for weeks on end, ostensibly “tending to business”, but more frequently ‘cavorting with their mistresses’.
To be precise, President Xi is attacking the triple evils of corruption, conspicuous consumption, and pillage of public wealth. The new austerity agenda and the public revelations of ill-gained wealth are focused on exposing public officials and private business people in order to regain public legitimacy. And it is succeeding,…. as far as it goes. Public indignation at the revelations is matched by high approval for the Xi leadership’s anti –corruption campaign.
What makes this far more than just a “power struggle among privileged elites” as the Wall Street Journal and the Financial Times have routinely claimed, are: 1. the duration of the campaign of over 2 years, 2. the scope of the campaign, covering top officials and Chinese business equivalents of Wall Street moguls, 3. The nature of the punishment including long prison terms and even death sentences (rather than the mere ‘slap on the wrists and paltry fines’ that US regulators have given to Wall Street’s billion-dollar swindlers), and 4. the ongoing nature of the process. The sweep and magnitude of Xi’s campaign has all the makings of a ‘cultural revolution’ – not the episodic ‘blowing off steam’ or ‘scapegoating of rivals’ described in the Western press.
The Nature of Xi’s Cultural Revolution
Xi’s ‘cultural revolution’ is directed and driven from above – established legal authorities are in charge – the masses are excluded, and preemptory justice is eschewed: regular court proceedings decide guilt and sentencing.
Secondly, Xi’s ‘cultural revolution’ does not, in any way or place, call into question capitalist property relations, foreign investors, or large-scale inflows and outflows of investment or legally registered speculative capital. Nor has Xi called into question existing capital-labor relations.
Xi’s ‘cultural revolution’ is an attempt to sanitize existing capitalist relations, and to infuse a new capitalist ethic. He wants to ‘revise’ Deng’s famous precept “Getting Rich is Good” to read “Get Rich Lawfully . . . or Face Jail”. China is rated number 100 out of 175, on a corruption scale published by Transparency in 2014 (Financial Times 12/4/14, p. 4). Xi’s war on corruption is based on the premise that corruption undermines China’s status as a global power – it ranks with Algeria and Surinam. Secondly, Xi hopes that he can ‘reform’ the public sector in order to privatize it and he wants the sale to go to the highest bidder, not the biggest bribe giver.
His campaign attacks privileged elites, who accumulate and dispose of wealth illegally but he has never sought to diminish the class system, the hierarchy and inequalities which concentrate political power and forms the basis of corrupt bribe giving and taking.
Xi’s ‘cultural revolution’ is continuing and corruption may lessen. Ostentatious public spending is declining. But this layer of ‘new morality’ is spread thinly over a system of power that can easily revert to the ‘old system’ once the ‘revolution’ ends.
Xi’s noteworthy ‘cultural revolution’, the moralization of public administration and private capitalism, can only succeed if it is accompanied by a social transformation: ethics at the service of social justice and equality and by a democratization of the economic decision-making process. The problem is that Xi, by family, social ties and political allegiances is deeply embedded in a milieu which absolutely rejects any such ‘deepening’ of Xi’s ‘cultural revolution’.
His cultural revolution is strictly guided by a singular objective: to force ‘morality’ on the ‘captains of capital’ in order to facilitate the smooth transition to fully liberalizing China’s economy. President Xi, along with his anti-corruption campaign, is steadily loosening state control over foreign financial investments in Chinese stocks and financial sector; he is moving strongly to expand China’s overseas investments; he is accelerating the privatization of public enterprises and increasingly opening financial services to Wall Street and the City of London. He is also internationalizing the use of the yuan-the Chinese currency- in global transactions, displacing the dollar.
In other words, his cultural revolution is a bridge to a new stage of Chinese capitalist expansion; it will lessen the crude open plunder of the public treasury, but it will not lessen the exploitation of labor nor slow the increasing concentration of wealth and privilege. That will require a different kind of ‘cultural’ revolution- one led from below by workers, peasants and salaried employees. A real ‘cultural revolution’ that realizes the ethical ideals of ‘good government’ through a transformation of class relations.
Xi’s anti-corruption campaign confirms what many workers already knew – but it also unmasks the systemic decay and forges an elementary class consciousness: counter-posing honest, hardworking workers to corrupt privileged oligarchs. Xi is aware of the danger that his campaign could ignite a popular fire: That is why he has kept a tight hold on the process. He is trying to navigate the liberal capitalist transition around the shoals of existing capitalist rot without arousing mass unrest.
Economic ties appear to be at the top of the agenda, as Egyptian President Abdel Fattah al-Sisi prepares for a state visit to China this week.
At a December 18 press briefing for Chinese official media, Sisi announced, “we are looking forward to developing our strategic relations with our friends in China,” reported Xinhua news agency.
“Cooperation between Egypt and China is not new, and the purpose of the visit is to confirm and develop this cooperation and discuss Chinese investment chances in Egypt,” the president reportedly added.
During the visit, which is scheduled to run from December 22 to 25, officials expect to sign 25 bilateral agreements, mostly concerning economic and investment plans, according to Egypt’s State Information Service.
The president’s visit is preceded by a delegation including the ministers of trade and industry, transport and international cooperation. The delegation set off for Beijing on December 19, and is scheduled to meet with Chinese companies interested in investing in Egypt. They are also set to discuss ways of boosting trade, investment and cooperation in industry and transport.
Trade between Egypt and China was worth around US$10 billion in 2013, a figure officials expect to exceed $11 billion in 2014. However, the balance of trade is overwhelmingly in favor of China. Egypt’s exports to China have historically made up around 10 percent of the total trade volume.
China’s investments in Egypt amount to $8.4 billion, according to The China Global Investment Tracker, a project of the US based Heritage Foundation. These investments include the North West Suez Special Economic Zone, a joint Egyptian-Chinese venture near Ain Sokhna. The project is part of a 2006 plan by China to internationalize its economy by developing 50 such zones in strategic locations around the world.
Sisi is hoping to increase investment and boost exports to China during his visit, which comes ahead of a March summit for international investors in Egypt. As a sign of the state’s hopes for Chinese involvement in the summit, one potential date was nixed due to a conflict with the Chinese New Year holiday.
During his meeting with the Chinese press, Sisi mentioned the Suez Canal Development Project as a potential area for Chinese investment, as well as plans to redevelop Egypt’s road network.
Sisi’s predecessor, Mohamed Morsi, made a similar state visit to China in 2012. For his first state visit outside of the MENA region, Morsi traveled to Beijing, along with a delegation of seven ministers and 80 businessmen. Whilst he was there, China agreed to grant Egypt US$69 million in development assistance, and to facilitate access to a multi-billion dollar credit line for development projects in Africa. Private companies claimed to have secured billions of dollars worth of deals.
At the time, Morsi’s decision to visit China was viewed as an assertion of independence from the United States and other Western powers.
Despite its hostility to the regime it ousted from power, the Sisi administration appears to be continuing this policy, courting aid from foreign powers like Russia and China, as well as from the United States and its allies in the Arab Gulf.
Sisi has praised China, in particular, for separating economic aid from political issues. “China has balanced policies and does not interfere in other countries’ domestic affairs, which is one of the reasons for China’s success,” Xinhua quotes Sisi as saying.
By contrast, Western powers like the United States and the European Union are more likely to tie aid money to human rights and other political concerns. The United States has suspended hundreds of millions of dollars in aid until Egypt can meet democracy and human rights benchmarks, although earlier this month it allowed an exemption in the case of national security interests.
President Vladimir Putin and Chinese leader Xi Jinping have signed a memorandum of understanding on the so-called “western” gas supplies route to China. The agreement paves the way for a contract that would make China the biggest consumer of Russian gas.
Russia’s so-called “western” or “Altay” route would supply 30 billion cubic meters (bcm) of gas a year to China.
The new supply line comes in addition to the “eastern” route, through the “Power of Siberia” pipeline, which will annually deliver 38 bcm of gas to China. Work on that pipeline route has already begun after a $400 billion deal was clinched in May.
“After we have launched supplies via the “western route,” the volume of gas deliveries to China can exceed the current volumes of export to Europe,” Gazprom CEO Aleksey Miller told reporters, commenting on the deal.
Speaking to journalists on the eve of his visit to Beijing, Putin was optimistic about prospects for the new gas deal with China.
“We have reached an understanding in principle concerning the opening of the western route,” Putin said. “We have already agreed on many technical and commercial aspects of this project, laying a good basis for reaching final arrangements.”
The “western” route deal is one of the 17 agreements signed at the Sunday meeting between Putin and Xi.
They also included a framework agreement between Gazprom and China’s CNPC on gas deliveries and a memorandum of understanding between Gazprom and another Chinese energy giant, CNOOC.
Gazprom and CNPC have also signed a preliminary agreement for China National Oil and Gas Exploration and Development to take a 10 percent stake in Russia’s Vancorneft.
Among the business issues discussed by Putin and Xi at their fifth meeting this year was the possibility of payment in Chinese yuan, including for defense deals military, Russian presidential spokesman Dmitry Peskov was cited as saying by RIA Novosti.
Chinese President Xi Jinping on Saturday announced China will contribute $40 billion to set up a Silk Road Fund to strengthen connectivity in the Asia-Pacific region.
Xi said the goal of the Fund is to “break the bottleneck in Asian connectivity by building a financing platform.”
The new Silk Road Fund will be used to provide investment and finance for infrastructure, industrial projects along the “Belt and Road”, Xi said, referring to China’s Silk Road Economic Belt and the 21st Century Maritime Silk Road initiatives.
He added that the fund will be “open” to investors from both within and outside Asia.
The Asian Development Bank has estimated that in the next decade Asian countries will need $8 trillion in infrastructure investments to maintain the current economic growth rate.
“The Silk Road boasts a 3-billion population and a market that is unparalleled both in scale and potential,” Xi said in September last year.
The Silk Road connected China and Europe from around 100 B.C.
The 4,000-mile road linked ancient Chinese, Indian, Babylonian, Arabic, Greek and Roman civilizations.
A new map unveiled by Xinhua shows the Chinese plans for the Silk Road run through Central China to the northern Xinjiang from where it travels through Central Asia entering Kazakhstan and onto Iraq, Iran, Syria and then Istanbul in Turkey from where it runs across Europe cutting across Germany, Netherlands and Italy.
The maritime Silk Road begins in China’s Fujian and ends at Venice, Italy.
In a landmark achievement, 21 Asian nations including China and India last month signed on a new infrastructure investment bank which would rival the World Bank.
One of the first projects of the new Bank is expected to be financing infrastructure projects along the “Silk Road Economic Belt” and the “Maritime Silk Road” re-establishment.
Meanwhile on Saturday in Beijing, the Chinese President stressed that efforts should be made to realize Asia’s connectivity by making Asian countries a priority.
“Asian countries are just like a cluster of bright lanterns. Only when we link them together, can we light up the night sky in our continent,” he said.
China will provide neighboring countries 20,000 training opportunities for connectivity professionals in the coming five years.
Experts say these new announcements will boost China’s global influence and enhance its soft power.
Apart from the AIIB, the BRICS new $100 billion Development Bank is also being headquartered in China.
“China has considerable experience in infrastructure planning and construction, and financing projects outside the country. As Finance Minister Lou Jiwei has said, China Development Bank’s commercial infrastructure loan is now far bigger than that of the World Bank and ADB combined. And surprisingly, this process started only 20 years ago,” write Asit Biswas and Cecilia Tortajada, China scholars at the Lee Kuan Yew School of Public Policy, Singapore.
TBP and Agencies
In yet another episode that threatens to undo efforts aimed at finding common ground to tackle hacking, the Chinese Foreign Ministry told the US to stop “fabricating stories” and “mudslinging” about alleged Chinese commercial spying. A Federal Bureau of Investigation (FBI) official has accused China of stealing secrets from US firms.
“Chinese laws forbid hacking or any other behavior harmful to cyber security, and it is an undoubted fact that the Chinese government resolutely cracks down on crimes,” China’s Foreign Ministry spokesman Hong Lei said on Thursday in Beijing at a daily news briefing.
During a TV appearance on CBS, FBI director James Comey said earlier this week that China topped the list of countries seeking to steal secrets from US firms, costing American businesses billions of dollars every year.
“I liken them a bit to a drunk burglar. They’re kicking in the front door, knocking over the vase, while they’re walking out with your television set. They’re just prolific,” Comey said.
China hit back with charges of mass surveillance of private citizens and businesses by the US.
“Again, we urge the U.S. side to drop its wrongful fabrication of stories and deliberate mudslinging toward China, as well as stop its large-scale, systematic cyber attacks on other countries,” said the Chinese spokesman.
The US side’s attempt to divert attention by accusing others will not succeed, Hong added, referring to revelations by former US National Security Agency whistle-blower Edward Snowden about US cyber-spying that included hacking into computers in China since 2009.
Sino-US ties have long been dogged by accusations of cyber espionage.
In May this year, a senior Chinese military officer labelled the United States the world’s biggest cyber-thief a week after a grand jury in Washington indicted five Chinese officers on charges of hacking into American companies to steal trade secrets.
“In terms of both military and political intelligence and trade secrets, the United States is the world’s No.1 cyber thief and its spying force should be indicted,” Sun Jianguo, deputy chief of General Staff of the Chinese People’s Liberation Army, said.
“From Wikileaks to the Snowden incident, the U.S. hypocrisy and double standards on the issue of network security have long been obvious,” the Chinese Defence Ministry said in a statement, lashing out at the US indictment.
The US is the biggest attacker of China’s cyberspace, with US servers taking control of 1.18 million Chinese host computers between March 19 and May 18, according to the China Internet information office.
TBP and Agencies