China will not be conquered again, even if every last Chinese has to join the fight.
In the past four days, China has sent first 28, then 29 fighters and bombers near Taiwan. (Taiwan itself reports different numbers). Then, the US announced on Sunday that this is provocative. So, China called the statement irresponsible and sent a massive number of 59 fighters and bombers near Taiwan in a ‘take that!’ move.
But first, why would China militarily get involved in Taiwan, as it is their own territory under the 1992 Consensus for “one-China”? Taiwan is clearly China’s internal affair. What are their red lines?
Taiwan declaring a flash independence (they cannot really because they are umbilically connected to the mainland)
Internal turmoil inside Taiwan as we saw in Hong Kong
Taiwan may make a non-legal military alliance with another country
And any violation of the 1992 consensus.
None of these conditions are currently present, but we will need expert advice on the 1992 consensus. I do not know de jure how close Taiwan is to that red line. De facto the Taiwan announcement that they are preparing for war is completely provocative.
Currently China is not threatening, she is using her air force to deliver very strong warnings that the conditions are approaching red lines.
Lets look at Global Times. Bear in mind that the Global Times is not a bullhorn for Chinese people. It is for the dissemination of information to western people. That is its function.
– Time to warn Taiwan secessionists and their fomenters: war is real:
“The secessionist forces on the island will never be allowed to secede Taiwan from China under whatever names or by whatever means, and, the island will not be allowed to act as an outpost of the US’ strategic containment against China. “
– “The strategic collusion between the US and Japan and the DPP authorities is becoming more audacious, and the situation across the Taiwan Straits has almost lost any room for maneuver teetering on the edge of a face-off, creating a sense of urgency that the war maybe triggered at any time.”
Sunday, further Global times writing appeared, by a GT voice, warning the EU (GT voice should indicate to us that this is unified among the Chinese people).
– China will reconsider the European trade agreement.
“If the EU simply wants to develop normal economic and trade relations with the Taiwan island, its unusual emphasis on the latter’s role in its Indo-Pacific strategy should be viewed with suspicion. Some European politicians may think that playing the “Taiwan card” will draw more attention and could help pressure the mainland to make more concessions. But confusing the right and the wrong on China’s bottom line is a dead end.
The Chinese mainland’s position on the Taiwan question remains clear and resolute. All exchanges with the island must be handled in strict accordance with the one-China principle. They cannot exceed the scope of normal nonofficial cooperation and exchange.”
So, this is where we stand in this face-off and more analysis will follow.
Continuation of “Sitrep : China. Is. Dead. Serious.”
Let’s take a look at what China overcame in our near history.
The NED and similar organizations’ sponsored “Color Revolutions” in Hong Kong, Tibet, and Xinjiang all collapsed. We can also be sure that this escalation that we see now is not really about Taiwan. Taiwan is playing its role, like the dissidents in Hong Kong did.
The Trump Trade War collapsed and his focus on tariffs is now taking a tremendous toll on the US West Coast Ports.
The western propaganda war on China is collapsing because of the efforts of blogs like The Saker Blog and many others that took up writing about this.
The economic war is collapsing. For this, we have to follow Michael Hudson who details the butt-hurt Soros types who cannot make China dance to their tune. China has done massive work so that they do not have monopolies and internal destabilization by ‘too big to fail types’.
The return of Meng Wanzhou as a figure of national pride, which was a very delicate operation if one follows all of the plane routes during the sensitive exchange. Meng was exchanged for two worthless Canadian spies. There is another theory and this is that Canada tumbled to pay back the US for not including them in AUKUS.
The idea that the Chinese are not soldiers. They are that now because they have to be. * More about this following.
Let’s see what China gained in our near history
The pride, persistence, and trust of the citizens.
Major developments in space, like their own space station (slated to be a launching platform for? For what really? I do not know but the west has declared space a warfighting domain.) Most nations are welcome to come and hook up their own module, but the western world is not. This is a little payback for not allowing Chinese astronauts on the international space station.
A top US general, Milley, is so fearful of China that he called his counterpart in the late days of the Trump administration and told them that the US will not attack. (General Miley called to deliver a madman message–we have a madman at the helm and he may send nukes your way, so don’t do anything to give him an excuse. The poor general also had to deliver a contradicting message–at the same time, America is not falling apart; everything is hunky-dory and the well-oiled machine is running smoothly. ) (I know this has been taken out of perspective by almost everyone, but I am thankful, no matter that he may be a sniveling idiot. He did the rest of the world a favor).
China is in the process of destroying the dollar hegemony slowly but surely with Russia already having done its part and divesting from the dollar in their sovereign wealth fund. This deserves an analysis all by itself. Needless to say, China is launching its digital Renminbi, or Digital Currency Electronic Payment, commonly referred to as E-CNY, a central bank digital currency issued by China’s central bank, the People’s Bank of China. It is the first digital currency to be issued by a major economy. The digital RMB is legal tender and has equivalent value with other forms of CNY, such as bills and coins.
The fight against a virus called Covid.
China is now exceeding the US in almost all economic metrics, although they still refer to themselves as the 2nd major economy.
And at this stage, China makes major military flights near Taiwan.
A few statements:
China has no interest in military action against Taiwan
Taiwan has no real desire for military action against China (it would be somewhat like swatting a fly for China and will be over in an hour whichever method China chooses).
Here is Taiwanese Foreign Minister warning that his country is preparing for war with China. He asks Australia for help and Australia’s 60 minutes distributes the war propaganda.
Is the US interested in a war against China over Taiwan? We simply do not know.
What do we know?
Taiwan is a smaller copy of the economic miracle of China and there is no question of its economic success and high tech ability. But China mainland purchases over 40% of Taiwan’s production in both high-tech and agricultural products.
By studying Taiwan’s financial reports, MintPress has ascertained that the semi-autonomous island of 23 million people has, in recent years, given out millions of dollars to many of the largest and most influential think tanks in the United States.
It is then easy to conclude that with this revolving door, the US decided that Taiwan is an easy ingress to their hope for regime change in China itself (stated publicly by Mike Pompeo) and the AUKUS deal started the new range of increased provocations: It looks like any of the old color revolution tactics or initiatives, just now with an added threat.
This one, could end up in a hot war with both Russia and China.
Taiwan will not have a referendum for independence, because independence is not a done deal for the Taiwanese people. The ruling class fears that such a referendum will not be successful. We all know the ‘call to democracy’ and we all know that this is invoked over and over by hegemonic powers to justify their own excesses. Well today, Taiwan’s Tsai is invoking ‘a call to democracy’ via an article in Foreign Affairs Magazine. China is not impressed as she knows as well as you and I, what that really means. https://www.globaltimes.cn/page/202110/1235658.shtml
China’s interest is peace and security in the region, which is now being called Indo-Pacific. Martyanov says this terminology is hegemon speak, and I’m inclined to agree with him. It used to be Asia Pacific. I so hope someone can draw me the borders (even a dash line) where the Indo pacific and the Asia Pacific exists. Wikipedia, instead of being obscurantist as usual, this time gives the plot away.
The term first appeared in academic use in oceanography and geopolitics. Scholarship has shown that the “Indo-Pacific” concept circulated in Weimar Germany, and spread to interwar Japan. German political oceanographers envisioned an “Indo-Pacific” comprising anticolonial India and republican China, as German allies, against “Euro-America”.[2] Since 2010s, the term “Indo-Pacific” has been increasingly used in geopolitical discourse. It also has “symbiotic link” with the Quadrilateral Security Dialogue, or “Quad”, an informal grouping of in the region, comprising Australia, Japan, India, and the United States. It has been argued that the concept may lead to a change in popular “mental maps” of how the world is understood in strategic terms.https://en.wikipedia.org/wiki/Indo-Pacific
Martyanov says that the US has clear dominance in submarine capability and he also says that escalation is something that is very hard to predict. Here we see escalation toward war, with the US using probably the only card that they have to play, trying to kick off an ocean-wide domination conflict on the shipping lanes of communications, with probably the only weapon that they have left, submarines to try and consolidate at least something of US economy and influence across the world. Right here the issue of escalation becomes complex. Russia will not stand out of this and what happens when the Zircons start flying? How soon until Japan, Australia and Taiwan are demolished? We will leave this here for professional analysts to opine.
With that as a backdrop, let’s return to China, specifically the general belief that the Chinese are not born soldiers. That is true, yet the difference is that they prefer to solve problems non-kinetically. (Which is 100% fine with me!) But, they have other abilities, one of which is that they do not give up. The Saker has often said that morale is the greatest weapon of a military force. In this case, I would add to that: preparedness. Again Martyanov said that this thinking on the dominance of sea-lanes is not new. Well, China knows that as well, and they have prepared.
Every school child and university student in China now goes through military training. For the school kids, it is part of the initiative by the Chinese leaders to relieve the school kids from absurd requirements for STEM learning and to get them outside to take part in healthy play and strengthen them physically.
Every city has a local militia and they are armed to the teeth and drill and practice continually. This alone is estimated at 1 million feet on the ground (from Chinese sources).
If kinetic action breaks out in their own backyard, they have the numbers and home team advantage.
Following are some comments from our China correspondents. I don’t have the necessary 2 sources plus another for these, but I put them here to give you an idea of the chat.
China is known to be able to set together production lines very quickly. In these comments, this one is comical and says that China is mass producing nuclear warheads like they crank out paper lanterns. The only thing on earth that is faster is the US money machine.
It may be a comical comment, but the underlying issue here is that the average Chinese person has no doubt that China will, and is able to build whatever is necessary, any war materiel of any kind, to withstand kinetic action.
Is this meaningful in discussing this escalation? I would say yes.
More comments:
If you think a war against China (and Russia – we have to call in Russia at this stage) will be a perpetual war, kindly think again. This is not a win or a lose – it is total destruction of the one that fires the first shot or shoots the first missile or positions the first submarine to destabilize sea-lanes.
This represents the average Chinese and their chat and it is not the type of barroom soldier chat. These are ordinary people.
China is a merit nation and very serious. One can expect precision and ruthlessness. You may want to believe that the Chinese are not born warriors or you may want to believe that they cannot innovate. You can believe what you want, but take a look at these comments:
They do not believe in surgical strikes should anyone attack them. They believe in pounding the source of the attack and whatever is around it, into oblivion. They have their own history as a template.
Btw, does this remind you of the Russians, who said that any strike on Russia will not only take out the strike, but also the platform where the strike comes from? The interaction between Russia and China militarily has grown tremendously as well, but again, this is another analysis.
I expect full-on military readiness as the Chinese military has been on a readiness footing for about a year now.
An outstanding question is how unified Asia is around China. Again we come up against Martyanov’s principle of escalation and this is really difficult to predict.
There is the old saying that goes like this: Do not march on Moscow!. We need to add one. Do not militarily threaten Baba Beijing!. It does not matter how for how long, they do not count their own possible dead, but they will stay the course.
Can we hope for level heads in Washington DC? Realism tells us that we have to hope for the best, but prepare for the worst. China is doing that.
Russia ramps up natural gas supplies to China via Power of Siberia mega-pipeline
“The export of gas to China through the Power of Siberia gas pipeline continues to grow. Supplies regularly exceed Gazprom’s daily contractual obligations,” the company said in a statement, adding that the volume of gas delivery last month “was 2.9 times higher than in January 2020.”
Says subscriber Frans Vandenbosch, “If I have to describe China in one word, then I would say ‘intense’. Western companies are sheltered workshops, they do not know what real competition is. They should benchmark China to know what real harsh competition looks like.” Adds Josh Gardner, “Online retail in China is cut-throat. Comparing Taobao with Amazon is like comparing ballet to rugby.”
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This blog fairly reflects the stance of Chinese people on the long running trade war. Although it contains some hubris, there is no question that the person in the street is convinced that China will be victorious.
China is establishing an invincible position in its trade war. It will switch many of its exports from the US to BRI countries and move the industries that produce goods for export to the US to the industrial parks in BRI countries to avoid US tariffs and reduce labor costs.
“In the long run, China’s Belt and Road initiative (BRI) will bring economic growth to developing countries and expand China’s market there. It will enable China to switch lots of its exports from the US to those countries. Moreover, BRI will enable China to move the industries that produce goods for export to the US to the industrial parks built by BRI in those countries to avoid US tariff hikes and reduce labor costs. China will thus establish its invincible position in its trade war with the US.” Read more about the Plan for Long-term Victory
And where is Jack Ma?
“Ant Group Co. is planning to turn itself into a financial holding company overseen by China’s central bank, responding to pressure to fall fully in line with financial regulations, according to people familiar with the matter.
Chinese regulators recently told Ant, which is controlled by billionaire Jack Ma, to become a financial holding company in its entirety, subjecting it to more stringent capital requirements, the people said. Ant, in response, has submitted to authorities an outline of a restructuring plan, they said.”
The video is worthwhile watching for background, even though it is from the Wall Street Journal.
Jack Ma made the unforgivable error of criticizing in public. Rule one in China – don’t make the other guy lose face while there are methods to bring problems to the attention of the authorities. In reality, he seemed to have been absolutely right, and Ant Group was immediately used as a case in point, where the financial regulators fixed their own errors. This of course led to Ant Group having to disclose their real business as one of the biggest lenders in China, besides their vast technology footprint. Given what happened in the US with behemoths such as Google and Twitter and large de-platforming, I do not blame the Chinese authorities one bit for having decided that no-one should have this much power.
Now that we’ve found Jack Ma who was busy restructuring his Ant Group, more on China’s credit market.
China’s credit market got big fast because credit services fit traditional practices. Despite its reputation as a “nation of savers,” Chinese society has traditionally been heavily reliant on debt, facilitated through a long tradition of private and informal borrowing and lending. In this system, instead of concepts like “credit,” access to loans depended on renqing, “human sentiments.” Read full article $→
So, you want to join the CCP? It is not that easy.
“Next year the Chinese Communist Party (CCP) turns 100. Since its founding in 1921, the CCP has grown from a small cabal of Marxist intellectuals into the world’s second-largest political party, behind only the Bharatiya Janata Party in India. One of the reasons for the CCP’s success has been its cultivation of human capital—any organization is only as good as its people.
Ahead of the Party’s centenary, understanding its longevity requires an understanding of its members. While the Party is frustratingly opaque about internal operations, its human resources division, known as the Organization Department, does publish annual data on membership. After the 2019 numbers were released in June 2020, MacroPolo scoured open source databases to compile the most complete public dataset on CCP membership.” Read more …
Belt and Road
The Sinocentric bloc of Turkey, Iran and Pakistan could leave America’s ally India isolated and weak. The only three Muslim states with significant military capacity and economic potential participating in the $2 trillion BRI will promote Chinese influence from the Indian Ocean to the Black Sea. Read full article $→
$10 billion for MENA (Middle-East & North Africa)’s Five BRI Projects): Egypt–Cairo’s New Administrative Capital & CBD; Turkey–The Hunutlu Thermal Power Plant; Jordan–Attarat Oil Shale Power Plant; UAE–Hassyan Clean Coal Power Plant; Lebanon–National Music Conservatory. MENA has 578 million people and 60% of world’s oil, 45% of its gas.Read full article $→
DEBUNK: As a minority Chinese (Manchurian) with his mother side hailing from Hulun Buir, Inner Mongolia, I can say from my own experience that this is FAKE NEWS at its best. The truth is, in the Mongolian language primary education system, Mandarin has been taught and used since my mother can remember. The only change this time is to replace some locally created Mandarin language textbooks with national, official Mandarin language textbooks.
Yes, both of them are Mandarin textbooks. Yet New York Times and its FAKE journalists can’t wait to cook up new FAKE news completely distorting the truth. Shame on the New York Times and its FAKE news journalists! A bit of background for your information:
In Inner Mongolia, where half of my relatives are from, two primary education systems operate in parallel: one in Mandarin, one in Mongolian. Chinese Mongolians can opt for either one and most Chinese Mongolians so far opted for the one in Mandarin – the Mandarin system is of much better education quality due to better human recourse on teachers, and the kids won’t need another ‘prep-year’ before formal university when they attend a university program being taught in Mandarin. In contract, the ones who chose the Mongolian system, despite continuous government fundings to ensure it’s operational, still have to endure the less quality of education.
And this leads to life-long differences in career development and social mobility between two groups of students. There are law-required quota for these Mongolian-taught students in top Chinese universities, including THU and PKU. However, the truth is that these students often find their university coursework beyond their capability, and the fail rate is much higher than the Mongolian students taught in the Mandarin system.
So should the regulators allow those Mongolian-taught Chinese Mongolian students to rot and remain disadvantaged for life? Or should the regulators find ways to improve the education quality they receive? I know the US of A has chosen the former one for its Black, Latino, and Native American’ citizens’.
But this is the PEOPLE’S Republic of China. We agreed we shall advance together. Let’s never forget: Fabricating fake news to create hatred and conflicts between the native populations has always been a standard colonial conquest tactic and has been practiced by the western imperialists for centuries. Chang Wanyan
BUNK: British broadcasting regulator Ofcom has revoked China Global Television Network’s (CGTN) licence because it is “controlled by the Chinese Communist Party and therefore disqualified from holding a broadcast licence under UK.” Ofcom criticized CGTN’s coverage of the Hong Kong protests as in “serious breach of fairness and privacy rules”. (Ofcom also banned Iran’s PressTV). Read full article →
DEBUNK: CGTN says, “In early 2020, manipulated by extreme right-wing organizations and anti-China forces, Ofcom launched an investigation into CGTN’s broadcasting license in the UK. We provided detailed explanations to Ofcom in a proactive and cooperative manner, proposed transferring CGTN’s broadcasting license and sought a constructive solution. However, Ofcom disregarded CGTN’s reputation as a professional international media organization and its 18-year good record of broadcasting in the UK, and made a final ruling, based on the so-called political nature of CGTN and related Chinese media organizations, to refuse the transfer and to revoke CGTN’s broadcasting license.We believe that the continued broadcasting of CGTN’s television news service to a British audience is in the public interest of the UK. We comply with the laws and regulations of every country and provide news and information to an international audience with diverse and balanced perspectives, and will continue to promote understanding, communication, trust and cooperation”.Read full article →
This represents but a fraction of what is included in the Here Comes China newsletter. If you want to learn about the Chinese world, get Godfree’s newsletter here: https://www.herecomeschina.com/#subscribe
This week’s selection includes a separate explanation on just how the Chinese Communist Party and Government operates. For those that visit these weekly Sitreps to learn, this may put an end to the regular discussion items of just how bad the CCP is. You did know that China has six political parties, did you? The people that I’ve consulted say the following: China’s system works for China. We do not suggest you adopt our system, so, there is no reason for you to insist we adopt yours.
From a regular Twitter Feed by ShangaiPanda, here is how it actually works, by meritocracy. What this means is that Xi Jinping for example already had 40 years experience in governing, before he was both selected, and elected to his position.
From Godfree’s newsletter which is just brimming with interesting items this week, we’ve selected items about:
space,
Islam, communism and the BRI,
trade war and trade deficit,
and a highly educational piece by ‘Chairman Rabbit’, who analyses America from a Chinese perspective.
On studying China it is good to remember that unlike many other countries, China as a country holds together from two perspectives, a long lasting civilizational unity, as well as a sovereign state.
Space – high technology that is green technology
China has safely landed a reusable spacecraft which it claims will provide a “convenient and inexpensive” method of getting to and from space. The craft launched on September 4th and landed on September 6th after spending two days in orbit, according to the state-run Xinhua News Agency. Very little is known about the spacecraft, including even its basic design. There are no picture or renders of the craft, but there have been rumors it is a spaceplane similar to the Air Force’s X-37B. A Chinese military source told the South China Morning Post they could not provide details on the mission but that “maybe you can take a look at the US X-37B.”[MORE]
Islam, Communism and the BRI
The significance of having 52 Muslim countries (37.6%) that comprise 87.5 per cent of World Muslims in the BRI alliance, is not lost on the United States and its allies who are not particularly pro-Islam, which may explain their sudden interest to ‘care’ about the plight of Muslims in Xinjiang! Soon after the Bolshevik uprisings, Communism and Islam seemed destined to liberate the Muslim world from European Imperialism, but that was not to be due to their ideological differences. This presented an opportunity to the United States and its allies, where they coopted anti-Communist Jihadism to disrupt Communism. This had the unintended consequence of being the impetus for China’s Belt and Road Initiative, which presented the U.S. and its allies with new challenges.
Soon after the Bolshevik revolution of 1917, Communism and Islam were the impetus for revolutions against European imperialism in Egypt, Iraq, India, Caucasus and Central Asia, and the Indonesian Archipelago. However, divergent views about Communism proved divisive among Muslims (who are also quite divergent in their theological interpretations of Islam) and this quasi- ideological alliance was all over by the onset of the Cold War. Those irrevocable divisions may have been due to the essence of Islam’s socio-economic and political system. It is more consultative (‘Shoura’ or democratic theocracy) and entrepreneurial in nature, which is more compatible with social democracy and capitalism, than with communism’s autocratic state planned economy.
The other reason for such failure is the proactive role of the United States (and some Western Europeans, like Britain and France) in using Christian missionaries and NGOs in intelligence gathering while spreading Christianity in Africa, Asia, the Middle East and South America. In the 1970s, it was revealed that the CIA sponsored missionaries in Kerala and Nagaland to not only block the advance of Communism in India, but also to establish sufficient tensions between India and China and prevent any regional stability that continues to our present day.
In the 1980s, the CIA’s material support to the Afghan Mujahideen (and by default the Afghan Arabs, like Osama Bin Laden and his followers, who were rounded up from the different Arab and Muslim countries by their intelligence services and sent to Afghanistan, via Pakistan for their paramilitary training by the ISI, in the hope that they would never come back) only exacerbated extremist violence ever since. In the 1990s, the predominantly Muslim former Soviet Republics of Central Asia; Kazakhstan, Kyrgyzstan, Tajikistan, and other Islamic countries like Afghanistan and Pakistan opened their doors to Saudi-sponsored Wahhabi Islam (probably with the ‘blessings’ of the CIA).
This resulted in an upsurge of Islamist fundamentalism and separatist movements in central Asia, like al-Qaeda affiliated Turkestan Islamic Party(TIP), Hizb ut-Tahrir (HuT) and Harkat-ul-Jihad-al-Islami (HuJI), which have presented a challenge to China and others in the region. Since the rise of anti-Communist Jihadism in the 1980s and its coopetition by the Anglo-Americans to disrupting Communism ever since may have been the impetus for China’s Belt and Road Initiative (BRI).
The $8 trillion investment by China in its bold, innovative and strategic Belt and Road Initiative (BRI) alliances with 138 countries comprising 51.7% of world GDP offers an infrastructure backbone of maritime, land and digital trade alliances. The BRI alliances represent 4.8 billion people (61.7%) of the world population. Of which an estimated 1.4 billion (29.2%) identify as Muslim and are part of the 52 member countries of the Organisation of Islamic Countries (OIC), including all 22 Arab countries.
China’s BRI strategic alliances with Arabic and Muslim countries can only help neutralise the existential threat of global Islamist fundamentalism in the long-term by spreading economic prosperity and alleviating poverty. Also, it will not only bring prosperity and stability to China’s underdeveloped north-western part (Xinjiang holds 1.33% of China’s population and contributes 1.35% to China’s GDP), but also to (its ideological partner in the new world order) Russia, and other BRI partners on its western border.
Coupled with technological innovations in global cross-border trade and finance, the BRI projects would no doubt accelerate global economic growth and revive China’s historical legacy in boosting entrepreneurships without compromising necessary protections of the weak. Those infrastructure-driven alliances are building a global community with a shared future for mankind. This is so important at a time when our world is divided by poverty, crippling national debts and the rise of ultra-nationalism.
The clash of civilizations, anti-(Muslim)-refugees’ sentiment and Islamophobia are just symptoms of the rise in white supremacism and alt-right extremism sweeping the Anglo-American and European nations. Those groups subscribe to a conspiracy theory of cultural and population replacement or nativism, where white European populations are being replaced with non-Europeans (predominantly Muslim Arabs from Syria and elsewhere) due to the complicity of ‘replacist’ elites.
For example, the ‘Génération Identitaire’ (GI) movement in France, which considers itself a ‘defender’ of the European civilization has affiliated youth groups in Austria, Belgium, Czech Republic, Germany, Hungary, Ireland, Italy, Netherlands, Slovenia and the United Kingdom. This heightened sense of ultra-nationalism is driving Western democratic politics away from economic concerns, in favour of issues related to culture and identity. No doubt, Anglo-American and European anxieties about China’s technological, economic and geopolitical dominance may be rooted in their innate fears about being displaced by an Asian culture and the potential spread of Socialism with Chinese characteristics to the 138 countries that joined the BRI alliances, after having spent a good part of over 70 years fighting Communism.
America’s continued rise as a world power—from the 1890s through the Cold War—and its bid to extend its hegemony deep into the twenty-first century through a fusion of cyberwar, space warfare, trade pacts, and military alliances – is now limited by the reality that it has to dismantle China’s BRI alliances as it did to the USSR. This is why the ‘five eyes’ alliance is going on the offensive with (a) sanctions and visa restrictions for Chinese officials, (b) bans on China’s technological 5G innovations (Huawei, Tik Tok and WeChat under the guise of ‘National Security’ concerns), (c) tariffs trade wars, and (d) a particular focus on ‘human rights’ in Hong Kong and Xinjiang.
The significance of having 52 Muslim countries (37.6%) that comprise 87.5 per cent of World Muslims in the BRI alliance, is not lost on the United States and its allies who are not particularly pro-Islam, which may explain their sudden interest to ‘care’ about the plight of Muslims in Xinjiang! Thus, it is not unreasonable to conclude that the sole purpose of those disruptive policies by the “five-eyes” alliance is to intensify the global anti-China sentiment that is already aggravated due to COVID-19, and to inflame Muslim sentiment in particular, so as to torpedo China’s largest economic and geopolitical Belt and Road alliances.[MORE] [George Mickhail is an LSE trained academic and a geopolitical risk analyst with 30 years’ experience in major global accounting firms and business schools.]
Trade War and Trade Deficit
The US trade deficit with China widened in July – an embarrassing situation for President Trump, who Taiwan’s Liberty Times said had been left with a ‘green face’ (a crude expression that makes plain this is a bad outcome for him). When the US President campaigned four years ago, he strongly accused China of seizing American wealth in what he hailed as “the biggest theft in history.” After his election, he maintained this position against China. However, the latest data will hardly please him. The United States had a $31.6 billion trade deficit with China in July, which was an 11.5% increase from June. The paper noted that before the outbreak of the coronavirus, the US trade deficit with China was narrowing, but it has gradually expanded since the epidemic spread. Data released by the US Census Bureau on Thursday showed that the trade deficit with China in Q2 increased by 36.8% compared to Q1. The deficit in July was 4.36% larger than that in July 2016.[MORE]
‘Chairman Rabbit’ Analyzes America
Editor’s Note: Tu Zhuxi (Chairman Rabbit) is the nom de plume of Ren Yi, a Harvard-educated Chinese blogger who has amassed more than 1.6 million followers on Weibo who seek out his political commentary, much of which falls under a genre we might facetiously call “America-watching.”
Today, I scrolled through the interview Professor Ezra Feivel Vogel gave with the Global Times: “90 year-old Professor Vogel: Unfortunately, there is a possibility of armed confrontation between the United States and China.” The veteran professor—who has researched China and East Asia all his life and promoted the development of ties between the United States and China—conveyed intense unease after witnessing two years of sharp downturn in Sino-U.S. relations under the Trump Administration. He could not bear not to air his concerns.
This interview comes at an opportune time. As you can see, I have excerpted a short comment from the interview. This excerpt perfectly echoes the content I have wanted to expand on these last two days:
Vogel: There is a new article in the Atlantic magazine by James Fallows that gives the most comprehensive explanation of what has happened. And it clearly is the Trump administration.
Before the coronavirus, there had been plans in earlier administrations for dealing with an epidemic. We had a good overall plan. Trump did not use those plans at all. He even acted when he first heard about the coronavirus pandemic as if there was not a big problem. So things were delayed. It clearly is Trump’s responsibility.
At the time of writing, the United States has around 3.8 million confirmed cumulative cases, 140,000 deaths, and a daily increase of about 64 thousand cases. The diagnosis of experts and intellectuals around the United States: this is all due to the Trump Administration.
First of all, the United States’ so-called “good overall plan” for epidemic response was targeted towards a type of infectious disease that resembles the flu in infectiousness, hazard, and lethality. The United States after all has quite a few documentaries and special television programming about pandemics, and every year in every corner of the country drills are held about pandemics, but all of these were with the assumptions of a flu-like disease. COVID-19 was not within the expectations of an American plan for epidemic response, and indeed was beyond the response plan of every country in regard to an infectious disease with respiratory transmission. COVID-19 is an especially potent epidemic, a disease with an extraordinarily high death rate. The epidemic response plan that the United States currently had in place was entirely insufficient for COVID-19. Dr. Anthony Fauci brought up this topic several times in the last few months, especially in the early stages of the epidemic: the American system and design is either insufficient or entirely ineffectual against COVID-19. Dr. Fauci was speaking only from the standpoint of public hygiene and healthcare system and his analysis did not broaden past these considerations.
I have been following the news, media, and commentaries of the U.S. right and left. Criticisms of the epidemic response have generally been from Democratic Party, anti-Trump, and/or liberal-aligned intellectuals. Even after several months, I have rarely encountered essays or discussions that analyze in-depth the full extent of the difficulties facing the U.S. COVID-19 response by synthesizing broader observations on the nation’s political system, society, governance, culture, and economy.
Basically, all the analyses have taken the question and subsumed it under the issue of “political leadership”—usually pointing towards the President, the White House, and state governors. The majority of these analyses lay blame onto the very person of Trump.
Basically, all the analyses have taken the question and subsumed it under the issue of “political leadership”—usually pointing towards the President, the White House, and state governors. The majority of these analyses lay blame onto the very person of Trump.
According to this logic, the reason for the U.S.’s weak response to the epidemic is Trump and Trump alone. If only there was only another person in charge, the U.S. could have defeated COVID-19.
Readers who follow me should know my methods well: I have always begun my analyses from a sociological point of view. How could the U.S. use influenza as the primary lens to understand COVID-19, and how did this understanding influence the U.S.’s subsequent responsive actions? I have since wrote many essays on this topic, for example my April 1st, 2020 essay: “Can the United States Shut Down Entire Cities and Thoroughly Practice Social Distancing Like China? A Discussion of American Exceptionalism” (link in Chinese).
In that piece, I argue that due to the U.S. political and legal system, enacting a comprehensive and stringent social distancing program, including measures such as quarantining cities, is simply not possible.
In the next few months, I will continue my analysis and extend towards the political level. Not too long ago, I collected a few writings into this listicle: “13 Reasons for the Ineffectual Response towards COVID-19 of the United States and ‘Society Construction’ During an Epidemic” (link in Chinese).
I summarized thirteen reasons for the U.S.’s weak response to the epidemic:
Government system: the separation of powers between the federal, state, and local governments
Government system: the separation of powers between the legislative, executive, and judiciary bodies
Wide racial and class disparities
A culture that understands individualism as a cardinal virtue, even to the point of opposing social or collective interests
An overwhelmingly one-sided emphasis on political and civil rights
“Gun culture”: the spirit of Manifest Destiny, rugged individualism, and militarism
“Bible culture” and anti-intellectualism
A pluralistic society without common understanding or consensuses
A government and media that intensifies rather than ameliorates social tensions
A values system that does not respect the elderly and does not assign elders special protections
Family structures which are not suited to fighting against COVID-19
The precarious economic situation of the United States’ middle and lower classes (like walking on a tightrope, i.e. living from paycheck to paycheck or credit problems)
Other cultural factors, such as resistance against wearing masks
There are certainly many more reasons than the ones I have listed. But what I wish to express is that the U.S.’s weak response to the epidemic is the combined result of political, legal, social, cultural, economic, and other factors. The White House, as one of the holders of broad public authority (the executive section of the federal government), has in fact significantly limited power over this broader structural context.
The U.S. cannot manage stringent social distancing, large-scale quarantines of cities, nor restrictions on interstate travel. Health QR codes on mobile devices are entirely impossible with citizens’ insistence on privacy protections. A vast society led primarily by individualism and anti-intellectualism can hardly speak of epidemic management. These factors are not problems that can be resolved with the changing of a president. I believe that even if it were Obama, Hillary, or Biden as president, they would not be able to reverse the tide of the battle against COVID-19, even if they would be slightly more effective—for instance if they had taken the initiative and emphasized the importance of masks. This is because fighting an epidemic does not depend on the lobbying or practices of a president, but rather on the public health and prevention system of an entire country, one which from top to bottom must act in unity and move together. Public authority must comprehensively, effectively, and consistently implement policies (such that each locality will not have its own variant policies), and also cannot allow any level of the judiciary to interfere in the problems of any level of government. On the balance between citizen and society, preparations must absolutely be made to cede rights to the collective. “Political and civil rights” must in these times yield way.
The very design of U.S. political and legal institutions is meant to inhibit collective rights. Balance of powers is at the core of American governance. Political and civil rights are the bedrock of American political values. To deny these values equates to the very denial of the U.S.’s fundamental being.
The very design of U.S. political and legal institutions is meant to inhibit collective rights.
Therefore, to take the U.S.’s weak response to the epidemic and shove it at “political leadership” and at the feet of Trump is not merely skin-deep, but avoids the real problem and focuses on easy answers. It is simply not looking at the substance of the situation.
For several months I have followed U.S. political commentaries on the left and right, and I can confirm I have not seen any analysis of depth. The overwhelming majority of analyses are overly narrow and concrete, pointing at an individual perhaps. Rare is the person who can leap outside the U.S. political structure and carry out a detailed assessment from a third point-of-view. Why? I summarize two reasons:
(1) Americans are sort of like the baffled participant in a game; sometimes the onlookers see more of the game than the players. Americans honestly believe that the American system is exceptional, the best in the world. This is an earnest and steadfast faith, an authentic “self-confidence in path, self-confidence in principles, self-confidence in system, self-confidence in culture” [the “Four Self-Confidences” of Xi Jinping Thought]. They simply cannot bring themselves to doubt or oppose the American system. Since the American system is perfect, once the epidemic creates problems, by the process of elimination, Americans reason that the problem must stem only from electing the right or wrong politician. From this line of thought, pick out the one who has the most power: this is Trump’s fault. After him, perhaps we blame the governor of Florida, DeSantis. This is about as deep as the majority of Americans introspect.
(2) Criticizing the American system is a serious political error. It’s taboo. This is because it is anti-American, “unpatriotic,” “un-American.” It is a stance that doubts the very foundations of the United States. So when there is an elephant in the room in regards to the American system, everybody can see it but dare not speak up. I believe that the majority of people do not even see this elephant in the room because they have been so thoroughly brainwashed by the perfection of the American system. It is only a minority of people who can see this. These people very well could be Democrats or liberal intellectuals. This small number of people aware of reality cannot point out the elephant, however, even if they can see it. This is because pointing it out cannot change the situation on the ground, yet will still result in censure and criticism. One would rather polish a cannonball and lob it at Trump.
In summary, if we compare China with the United States, we would discover an interesting phenomenon.
When Chinese people criticize, they are accustomed to focusing criticisms on the system. “Systemic problem.” “Systemic-ism .” Even though there are indeed problems at the individual level, these problems are thoroughly rooted in the larger system. “Because the system produced this type of person,” “because the system could not restrain or check this particular person.” At any rate, any analysis fundamentally leads back to systemic problems.
When American people criticize, it is focusing the problem onto the physical body of an individual politician. It is not the system at fault, because the system is already perfect or close to perfect, so it can only be a problem birthed from the politician: this pundit’s personality is bad, their abilities did not cut it. All criticisms are of this sort. With that, if an impotent pundit is continuously elected or re-elected—for instance if Trump is re-elected, then this is a problem of the voters. But at this time, the analysis simply cannot proceed further. In the calculus of American political values, the political values of every person are equal: one cannot belittle the voters. In 2016 during the presidential race, Hillary Clinton belittled Trump’s supporters and faced an overwhelmingly negative backlash, costing her the ultimate price (this could perhaps be why she lost the presidential race). What is left then is to criticize the political influence of the media, campaign funding, and interest groups. But even here the analysis must end. Within the proscribed limits of the dialogue, it is easy to enter into another level of analysis—for example, could it be that the U.S. electoral system has fundamental faults? If one gets to this level, it touches upon the very body of U.S. democracy and its electoral system. One would be entering a live mine zone, teetering on the edge of political error.
In this sort of environment, Americans naturally will avoid hard problems and search for easy answers. They will not explore systemic problems, but rather focus their entire attention on electoral solutions.
Under this existing electoral process, one can only, perhaps, push their preferred candidate onto the political stage and wish only for their own candidate to ascend to the office, so that in the next few years that candidate can advance their own political programs and thereby protect the interests of the candidate’s supporters. In this sort of environment, Americans naturally will avoid hard problems and search for easy answers. They will not explore systemic problems, but rather focus their entire attention on electoral solutions.
Therefore, American politics are entirely driven by the short-term. They will look at long-term problems as a certainty before avoiding them, exerting only in order to resolve short-term problems. Even though there are scholars and intellectuals who can produce long-term analyses of wide historical and societal scale, this sort of analysis remains locked in the library and Ivory Towers, away from the stain of political practice.
The American “Revolution”
In the week after the conclusion of the 2016 election in the United States, Democratic primary candidate Bernie Sanders published his book Our Revolution. As everybody knows, 2016 was the contest between Trump and Clinton. Yet Bernie Sanders was the more extreme, more left (called a “socialist”) candidate of the Democratic Party, who was ultimately knocked out by the mainstream Clinton in the primaries. But he retains many fans among the Democratic Party’s “progressive wing”, including many youth. In his book, he introduced his thoughts as well as his explanations and analyses on all sorts of issues of the day, including the wealth gap, race relations, environmental problems, healthcare problems, the problem of media and interest groups binding politics, gender pay disparity, and the problem of Wall Street and big corporations.
Sanders’ diagnosis of American problems intersects with Trump: it is only that while Sander’s target audience was quite broad (for example, minorities, vulnerable groups, and women), Trump’s was much more parochial. On similar problems, Trump would provide right-wing resolutions to his limited audience of voters, but Sanders provided left-wing resolutions to his broad audiences—because of this, he was smeared as a “socialist”. Of course, during Sander’s entire campaign, there remained an unspeakable doubt: that is, can a big-city Jewish American ‘elite’ from Brooklyn, New York actually win the votes to be elected as President of the United States? This same problem may apply to Michael Bloomberg. To date, it seems this question answers in the negative.
But I do not wish to talk about Sanders’ propositions or ethnicity, but rather his slogan: “Our Revolution”.
“Our Revolution” has now become a left-wing action organization with roots in the 2016 Bernie Sanders campaign, and it continues to organize movements within the Democratic Party and in other broader social contexts.
“Our Revolution” has three key actions: “Win on our issues,” “Transform the Democratic Party,” and “Elect progressives up and down the ballot.”
It is of note that Sanders is the most mainstream American politician to date to support the idea of a revolution. However, what I wish to point out to Chinese readers is that this concept of “revolution” is nothing more than propagating his own thoughts and policy proposals to a wider audience, in order to get his own people elected and achieve electoral success himself.
People more familiar with Chinese political discourse should know the difference between “revolution” and “reform.”
Revolution is overturning and starting over again: toppling the old system and the old order, and constructing a new system. Revolution is often violent, of great force, compelled, and refuses to abide by the present system. From the standpoint of Marxism, revolution is class struggle, a fiery worker’s movement. From the standpoint of Leninism, it is a violent movement. From the standpoint of Mao Zedong:
“A revolution is not a dinner party, or writing an essay, or painting a picture, or doing embroidery; it cannot be so refined, so leisurely and gentle, so temperate, kind, courteous, restrained and magnanimous. A revolution is an insurrection, an act of violence by which one class overthrows another.”
In the Chinese context, and indeed in the majority of cultural and social contexts, “revolution” is an intense action: revolution demands the overthrowing of the present system. Abiding by the present system, or moving within the current system and order, can only be reform.
But it is different in the United States. In the United States, challenging and overthrowing the system is taboo. It is simply impossible. This is because the American system is considered sacred, perfect. It is only particular individuals who have problems, only particular problems that cannot be handled well. The system itself has no problems. Therefore, all actions can only be carried out within the purview of what the system allows. The only path is by election—use a successful election to construct the starting point and foundations of societal change.
The American system is considered sacred, perfect. It is only particular individuals who have problems, only particular problems that cannot be handled well. The system itself has no problems.
Because of this, in the political rhetoric of Bernie Sanders, we see not a radical revolution or transformation, but a complete obedience to the American system. Due to the American people’s 100% approval and obedience to the system, any possibilities that people may have substantive critique or doubts vis-à-vis the system are cut off, and no action can be taken. The American system has completely limited their space for movement. Even “radicals” similarly can only raise high the banner of the American system, and can only work and influence society within designated limits: by pushing their own candidates in elections.
A few weeks ago, the police brutality case of George Floyd caused massive numbers of Americans to take to the streets and protest without ceasing.
Yet have we seen any protestor put out protest against the very structure of America’s political system, institutions, and government? Will there be any person who comes and burn the Constitution? Burn the American flag? Will there be any person who will put forth concrete plans of actions towards subversion?
There wasn’t any. The protestors could only protest a few “conditions.” Each path towards resolution is diverted back into elections.
The United States uses the separation of powers mechanism to spread the vast majority of social contradictions among the politicians of the various local jurisdictions. Through the possibility of election, in order to resolve these contradictions, the people complain while pointing at the politicians, not the institutions themselves. In the end, the people believe they hold the power and can influence politics through the vote, carrying on their lives under this sort of hope.
The most awe-inspiring politics indeed is this: one in which people believe they have the power and thus maintain steadfast hope in the future, while at the same time changing nothing about the current situation.
A few weeks ago, when riots erupted all around the United States, Secretary of State Pompeo could still proudly boast and simultaneously demean China: Wehave freedom of assembly, expression, and freedom to protest.
The American system has already developed to this point: simply give the people freedom of expression and freedom to protest so that they can feel themselves righteous and superior, after which they may do as they wish.
I have before written an essay “From ‘Moral Licensing’ and ‘black-clad warriors’ to the ‘Sick People of Hong Kong’” in which I explained the concept of moral licensing:
“People believe that if they had prior done something good, they can then possibly condone themselves (or even indulge themselves) when in the future they do something not as good (even actions that do not conform to one’s own or the public’s moral standards).”
The circumstances surrounding the system of the U.S. are such: if we allow people expression, allow them to freely scold the government, this grants the people “political and civil rights.” This itself grants the American system moral superiority; it is the ends not the means. Afterwards, the government need not do anything further: “half-heartedly listen yet decide to do nothing.” That there have been so many racial conflicts and riots in the past few decades demonstrates that this kind of “expression” does not bring any substantive political transformation. American society has not experienced any fundamental changes. The people who can bear it no more cannot help but take to the streets after many a hard years.
The U.S.’s electoral system is a systemic, national form of “moral licensing”:
First, it grants people the right to vote, grants people a few nominal political and civil rights, allowing the people to feel that they have power and agency and thereby perceive moral self-satisfaction.
Afterwards, the politicians and elites can recount the greatness and glory of the system, right and proper as it is. “We allow African Americans to go out on the streets! So our system is progressive.” “We had Obama as president, how can our society be discriminatory against African Americans?”
The first stage of American politics is taking “the right to express concerns” and equating it with “measures to resolve the problem.” I allowed you to express your opinion, so all is well.
The second stage of American politics is taking “the right to express concerns” and using it as legitimization for “tacit allowance of the bad.” I allowed you to express your opinion, and I even allowed a black president, so what are you babbling about?
As one can see, the separation of powers and electoral system in the United States has created a perfect “cognitive trap” — people believe that this system can endlessly empower individuals and provide limitless potential and possibilities, that it can change anything. This system is in fact like a black hole, taking all the potential and sucking it in and dispelling it — even if it means there will be no changes in reality.
This system is in fact like a black hole, taking all the potential and sucking it in and dispelling it — even if it means there will be no changes in reality.
I believe that there will not be an insurrection in the U.S. because there is no power in the U.S. that can overturn or transform the American system. The American system is too powerful, it can already change the meaning of words: turning “revolution” into reforms hemmed in by the limits of the electoral system. This is indeed an extraordinarily powerful system.
Only an enormous outside pressure can cause the United States to change.
China is just such a pressure currently placed on the United States. In the beginning, the pressure was indistinct, unclear, but now it grows more apparent as China continues its rise.
Why Can’t America Criticize Its Own System?
Apart from “empowering” people, giving them the fantastic illusion of grasping political power and being able to influence it, the American electoral system is also importantly related to the system’s construction of an American person’s identity.
As I have written two days prior in the essay “Why the United States Does Not Understand China — From the Original Intention of the Communist Party of China, to European Civilization, to American Politics”, the United States is an multi-national country, assimilating many people from different ethnicities, nationalities, cultures, and societies. To bind these people together, a country cannot rely on blood ties, shared ethnicity, or shared culture, but instead on shared political values—the approval of the Constitution of the United States, and the approval of the foundational political values of the United States.
Political values and the American system: these two formulate the “national identity” of the United States.
Disavowing the American system is tantamount to disavowing the American national identity, necessarily meaning being anti-American.
Every civilization must construct its own foundations for national identity.
The national identities of European countries lay upon race, blood, and land, and, after, language and culture. Denying one’s race, blood, land, and language is to go against one’s own national character, and is hardly acceptable.
China is also multi-national, its national identity based more on culture and language; one able to integrate into the Chinese nation is one who can be accepted. Land is secondary, and ethnicity and blood ties may also be factors. But in summary, the inclusiveness of the Chinese people is quite potent, with ethnicity, blood ties, and other such factors relatively weak considerations. From the point-of-view of Chinese people, disavowing Chinese culture, history, tradition, or the perception of China’s territory and borders, is what it takes to disavow or be disloyal to China.
From the standpoint of the United States, ethnicity, blood, land, language, culture, and history are not key factors; only political values are. To disavow the American system is to disavow the American “nation.”
From the standpoint of any nationality, for one to deny their own national character is very much unacceptable, no matter if it is Europe, China, or the United States. The distinction from Europe and China is that the American nationality is built on the foundation of a political system and values.
In what circumstances then does a society or a nationality go against and disavow their own nationality?
I am currently of the belief that it is only in a cross-ethnic or transnational international setting where one could find serious frustrations which could produce such a self-disavowal.
Only in facing an enormous failure can there possibly be a self-disavowal, even a “self-hatred”.
China’s concept of nationality is built on culture and civilization. In the past two hundred years or so, China has suffered foreign invasion and bullying, thoroughly fell behind and received thrashings, and as a result came to doubt much of its own system and culture. This type of self-doubt and self-disavowal has persisted onto the present day. Chinese people tend to search for their own “inherent weaknesses” among their traditional culture.
Once the Chinese economy grew, and subsequently once its global standing rose, people began to change, becoming self-confident, and more were able to see the good aspects of Chinese traditional culture and contemporary societal practices.
The U.S. is similar. The American concept of national character is its own system and political value. Nothing short of a severe frustration of the American system, perhaps by China comprehensively catching up to or surpassing the United States, perhaps even failing in a competition or struggle with China, would possibly wake up the Americans to their senses. The basis for the United States’ own “four self-confidences” is its absolute leading role in the world for the past close to a century. The U.S.’s strength made people believe that the American system must be superior, and based on this they came to believe that America’s national character must be superior. The U.S. vigilantly guards against and attacks any other country that could challenge its national might, because any challenge would undermine the supposed superiority of the U.S.’s national character.
The U.S. vigilantly guards against and attacks any other country that could challenge its national might, because any challenge would undermine the supposed superiority of the U.S.’s national character.
If China one day rises and is to enter conflict with the United States and comes to outdo the American system, then for certain it would deal a huge blow to the self-confidence of the American people.
Only in such a time may the American people perhaps engage in deeper introspections on their system and models, and thereby possibly search for and implement necessary reforms.
I believe that American politics and society have extraordinarily powerful inertia and cannot initiate any self-led, self-directed adjustments in the short-term, unless there is outside pressure.
China’s rise is by now inevitable and will come to pressure the U.S. more as time goes on. At a certain point, the U.S. will be forced to confront and rethink their own system, to seek more changes and reforms. This is precisely like the period at the end of the 70s and beginning of the 80s, in which the U.S. confronted the rise of Japan in industrial and commercial matters. Thus, the U.S. increasingly scrutinizing China is only a matter of time.
As China continues to grow stronger, its influence on international affairs will naturally grow larger as well. At the same time, the United States will experience a relative decline, its soft power and political influence around the world will face relative decline as well. China can indeed throw out or act as a challenge, check, or supplement (the terminology is not important) to the American model in the future, and proceed on a path distinct from that of the West.
The path China takes will also influence the course of human development in the future, and indeed may be a course we will get to see in our lifetimes.
Finally, if there is a lesson that China must draw from the U.S. concerning principles of political systems, it must be that we must constantly remember to remain humble. Under no circumstances can we allow ourselves to become complacent and lose our vigilance. We must constantly look at our shortcomings, search for reforms and improvements, and consistently upgrade ourselves. “Four self-confidences” of course is vitally important, but we must at the same time retain our characteristically Chinese low-key, pragmatic, cautious, modest, and moderate dispositions.
We must never emulate the Americans in their blindness, arrogance and self-importance, lack of introspection, or their coarse self-confidence.[MORE]
Translated by Sean Haoqin Kang. The original Wechat blogpost, “American ‘Revolution’: The ‘Systemic Trap’ and the Lessons China Must Draw” can be found here (link in Chinese).
‘’The years since the 1970s are unprecedented in terms of their volatility in the price of commodities, currencies, real estate, and stocks. There have been 4 waves of financial crises: a large number of banks in three, four or more countries collapsed at about the same time. Each wave was followed by a recession, and the economic slowdown which began in 2008 was the most severe and most global since the great depression of the 1930s … Bubbles always implode, since by definition they always involve non-sustainable increases in the indebtedness of a group of borrowers and/or non-sustainable increases in the price of stocks/shares … Debt can increase much more rapidly than income for an extended period …’’ But ‘’… when eventually the rate of their indebtedness slows the ‘day of reckoning’ occurs, when there isn’t enough cash to pay the interest on outstanding loans the bust is inevitable.’’ (1)
Interestingly enough 1971 was the year when Nixon took the world off the gold standard, which had been in effect since 1944. At a stroke this was probably the most destabilizing event since the Wall Street Crash of 1929. But the full effects didn’t filter through the system until the decades beginning in the 1960s. The problem was the fact that the US economy had undergone a metamorphosis from being a surplus trading nation to being a deficit nation. Earlier, in 1944 to be exact, it was agreed at the Bretton Woods conference that a new trading system needed to be constructed, this in order to overcome the problems of the inter-war trade wars which had led to mutual impoverishment. The new global trade architecture was to be based upon a hierarchy of hard currencies, the British pound, the French Franc, the Italian Lira et cetera all aligned at a fixed rate of exchange with the US dollar which was to be convertible with gold at $35 per ounce.
The system worked for a while but excess US expenditures – namely the imperial expeditions in Korea and Indo-China, as well as a bloated system of some 800 military bases stationed in areas all over the world, and add in the social expenditures of the LBJ administration in the US, all of which meant that abundant US$s were turning up all over the place, particularly in Europe and Japan. Holders of these surplus greenbacks sought conversion into either their own currencies or the universal equivalent – gold. This gave rise to a run on gold since the US was required to honour the arrangement of convertibility. In its turn this led to a serious depletion of US gold reserves which necessitated the US (and by implication involve the rest of the world) to unilaterally suspend the gold standard. Henceforth US trading partners would, whether they liked it or not, take dollars which they were assured were as good as gold (a ridiculous proposition). This was described by the French politician Valery Giscard D’Estaing as an ‘Exorbitant Privilege’ and of course he was perfectly correct. At this point the Triffin Dilemma/Paradox kicked in. But I have covered this elsewhere (See The Rise and Fall of Empires).
It should be understood that booms and busts have always been normal in a capitalist economy. Two eminent political economists have put forward their explanation of this phenomenon as follows.
Karl Marx (1818-1883) explained that capitalists would try to boost their profits in new and more productive technology to save labour costs. In a letter to his close compatriot and friend – Friedrich Engels – he wrote: ‘’All of you note that from reasons I no longer have to explain, that capitalist production moves through certain periodical cycles.’’ He particularly identified the rate of profit to be the independent variable in capitalist production; this variable gave rise to a number of other dependent variables such as employment and unemployment, investment decisions, stock market booms and slumps, and capitalist companies borrowing monies by issuing shares/stocks or borrowing directly from banks. They also began to issue bonds as did governments. Thus the role of finance capital was enormously enhanced.
Joseph Schumpeter (1883-1950) reckoned that when capitalism went into a crisis or slump, it made much of the old equipment or plant obsolete. Other capitalists then began to turn to the new technology to gain advantage, so capitalist slumps led to innovations. Schumpeter called this process ‘creative destruction’. So a cycle of new technology would start after a major slump. But this new technology would not be developed until the profits cycle moved into upswing. Then there would be a take-off of the new technology. The next downward wave would mean a setback to the new technology cycle and an even worse situation for capitalists depending on the old technology. Finally, in another new upswing for profits, the new technology would take over as the dominant force. In the next downswing the new technology would become mature and capitalists would look for new systems and the whole process would restart.
These cycles, however, would very much vary in duration from fairly short-term business restocking, to longer term business cycles, property cycles, profit cycles and into longer and more profound upheavals which may have matured over decades. The Kondratiev cycle being a prototype which has lasted for at least 60 years. Nikolai Kondratiev himself was a Soviet economist who was able to identify such cycles. Four such waves were identified from the late 1700s and four complete waves were identified by Kondratiev. Such waves were occasioned by the usual boom-bust cycle but essentially these cycles were pushed forward by the production and diffusion of new technologies and the operationalization of new modes of production. From water powered, steam powered, electrification, Fordist organized production, and digital communications and computerization of the entire economy. These were the ongoing means of production, although the class nature of the capitalist system did not change.
Unfortunately Kondratiev found himself on the wrong side of the Stalinist nomenklatura and was arrested for suggesting that the US would not necessarily collapse in the great recession of ’29. Heresy! He was arrested and did 8 years in one of those grim Soviet prisons, and finally taken out and was shot by firing squad in 1938. These were grim times.
In recent years, however there has been a new development feature which has been exacerbated during crisis situations involving that part of the economy indicated by the acronym FIRE (Finance, Insurance and Real Estate) and its growing importance in the economy in both qualitative and quantitative terms.
Finance as it is referred to has always been part of the general economy. But it was always in a sense the junior partner to industry and subordinate as such. Its role was to support the productive sector in terms of credit and liquidity, but the relationship has now become almost inverted. Value producing Industry is now relegated to the second tier of the economy and finance now runs the show.
‘’To maintain the semblance of vitality Western capitalism has become increasingly dependent on expanding debt levels and on the expansion of fictitious capital … fictitious capital is made up of financial assets that are only symbols of value, not real values. For example company shares that are traded like goods and services do not in the same way embody value. They are tokens which represent part ownership of a company and the potential of a distribution of future profits in the form of dividends. The paper or electronic certificate itself is not a genuine value that can create more value. Rising share/stock prices are often presented as the evidence of a healthy economy, but the amount of money that a share/stock changes hands says nothing definitive about the value of the company’s assets or about its productive capacity. On the contrary, it is when real capital stagnates that the amount of fictitious capital tends to expand.’’(2)
Turning to financialisation proper and its genesis. This phenomenon was enabled through the holy trinity of privatisation-liberalisation-deregulation. This was a political/economic project which began to take root in the 1970s but came into full fruition in the 1980s led by Margaret Thatcher and Ronald Reagan. At both the political and economic level radical theorists such as those ensconced at the Chicago University department of Economics became the crucial protagonists in a movement led by Milton Friedman and which was to become known as the Chicago School. Its impact was profound. This insofar as it signalled the end of one epoch and the beginning of another.
‘’The expansion of the financial sector is the most recognisable aspect of financialisation. However a more telling part for how the workings of the economy change is the adoption of financial activities by the non-financial corporate sector, by the wider industrial economy. The core feature of financialisation is the fusion of industry with financial activity. (My emphasis -FL) Troubled financial firms turn to financial activity in order to raise cash and/or shore up profitability.
These activities start with raising debt to fund business operations working at sub-par profitability. They extend into financial engineering where buying and selling shares or acquiring companies take precedence over productive investment and organic growth in the underlying businesses. Financial services companies are often helpful in conducting these activities. The drive-through comes from the non-financial businesses that are obliged to pursue financial activities when their original productive ones are less profitable and remunerative.’’ (3)
The hegemon of deregulated finance had thus assumed a seemingly unstoppable momentum from the late 20th century, through to the 80s and 90s until the early 21st century. It has been a process whereby financial markets, financial institutions, and financial elites gain greater influence over economic policy and economic outcomes. It has impacted on the economy producing deep-going changes, not necessarily for the better. But its principal raison d’etre has been to elevate the significance and practice of rent-seeking activities relative to the real value-producing sector. Economic rent is essentially parasitic involving the tapping into those income streams which are producing real value. These consist inter alia of – banks, credit agencies, investment companies, brokers and dealers of commodities and securities, security and commodity exchanges, insurance agents, buyers, sellers, lessors, lessees and so forth – has now reached such a level that it has become larger, more ubiquitous, and profitable than productive industry.
In contemporary terms financial institutions had been involved in the acquisition of economic rent. This consisted of little more than a parasitic claim on real value as was produced in the production process. To cite a simple example. Parking meters don’t produce any new value, they merely transfer existing value from the motorist to whoever is collecting the meter charges. Other examples are rent from land, patents and copyrights, monopolistic pricing and so forth. This situation was initially outlined by David Ricardo (1772-1823) who argued that ‘’The interest of the landlord is also opposed to the interest of every other class in society – namely, capitalists and workers. Ricardo’s animus toward the land-owning classes was in part based upon this theory of economic rent as outlined in his definitive work, The Principles of Political Economy and Taxation first published in 1817. It was a theme that Keynes took up 2 centuries later with his recommendation of the early ‘euthanasia’ of the ‘rentier’ and the rentier class. The views of Ricardo and Keynes were unfortunately disregarded, and to this day, in the UK at least, the Monarchy, landed aristocracy and rentier class are still very much a power in the land. (The UK never had its bourgeois revolution, or rather it did in the civil war between Parliament and the King – 1642-49. Cromwell and Parliament won, and Charles 1 had his head chopped off in 1649, but there was a restoration whereby his son Charles 2 was brought back from France to claim the throne of England.)
But I digress.
The whole process of financialisation was to divert income from the real value-producing sector of the economy and transferring it through various rental manipulations to the financial sector. Needless to say this would purposely result in inequality and stagnant and/or falling wage levels.
Thus from 1970 onwards this part of the economy has grown from almost nothing to 8% of US Gross Domestic Product (GDP). This means that one dollar in every ten is associated with finance. In terms of corporate profits finance’s contribution now represents around 40% of all corporate profits in the US. This is a significant figure and, moreover, it does not include those overseas earnings of companies whose profits are repatriated to their countries of origin.
Finance operates at different levels in the economy: through changes in the structure and operation of financial markets, changes in the behaviour of nonfinancial corporations, and changes in economic policy
The increasing pervasiveness of finance in the contemporary world economy and its ever-expanding role in overall economic activities, and in addition to its ongoing growth in profitability, are the indicators of growth and spread of financialisation. Given the historical record, however, it seems highly probable that this financial ascendency will not be permanent and the whole house of cards will eventuate into a collapse into debt-deflation and a long period of economic depression.
The template for contemporary financial operations can be described from activities of Investment banks like Goldman Sachs as well as run-of-the-mill commercial banks. Of course, as stated, these venerated institutions do not create value as such; they are purely rent-extractive. Commercial banks can and do make loans out of thin air, debit this loan to the would-be mortgagee who then becomes a source of permanent income flow to the bank for the next 25 years. At a more rarefied level Goldman Sachs is reputed to make year-on-year ‘profits’ by doing – what exactly? Nothing particularly useful. But then Goldman Sachs is part of the cabal of central banks and Treasury departments around the world. It is not unusual to see the interchange of the movers and shakers of the financial world who oscillate between these institutions. Hank Paulson, Mario Draghi, Steve Mnuchin, Robert Rubin, and most recently from the IMF to the ECB, Madame Lagarde … on and on it goes.
This system now moves into ever more vertiginous levels of instability. But this was the logical consequence of deregulation. Regulation involves additional costs, but the last thing financial markets want is an increase in costs: ergo, deregulation. But this was to be wholly expected. As a result the history of regulation is that new types of institutions are developed that exist outside the scope of regulations, e.g., money-market funds were developed as a way to pay interest on demand deposits. The offshore market developed to avoid the costs that domestic banks incur in the form of reserve requirements and deposit insurance premiums; the offshore branches of US banks – i.e., the Eurodollar market – could pay higher interest rates than their domestic branches. The whole institutional structure – its rules, regulations and practises were deregulated, and finance was let off the leash. Thatcher, Reagan, the ‘Big Bang’ had set the scene and there was no going back: neoliberalism and globalization had become the norm. From this point on, however, there followed a litany of crises mostly in the developing world, but these disturbances were in due course to move into the developed world. Serial bubbles began to appear.
Ever mobile speculative capital was to move from one financial debacle to the next leaving a trail of wreckage and destruction in its wake. But, hey, that was someone else’s problem. The Savings and Loans crisis 1980’s and 90’s, Long Term Capital Management, 1998, dot.com bubble 2000/2001 and the property market bust in 2008 where the precursors of the current and even deeper blow-out.
But contrary to popular mythology – ‘this time it’s different’ – any boom and bust has an inflexion point where boom turns to bust. This is when buyers incomes, and borrowers inability to extend their loans could no longer support the rise in the price level. Euphoria turned to panic as borrowers who once clamoured to buy were now desperate to sell. 2008 had arrived. The same financial drama of boom and bust was to repeat itself. In the initial euphoria property prices went up but the market became oversold. At this point house prices and the prices of attendant derivatives – e.g. Mortgaged Backed Securities (MBS) – began to stall. The incomes and borrowing of would-be purchasers could no longer support the ever-rising property asset prices. The cycle had reached its inflexion point, now the whole thing went into reverse. Everyone was frantic to sell, prices collapsed. Some – a few – made money, quite a few lost monies. Investors were wondering what had happened to their gains which they had made during the up phase. Where had all that money gone? In fact the ‘gains’ were purely fictional as were the losses. Such gains/losses which had appeared then simply disappeared like a will ‘o’ the wisp. The gains and losses were never there in the first place given as an accounting identity they were balanced.
One would have thought that past experience would have chastened investors into a more conservative frame of mind. But no. Whenever there was a sniff of something for nothing the mob starts to move like Wildebeest on the plains of the Serengeti, an unstoppable stampede. Even such luminaries as Sir Isaac Newton perhaps one of the greatest scientific minds of his day who lost a cool £20000.00 on the South Sea Bubble lamented in 1720 that ‘’I could calculate the movement of heavenly bodies but not the madness of the people.’’ I suppose you could see this as being yet of another instance of human irrationalism – a recurring theme and instances in human nature, of which sadly there have been many.
And what has all of this to do with Coronavirus? Well everything actually. I take it that we all knew that the grotesquely overleveraged and dangerously poised world economy was heading for a ‘correction’ but that is rather an understated description. Massive downturn would be more accurate. This was already baked into the cake prior to the COVID-19s emergence and warnings were duly given and then routinely ignored. We are now left with a combination of a dangerous pandemic crisis combined with a huge financial and economic correction. The world was a combination of a unprecedently bloated paper money bubble and a rampant and virulent pandemic virus. Anticipated consequences can only be imagined.
NOTES
(1) Manias, Crashes and Panics – Kindelberger and Aliber – P.1/2 – 6th Edition 2011.
(2) Phillip Mullan – Creative Destruction – p.22
(3) Mullan – Ibid, – p.22/23
*A note on fictitious capital:
Fictitious capital is a by-product of capitalist accumulation. It is a concept used by Karl Marx in his critique of political economy. It is introduced in chapter 25 of the third volume of Capital. Fictitious capital contrasts with what Marx calls “real capital”, which is capital actually invested in physical means of production and workers, and “money capital”, which is actual funds being held. The market value of fictitious capital assets (such as stocks and securities) varies according to the expected return or yield of those assets in the future, which Marx felt was only indirectly related to the growth of real production. Effectively, fictitious capital represents “accumulated claims, legal titles, to future production’’ and more specifically claims to the income generated by that production.
The moral of the story is that it is not possible to print wealth or value. Money in its paper representation of the real thing, e.g., gold, is not wealth it is a claim on wealth.
When the Lie Becomes the Truth There is No Moving Backwards
In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex.
The potential for the disastrous rise of misplaced power exists, and will persist. (President Dwight D. Eisenhower, January 17, 1961)
***
The World is being misled concerning the causes and consequences of the corona crisis.
The COVID-19 crisis is marked by a public health “emergency” under WHO auspices which is being used as a pretext and a justification to triggering a Worldwide process of economic, social and political restructuring.
Social engineering is being applied. Governments are pressured into extending the lockdown, despite its devastating economic and social consequences.
What is happening is unprecedented in World history.
Prominent scientists support the lockdown without batting an eyelid, as a “solution” to a global health emergency.
Amply documented, the estimates of the COVID-19 disease including mortality are grossly manipulated.
In turn, people are obeying their governments. Why? Because they are afraid?
Causes versus solutions?
The closing down of national economies applied Worldwide will inevitably result in poverty, mass unemployment and an increase in mortality. It’s an act of economic warfare.
Stage One: Trade War against China
On January 30, 2020 the WHO Director General determined that the coronavirus outbreak constitutes a Public Health Emergency of International Concern (PHEIC). The decision was taken on the basis of 150 confirmed cases outside China, First cases of person to person transmission: 6 cases in the US, 3 cases in Canada, 2 in the UK.
The WHO Director General had the backing of the Bill and Melinda Gates Foundation, Big Pharma and the World Economic Forum (WEF). The decision for the WHO to declare a Global Emergency was taken on the sidelines of the World Economic Forum (WEF) in Davos, Switzerland (January 21-24).
One day later (January 31) following the launch of the WHO Global Emergency, The Trump administration announced that it will deny entry to foreign nationals “who have traveled in China in the last 14 days”. This immediately triggered a crisis in air transportation, China-US trade as well as the tourism industry. Italy followed suit, cancelling all flights to China on January 31.
The first stage was accompanied by the disruption of trade relations with China as well as a partial closedown of export manufacturing sector.
A campaign was immediately launched against China as well ethnic Chinese. The Economist reported that
“The coronavirus spreads racism against and among ethnic Chinese”
“Britain’s Chinese community faces racism over coronavirus outbreak”
“Chinese communities overseas are increasingly facing racist abuse and discrimination amid the coronavirus outbreak. Some ethnic Chinese people living in the UK say they experienced growing hostility because of the deadly virus that originated in China.”
And this phenomenon is happening all over the U.S.
Stage Two: The Financial Crash Spearheaded by Fear and Stock Market Manipulation
A global financial crisis unfolded in the course of the month of February culminating in a dramatic collapse of stock market values as well as a major decline in the value of crude oil.
This collapse was manipulated. It was the object of insider trading and foreknowledge. The fear campaign played a key role in the implementation of the stock market crash. In February, roughly $6 trillion have been wiped off the value of stock markets Worldwide. Massive losses of personal savings (e.g. of average Americans) have occurred not to mention corporate failures and bankruptcies. It was a bonanza for institutional speculators including corporate hedge funds. The financial meltdown has led to sizeable transfers of money wealth into the pockets of a handful of financial institutions.
Stage Three: Lockdown, Confinement, Closing Down of the Global Economy
The financial crash in February was immediately followed by the lockdown in early March. The lockdown and confinement supported by social engineering was instrumental in the restructuring of the global economy. Applied almost simultaneously in a large number countries, the lockdown has triggered the closing down of the national economy, coupled with the destabilization of trade, transport and investment activities.
The pandemic constitutes an act of economic warfare against humanity which has resulted in global poverty and mass unemployment.
Politicians are lying. Neither the lockdown nor the closing down of national economies constitute a solution to the public health crisis.
Who Controls the Politicians?
Why are politicians lying?
They are the political instruments of the financial establishment including the “Ultra-rich philanthropists”. Their task is to carry out the global economic restructuring project which consists in freezing economic activity Worldwide.
In the case of the Democrats in the US, they are largely concerned in opposing the reopening of the US economy as part of the 2020 election campaign. This opposition to reopening the national and global economies is supported by “Big Money”.
Is it opportunism or stupidity. In all major regions of the World, politicians have been instructed by powerful financial interests to retain the lockdown and prevent the re-opening of the national economy.
The fear campaign prevails. Social distancing is enforced. The economy is closed down. Totalitarian measures are being imposed. According to Dr. Pascal Sacré
… in some countries, patients can leave hospital by agreeing to wear an electronic bracelet. This is only a sample of all the totalitarian measures planned or even already decided by our governments in favor of the coronavirus crisis. It goes much further, it’s limitless and it affects a good part of the world, if not the whole world. .
The “Herding Instincts” of Politicians
Are corrupt governments acting like “police dogs” with “herding instincts” going after their sheep.
Is “the herd” too scared to go after their “government”?
The analogy may be simplistic but nonetheless considered relevant by psychologists.
“Some breeds of dogs [corrupt politicians] have herding instincts that can be brought out with the right training and encouragement [bribes]. …. teach your dog [political proxy] basic obedience and see if it [he, she] displays herding tendencies. … Always look for a trainer who uses reward-based training methods [bribes, personal gain, political support, accession to high office]” (How to Teach Your Dog to Herd)
But there is another dimension. Politicians in high office responsible for “convincing their herd” actually believe the lies which are being imposed upon them by higher authority.
The lie becomes the truth. Politicians endorse the consensus, they enforce “social engineering”, they believe in their own lies.
It’s Not an Epidemic, It’s An Operation
US Secretary of State Mike Pompeo (slip of the tongue) tacitly admits in a somewhat contradictory statement that the COVID-19 is a “Live Exercise”, an “Operation”:
“This is not about retribution,… This matter is going forward — we are in a live exercise here to get this right.”
To which president Trump retorted “you should have told us”.
Those words will go down in history.
Geopolitics
Let us be under no illusions, this is a carefully planned operation. There is nothing spontaneous or accidental. Economic recession is engineered at national and global levels. In turn, this crisis is also integrated into US-NATO military and intelligence planning. It is intent not only upon weakening China, Russia and Iran, it also consists in destabilizing the economic fabric of the European Union (EU).
“Global Governance”
A new stage in the evolution of global capitalism is unfolding. A system of “Global Governance” controlled by powerful financial interests including corporate foundations and Washington think tanks oversees decision-making at both the national and global levels. National governments become subordinate to “Global Governance”. The concept of World Government was raised by the late David Rockefeller at the Bilderberger Meeting, Baden Germany, June 1991: “We are grateful to the Washington Post, The New York Times, Time Magazine and other great publications whose directors have attended our meetings and respected their promises of discretion for almost 40 years. … It would have been impossible for us to develop our plan for the world if we had been subjected to the lights of publicity during those years. But, the world is now more sophisticated and prepared to march towards a world government. The supranational sovereignty of an intellectual elite and world bankers is surely preferable to the national auto-determination practiced in past centuries.” (quoted by Aspen Times, August 15, 2011, emphasis added) .In his Memoirs David Rockefeller states: .“Some even believe we are part of a secret cabal working against the best interests of the United States, characterizing my family and me as ‘internationalists’ and of conspiring with others around the world to build a more integrated global political and economic structure, one world if you will. If that is the charge, I stand guilty, and I am proud of it.” (Ibid) .The Global Governance scenario imposes a totalitarian agenda of social engineering and economic compliance. It constitutes an extension of the neoliberal policy framework imposed on both developing and developed countries. It consists in scrapping “national autodetermination” and constructing a Worldwide nexus of pro-US proxy regimes controlled by a “supranational sovereignty” (World Government) composed of leading financial institutions, billionaires and their philanthropic foundations. .The 2010 Rockefeller Foundation’s “Scenarios for the Future of Technology and International Development Area” produced together with Global Business Monitoring Network, GBN) had already outlined the features of Global Governance and the actions to be taken in relation to a Worldwide Pandemic. The Rockefeller Foundation proposes the use of scenario planning as a means to carry out “global governance”..
The Report envisages (p 18) a simulation of a Lock Step scenario including a global virulent influenza strain:
.
“LOCK STEP:A world of tighter top-down government control and more authoritarian leadership, with limited innovation and growing citizen pushback In 2012, the pandemic that the world had been anticipating for years finally hit. Unlike 2009’s H1N1, this new influenza strain—originating from wild geese—was extremely virulent and deadly. Even the most pandemic-prepared nations were quickly overwhelmed when the virus streaked around the world, infecting nearly 20 percent of the global population and killing. 8 million in just seven months”
–
It is worth noting that this simulation was envisaged in the year following the 2009 H1N1 Swine flu Pandemic, which was revealed to be a totally corrupt endeavor under the auspices of the WHO in liaison the Big Pharma which developed a multibillion dollar vaccine program.
Instructions are transmitted to national governments worldwide. The fear campaign plays a crucial role in building acceptance and social submission to this “supranational sovereignty of an intellectual elite and bankers”..Global governance establishes a consensus which is then imposed on “sovereign” national governments Worldwide, described by David Rockefeller as “national auto-determination practiced in past centuries”. Essentially, this is an extended form of “regime change”..Thousands of politicians and officials must be convinced and/or bribed for this operation to succeed. It’s an unsubtle form of “political arm twisting” (while respecting “social distancing”)..The decision to close down the global economy with a view to “saving lives” has not only been accepted as a means to combating the virus, it has been sustained by media disinformation and the fear campaign.
People do not question the consensus, a consensus which borders on the absurd.
.
Global Capitalism and “The Economic Landscape”
The crisis redefines the structure of the global economic landscape. It destabilizes small and medium sized enterprises Worldwide, it precipitates entire sectors of the global economy including air travel, tourism, retail trade, manufacturing, etc. into bankruptcy. The lockdown creates famine in developing countries. It has geopolitical implications.
The Pentagon and US intelligence are involved. The corona crisis affects to conduct of US-NATO led wars in the Middle East including Syria, Iraq and Afghanistan and Yemen. It is also used to target specific countries including Iran and Venezuela.
This engineered crisis is unprecedented in world history. It is an act of war.
The lockdown triggers a process of disengagement of human and material resources from the productive process. The real economy is brought to a standstill. Curtailing economic activity undermines the “reproduction of real life”. This not only pertains to the actual production of the “necessities of life” (food, health, education, housing) it also pertains to the “reproduction” of social relations, political institutions, culture, national identity. At the time of writing, the lockdown is not only triggering an economic crisis, it is also undermining and destroying the very fabric of civil society not to mention the nature of government and the institutions of the state (crippled by mounting debts), which will eventually be privatized under the supervision of Big Money creditors.
There are conflicts within the capitalist system which are rarely addressed by the mainstream media. Billionaires, powerful banking and financial institutions (which are creditors of both governments and corporations) are waging an undeclared war against the real economy. Whereas the Big Money financial and banking establishment are “creditors”, the corporate entities of the real economy which are being destabilized and driven into bankruptcy are “debtors”.
Bankruptcies
This diabolical process is not limited to wiping out small and medium sized enterprises. Big Money is also the creditor of large corporations (including airlines, hotel chains, hi tech labs, retailers, import-export firms, etc.) which are now on the verge of bankruptcy.
The global financial establishment is not monolithic. It is marked by divisions and rivalry. The dominant Big Money faction seeks to destabilize its competitors from within. The results of which would be a string of bankruptcies of regional and national banking institutions as well as a process of global financial consolidation.
In the US, numerous retailers, airlines, restaurant and hotel chains filed for Chapter 11 bankruptcy in February. But this is just the beginning. The big gush of bankruptcies will occur in the wake of the lockdown (“The New Normal”). And at the time of writing, the financial establishment is relentlessly pressuring (corrupt) national governments to postpone the lifting of the lockdown. And the governments are telling us that this is to “protect people against the virus”.
Canada’s province of Alberta which is largely dependent on oil revenues is bankrupt.
“Countries that represent over 50 per cent of the world’s global GDP are closed for business. Economists looking for historical comparisons mention the 1929 stock crash, the 1974 economic crisis or the 2008 recession. But they admit that these all fall short of the toll that this pandemic could have.” (Wired News UK, April 29, 2020
In Britain, recent reports state (It’s very British”) “we do not know how many have gone bankrupt”.
A chunk of Britain’s business landscape may have already been permanently erased, as some 21,000 more UK businesses collapsed in March alone than the same month a year ago, according to data gathered by the Enterprise Research Centre, a group of university researchers.
What these reports fail to mention are the unspoken causes: a fear campaign on behalf of the creditors, instructions by corrupt governments to close down the economy, allegedly to “save lives”, which is a big lie. Lives are not being saved, and they know it.
The coronavirus crisis “has ground U.S. business to a halt”. National economies are destabilized. The objective of Big Money is to weaken their competitors, “pick up the pieces” and eventually buy out or eliminate bankrupt corporations. And there are many to choose from.
Global Finance Capitalism
The interests of Big Money (global financial interests) overlap with those of Big Pharma, Big Oil, the Defense contractors, etc. Major banking institutions in the US including JP Morgan Chase, Bank of America, Citigroup, Wells Fargo, State Street Co. and Goldman Sachs, are investing in the war economy including the development of nuclear weapons under Trump’s 1.2 trillion dollar nuclear weapons program (first established under Obama).
The ultimate objective of “Big Money” is to transform nation states (with their own institutions and a national economy) into “open economic territories”. That was the fate of Iraq and Afghanistan. But now you can do it without sending in troops, by simply ordering subservient proxy governments integrated by corrupt politicians to close down their economy on humanitarian grounds, the so-called “Responsibility to Protect” (R2P) without the need for military intervention.
Impossible to estimate or evaluate. More than half the global economy is disrupted or at a standstill.
Let’s be clear. This is an imperial agenda. What do the global financial elites want? To privatize the State? To own and privatize the entire planet?
The tendency is towards the centralization and concentration of economic power. Heavily indebted national governments are instruments of Big Money. They are proxies. Key political appointments are controlled by lobby groups representing Wall Street, The Military Industrial Complex, Big Pharma, Big Oil, the Corporate Media and the Digital Communications Giants, etc.
Big Money in Europe and America (through Washington Lobby groups) seek to control national governments.
In what direction are we going? What is the future of humanity? The current corona crisis is a sophisticated imperial project, which consists in Worldwide domination by a handful of multibillion dollar conglomerates. Is this World War III? Global capitalism is destroying national capitalism.
The unspoken intent of global capitalism is the destruction of the nation state and its institutions leading to global poverty on an unprecedented scale.
The following citation by Lenin dated December 1915 at the height of the First World War pointed with foresight to some of the contradictions which we are presently facing. On the other hand, we should understand that there are no easy solutions and that this crisis is intended to reinforce imperialism and the clutch of global capitalism:
“There is no doubt that the development is going in the direction of a single World trust which will swallow up all enterprises and all states without exception. But the development in this direction is proceeding under such stress, with such a tempo, with such contradictions, conflicts and convulsions not only economical, but political national, etc. etc — that before a single world trust will be reached, before the respective financial national capitals will have formed a “World Union” of ultra imperialism, imperialism will explode and capitalism will turn into its opposite.
(V. I. Lenin, Introduction to Imperialism and World Economy by N, Bukharin, Martin Lawrence, London, printed in the US, Russian Edition, November 1917)
How to reverse the tide. The first priority is to repeal the lie.
In this regard, it is unfortunate that many people who are “progressive” (including prominent Left intellectuals) are –despite the lies– supportive of the lockdown and closing down of the economy as a solution to the public health emergency. That’s the stance of the Democratic Party in the US, which goes against common sense.
Truth is a powerful weapon for repealing the lies of the corporate media and the governments.
When the Lie Becomes the Truth There is No Moving Backwards
Without the fear campaign and media propaganda, the actions taken by our governments would not have a leg to stand on.
“Social Distancing” does not prevent the financial elites from providing instructions to corrupt politicians.
On the other hand, “social distancing” combined with confinement is being used as a means of social subordination. It prevents people from meeting as well as protesting this so-called New World Order.
Organization, Truth and Solidarity are essential to reversing the tide. The first step of a worldwide movement is “counter-propaganda”.
China is reportedly moving towards ending the “Phase One” Trade deal with the US.
The Chinese government appears to be walking back on the deal, reportedly telling state-owned agricultural firms to halt purchases of U.S. soybeans, one of the major U.S. agricultural exports to China and a pillar of the deal’s promised $200 billion in extra exports.
Beijing’s decision followed the May 29th U.S. announcement that Washington will potentially take steps to revoke Hong Kong’s special status and possibly levy sanctions and other economic weapons against both China proper and the once-autonomous region.
State-owned traders Cofco and Sinograin were ordered to suspend purchases, according to an unnamed source of Bloomberg.
Chinese buyers have also canceled an unspecified number of U.S. pork orders, one of the sources claimed.
Chinese Premier Li Keqiang vowed in May that China would implement the trade deal, however, rising tensions in regard to Hong Kong, plus Washington’s continued accusations towards Beijing in regard to COVID-19, and weapon sales to Taiwan, have strained relations significantly.
“We will work with the United States to implement the phase one China-U.S. economic and trade agreement,” Premier Li Keqiang told an annual gathering of lawmakers in Beijing on May 22nd. “China will continue to boost economic and trade cooperation with other countries to deliver mutual benefits.”
That vow appears to be in the past now.
“The market has already seen the deteriorating relationship between the China and the U.S. and many think that with the slow progress of Chinese commodity buying so far, the trade deal’s future was already in jeopardy,” said Michael McDougall, a managing director at Paragon Global Markets in New York.
Currently, analysts consider the deal as good as dead, and the only question now is what form of trade confrontation will take its place at a time when U.S. economic policy toward China is dictated less by long-term national interest and more by short-term electoral calculations.
“The locus inside the administration has moved from, ‘Should we drop the deal?’ to, ‘And then do what?’” said Derek Scissors, a China trade expert at the American Enterprise Institute who sometimes consults with the White House. “Trump wants to make sure that [prospective Democratic presidential nominee Joe] Biden can’t outflank him on China. But that dramatic action, if there is any, is going to have costs.”
Since the phase-one deal delivered a truce to growing U.S.-China tensions, what would it mean when it ends?
“The ‘phase one’ deal’s importance to the overall relationship is relatively small. It’s not the anchor that some thought it could be,” said Scott Kennedy, a China expert at the Center for Strategic and International Studies, who described the status of the trade deal—if reports of Chinese orders to halt purchases are confirmed—as “hanging by a thread.”
“The deal itself cannot stabilize the relationship, but if you remove the deal, then that is further evidence that both sides are throwing up their hands and see the relationship in purely competitive terms with nothing on the other side of the scale,” Kennedy said.
From the very beginning I’ve been a staunch critic of President Trump’s “Energy Dominance” policy. And I was so for a myriad of reasons, but mostly because it was stupid.
Not just stupid, monumentally stupid. Breathtakingly stupid.
And I don’t say this as someone who hates Trump without reservation. In fact, I continue to hope he will wake up one day and stop being the Donald Trump I know and be the Donald Trump he needs to be.
I don’t have Trump Derangement Syndrome of any sort. Neither MAGApede nor Q-Tard, an Orange Man Bad cultist or NPC Soy Boy, I see Trump for what he is – a well-intentioned, if miseducated man with severe personal deficiencies which manifest themselves in occasionally brilliant but mostly disastrous behavior.
Energy Dominance was always a misguided and Quixotic endeavor. Why? Because Trump could never turn financial engineering a shale boom into a sustainable advantage over lower-cost producers like Russia and the OPEC nations.
The policy of blasting open the U.S. oil spigots to produce a production boom built on an endless supply of near-zero cost credit was always going to run into a wall of oversupply and not enough demand.
The dramatic collapse of U.S. oil prices in the futures markets which saw the May contract close on April 20th at $-40.57 per barrel is the Shale Miracle hitting the fan of low demand and leaving the producers and consumers in a state which can only happen thanks to biblical levels of government intervention.
We will never let the great U.S. Oil & Gas Industry down. I have instructed the Secretary of Energy and Secretary of the Treasury to formulate a plan which will make funds available so that these very important companies and jobs will be secured long into the future!163KTwitter Ads info and privacy56.6K people are talking about this
It’s clear from this statement that Trump is ready to throw more trillions at the oil industry to keep it and the millions of jobs from disappearing as he does what he always does when confronted with a real problem, doubles down on the behavior that caused it in the first place.
Politicians, even the best ones, are ultimately vandals. They have no other tool than to reallocate scarce capital towards their ends rather than that demanded by the market.
And the main reason why Trump was never going to win the Energy Dominance War he started was because the world doesn’t want the type and kind of oil the U.S. produces at the quantities needed to “Win!”
Ultra-light sweet crude coming from the Bakken, Eagle Ford and Permian simply isn’t that high in demand for export. It’s of limited usage. And, in the end, if the price is right enough, offering oil for sale in ‘not-dollars’ only makes that demand curve even more elastic.
The collapse in oil prices which Trump is desperate to stop won’t simply because Trump stands there like King Canute, arms outstretched. He and his terrible energy policy stand naked now that the tide has gone out.
And the reason for this is simple. There is more to the world economy than money. Money is what makes the economy work but it, in and of itself, is incapable of creating wealth. All money does is act as a means to express our needs and desires at the moment of the trade.
Trump’s vandalizing the world’s energy markets for the past three and a half years now comes back to bite him. To prop up surging U.S. production he has:
Supported a disastrous war against the people of Yemen
Repurposed U.S. troops clinging to positions in Syria while stealing their oil
Nearly started a shooting war with Iran…. Twice.
Embargoed Venezuela, stole its money, attempted a failed coup and brought even more support to President Maduro from Russia and China.
Spent billions pointing missiles at Russia via NATO.
Supported a vicious war to prevent the secession of the Donbass.
Delayed the construction of Nordstream 2.
Sowed chaos enough to set Turkey to claiming the Eastern Mediterranean while fighting a losing war in Libya.
Started a massive trade war with China.
Spent trillions throwing the U.S. budget deficit for 2020 out beyond 20% of the U.S.’s 2019 GDP.
I could go on, but I think you get the point. None of these acts are defensible as anything other than immoral and counterproductive.
Having antagonized literally more than three-quarters of the world with this insanity, Trump will now turn his destructive gaze on the very people he purports to serve, the American people. Saving jobs through subsidies is capital destructive. It doesn’t matter who does it, Trump, Putin, Xi or FDR.
If Trump tariffs on imports it will only keep the cost of energy for Americans higher than it should be at a time when they need it to be as cheap as possible.
The incentive to improve performance by these companies, shutter expensive wells, default on debt or shift capital away from the unproductive will not happen. The healthy cleansing of bankruptcy is averted. The vultures who profited on the way up will not go bankrupt because the bust is avoided and those that were prudent waiting for this moment will not be rewarded with the reins of the means of production.
And again, we see another one-way trade for Wall St.
All Trump will do here is entrench the very powers that he thinks he’s been fighting, destroying small businesses, nationalizing, in effect, whole swaths of the U.S. economy and setting up the day when everyone else around the world shrugs when he bark.
Because the net effect has been to see the rise in more of the oil trade conducted in currencies other than the U.S. dollar. That trend will continue in a deflating price environment where the need to service dollar-denominated debt is soaking up the supply of dollars faster than the Fed can monetize the debt issued by the U.S. Treasury.
The oil trade will shift from dollars. Dollars will be used to pay off debt, the world will decouple from the dollar and all those dollars currently hoarded overseas and whose demand today will be supply tomorrow will ensure the U.S. economy suffers the worst kind of depression, one of rising commodity prices, falling asset prices and falling wages.
So, Trump will continue to be, as I put it recently, The Master of the Seen, choosing, as always, to ignore the unseen effects of propping up firms that should rightly go the way of all bad ideas, like Marxism.
The U.S. had a grenade dropped on its budget. It looks like a nuclear bomb, but that’s only because of the continued arrogance and necessity of politicians, like Trump, needing to be ‘seen’ doing something caused far more damage than it would have if they hadn’t intervened in the first place.
The adage, “never let a crisis go to waste,” is apropos here. Politicians use the cover of crisis to act. They have to be ‘seen’ acting rather than not. Trump is acutely aware of this because he truly can’t stand criticism.
A man without principles, Trump acts mostly out of his need to deflect criticism and be ‘seen’ by his base as their champion.
But no, Trump outs himself as the biggest Marxist of all time, defending the workers while robbing them of their future through the destruction of their real wealth. His policy mistakes become our real problems. And he compounded those problems by listening to the medical complex vultures about COVID-19 and now he’s trapped but everyone else will pay the price.
He is someone without the sense or the understanding that sometimes the best thing to do is admit defeat, reverse course and put down the scepter of power. But Trump doesn’t know how to do that. He doesn’t know how to actually lead.
Energy Dominance will turn into an Energy Albatross and it will weigh on Trump’s neck in his second term that will see him leave office reviled as the great destroyer of not only the U.S.’s wealth, but more importantly, its standing in the world.
The G20 met in virtual session on April 10, ostensibly to address the crippling one-two punch brought on by the economic impact of coronavirus and the simultaneous collapse of the price of oil resulting from Russia and Saudi Arabia flooding an already depressed market.
In the end, the world’s leading oil producers finalized an agreement on sweeping oil production cuts, building on a previous agreement between Russia and Saudi Arabia to stop their price war. The United States is taking credit for this breakthrough, however, citing the role it played in helping bring Mexico to closure.
But the U.S. contribution was, and is, illusory—President Trump is in no position to promise cuts in U.S. oil production, and as such remains unable to meaningfully contribute to the global oil production reduction scheme. Void of any substantive final agreement, global energy markets will continue to suffer as production far outstrips demand. For U.S. oil producers, who have already seen a 2.5-3 million barrel per day decrease in production, the results will be catastrophic, driving many into bankruptcy and helping push the U.S. economy into a tailspin that will lead to a depression potentially worse than that of the 1930’s.
Trump’s only recourse may be to turn to Russia for help in offsetting needed U.S. oil production quotas, which appears to have been the Russian plan all along.
On Monday March 30, President Trump spoke on the phone with Russian President Vladimir Putin. The suppressed price of oil, and Russia’s role in facilitating that vis-à-vis its refusal to cut its oil production, thereby triggering a price war with Saudi Arabia, was the dominant topic. A Kremlin read-out of the call noted that “opinions on the current state of global oil markets were exchanged. It was agreed there would be Russo-American consultations about this through the ministers of energy.”
During the call, Trump mentioned America’s need for life-saving medical supplies, including ventilators and personal protective equipment. Putin asked if Russia could be of assistance, and Trump said yes.
The decision to allow Russian aid (purchased by the U.S.) into the country, however, directly contradicted guidance that had been issued by the U.S. State Department a full week before Trump’s phone call with Putin. On March 22, the State Department sent out an internal email to all U.S. Embassies with guidance on how to proceed with seeking out critical support. “Depending on critical needs, the United States could seek to purchase many of these items in the hundreds of millions with purchases of higher end equipment such as ventilators in the hundreds of thousands,” the email stated. The email noted that the request applies to all countries “minus Moscow,” indicating the United States would not ask Russia for support.
While the two leaders, according to the White House, “agreed to work closely together through the G20 to drive the international campaign to defeat the virus and reinvigorate the global economy,” the March 30 phone call apparently did not directly touch upon U.S. sanctions on Russia. In fact, Trump told Fox News prior to the leaders’ exchangethat he fully expected Putin to bring it up. He did not say how he might respond if Putin did.
Trump’s confidence in a Putin sanction request most likely stemmed from a statement made by the Russian President to a virtual meeting of G20 leaders on March 22, where he noted that “ideally we should introduce a…joint moratorium on restrictions on essential goods as well as on financial transactions for their purchase.” Putin’s comments were more pointed toward the lifting of sanctions for humanitarian purposes on nations like Iran and Venezuela, but his conclusion hinted at a larger purpose: “These matters should be freed of any politics.”Economic Warfare against Russia: Moscow Condemns New “Draconian” Sanctions, Weighs Banning Rocket Engines to US
Russia has been operating under U.S. and European sanctions following its annexation of Crimea in 2014 and its role in the Ukraine crisis. But the sanctions that have angered Russia the most—and which have contributed to Russia’s price war with Saudi Arabia targeting U.S. oil producers—were those levied against NordStream 2, the Russian pipeline intended to supply Germany, and Europe, with natural gas. Trump signed a bill authorizing these sanctions in December 2019. Russia immediately condemned this action.
Instead of asking Trump outright to lift sanctions, Putin got Trump to help underscore Russia’s position that sanctions were an unnecessary impediment to relations between the U.S. and Russia during the coronavirus pandemic. In agreeing to allow the Russian AN-124 aircraft to deliver medical supplies to the U.S., Trump unwittingly played into a carefully laid bit of Russian propaganda.
Among the aid Russia delivered were boxes of Aventa-M ventilators, produced by the Ural Instrument Engineering Plant (UPZ). UPZ is a subsidiary of Concern Radio-Electronic Technologies (KRET) which, along with its parent holding company ROSTEC, has been under U.S. sanctions since 2014. According to the State Department, which payed for 50 percent of the equipment on the flight, the sanctions do not apply to the purchase of medical equipment. But by purchasing critical medical equipment from sanctioned companies, the State Department simultaneously violated its own guidance against buying Russian equipment while underscoring Putin’s point—sanctions should be waived for humanitarian purposes.
But Putin’s trap had one more twist. According to the Russians, half of the aid shipment was paid for by the U.S. State Department, and the other half by the Russian Direct Investment Fund (RDIF), a Russian sovereign wealth fund which, like ROSTEC, was placed on the U.S. lending blacklist in 2014 following Russia’s intervention in Crimea. The arrival of an airplane full of critical medical equipment ostensibly paid in part by a sanctioned Russian sovereign wealth fund provided a window of opportunity for Kirill Dmitriev, the CEO of RDIF, to gain access to the U.S. mainstream media to push the Russian line.
On April 5, Dmitriev published an OpEd on the CNBC web page titled “The US and Russia should work together to defeat the coronavirus.” Dmitriev likened the current global struggle against the coronavirus pandemic to the fight against Nazi Germany. “During World War II, American and Russian soldiers fought side by side against a common enemy,” he wrote. “We achieved victory together. Just as our grandfathers stood shoulder to shoulder to defend our values and secure peace for future generations, now our countries must show unity and leadership to win the war against the coronavirus.”
But Dmitriev’s true target was oil, and by extension, sanctions. “In times like this,” he noted, “new approaches to explore close collaboration between the U.S., Russia and other countries are needed to stabilize energy and other markets, to coordinate policy responses and to revitalize economic activity. For example, Russia proposed to jointly undertake significant oil output cuts with the U.S., Saudi Arabia and other countries to stabilize markets and secure employment in the oil industry.”
Getting the U.S. to lift sanctions was a big ask, something Dmitriev acknowledged. “To change the views on Russia in an election year may be an insurmountable challenge. But so it also seemed in 1941, when the U.S. and the Soviet Union put behind the differences of the past to fight the common enemy.”
While the “common enemy” referred to by Dmitriev was clearly the coronavirus pandemic, he could also have been speaking about Senator Ted Cruz, and others of his ilk, who led the charge to sanction NordStream 2. The current oil crisis has hit Texas particularly hard. In an indication of things to come, Whiting Petroleum, a major player in the shale oil industry,filed for Chapter 11 bankruptcy protection. Whiting specialized in North Dakota fracking, which required oil prices of $60 per barrel to be economically viable. The current price of sub-$25 doomed the company. Texas fracking is slightly cheaper, with a profitability margin of around $49. With oil prices depressed, Texas companies are feeling the pinch, and are on the verge of collapse.
Trump agreed to participate in the G20 meeting because of the promise of a Russian-Saudi production cut; on this, Putin delivered. But the Russians made any final agreement contingent upon Trump agreeing to significant reduction in U.S. oil production. This was never a possibility—whereas both Russia and Saudi Arabia have national oil companies whose operations are a matter of national policy, the U.S. oil industry is privately owned in its entirety, and dependent on supply and demand equations derived from a free market to determine profitability.
While the G20 meeting resulted in collective cuts of close to 10 million barrels a day, the drop in demand for oil brought on by the coronavirus pandemic has created a glut in which the world produces some 27.4 million barrels per day in excess of global needs. The bottom line is the G20 cuts won’t solve the problem of too much oil, and without additional cuts, the bottom will continue to fall out of the oil market, dooming U.S. producers.
Trump cannot turn on or off the U.S. oil-producing spigot, a fact Russia knows only too well. When Trump attempted to gain credit for a 2.5-million-barrel reduction in production brought on by bankruptcy, Russia refused to allow it. Likewise, when Trump promised cuts in oil production to help Mexico meet G20 targets, it was a promise the American president is unable to deliver on. In getting the U.S. to agree to attend a G20 summit on oil production, the Russians lured the U.S. into a policy trap from which there is no escape.
Void of any final agreement, the U.S. oil industry will inevitably collapse. Trump claims that the G20 virtual summit came up with cuts totaling up to 20 million barrels per day, without explaining how he came up with this number. This number is fictional; the U.S. production crisis is not. Trump’s only hope is for a further softening of the Russian position on production. But this will not come without a price, and that price will be the lifting of energy-sector sanctions targeting Russia.
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Scott Ritter is a former Marine Corps intelligence officer who served in the former Soviet Union implementing arms control treaties, in the Persian Gulf during Operation Desert Storm, and in Iraq overseeing the disarmament of WMD. He is the author of several books, including his forthcoming, Scorpion King: America’s Embrace of Nuclear Weapons From FDR to Trump (2020).
The New Silk Roads – or Belt and Road Initiative (BRI) – were launched by President Xi Jinping in 2013, first in Central Asia (Nur-Sultan) and then Southeast Asia (Jakarta).
One year later, the Chinese economy overtook the U.S. on a PPP basis. Inexorably, year after year since the start of the millennium, the U.S. share of the global economy shrinks while China’s increases.
China is already the key hub of the global economy and the leading trade partner of nearly 130 nations.
While the U.S. economy is hollowed out, and the casino financing of the U.S. government – repo markets and all – reads as a dystopian nightmare, the civilization-state steps ahead in myriad areas of technological research, not least because of Made in China 2025.
China largely beats the U.S. on patent filings and produces at least 8 times as many STEM graduates a year than the U.S., earning the status of top contributor to global science.
A vast array of nations across the Global South signed on to be part of BRI, which is planned for completion in 2049. Last year alone, Chinese companies signed contracts worth up to $128 billion in large-scale infrastructure projects in dozen of nations.
The only economic competitor to the U.S. is busy reconnecting most of the world to a 21st century, fully networked version of a trade system that was at its peak for over a millennia: the Eurasian Silk Roads.
Inevitably this state of things is something interlocking sectors of the U.S. ruling class simply would not accept.
Branding BRI as a “pandemic”
As the usual suspects fret over the “stability” of the Chinese Communist Party (CCP) and the Xi Jinping administration, the fact is the Beijing leadership has had to deal with an accumulation of extremely severe issues: a swine-flu epidemic killing half the stock; the Trump-concocted trade war; Huawei accused of racketeering and about to be prevented from buying U.S. made chips; bird flu; coronavirus virtually shutting down half of China.
Add to it the incessant United States government Hybrid War propaganda barrage, trespassed by acute Sinophobia; everyone from sociopathic “officials” to self-titled councilors are either advising corporate businesses to divert global supply chains out of China or concocting outright calls for regime change – with every possible demonization in between.
There are no holds barred in the all-out offensive to kick the Chinese government while it’s down.
A Pentagon cipher at the Munich Security Conference once again declares China as the greatest threat, economically and militarily, to the U.S. – and by extension the West, forcing a wobbly EU already subordinated to NATO to be subservient to Washington on this remixed Cold War 2.0.
The whole U.S. corporate media complex repeats to exhaustion that Beijing is “lying” and losing control. Descending to sub-gutter, racist levels, hacks even accuse BRI itself of being a pandemic, with China “impossible to quarantine”.
All that is quite rich, to say the least, oozing from lavishly rewarded slaves of an unscrupulous, monopolistic, extractive, destructive, depraved, lawless oligarchy which uses debt offensively to boost their unlimited wealth and power while the lowly U.S. and global masses use debt defensively to barely survive. As Thomas Piketty has conclusively shown, inequality always relies on ideology.
We’re deep into a vicious intel war. From the point of view of Chinese intelligence, the current toxic cocktail simply cannot be attributed to just a random series of coincidences. Beijing has serial motives to piece this extraordinary chain of events as part of a coordinated Hybrid War, Full Spectrum Dominance attack on China.
Enter the Dragon Killer working hypothesis: a bio-weapon attack capable of causing immense economic damage but protected by plausible deniability. The only possible move by the “indispensable nation” on the New Great Game chessboard, considering that the U.S. cannot win a conventional war on China, and cannot win a nuclear war on China.
A biological warfare weapon?
On the surface, coronavirus is a dream bio-weapon for those fixated on wreaking havoc across China and praying for regime change.
Yet it’s complicated. This report is a decent effort trying to track the origins of coronavirus. Now compare it with the insights by Dr. Francis Boyle, international law professor at the University of Illinois and author, among others, of Biowarfare and Terrorism. He’s the man who drafted the U.S. Biological Weapons Anti-Terrorism Act of 1989 signed into law by George H. W. Bush.
Dr. Boyle adds, “all these BSL-4 labs by United States, Europe, Russia, China, Israel are all there to research, develop, test biological warfare agents. There’s really no legitimate scientific reason to have BSL-4 labs.” His own research led to a whopping $100 billion, by 2015, spent by the United States government on bio-warfare research: “We have well over 13,000 alleged life science scientists… testing biological weapons here in the United States. Actually this goes back and it even precedes 9/11.”
Dr. Boyle directly accuses “the Chinese government under Xi and his comrades” of a cover up “from the get-go. The first reported case was December 1, so they’d been sitting on this until they couldn’t anymore. And everything they’re telling you is a lie. It’s propaganda.”
The World Health Organization (WHO), for Dr. Boyle, is also on it: “They’ve approved many of these BSL-4 labs (…) Can’t trust anything the WHO says because they’re all bought and paid for by Big Pharma and they work in cahoots with the CDC, which is the United States government, they work in cahoots with Fort Detrick.” Fort Detrick, now a cutting-edge bio-warfare lab, previously was a notorious CIA den of mind control “experiments”.
Relying on decades of research in bio-warfare, the U.S. Deep State is totally familiar with all bio-weapon overtones. From Dresden, Hiroshima and Nagasaki to Korea, Vietnam and Fallujah, the historical record shows the United States government does not blink when it comes to unleashing weapons of mass destruction on innocent civilians.
For its part, the Pentagon’s Defense Advanced Research Project Agency (DARPA) has spent a fortune researching bats, coronaviruses and gene-editing bio-weapons. Now, conveniently – as if this was a form of divine intervention – DARPA’s “strategic allies” have been chosen to develop a genetic vaccine.
The 1996 neocon Bible, the Project for a New American Century (PNAC), unambiguously stated, “advanced forms of biological warfare that can “target” specific genotypes may transform biological warfare from the realm of terror to a politically useful tool.”
There’s no question coronavirus, so far, has been a Heaven-sent politically useful tool, reaching, with minimum investment, the desired targets of maximized U.S. global power – even if fleetingly, enhanced by a non-stop propaganda offensive – and China relatively isolated with its economy semi paralyzed.
Yet perspective is in order. The CDC estimated that up to 42.9 million people got sick during the 2018-2019 flu season in the U.S. No less than 647,000 people were hospitalized. And 61,200 died.
This report details the Chinese “people’s war” against coronavirus.
It’s up to Chinese virologists to decode its arguably synthetic origin. How China reacts, depending on the findings, will have earth-shattering consequences – literally.
Setting the stage for the Raging Twenties
After managing to reroute trade supply chains across Eurasia to its own advantage and hollow out the Heartland, American – and subordinated Western – elites are now staring into a void. And the void is staring back. A “West” ruled by the U.S. is now faced with irrelevance. BRI is in the process of reversing at least two centuries of Western dominance.
There’s no way the West and especially the “system leader” U.S. will allow it. It all started with dirty ops stirring trouble across the periphery of Eurasia – from Ukraine to Syria to Myanmar.
Now it’s when the going really gets tough. The targeted assassination of Maj. Gen. Soleimani plus coronavirus – the Wuhan flu – have really set up the stage for the Raging Twenties. The designation of choice should actually be WARS – Wuhan Acute Respiratory Syndrome. That would instantly give the game away as a War against Humanity – irrespective of where it came from.The views of individual contributors do not necessarily represent those of the Strategic Culture Foundation.
Would Mao Zedong (pictured in background at Tiananmen Gate in Beijing) be happy with China’s attempt to win a ‘People’s War’ on the coronavirus? Photo: Nicolas Asfouri / AFP
Chinese President Xi Jinping is leading a scientific ‘People’s War’ against the coronavirus
President Xi Jinping formally told WHO head Tedros Ghebreyesus, at their meeting in Beijing earlier this week, that the coronavirus epidemic “is a devil and we cannot allow the devil to hide.”
Ghebreyesus for his part could not but praise Beijing for its extremely swift, coordinated response strategy – which includes fast identification of the genome sequence. Chinese scientists have already handed over to Russian counterparts the virus genome, with snap tests able to identify it in a human body within two hours. A Russia-China vaccine is under development.
The devil, of course, is always in the details. In a matter of a few days, at the peak of the most congested travel period of the year, China did manage to quarantine an urban environment of over 56 million people, including megalopolis Wuhan and three nearby cities. This is an absolute first in terms of public health, anytime in history.
Wuhan, with a GDP growth of 8.5% a year, is a significant business center for China. It lies at the strategic crossroads of the Yangtze and Han rivers and at a railway crossroads as well – between the north-south axis linking Guangzhou to Beijing and the east-west axis linking Shanghai to Chengdu.
As premier Li Keqiang was sent to Wuhan, President Xi visited the strategic southern province of Yunnan, where he extolled the immense government apparatus to boost control and sanitary prevention mechanisms to limit propagation of the virus.
Coronavirus catches China at an extremely sensitive juncture – after the (failed) Hybrid War tactics displayed in Hong Kong; an American pro-Taiwan offensive; the trade war far from solved by a mere “phase 1” deal while more sanctions are being plotted against Huawei; and even the assassination of Maj. Gen. Qasem Soleimani, which ultimately is about targeting the expansion of the Belt and Road Initiative (BRI) in Southwest Asia (Iran-Iraq-Syria).
The Big Picture spells out Total Information War and non-stop weaponization of the China “threat” – now even metastasized, with racist overtones, as a bio-threat. So how vulnerable is China?
A people’s war
For almost five years now a maximum-security biolab has been operating in Wuhan dedicated to the study of highly pathogenic micro-organisms – set up in partnership with France after the SARS epidemic. In 2017, Nature magazine was warning about the risks of dispersion of pathogenic agents out of this lab. Yet there’s no evidence this might have happened.
In crisis management terms, President Xi has lived up to the occasion – ensuring that China fights coronavirus with nearly total transparency (after all, the internet wall remains in place). Beijing has warned the whole government apparatus in no uncertain terms not to attempt any cover-ups. A real-time webpage, in English, here, is available to everyone. Whoever is not doing enough will face serious consequences. One can imagine what awaits the party chief in Hubei, Jiang Chaoliang.
A post that went viral all over the mainland this past Sunday states, “We in Wuhan have truly entered the stage of people’s war against the new viral pneumonia”; and many people, “mainly Communist Party members” have been confirmed as “volunteers and observers according to street units.”
Crucially, the government directed everyone to install a “Wuhan Neighbors” applet downloaded from WeChat. That determines “our home’s quarantine address through satellite positioning, and then lock on our affiliated community organization and volunteers. Thenceforth, our social activities and information announcements would be connected to the system.”
Theoretically, this means that “anyone who develops a fever will report their condition through the network as soon as possible. The system will immediately provide an online diagnosis, and locate and register your quarantine address. If you need to see a doctor, your community will arrange a car to send you to the hospital through volunteers. At the same time, the system will track your progress: hospitalization, treatment at home, discharge, death, etc.”
So here we have millions of Chinese citizens totally mobilized in what’s routinely described as a “people’s war” using “high technology to fight against illness.” Millions are also drawing their own conclusions when comparing it with the use of app software to fight against the police in Hong Kong.
The biogenetic puzzle
Apart from crisis management, the speed of the Chinese scientific response has been breathtaking – and obviously not fully appreciated in an environment of Total Information War. Compare the Chinese performance with the American CDC, arguably the top infectious disease research agency in the world, with an $11 billion annual budget and 11,000 employees.
During the Ebola epidemic in West Africa in 2014 – considered a maximum urgency, and facing a virus with a 90% fatality rate – the CDC took no less than two months from getting the first patient sample to identifying the complete genomic sequence. The Chinese did it in a few days.
During the swine flu in the US in 2009 – 55 million infected Americans, 11,000 killed – the CDC took over a month and a half to come up with identification kits.
The Chinese took only one week from the first patient sample to complete, vital identification and sequencing of coronavirus. Right away, they went for publication and deposit in the genomics library for immediate access by the whole planet. Based on this sequence, Chinese biotech companies produced validated essays within a week – also a first.
And we’re not even talking about the now notorious building of a brand new state of the art hospital in Wuhan in record time just to treat victims of coronavirus. No victims will pay for their treatment. Additionally, Healthy China 2030, the reform of the health/development system, will be boosted.
Coronavirus opens a true Pandora’s box on biogenetics. Serious questions remain about experiences in vivo in which the consent of “patients” will not be required – considering the collective psychosis initially developed by Western corporate media and even the WHO around coronavirus. Coronavirus could well become a pretext for genetic experiments via vaccines.
Meanwhile, it’s always enlightening to remember Great Helmsman Mao Zedong. For Mao, the top two political variables were “independence” and “development.” That implies full sovereignty. As Xi seems determined to prove a sovereign civilization-state is able to win a scientific “people’s war,” that does not exactly spell out “vulnerability.”
Our relationship with China just went from bad to worse, and most Americans don’t even realize that we just witnessed one of the most critical foreign policy decisions of this century. The U.S. Senate just unanimously passed the “Hong Kong Human Rights and Democracy Act of 2019”, and the Chinese are absolutely seething with anger.
Violent protests have been rocking Hong Kong for months, and the Chinese have repeatedly accused the United States of being behind the protests. Whether that is true or not, the U.S. Senate has openly sided with the protesters by passing this bill, and there is no turning back now.
The protesters in Hong Kong have been waving American flags, singing our national anthem and they have made it exceedingly clear that they want independence from China. And all of us should certainly be able to understand why they would want that, because China is a deeply tyrannical regime. But to the Chinese government, this move by the U.S. Senate is essentially an assault on China itself. They are going to argue that the U.S. is inciting a revolution in Hong Kong, and after what the Senate has just done it will be very difficult to claim that is not true.
The Chinese take matters of internal security very seriously, and the status of Hong Kong is one of those issues that they are super sensitive about. China will never, ever compromise when it comes to Hong Kong, and if the U.S. keeps pushing this issue it could literally take us to the brink of a military conflict.
And you can forget about a comprehensive trade agreement ever happening. Even if a Democrat is elected in 2020, that Democrat is going to back what the Senate just did. That is why it was such a major deal that this bill passed by unanimous consent. It sent a message to the Chinese that Republicans and Democrats are united on this issue and that the next election is not going to change anything.
And the trade deal that President Trump was trying to put together was already on exceedingly shaky ground. “Phase one” was extremely limited, nothing was ever put in writing, and nothing was ever signed. And in recent days it became quite clear that both sides couldn’t even agree about what “phase one” was supposed to cover…
A spokesperson for China’s Commerce Ministry said earlier this month that both countries had agreed to cancel some existing tariffs simultaneously. Trump later said that he had not agreed to scrap the tariffs, lowering hopes for a deal.
“They’d like to have a rollback. I haven’t agreed to anything,” the president said.
On Tuesday, Trump was visibly frustrated by how things are going with China, and he publicly warned the Chinese that he could soon “raise the tariffs even higher”…
President Donald Trump threatened higher tariffs on Chinese goods if that country does not make a deal on trade.
The comments came during a meeting with the president’s Cabinet on Tuesday. The U.S. and China, the world’s two largest economies, have been locked in an apparent stalemate in trade negotiations that have lasted nearly two years.
“If we don’t make a deal with China, I’ll just raise the tariffs even higher,” Trump said in the meeting.
Unfortunately, raising tariffs isn’t going to fix anything at this point.
In fact, Trump can raise tariffs until the cows come home but it isn’t going to cause the Chinese to budge.
That is because on Tuesday evening everything changed.
In a widely anticipated move, just after 6pm ET on Tuesday, the Senate unanimously passed a bipartisan bill, S.1838, showing support for pro-democracy protesters in Hong Kong by requiring an annual review of whether the city is sufficiently autonomous from Beijing to justify its special trading status. In doing so, the Senate has delivered a warning to China against a violent suppression of the demonstrations, a stark contrast to President Donald Trump’s near-silence on the issue, the result of a behind the scenes agreement whereby China would allow the S&P to rise indefinitely as long as Trump kept his mouth shut.
As we reported last week, the vote marks the most aggressively diplomatic challenge to the government in Beijing just as the US and China seek to close the “Phase 1” of their agreement to end their trade war. The Senate measure would require annual reviews of Hong Kong’s special status under U.S. law to assess the extent to which China has chipped away the city’s autonomy; in light of recent events, Hong Kong would not pass. It’s unclear what would happen next.
I am finding it difficult to find the words to describe what this means to the Chinese.
We have deeply insulted their national honor, and our relationship with them will never be the same again.
Many will debate whether standing up to China on this issue was the right thing to do, but in this article I am trying to get you to understand that there will be severe consequences for what the U.S. Senate just did.
There isn’t going to be a comprehensive trade deal, the global economy is going to suffer greatly, and the Chinese now consider us to be their primary global adversary.
Shortly after the Senate passed the bill, a strongly worded statement was released by the Chinese government. The following excerpt comes from the first two paragraphs of that statement…
On November 19th, the US Senate passed the “Hong Kong Bill of Rights on Human Rights and Democracy.” The bill disregards the facts, confuses right and wrong, violates the axioms, plays with double standards, openly intervenes in Hong Kong affairs, interferes in China’s internal affairs, and seriously violates the basic norms of international law and international relations. The Chinese side strongly condemns and resolutely opposes this.
In the past five months, the persistent violent criminal acts in Hong Kong have seriously jeopardized the safety of the public’s life and property, seriously trampled on the rule of law and social order, seriously undermined Hong Kong’s prosperity and stability, and seriously challenged the bottom line of the “one country, two systems” principle. At present, what Hong Kong faces is not the so-called human rights and democracy issues, but the issue of ending the storms, maintaining the rule of law and restoring order as soon as possible. The Chinese central government will continue to firmly support the Hong Kong SAR Government in its administration of the law, firmly support the Hong Kong police in law enforcement, and firmly support the Hong Kong Judiciary in punishing violent criminals in accordance with the law, protecting the lives and property of Hong Kong residents and maintaining Hong Kong’s prosperity and stability.
For a long time I have been warning that U.S. relations with China would greatly deteriorate, and this is the biggest blow that we have seen yet.
The U.S. and China are now enemies, and ultimately that is going to result in a tremendous amount of pain for the entire planet.
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When will Americans start to wake up and realize what is happening? At the end of last week, President Trump announced that the U.S. would be imposing a 10 percent tariff on 300 billion dollars worth of Chinese imports, and that marked a dramatic escalation in our trade war with China. This move by Trump came as a total shock to Chinese officials, and global financial markets were thrown into a state of turmoil. Since that announcement, we have been waiting for the other shoe to drop, because we knew that the Chinese would retaliate. But honestly, very few of the experts expected something like this. On Monday, China announced that it is going to completely stop buying U.S. agricultural products…
China confirmed reports that it was pulling out of U.S. agriculture as a weapon in the ongoing trade war.
A spokesperson for the Chinese Ministry of Commerce said Chinese companies have stopped purchasing U.S. agricultural products in response to President Trump’s new 10% tariffs on $300 billion of Chinese goods.
This is essentially a trade war equivalent of a nuclear bomb.
If the Chinese would have slapped U.S. agricultural products with tariffs, that would have been a proportional response. But to quit buying them entirely is an unprecedented escalation in a trade war that is really starting to spiral out of control.
And it is also clearly a political attack on President Trump. The Chinese know that Trump is highly popular in rural areas, and this ban on U.S. agricultural products is going to severely hurt farmers in rural areas all across the United States.
U.S. voters tend to be more influenced by their bank accounts than by anything else, and so this is a smart strategic move by the Chinese if they would like to see a Democrat get elected in 2020.
In 2017, the Chinese bought 19.5 billion dollars worth of U.S. agricultural products, and that number dropped to just 9.1 billion dollars in 2018.
Now that number is going to zero, and according to Farm Bureau Federation President Zippy Duvallthis latest move by China is going to be “a body blow to thousands of farmers and ranchers who are already struggling to get by.”
Please say a prayer for our farmers, because they really need it.
In addition to ending purchases of U.S. agricultural products, the Chinese also allowed the value of the yuan to decline dramatically on Monday. This really rattled global financial markets, and shortly thereafter U.S. Treasury officials formally designated China as a “currency manipulator”. The following comes directly from the official website of the Treasury Department…
The Omnibus Trade and Competitiveness Act of 1988 requires the Secretary of the Treasury to analyze the exchange rate policies of other countries. Under Section 3004 of the Act, the Secretary must “consider whether countries manipulate the rate of exchange between their currency and the United States dollar for purposes of preventing effective balance of payments adjustments or gaining unfair competitive advantage in international trade.” Secretary Mnuchin, under the auspices of President Trump, has today determined that China is a Currency Manipulator.
As a result of this determination, Secretary Mnuchin will engage with the International Monetary Fund to eliminate the unfair competitive advantage created by China’s latest actions.
This is the first time since the 1990s that the Treasury Department has used this designation on any of our trading partners, and it is the kind of move that would not be made unless all hopes for a trade deal were completely gone.
Of course the Chinese wouldn’t have made the moves that they made either if they were still holding out hope for a negotiated solution. According to one market analyst that was quoted by CNBC, the Chinese are “signalling that they have lost confidence that they can reach an agreement with Trump.”
So what this means is that in the short-term things are going to get bad for the global economy.
Really bad.
In the longer term, the structure of the entire global economic system could change dramatically, and this will especially be true if Donald Trump emerges triumphant in 2020. According to economist Neil Shearing, we could literally be looking at “the end of the world as we know it”…
Among the implications for more deterioration in the global picture that Shearing cites are the “disintegration of the rules-based system” that has governed international commerce since the end of the World War II, and a potential “Balkanization” of the world economy as the U.S. and China develop their own standards, tech platforms and payment systems.
“It’s too soon to say exactly how events will pan out, but this casts the escalation in the US-China trade war over the past year in an altogether more ominous light. We may be witnessing the end of the world as we know it,” he wrote.
It is difficult to imagine a world in which there is no trade between the United States and China, and many would argue that we would be far better off today if we had never gone down that road in the first place.
But now that our two economies are so deeply integrated, trying to decouple is going to be an exceedingly painful process.
If you are familiar with my work, than you already know that I am not a fan of the Chinese government at all. Something needed to be done about China, because they have been brazenly taking advantage of us and flouting the rules for decades.
Having said that, it is imperative that the American people understand that a messy breakup with China is going to cause an extraordinary amount of pain for us, for them and for the whole world.
It looks like this trade war could be the spark that plunges the global economy into utter chaos, and right now very few Americans seem to understand the true scope of the economic nightmare that appears to be headed our way.
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كلّ شيء يحصل في بحر العرب وخليج فارس من حرب ناقلات وتحفز وأرصاد الى تعارض إرادات وديبلوماسية حياكة السجاد تشي بما يلي:
انّ ما يطلق عليه الأزمة الأميركية الإيرانية، الدائرة الآن في الخليج وبحر العرب وبقية مناطق الإقليم، من اليمن الى العراق وسورية ولبنان وفلسطين، ليست أزمة عادية وإنما هي معركة استراتيجية كبرى بين كتلتين دوليتين هما :
الولايات المتحدة الاميركية، مدعومة من حلف شمال الأطلسي بشكل كامل ومن الأنظمة العربية العميلة في جزيرة العرب، الى جانب الكيان الصهيوني طبعاً.
وهي بمعنى من المعاني إنهاء هيمنة القطب الواحد، ايّ الولايات المتحدة، على العالم.
لا يوجد أيّ أفق، لا على الصعيد التكتيكي ولا على الصعيد الاستراتيجي، لتحقيق أيّ من أهداف الولايات المتحدة، لا في منطقة الصراع المفتوح حالياً ولا مناطق أخرى من ساحات المواجهة، مثل وسط آسيا أو بحر الصين أو منطقة البحر الأسود/ أوكرانيا. وكذلك هو الوضع في منطقة بحر البلطيق/ شمال غرب روسيا، حيث يستمرّ تحشيد قوات كبيرة لحلف الناتو بالقرب من الحدود الروسية الشمالية الغربية/ أيّ بالقرب من مدينة لينينغراد ذات الرمزية التاريخية والوطنية الكبرى في روسيا خضعت لحصار الجيوش الألمانية لمدة 900 يوم دون أن تستسلم .
يتمثل الجانب الاستراتيجي، في المعركة الدائرة حالياً، في انّ إيران تتصدّى بشكل مباشر لمحاولات الولايات المتحدة السيطرة، ليس فقط على منابع النفط الموجودة في الجزيرة العربية وإيران بهدف التحكم في إمدادات الطاقة للأسواق الصينية والباكستانية وأسواق دول شرق آسيا لإبطاء نمو اقتصاديات هذه الدول وإضعاف قدرتها على منافسة الولايات المتحدة، على الصعيد الدولي، وانما تتعدّى الأهداف الأميركية كلّ ذلك، حيث انّ طبيعة هذه المواجهة تشمل قبل كلّ شيء الجوانب الاقتصادية الدولية. وبكلام أكثر وضوحاً فإنّ واشنطن ودول الناتو يحاولون السيطرة على منطقة المواجهة الحاليّة، الممتدة من سواحل فلسطين المحتلة غرباً وحتى سواحل الصين وروسيا الشرقية على المحيط الهادئ.
اما كلمة سر هذا الجانب الاستراتيجي فهي: مشروع الطريق والحزام الصيني، ذو الطابع الدولي والعابر للقارات، الذي سيكرّس إنهاء السيطرة الاقتصادية والمالية الأميركية على مقدرات شعوب العالم.
وهذا يعني أنّ معركة إيران، ومعها حلف المقاومة، الحاليّة، مع الأطراف الاستعمارية المذكورة أعلاه، هي معركة فرط استراتيجية، يتمثل هدف إيران وحلفائها، من وراء خوضها، في ما يلي:
ـ إنجاز حقوق إيران، ليس فقط في المجال النووي، وإنما في الحفاظ على أمن الملاحة البحرية في كلّ المنطقة الممتدة من خليج عدن وحتى غرب المحيط الهندي. وهو ما يشكل مانعاً قوياً أو خط دفاع أوّل عن حدود الصين الغربية وحدود روسيا الجنوبية الغربية.
ـ إنهاء عوامل التوتر المتجدّد في الإقليم وذلك باقتلاع جذور أسبابه، المتمثلة في الوجود العسكري الاميركي الأطلسي المكثف في جزيرة العرب وفي بحار المنطقة وصولاً الى بحر الصين الجنوبي، خاصة أنّ سلاح البحرية الإيراني قادر، ودون أدنى شك، على تأمين خطوط الملاحة بكلّ كفاءة واقتدار.
ـ أما آلية الحماية المنشودة فيمكن تحقيقها، وبكلّ سهولة، عبر تطبيق الاقتراح الإيراني، المقدّم منذ أشهر، والذي ينص على إنشاء نظام أمني إقليمي تشارك فيه كلّ دول المنطقة، العربية منها وغير العربية، كباكستان وإيران، وإخلاء المنطقة من القواعد والأساطيل الأجنبية.
أما في ما يتعلق باحتمالات سير هذه المعركة، وتطوراتها في الميدان، فإنّ ذلك لن يتعدّى مرحلة ممارسة التفاوض تحت النار، أيّ انّ طرفي المعركة، خاصة إيران وحلف المقاومة، سيواصلان تنفيذ خطوات للضغط العسكري على العدو، على امتداد ساحة المواجهة، وذلك لثقتها الكاملة بنفسها وقدراتها أولاً ولتيقنها من محدودية قدرات العدو ثانياً.
وعندما نتحدث عن محدودية قدرات العدو فإننا بالأكيد لا نعني انّ قدرات إيران العسكرية تفوق في حجمها قدرات المعسكر المعادي، وإنما نعني محدودية قدرة العدو في استخدام ما لديه من قدرات عسكرية. وهذا ما يسمّى في علم السياسة: محدودية استخدام القوة. الأمر الذي يعود الى أسباب عديدة لا مجال لتعدادها في هذا المجال…
وإنما لا بدّ من التذكير بأهمّها، ألا وهو عدم وجود ايّ نية حقيقية، لدى الرئيس الأميركي الحالي، في خوض حرب ضدّ إيران وحلفائها. علاوة على تخوّف الرئيس ترامب من تدحرج أيّ عمليات، حتى ولو كانت محدودة، ضدّ إيران إلى حرب شاملة، الأمر الذي لا قدرة للولايات المتحدة الأميركية على المغامرة به، إذ انّ مثل هكذا تطوّر سيحتاج الى نشر ما لا يقلّ عن 750 ألف جندي أميركي/ أطلسي في منطقة العمليات إيران والعراق وسورية ، بالإضافة الى قراءة الفاتحة على روح قاعدة واشنطن العسكرية في فلسطين المحتلة، «إسرائيل»، والتي ستزول عن الوجود خلال ساعات بدء الحرب الأولى.
إذن… فالولايات المتحدة لديها القوة العسكرية، المجمّدة او المشلولة او المغلولة الأيدي، بسبب ظروف الميدان السياسية والعسكرية. بينما تستند القيادة الإيرانية الى يد مطلقة في اتخاذ القرارت الحازمة والمبنية على الظروف الموضوعية المؤاتية أيضاً ما يجعل القارئ الموضوعي لمسرح العمليات، يخرج بنتيجة لا تقبل الشك ألا وهي:
انّ الطرف الأقوى في المواجهة سيكون بالتأكيد ذلك الطرف الذي تقاتل معه الجغرافيا والإرث الحضاري الإيراني، الأكبر والأعمق والذي يستند اليه الإمام السيد علي الخامنئي في قيادته للمعركة وفي قراراته وتوجيهاته للآلة السياسية والديبلوماسية والعسكرية في إيران، المتكئة الى فقه إسلامي ديناميكي ثوري أكثر عمقاً وزخماً من كلّ ما يمكن ان يتصوّره السياسيون التقليديون.
ثمة معادلة جديدة تتشكل في العمل السياسي الدولي تشي بحصول هزائم مدوية تنتظر الأميركيين وأذنابهم وانتصارات كبرى غير مسبوقة في المسرح الدولي لصالح إيران وحلفائها.
– لا نعلم إذا كان البريطانيون قد انتبهوا أم لم ينتبهوا إلى أهمية ما وفروه لإيران في معركتها التاريخية حول السيادة والقوة في مضيق هرمز، الذي يمثل مفصل الاستراتيجية الإيرانية في الإفادة من ميزات الجغرافيا الدولية الاقتصادية والعسكرية التي تعرف كيف تدير معادلاتها. فالخطوة الرعناء لبريطانيا في إيقاف الناقلة الإيرانية في مضيق جبل طارق، لا تستقيم إلا إذا تصرفت لندن على أساس أن الدولة التي تملك السيادة البرية على طرف المضيق تملك الحق بتفتيش السفن التي تتجاوزه وفقاً لمفهوم المرور العابر قانونياً، أي المرور باتجاه مقصد نهائي آخر، دون التوغل في المياه الداخلية للدولة المشاطئة، بينما المواجهة التي تخوضها واشنطن مع إيران حول المرور العابر في مضيق هرمز تنطلق من إنكار أي حقوق للدول المشاطئة للمضيق في التعامل مع «المرور العابر».
– الخطوة الإيرانية التي استهدفت الناقلة البريطانية أخذت وقتاً قبل أن تعتمد إيران تنفيذها رغم السهولة التكتيكية لعملية التنفيذ، لأن إيران كانت تحسب المداخل والمخارج للعملية. فالأصل بالنسبة للأميركي عندما ورط بريطانيا في عملية السيطرة على الناقلة الإيرانية، كان وضع إيران أمام موقف محرج، بين ردّ يتضمن المخاطرة بخسارة وقوف بريطانيا ضمن ثلاثي أوروبي مساند للاتفاق النووي، يضم بريطانيا وفرنسا وألمانيا، وهو ما لا تريده إيران رغم عدم رضاها عن حدود الاستجابة الأوروبية لموجبات الاتفاق النووي تجارياً ومالياً، ورغم إدراكها لكون بريطانيا تشكل أضعف الحلقات الأوروبية في التمسك بالاتفاق، لكن طهران تدرك الخطة الأميركية التي تنطلق من استشعار الفشل بعزل إيران، ومن الشعور بالضيق لكون واشنطن لا تزال وحدها خارج الاتفاق، من أصل الخمسة زائداً واحداً، وتسعى عبر إخراج بريطانيا، أن تخطو الخطوة الأولى قبل الانتقال للتركيز على شريك آخر، صولاً لإسقاط الشركاء الأوروبيين، ووضع إيران أمام معادلة تضعها طهران في حسابها كاحتمال وارد طالما قررت البدء بخطوات إجرائية للخروج من الاتفاق النووي، لكنها لا تسعى لتقديمها خدمة مجانية لواشنطن.
– بالمقابل تدرك طهران أن ترك التصرف البريطاني دون ردّ رادع سيعني فتح الباب للتمادي في التعامل مع إيران من موقع التطاول على حقوقها القانونية، في ميادين كثيرة من مجالات التجارة العالمية، لذلك رسمت طهران معادلة مبتكرة لتعاملها مع بريطانيا، فتركت لندن تخوض المعركة السياسية والقانونية والدبلوماسية لتأكيد أن عملية إيقاف الناقلة الإيرانية عمل قانوني، استناداً إلى بدء سيادة الدولة المشاطئة للمضيق، وبعدما اكتملت المرحلة قامت إيران بما يترجم هذا المبدأ من موقعها على مضيق هرمز، بحجز الناقلة البرطانية، وهو شأن مختلف عن تهديدات إيران السابقة بإقفال المضيق، وطورت إيران المفهوم القانوني بالإعلان عبر مجلس الشورى عزمها عن فرض رسوم مرور في مضيق هرمز، والأمر ليس بالعائد المالي للمرور، وهو في كل حال ليس بسيطاً، بل في كون تسديد الرسوم سيعني التوقف عند نقطة جمارك إيرانية بما يعنيه ذلك من حق التفتيش، والتحقيق وربما التوقيف، وما يعنيه عموماً من تثبيت حق الإمساك بالعبور من المضيق.
– لم تتأخر إيران بعد ذلك عن منح بريطانيا الجواب الإيجابي على قبول مساعٍ عمانية للوساطة من أجل حل النزاع، وما قد يتضمنه من صيغة لمقايضة الناقلتين الإيرانية والبريطانية، وضمان متبادل لحرية عبور الناقلات البريطانية في مضيق هرمز مقابل حرية عبور الناقلات الإيرانية في مضيق جبل طارق، ويكون على واشنطن بذلك البحث عن طرق أخرى لمواجهة إيران، طرق لا تمنح إيران فرص تحويل التحدي إلى فرصة، كما قالت أغلب الطرق الأميركية حتى الآن، فمعادلة هرمز مقابل جبل طارق ومثله، لم تكن ورادة في الحسابات الإيرانية الذكية لو لم تقدّمها لها الحسابات الأميركية الغبية.
July 7, 2019 (Joseph Thomas – NEO) – If Washington’s goal was to pressure and isolate China by targeting smartphone giant Huawei, it seems to have accomplished the exact opposite. In the process, the US has only accomplished in exposing its own growing weakness and unreliability as a trade partner amid a much wider, misguided and mismanaged “trade war.”
While we’re only talking about smartphones and economic competition, however fierce, the outcome of this smartphone battle amid a much wider trade war will have an impact on global power and who wields it in the years to come.
Losing Ungracefully
By May 2019, Huawei had firmly climbed to the number two spot in global smartphone sales at the expense of US-based Apple. By the first quarter of 2019 it had shipped 59.1 million phones compared to Apple, now third place, at between 36-43 million phones, IDC (International Data Corporation) reported.
IDC and many other articles based on its data would note that while Huawei and Apple have traded places in the past over who held second place among global smartphone sales, Huawei’s ascension this time seemed much more permanent.
Those watching the trajectory and inner workings of both tech giants will have noticed Apple’s decline as endemic internal management problems coupled with growing global competition tattered its reputation and consumer appeal.
Was it just a coincidence that just as first quarter sales data emerged, the US announced one of its more dramatic turns amid its wider trade war with China? The Trump administration would announce a ban on all American-made goods to Huawei including microchips made by Intel and Qualcomm as well as the Android operating system (OS) made by US tech giant Google.
Coupled with this move was a public relations blitz across the US media and their partners working within nations moving closer to China. In Thailand, for example, local media trained and influenced by US interests attempted to undermine consumer confidence in Huawei in the wake of US sanctions against the company.
This one-two punch was a partial success. Sales did slump and Huawei was faced with significant obstacles. But significant obstacles are not the same as insurmountable obstacles, and overcoming obstacles is often how true competitors strengthen themselves.
What Doesn’t Kill You Makes You Stronger
For Huawei, a tech giant integral to China’s wider economic and political success upon the global stage, it has all the resources and support it needs to weather the toughest of storms.
In the wake of US sanctions, and even in the lead up to them, Huawei has begun to source critical parts from non-US companies. It is also investing significantly in its own in-house alternatives to US manufactured microchips and even in an alternative OS to replace Android.
The fact that work on the OS supposedly began as early as 2018 indicates that Huawei executives are under no illusions regarding American goodwill. If America is to play nicely with Huawei and other Chinese companies, it will be because Huawei and other Chinese companies took steps leaving the US no other choice but to do so.
Android is an open source OS. This means that its code is free for all developers to access and use. It was the key to Android’s wide success, and thus Google’s domination of the smartphone OS market, but it is also a weakpoint in Google and the US government’s attempts to hobble Huawei.
Huawei’s alternative OS will be compatible with the open source Android system. Android applications can still be downloaded and used on a Huawei phone running Huawei’s OS, but instead of doing so through Google’s online application store, it will be done through Huawei’s.
As some media have pointed out, this means that Huawei’s setbacks by being restricted from Android will only be temporary. Long-term, Google stands to lose tens of millions, if not hundreds of millions of customers who will instead be using Huawei’s alternatives.
Google could even lose its dominion over smartphone OS development if Huawei made its own alternative as accessible and as appealing as Android, minus the political and economic threats aimed at nations Washington finds displeasing.
Maybe this is why the US appears to be backing off (for now), if only partially, from its initial threats against Huawei. Nothing the US is doing to Huawei actually addresses why US companies themselves are losing the smartphone war to begin with. Should companies like Huawei overcome what little leverage the US still has over global telecom tech, it will have a stronger smartphone product coupled with stronger, alternative infrastructure out of reach of US influence.
In efforts to isolate China, the US may be succeeding in only isolating itself.
US Threats Undermine Confidence in the US, Not China
Other nations needed little imagination to realise that if the US could target Chinese companies simply for outcompeting American corporations, they could easily find themselves next. This has made them sympathetic to China’s current challenges.
While media influenced by the US in various nations have aided US efforts to undermine China’s Huawei, the nations themselves have not.
In Thailand, for example, the Thai government has moved forward with plans to partner with Huawei to develop its national 5G network despite mounting pressure not to from the US, NPR would report.
Huawei is still a popular brand in Thai markets, in third place behind Oppo (also a Chinese brand) and Samsung, Bangkok Post reported.
Thai government agencies have been assuring consumers that US sanctions will not impact Huawei goods sold in Thailand in the short-term, while Huawei takes steps to ensure there will be no impact in the long-term.
Since Huawei is not the first Chinese tech company targeted by the US in such a manner, and with other Chinese-made smartphones becoming popular in nations like Thailand (Oppo for example), China as a nation will only pour further resources in protecting Chinese companies from the coercive measures taken by the US.
Other nations are not only sympathetic toward Chinese efforts, they themselves will likely take similar measures regarding their own industries.
The ongoing trade war with China is not the only example of economic warfare used by the US. We see much more extreme examples of US economic warfare aimed at Iran and Venezuela.
Growing US pressure placed on Russia is another example. The US has even gone as far as threatening nations like Germany with sanctions for moving ahead with a German-Russian pipeline (Nord Stream 2).
The US has revealed itself as an unreliable trade partner, bitter at any prospect of competition or genuine cooperation. Amid its trade war with China it has pressured its own allies to hamper trade with China, a move that benefits China’s trade partners in no conceivable way. The US is willing to do anything to anyone to cling to global economic supremacy and the power that stems from holding it in its own hands. Sharing it with China and Russia or even its own allies in Europe and East Asia dilutes both the potency of that power, and its ability to weild it with potent impunity.
False Pretexts Aren’t Just for Hot Wars
The US regularly uses false pretexts to launch its many real wars around the globe. Fabrications regarding “weapons of mass destruction” were used to justify the US invasion and occupation of Iraq in 2003. Disingenuous humanitarian concerns regarding imaginary abuses were used to justify the US military intervention in Libya. Serial but baseless accusations over chemical weapon use has been used to justify US military intervention in Syria.
But fabricating justifications to go off to war isn’t reserved merely for hot wars. The US is citing supposed security concerns to target China’s Huawei, coincidentally just as it permanently overtakes US-based Apple in global smartphone sales, and amid a wider trade war built on entirely different (but also fabricated) claims.
The fact that the US is lying about its motivations to target Huawei should be another warning to Beijing over the trustworthiness of the current circles dominating US economic and political power. It should also be a warning to the rest of the world when doing business with the US.
A robust strategy must be adopted by nations and between nations to protect themselves from the still potent and disruptive power the US holds over global economics.
Whether it is attempts by the US to undermine confidence in a nation’s economy, smear a nation’s tourism industry, attempts to reverse the global success of companies like Huawei or even sabotage energy deals made by the US’ own allies with nations Washington considers adversaries, what amounts to highly dangerous American-led economic warfare remains a critical threat to global peace and stability.
Strategies for protecting national industries by developing domestic industrial capacity and relying less on sourcing critical components from unreliable partners like the US is essential. So is protecting bilateral trade through the creation of financial exchange systems out of reach of US sanctions. Being able to counter Washington’s manufactured narratives used to justify its coercive economic behavior is also key.
Just as growing military prowess and unity of purpose among Eurasian nations have helped impede the growing number of America’s many and very destructive real wars, similar economic prowess and unity of purpose will be required to stifle America’s likewise disruptive economic warfare waged globally.
Huawei’s success or failure serves as a weather vane indicating in just what direction this balance of power is headed.
Joseph Thomas is chief editor of Thailand-based geopolitical journal, The New Atlas and contributor to the online magazine “New Eastern Outlook”.
What if tomorrow nobody but the United States would use the US-dollar? Every country, or society would use their own currency for internal and international trade, their own economy-based, non-fiat currency. It could be traditional currencies or new government controlled crypto-currencies, but a country’s own sovereign money. No longer the US-dollar. No longer the dollar’s foster child, the Euro. No longer international monetary transactions controlled by US banks and – by the US-dollar controlled international transfer system, SWIFT, the system that allows and facilitates US financial and economic sanctions of all kinds – confiscation of foreign funds, stopping trades between countries, blackmailing ‘unwilling’ nations into submission. What would happen? – Well, the short answer is that we would certainly be a step close to world peace, away from US (financial) hegemony, towards nation states’ sovereignty, towards a world geopolitical structure of more equality.
We are not there yet. But graffities are all over the walls signaling that we are moving quite rapidly in that direction. And Trump knows it and his handlers know it – which is why the onslaught of financial crime – sanctions – trade wars – foreign assets and reserves confiscations, or outright theft – all in the name of “Make America Great Again”, is accelerating exponentially and with impunity. What is surprising is that the Anglo-Saxon hegemons do not seem to understand that all the threats, sanctions, trade barriers, are provoking the contrary to what should contribute to American Greatness. Economic sanctions, in whatever form, are effective only as long as the world uses the US dollar for trading and as reserve currency.
Once the world gets sick and tired of the grotesque dictate of Washington and the sanction schemes for those who do no longer want to go along with the oppressive rules of the US, they will be eager to jump on another boat, or boats – abandoning the dollar and valuing their own currencies. Meaning trading with each other in their own currencies – and that outside of the US banking system which so far even controls trading in local currencies, as long as funds have to be transferred from one nation to another via SWIFT.
Many countries have also realized that the dollar is increasingly serving to manipulate the value of their economy. The US-dollar, a fiat currency, by its sheer money mass, may bend national economies up or down, depending in which direction the country is favored by the hegemon. Let’s put the absurdity of this phenomenon in perspective.
Today, the dollar is based not even on hot air and is worth less than the paper it is printed on. The US GDP is US$ 21.1 trillion in 2019 (World Bank estimate), with current debt of 22.0 trillion, or about 105% of GDP. The world GDP is projected for 2019 at US$ 88.1 trillion (World Bank). According to Forbes, about US$ 210 trillion are “unfunded liabilities” (net present value of future projected but unfunded obligations (75 years), mainly social security, Medicaid and accumulated interest on debt), a figure about 10 times the US GDP, or two and a half times the world’s economic output.
This figure keeps growing, as interest on debt is compounded, forming part of what would be called in business terms ‘debt service’ (interest and debt amortization), but is never ‘paid back’. In addition, there are about one to two quadrillion dollars (nobody knows the exact amount) of so-called derivatives floating around the globe. Aderivative is a financial instrument which creates its value from the speculative difference of underlying assets, most commonly derived from such inter-banking and stock exchange oddities, like ‘futures’, ‘options’, ‘forwards’ and ‘swaps’.
This monstrous debt is partly owned in the form of treasury bonds as foreign exchange reserves by countries around the world. The bulk of it is owed by the US to itself – with no plans to ever “pay it back” – but rather create more money, more debt, with which to pay for the non-stop wars, weapon manufacturing and lie-propaganda to keep the populace quiet and in lockstep.
This amounts to a humongous worldwide dollar-based pyramid system. Imagine, this debt comes crashing down, for example because one or several big (Wall Street) banks are on the brink of bankruptcy, so, they claim their outstanding derivatives, paper gold (another banking absurdity) and other debt from smaller banks. It would generate a chain reaction that might bring down the whole dollar-dependent world economy. It would create an exponential “Lehman Brothers 2008” on global scale.
The world is increasingly aware of this real threat, an economy built on a house of cards – and countries want to get out of the trap, out of the fangs of the US-dollar. It’s not easy with all the dollar-denominated reserves and assets invested abroad, all over the globe. A solution may be gradually divesting them (US-dollar liquidity and investments) and moving into non-dollar dependent currencies, like the Chinese Yuan and the Russian Ruble, or a basket of eastern currencies that are delinked from the dollar and its international payment scheme, the SWIFT system. Beware of the Euro, it’s the foster child of the US-dollar!
There are increasingly blockchain technology alternatives available. China, Russia, Iran and Venezuela are already experimenting with government-controlled cryptocurrencies to build new payment and transfer systems outside the US-dollar domain to circumvent sanctions. India may or may not join this club – whenever the Modi Government decides which way to bend – east or west. The logic would suggest that India orients herself to the east, as India is a significant part of the huge Eurasian economic market and landmass.
India is already an active member of the Shanghai Cooperation Organization (SCO) – an association of countries that are developing peaceful strategies for trade, monetary security and defense, comprising China, Russia, India, Pakistan, most Central Asian countries and with Iran waiting in the wings to become a full-fledged member. As such, SCO accounts for about half of the world population and a third of the world’s economic output. The east has no need for the west to survive. No wonder that western media hardly mention the SCO which means that the western average public at large has no clue what the SCO stands for, and who are its members.
Government-controlled and regulated blockchain technology may become key to counter US coercive financial power and to resist sanctions. Any country is welcome to join this new alliance of countries and new but fast-growing approach to alternative trading – and to finding back to national political and financial sovereignty.
In the same vein of dedollarization are Indian “barter banks”. They are, for example, trading Indian tea for Iranian oil. Such arrangements for goods to be exchanged against Iranian petrol are carried out through Indian “barter banks”, where currencies, i.e. Iranian rials and Indian rupees, are handled by the same bank. Exchange of goods is based on a list of highest monetary volume Indian trade items, against Iranian hydrocarbon products, for example, Iran’s large import of Indian tea. No monetary transaction takes place outside of India, therefore, US sanctions may be circumvented, since no US bank or US Treasury interference can stop the bilateral trade activities.
At this point, it might be appropriate to mention Facebook’s attempt to introduce a globe-spanning cryptocurrency, the Lira. Little is known on how exactly it will (or may) function, except that it would cater to billions of facebook members around the world. According to Facebook, there are 2.38 billion active members. Imagine, if only two thirds – about 1.6 billion – opened a Libra account with Facebook, the floodgate of libras around the world would be open. Libra is or would be a privately-owned cryptocurrency – and – coming from Facebook – could be destined to replace the dollar by the same people who are now abusing the world with the US-dollar. It may be projected as the antidote to government-controlled cryptocurrencies, thus, circumventing the impact of dedollarization. Beware of the Libra!
Despite US and EU sanctions, German investments in Russia are breaking a 10-year record in 2019, by German business pouring more than €1.7 billion into the Russian economy in the first three months of 2019. According to the Russian-German Chamber of Commerce, the volume of German companies’ investments in Russia is up by 33% – by € 400 million – since last year, when total investments reached € 3.2 billion, the largest since 2008. Despite sanctions which amounted to about € 1 billion combined for 140 German companies surveyed and registered with the Chamber of Commerce, and despite western anti-Russia pressure, Russia-German trade has increased by 8.4 percent and reached nearly € 62 billion in 2018.
In addition, notwithstanding US protests and threats with sanctions, Moscow and Berlin continue their Nord Stream 2 natural gas pipeline project which is expected to be finished before the end of 2019. Not only is the proximity of Russian gas a natural and logical supply source for Germany and Europe, it will also bring Europe independence form the bullying sales methods of the United States. And payments will not be made in US dollars. In the long-run, the benefits of German-Russian business and economic relations will far outweigh the illegal US sanctions. Once this awareness has sunk in, there is nothing to stop Russian-German business associations to flourish, and to attract other EU-Russian business relations – all outside of the dollar-dominated banking and transfer system.
President Trump’s trade war with China will eventually also have a dedollarization effect, as China will seek – and already has acquired – other trading partners, mostly Asian, Asian-Pacific and European – with whom China will deal in other than dollar-denominated contracts and outside the SWIFT transfer system, for example using the Chinese International Payment System (CIPS) which, by the way, is open for international trade by any country across the globe.
This will not only circumvent punishing tariffs on China’s exports (and make US customers of Chinese goods furious, as their Chinese merchandise is no longer available at affordable prices, or no longer available at all), but this strategy will also enhance the Chinese Yuan on international markets and boost the Yuan even further as a reliable reserve currency – ever outranking the US-dollar. In fact, in the last 20 years, dollar-denominated assets in international reserve coffers have declined from more than 90% to below 60% and will rapidly decline further as Washington’s coercive financial policies prevail. Dollar reserves are rapidly replaced by reserves in Yuan and gold, and that even in such staunch supporters of the west as is Australia.
Washington also has launched a counter-productive financial war against Turkey, because Turkey is associating and creating friendly relations with Russia, Iran and China – and, foremost, because Turkey, a NATO stronghold, is purchasing the Russian S-400 cutting-edge air defense system – a new military alliance which the US cannot accept. As a result, the US is sabotaging the Turkish currency, the Lira which has lost 40% since January 2018.
Turkey will certainly do whatever it can to get out from under the boot of the US-dollar stranglehold and currency sanctions – and further ally itself with the East. This amounts to a double loss for the US. Turkey will most likely abandon all trading in US dollars and align her currency with, for example, the Chinese Yuan and the Russian ruble, and, to the detriment of the Atlantic alliance, Turkey may very likely exit NATO. Abandoning NATO will be a major disaster for the US, as Turkey is both strategically, as well as in terms of NATO military power one of the strongest – if not the strongest – nation of the 29 NATO members, outside of the US.
If Turkey exits NATO, the entire European NATO alliance will be shaken and questioned. Other countries, long wary of NATO and of storing NATO’s nuclear weapons on their soils, especially Italy and Germany, may also consider exiting NATO. In both Germany and Italy, a majority of the people is against NATO and especially against the Pentagon waging wars form their NATO bases in their territories in Germany in Italy.
To stem against this trend, the former German Defense Minister, Ursula von der Leyen, from the conservative German CDU party, is being groomed to become Jean-Claude Juncker’s successor as President of the European Commission. Mr. Juncker served since 2014. Ms. Von der Leyen was voted in tonight, 17 July, with a narrow margin of 9 votes. She is a staunch supporter of NATO. Her role is to keep NATO as an integral part of the EU. In fact, as it stands today, NATO is running the EU. This may change, once people stand up against NATO, against the US vassal, the EU Administration in Brussels, and claim their democratic rights as citizens of their nation states.
Europeans sense that these Pentagon initiated and ongoing wars and conflicts, supported by Washington’s European puppet allies, may escalate into a nuclear war, their countries’ NATO bases will be the first ones to be targeted, sinking Europe for the 3rdtime in 100 year into a world war. However, this one may be all-destructive nuclear – and nobody knows or is able to predict the damage and destruction of such a catastrophe, nor the time of recovery of Mother Earth from an atomic calamity.
So, let’s hope Turkey exits NATO. It would be giant step towards peace and a healthy answer to Washington’s blackmail and sabotage against Turkey’s currency. The US currency sanctions are, in the long run, a blessing. It gives Turkey a good argument to abandon the US dollar and gradually shift towards association with eastern moneys, mainly the Chinese Yuan, thereby putting another nail in the US-dollar’s coffin.
However, the hardest blow for Washington will be when Turkey exits NATO. Such a move will come sooner or later, notwithstanding Ms. Von der Leyen’s battle cries for NATO. The breaking up of NATO will annihilate the western power structure in Europe and throughout the world, where the US still maintains more than 800 military bases. On the other hand, the disbanding of NATO will increase the world’s security, especially in Europe – for all the consequences such an exit will bear. Exiting NATO and economically exiting the US-dollar orbit is a further step towards dedollarization, and a blow to US financial and military hegemony.
Finally, investments of the Chinese Belt and Road Initiative (BRI), also called the New Silk Road, will be mostly made in Yuan and local currencies of the countries involved and incorporated in one or more of the several BRI land and maritime routes that eventually will span the globe. Some US-dollar investments may serve the People’s Bank of China, China’s Central Bank, as a dollar-divesting tool of China’s huge dollar reserves which currently stands at close to two trillion dollars.
The BRI promises to become the next economic revolution, a non-dollar economic development scheme, over the coming decades, maybe century, connecting peoples and countries – cultures, research and teaching without, however, forcing uniformity, but promoting cultural diversity and human equality – and all of it outside the dollar dynasty, breaking the nefarious dollar hegemony.
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This article was originally published on New Eastern Outlook.
Peter Koenig is an economist and geopolitical analyst. He is also a water resources and environmental specialist. He worked for over 30 years with the World Bank and the World Health Organization around the world in the fields of environment and water. He lectures at universities in the US, Europe and South America. He writes regularly for Global Research; ICH; RT; Sputnik; PressTV; The 21st Century; TeleSUR; The Saker Blog, the New Eastern Outlook (NEO); and other internet sites. He is the author of Implosion – An Economic Thriller about War, Environmental Destruction and Corporate Greed – fiction based on facts and on 30 years of World Bank experience around the globe. He is also a co-author of The World Order and Revolution! – Essays from the Resistance. He is a Research Associate of the Centre for Research on Globalization.
The original source of this article is Global Research
Iran’s Islamic Revolution Guard Corps [IRGC] seized a foreign oil tanker in the Gulf that was carrying one million liters of smuggled fuel.
The IRGC Navy said in a statement on Thursday that the foreign tanker ship has been captured on Sunday, July 14, by the military vessels patrolling the first naval zone in the Gulf as part of the operations to detect and fight against organized smuggling.
The IRGC Navy’s patrol vessels confiscated the foreign tanker that was carrying one million liters of smuggled fuel in a surprise operation after making sure that the ship was smuggling fuel, it added.
According to the statement, the foreign tanker was seized in southern parts of Larak, a small island in the Gulf, after obtaining a judicial warrant.
There were 12 foreign crew on board the tanker which has a capacity of 2 million liters of fuel, the statement noted, saying it had received smuggled fuel from the Iranian launches and was going to deliver the fuel to the foreign ships in more distant regions.
The IRGC Navy also denied reports by the Western media that Iran has captured another foreign vessel in recent days, saying judicial processes are going on in relation to the smuggling tanker.
On Tuesday, Iran’s Foreign Ministry said it has helped a foreign oil tanker that had been stalled in the Gulf due to technical failure.
According to Foreign Ministry Spokesman Abbas Mousavi, the foreign oil tanker has been taken to the Iranian coasts for assistance in line with the international regulations after the vessel sent out a mayday distress call.
“A foreign oil tanker encountered problem in the Gulf due to technical failure, and the Iranian forces, in accordance with the international regulations, rushed to help it after receiving a mayday distress call, and pulled it toward the Iranian waters with tugboat to carry out the necessary repairs,” Mousavi noted.
The comments came after the Associated Press claimed a small oil tanker from the United Arab Emirates travelling through the Strait of Hormuz has entered Iranian waters and turned off its tracker a few days ago, leading the US to suspect Iran seized the vessel amid heightened tensions in the region.
The Panamanian-flagged Riah turned off its transponder late Saturday night but an Emirati official said it sent no distress call.
Western economists and intellectuals obsessed with demonization of China are never shy of shortcuts glaringly exposing their ignorance.
The latest outburst posits that “we” – as in Western intellectuals – “are the modern version of Mary Shelley’s Frankenstein,” who electro-shocked a dead body (China) into a resurrected “murderous monster.”
So, welcome to the Sino-Frankenstein school of international relations. What next? A black and white remake with Xi Jinping playing the monster? Anyway, “we” – as in mankind’s best hope – should “avoid carrying on in the role of Frankenstein.”
The author is an economics professor emeritus at Harvard. He cannot even identify who’s to blame for Frankenstein – the West or the Chinese. That says much about Harvard’s academic standards.
Now, compare this with what was being discussed at a trade war symposium at Renmin University in Beijing this past Saturday.
Chinese intellectuals were trying to frame the current geopolitical dislocation provoked by the Trump administration’s trade war – without naming it for what it is: a Frankenstein gambit.
Li Xiangyang, director of the National Institute of International Strategy, a think tank linked to the Chinese Academy of Social Sciences, stressed that an “economic decoupling” of the US from China is “completely possible,” considering that “the ultimate [US] target is to contain China’s rise … This is a life-or-death game” for the United States.
Decoupling
Assuming the decoupling would take place, that could be easily perceived as “strategic blackmail” imposed by the Trump administration. Yet what the Trump administration wants is not exactly what the US establishment wants – as shown by an open letter to Trump signed by scores of academics, foreign policy experts and business leaders who are worried that “decoupling” China from the global economy – as if Washington could actually pull off such an impossibility – would generate massive blowback.
What may actually happen in terms of a US-China “decoupling” is what Beijing is already, actively working on: extending trade partnerships with the EU and across the Global South.
And that will lead, according to Li, to the Chinese leadership offering deeper and wider market access to its partners. This will soon be the case with the EU, as discussed in Brussels in the spring.
Sun Jie, a researcher at the Institute of World Economics and Politics at the Chinese Academy of Social Sciences, said that deepening partnerships with the Association of Southeast Asian Nations (Asean) will be essential in case a decoupling is in the cards.
For his part Liu Qing, an economics professor at Renmin University, stressed the need for top international relations management, dealing with everyone from Europe to the Global South, to prevent their companies from replacing Chinese companies in selected global supply chains.
And Wang Xiaosong, an economics professor at Renmin University, emphasized that a concerted Chinese strategic approach in dealing with Washington is absolutely paramount.
All about Belt and Road
A few optimists among Western intellectuals would rather characterize what is going on as a vibrant debate between proponents of “restraint” and “offshore balancing” and proponents of “liberal hegemony”. In fact, it’s actually a firefight.
Among the Western intellectuals singled out by the puzzled Frankenstein guy, it is virtually impossible to find another voice of reason to match Martin Jacques, now a senior fellow at Cambridge University. When China Rules the World, his hefty tome published 10 years ago, still leaps out of an editorial wasteland of almost uniformly dull publications by so-called Western “experts” on China.
Jacques has understood that now it’s all about the New Silk Roads, or Belt and Road Initiative: “BRI has the potential to offer another kind of world, another set of values, another set of imperatives, another way of organizing, another set of institutions, another set of relationships.”
Belt and Road, adds Jacques, “offers an alternative to the existing international order. The present international order was designed by and still essentially privileges the rich world, which represents only 15% of the world’s population. BRI, on the other hand, is addressing at least two-thirds of the world’s population. This is extraordinarily important for this moment in history.”
In fact, we are already entering a Belt and Road 2.0 scenario – defined by Minister of Foreign Affairs Wang Yi as a “high-quality” shift from “big freehand” to “fine brushwork.”
At the Belt and Road Forum this past spring in Beijing, 131 nations were represented, engaged in linked projects. Belt and Road is partnering with 29 international organizations from the World Bank to APEC, the Asia Pacific Economic Cooperation.
Apart from the fact that Belt and Road is now configured as a vast, unique, Eurasia-wide infrastructure and trade development project extending all the way to Africa and Latin America, Beijing is now emphasizing that it’s also a portmanteau brand encompassing bilateral trade relations, South-South cooperation and UN-endorsed sustainable development goals.
China’s trade with Belt and Road-linked nations reached $617.5 billion in the first half of 2019 – up 9.7% year-on-year and outpacing the growth rate of China’s total trade.
Chinese scholar Wang Jisi was right from the start when he singled out Belt and Road as a “strategic necessity” to counter Barack Obama’s now-defunct “pivot to Asia”.
So now it’s time for Western intellectuals to engage on a freak-out: as it stands, Belt and Road is the new Frankenstein.
On July 4, a detachment of Royal Marines and the authorities in Gibraltar seized a supertanker suspected of carrying oil to Syria on the belief it was breaching EU sanctions. 30 Royal Marines from 42 Commando were involved in the operation targeting Grace 1 that had sailed from Iran. The operation was made upon request from the US and the UK. If the oil on board is confirmed to be Iranian, the tanker would also be violating a US ban on Iranian oil exports.
Later, Iran’s Foreign Ministry summoned the British ambassador in Tehran, Rob Macaire, over the incident describing it as an “illegal seizure”. Nonetheless, it’s unlikely that the tanker will be released soon. Such operations mark the start of a new round of pressure campaign on the government of the Bashar al-Assad as well as Iranian oil exports in the region.
On July 3 and July 4, a fighting broke out between the Turkish-backed militant group known as the National Syrian Army and joint forces of the Syrian Army and the Kurdish People’s Protection Units (YPG) near the town of Hazwan in northern Aleppo. Turkish-backed militants admitted that at least 2 of their fighters were killed.
The army and the YPG jointly control an area between Afrin and the eastern countryside of al-Bab. Some Russian Military Police units are also deployed in key positions there. Tensions at the contact line between this area and the Turkish-occupied part of Syria grow after every successful attack of Kurdish rebels on Turkish targets in Afrin.
Several senior commanders of the al-Qaeda-affiliated Turkistan Islamic Party (TIP) have inspected the frontlines with the Syrian Army in northwestern Hama. The TIP released photos of the visit on July 2. They faces of the commanders are blurred but they may have been Abu Rida al-Turkistani and Ibrahim Mansour, the top commanders of the TIP.
The interesting fact is that the visit took place in the area near to the Turkish military observation post in Shir Mughar. It confirms the freedom of movement that terrorist groups have under the nose of Turkish troops that allegedly deployed there to prevent such developments. Under the demilitarized zone agreement radicals like the TIP and Hayat Tahrir al-Sham have to be withdrawn from the contact line. Nonetheless, this has never happened.
Ahead of the G20 Osaka Summit, Russian President Vladimir Putin spoke with The Financial Times Editor Lionel Barber and Moscow Bureau Chief Henry Foy, The Kremlin, Moscow, June 27, 2019.
Lionel Barber: Mr President, you head for Osaka shortly as the senior statesman at the G20. Nobody has been to so many international meetings of this grouping and the G7 over the last 20 years while you have been in charge of Russia. Before we talk about the G20 agenda and what you hope to achieve, we know that there are rising tensions between America and China in trade, the risk of conflict in the Gulf. I would be very grateful if you could talk a bit about how you have seen the world change over the last 20 years while you have been in power.
President of Russia Vladimir Putin: First, I have not been in power for all these 20 years. As you may know, I was Prime Minister for four years, and that is not the highest authority in the Russian Federation. But nevertheless, I have been around for a long time in government and in the upper echelons, so I can judge what is changing and how. In fact, you just said it yourself, asking what has changed and how. You mentioned the trade wars and the Persian Gulf developments. I would cautiously say the situation has not changed for the better, but I remain optimistic to a certain extent. But, to put it bluntly, the situation has definitely become more dramatic and explosive.
Lionel Barber: Do you believe that the world now has become more fragmented?
Vladimir Putin: Of course, because during the Cold War, the bad thing was the Cold War. It is true. But there were at least some rules that all participants in international communication more or less adhered to or tried to follow. Now, it seems that there are no rules at all. In this sense, the world has become more fragmented and less predictable, which is the most important and regrettable thing.
Lionel Barber: We will return to this theme of the world without rules, fragmentation, more transactional. But first, Mr President, tell us what you want to achieve in Osaka, in terms of your relationships with these other parties? What are your main goals for the summit?
Vladimir Putin: I would very much like all the participants in this event, and the G20, in my opinion, is a key international economic development forum today, so I would like all the G20 members to reaffirm their intention – at least an intention – to work out some general rules that everyone would follow, and show their commitment and dedication to strengthening international financial and trade institutions.
Everything else is details that complement the main topics one way or another. We certainly support Japan’s Presidency. As for the development of modern technology, the information world, the information economy, as well as our Japanese colleagues’ attention to matters such as longevity and the environment – all this is extremely important, and we will certainly support it and will take part in all these discussions. Even though it is hard to expect any breakthroughs or landmark decisions in the current conditions; we can hardly count on it today. But in any case, there is hope at least that during these general discussions and bilateral meetings we will be able to smooth out the existing disagreements and lay a foundation, a basis for positive movement forward.
Lionel Barber: You will have a meeting with Mohammad bin Salman in Osaka. Can we expect an extension of the current agreement on oil production? Limitations?
Vladimir Putin: As you know, Russia is not an OPEC member, even though it is among the world’s largest producers. Our daily production is estimated at 11.3 million barrels, I believe. The United States has surged ahead of us, though. However, we believe that our production stabilisation agreements with Saudi Arabia and OPEC in general have had a positive effect on market stabilisation and forecasting.
I believe both energy producers, in this case, oil producing countries, and consumers are interested in this, because stability is definitely in short supply at present. And our agreements with Saudi Arabia and other OPEC members undoubtedly strengthen stability.
As for whether we will extend the agreement, you will find out in the next few days. I had a meeting on this issue with the top executives of our largest oil companies and Government members right before this interview.
Lionel Barber: They are a little bit frustrated. They would like to produce more. Is that correct?
Vladimir Putin: They have a smart policy. It is not about increasing production, although that is a major component in the work of large oil companies. It is about the market situation. They take a comprehensive view of the situation, as well as of their revenues and expenses. Of course, they are also thinking about boosting the industry, timely investments, ways to attract and use modern technology, as well as about making this vital industry more attractive for investors.
However, dramatic price hikes or slumps will not contribute to market stability and will not encourage investment. This is why we discussed all these issues in their totality today.
Lionel Barber: Mr President, you have observed four American presidents at close quarters and will maybe five, you have had direct experience. So, how is Mr Trump different?
Vladimir Putin: We are all different. No two people are the same, just like there are no identical sets of fingerprints. Anyone has his or her own advantages, and let the voters judge their shortcomings. On the whole, I maintained sufficiently good-natured and stable relations with all the leaders of the United States. I had an opportunity to communicate more actively with some of them.
The first US President I came into contact with was Bill Clinton. Generally, I viewed this as a positive experience. We established sufficiently stable and business-like ties for a short period of time because his tenure was already coming to an end. I was only a very young president then who had just started working. I continue to recall how he established partner-like relations with me. I remain very grateful to him for this.
There have been different times, and we had to address various problems with all other colleagues. Unfortunately, this often involved debates, and our opinions did not coincide on some matters that, in my opinion, can be called key aspects for Russia, the United States and the entire world. For example, this includes the unilateral US withdrawal from the Anti-Ballistic Missile Treaty that, as we have always believed, and as I am still convinced, was the cornerstone of the entire international security system.
We debated this matter for a long time, argued and suggested various solutions. In any event, I made very energetic attempts to convince our US partners not to withdraw from the Treaty. And, if the US side still wanted to withdraw from the Treaty, it should have done so in such a way as to guarantee international security for a long historical period. I suggested this, I have already discussed this in public, and I repeat that I did this because I consider this matter to be very important. I suggested working jointly on missile-defence projects that should have involved the United States, Russia and Europe. They stipulated specific parameters of this cooperation, determined dangerous missile approaches and envisioned technology exchanges, the elaboration of decision-making mechanisms, etc. Those were absolutely specific proposals.
I am convinced that the world would be a different place today, had our US partners accepted this proposal. Unfortunately, this did not happen. We can see that the situation is developing in another direction; new weapons and cutting-edge military technology are coming to the fore. Well, this is not our choice. But, today, we should at least do everything so as to not aggravate the situation.
Lionel Barber: Mr President, you are a student of history. You have had many hours of conversation with Henry Kissinger. You almost certainly read his book, World Order. With Mr Trump, we have seen something new, something much more transactional. He is very critical of alliances and allies in Europe. Is this something that is to Russia’s advantage?
Vladimir Putin: It would be better to ask what would be to America’s advantage in this case. Mr Trump is not a career politician. He has a distinct world outlook and vision of US national interests. I do not accept many of his methods when it comes to addressing problems. But do you know what I think? I think that he is a talented person. He knows very well what his voters expect from him.
Russia has been accused, and, strange as it may seem, it is still being accused, despite the Mueller report, of mythical interference in the US election. What happened in reality? Mr Trump looked into his opponents’ attitude to him and saw changes in American society, and he took advantage of this.
You and I are talking ahead of the G20 meeting. It is an economic forum, and it will undoubtedly have discussions on globalisation, global trade and international finance.
Has anyone ever given a thought to who actually benefited and what benefits were gained from globalisation, the development of which we have been observing and participating in over the past 25 years, since the 1990s?
China has made use of globalisation, in particular, to pull millions of Chinese out of poverty.
What happened in the United States, and how did it happen? In the United States, the leading US companies –the companies, their managers, shareholders and partners – made use of these benefits. The middle class hardly benefitted from globalisation. The take-home pay in the US (we are likely to talk later about real incomes in Russia, which need special attention from the Government). The middle class in the United States has not benefited from globalisation; it was left out when this pie was divided up.
The Trump team sensed this very keenly and clearly, and they used this in the election campaign. It is where you should look for reasons behind Trump’s victory, rather than in any alleged foreign interference. This is what we should be talking about here, including when it comes to the global economy.
I believe this may explain his seemingly extravagant economic decisions and even his relations with his partners and allies. He believes that the distribution of resources and benefits of globalisation in the past decade was unfair to the United States.
I am not going to discuss whether it was fair or not, and I will not say if what he is doing is right or wrong. I would like to understand his motives, which is what you asked me about. Maybe this could explain his unusual behaviour.
Lionel Barber: I definitely want to come back to the Russian economy. But what you said is absolutely fascinating. Here you are, the President of Russia, defending globalisation along with President Xi whereas Mr Trump is attacking globalisation and talking about America First. How do you explain this paradox?
Vladimir Putin: I don’t think that his desire to make America first is a paradox. I want Russia to be first, and that is not perceived as a paradox; there is nothing unusual there. As for the fact that he is attacking some manifestations of globalisation, I made that point earlier. He seems to believe that the results of globalisation could have been much better for the United States than they are. These globalisation results are not producing the desired effect for the United States, and he is beginning this campaign against certain elements of globalisation. This concerns everyone, primarily major participants in the system of international economic collaboration, including allies.
Lionel Barber: Mr President, you have had many meetings with President Xi, and Russia and China have definitely come closer. Are you putting too many eggs in the China basket? Because Russian foreign policy, including under your leadership, has always made a virtue of talking to everybody.
Vladimir Putin: First of all, we have enough eggs, but there are not that many baskets where these eggs can be placed. This is the first point.
Secondly, we always assess risks.
Thirdly, our relations with China are not motivated by timeserving political any other considerations. Let me point out that the Friendship Treaty with China was signed in 2001, if memory serves, long before the current situation and long before the current economic disagreements, to put it mildly, between the United States and China.
We do not have to join anything, and we do not have to direct our policy against anyone. In fact, Russia and China are not directing their policy against anyone. We are just consistently implementing our plans for expanding cooperation. We have been doing this since 2001, and we are just consistently implementing these plans.
Take a look at what is written there. We have not done anything that transcends the framework of these accords. So there is nothing unusual here, and you should not search for any implications of the Chinese-Russian rapprochement. Of course, we assess the current global developments; our positions coincide on a number of matters on the current global agenda, including our attitude towards compliance with generally accepted rules in trade, the international financial system, payments and settlements.
The G20 has played a very tangible role. Since its inception in 2008, when the financial crisis flared up, the G20 has accomplished many useful things for stabilising the global financial system, for developing global trade and ensuring its stabilisation. I am talking about the tax aspect of the global agenda, the fight against corruption, and so on. Both China and Russia adhere to this concept.
The G20 has accomplished a lot by advocating quota changes at the International Monetary Fund and the World Bank. Both Russia and China share this approach. Considering the major increase in the global economic share of emerging markets, this is fair and right, and we have been voicing this position from the very beginning. And we are glad that this continues to develop and to proceed in line with changes in global trade.
Over the past 25 years or so (25, I believe), the share of G7 countries in the global GDP has declined from 58 percent to 40 percent. This should also be reflected in international institutions in some way. That is the common position of Russia and China. This is fair, and there is nothing special about this.
Yes, Russia and China have many coinciding interests, this is true. This is what motivates our frequent contacts with President Xi Jinping. Of course, we have also established very warm personal relations, and this is natural.
Therefore, we are moving in line with our mainstream bilateral agenda that was formulated as far back as 2001, but we quickly respond to global developments. We never direct our bilateral relations against anyone. We are not against anyone, we are for ourselves.
Lionel Barber: I am relieved that this egg supply is strong. But the serious point, Mr President, is, you are familiar with Graham Allison‘s book, The Thucydides’s Trap. The danger of tensions or a military conflict risk between a dominant power and a rising power, America and China. Do you think that there is a risk of a military conflict in your time between you, America and China?
Vladimir Putin: You know, the entire history of mankind has always been full of military conflicts, but since the appearance of nuclear weapons the risk of global conflicts has decreased due to the potential global tragic consequences for the entire population of the planet in case such a conflict happens between two nuclear states. I hope it will not come to this.
However, of course, we have to admit that it is not only about China’s industrial subsidies on the one hand or the tariff policy of the United States on the other. First of all, we are talking about different development platforms, so to speak, in China and in the United States. They are different and you, being a historian, probably will agree with me. They have different philosophies in both foreign and domestic policies, probably.
But I would like to share some personal observations with you. They are not about allied relations with one country or a confrontation with the other; I am just observing what is going on at the moment. China is showing loyalty and flexibility to both its partners and opponents. Maybe this is related to the historical features of Chinese philosophy, their approach to building relations.
Therefore I do not think that there would be some such threats from China. I cannot imagine that, really. But it is hard to say whether the United States would have enough patience not to make any rash decisions, but to respect its partners even if there are disagreements. But I hope, I would like to repeat this again, I hope that there would not be any military confrontation.
Lionel Barber: Arms control. We know that the INF agreement is in grave jeopardy. Is there any place, from Russia’s point of view, for future arms control agreements or are we in a new phase when we are likely to see a new nuclear arms race?
Vladimir Putin: I believe there is such a risk.
As I said already, the United States unilaterally withdrew from the ABM Treaty, and has recently quit the Intermediate-Range Nuclear Forces Treaty as well. But this time, it did not just quit but found a reason to quit, and this reason was Russia. I do not think Russia means anything to them in this case, because this war theatre, the war theatre in Europe is unlikely to be interesting to the US, despite the expansion of NATO and NATO’s contingent near our borders. The fact remains, the US has withdrawn from the treaty. Now the agenda is focused on theStrategic Arms Reduction Treaty (New START). I hope that I will be able to talk about it with Donald if we happen to meet in Osaka.
We said that we are ready to hold talks and to extend this treaty between the United States and Russia, but we have not seen any relevant initiative from our American partners. They keep silent, while the treaty expires in 2021. If we do not begin talks now, it would be over because there would be no time even for formalities.
Our previous conversation with Donald showed that the Americans seem to be interested in this, but still they are not making any practical steps. So if this treaty ceases to exist, then there would be no instrument in the world to curtail the arms race. And this is bad.
Lionel Barber: Exactly, the gloves are off. Is there any chance of a triangular agreement between China, Russia and America on intermediate nuclear forces or is that a dream, pie in the sky? Would you support such an end?
Vladimir Putin: As I said at the very beginning, we will support any agreement that can advance our cause, that is, help us contain the arms race.
It should be said that so far, the level and the development scale of China’s nuclear forces are much lower than in the United States and Russia. China is a huge power that has the capability to build up its nuclear potential. This will likely happen in the future, but so far our capabilities are hardly comparable. Russia and the United States are the leading nuclear powers, which is why the agreement was signed between them. As for whether China will join these efforts, you can ask our Chinese friends.
Lionel Barber: Russia is a Pacific power as well as a European and Asian power. It is a Pacific power. You have seen what the Chinese are doing in terms of their buildup of their Navy and their maritime strength. How do you deal with those potential security problems, territorial disputes in the Pacific? Does Russia have a role to play in a new security arrangement?
Vladimir Putin: You mentioned the build-up of naval forces in China. China’s total defence spending is $117 billion, if memory serves. The US defence spending is over $700 billion. And you are trying to scare the world with the build-up of China’s military might? It does not work with this scale of military spending. No, it does not.
As for Russia, we will continue to develop our Pacific Fleet as planned. Of course, we also respond to global developments and to what happens in relations between other countries. We can see all of this, but it does not affect our defence development plans, including those in the Russian Far East.
We are self-sufficient, and we are confident. Russia is the largest continental power. But we have a nuclear submarine base in the Far East, where we are developing our defence potential in accordance with our plans, including so that we can ensure safety on the Northern Sea Route, which we are planning to develop.
We intend to attract many partners to this effort, including our Chinese partners. We may even reach an agreement with American shippers and with India, which has also indicated its interest in the Northern Sea Route.
I would say that we are also primed for cooperation in the Asia Pacific region, and I have grounds to believe that Russia can make a considerable, tangible and positive contribution to stabilising the situation.
Lionel Barber: Can we just turn to North Korea? How do you assess the current situation and do you believe that in the end, any deal or agreement will have to accept the fact that North Korea has nuclear weapons and that total dismantling is just not possible? If I could just add, Mr President, I ask you this because Russia has a fairly small but still a land border with North Korea.
Vladimir Putin: You know, whether we recognise North Korea as a nuclear power or not, the number of nuclear charges it has will not decrease. We must proceed from modern realities, which are that nuclear weapons pose a threat to international peace and security.
Another pertinent question is where this problem stems from. The tragedies of Libya and Iraq have inspired many countries to ensure their security at all costs.
What we should be talking about is not how to make North Korea disarm, but how to ensure the unconditional security of North Korea and how to make any country, including North Korea feel safe and protected by international law that is strictly honoured by all members of the international community. This is what we should be thinking about.
We should think about guarantees, which we should use as the basis for talks with North Korea. We must be patient, respect it and, at the same time, take into account the dangers arising from this, the dangers of the nuclear status and the presence of nuclear weapons.
Of course, the current situation is fraught with unpredictable scenarios, which we must avoid.
Lionel Barber: You have obviously thought of this as an experienced foreign policy and security analyst and a strategist. How do you see the North Asia security situation over the next five to ten years, given you have Russia, you have China, you have Korea and Japan?
Vladimir Putin: You have said correctly that we have a common border, even if a short one, with North Korea, therefore, this problem has a direct bearing on us. The United States is located across the ocean, and the UK is located far away, while we are right here, in this region, and the North Korean nuclear range is not far away from our border. This why this concerns us directly, and we never stop thinking about it.
I would like to return to my answer to your previous question. We must respect North Korea’s legitimate security concerns. We must show it respect, and we must find a way of ensuring its security that will satisfy North Korea. If we do this, the situation may take a turn nobody can imagine today.
Do you remember what turn the situation took after the Soviet Union adopted the policy of détente? Do I need to say anything else?
Lionel Barber: Mr President, you have been in power or very close to power. I think in Davos I said to you when we met – you were not in power but still calling all the shots. After 20 years at the top or near the top, has your appetite for risk increased?
Vladimir Putin: It did not increase or decrease.Risk must always be well-justified. But this is not the case when one can use the popular Russian phrase: “He who doesn’t take risks, never drinks champagne.” This is not the case. Quite possibly, risks are inevitable when one has to make certain decisions. Depending on the scale of any decision, risks can be small or serious.
Any decision-making process is accompanied by risk. Before taking one’s chances, one has to meticulously assess everything. Therefore, risk based on an assessment of the situation and the possible consequences of the decisions is possible and even inevitable. Foolish risks overlooking the real situation and failing to clearly comprehend the consequences are unacceptable because they can jeopardise the interests of a great number of people.
Lionel Barber: How big was this Syria risk in terms of your decision to intervene?
Vladimir Putin: It was sufficiently high. However, of course, I thought carefully about this well in advance, and I considered all the circumstances and all the pros and cons. I considered how the situation around Russia would develop and the possible consequences. I discussed this matter with my aides and ministers, including those in charge of law enforcement agencies and other senior officials. In the long run, I decided that the positive effect from our active involvement in Syrian affairs for Russia and the interests of the Russian Federation would far outweigh non-interference and passive observation of how an international terrorist organisation grows ever stronger near our borders.
Lionel Barber: What has the return been like on the risk taken in Syria?
Vladimir Putin: I believe that it has been a good and positive return. We have accomplished even more than I had expected. First of all, many militants planning to return to Russia were eliminated. This implies several thousand people. They were planning to return to Russia or neighbouring countries with which we do not maintain any visa regime. Both aspects are equally dangerous for us. This is the first thing.
Secondly, we have managed to stabilise the situation in a nearby region, one way or another. This is also highly important. Therefore, we have directly strengthened Russia’s domestic security. This is the third thing.
Fourthly, we have established sufficiently good business-like relations with all regional countries, and our positions in the Middle East region have become more stable. Indeed, we have established very good, business-like, partner-like and largely allied relations with many regional countries, including Iran, Turkey and other countries.
Primarily, this concerns Syria, we have managed to preserve Syrian statehood, no matter what, and we have prevented Libya-style chaos there. And a worst-case scenario would spell out negative consequences for Russia.
Besides, I would like to openly speak of the mobilisation of the Russian Armed Forces. Our Armed Forces have received such practical experience that they could not have obtained during any peace-time exercises.
Lionel Barber: Are you committed to Mr al-Assad remaining in power or can we see, at some point, the transition in Syria that Russia would support, which would not be Libya?
Vladimir Putin: I believe that the Syrian people should be free to choose their own future. At the same time, I would like the actions of external players to be substantiated and, just as in the case of the risks you have mentioned, predictable and understandable, so that we can consider at least our next moves.
When we discussed this matter only recently with the previous US administration, we said, suppose Assad steps down today, what will happen tomorrow?
Your colleague did well to laugh, because the answer we got was very amusing. You cannot even imagine how funny it was. They said, “We don’t know.” But when you do not know what happens tomorrow, why shoot from the hip today? This may sound primitive, but this is how it is.
Therefore, we prefer to look at problems thoroughly from all possible angles and not to be in any hurry. Of course, we are perfectly aware of what is happening in Syria. There are internal reasons for the conflict, and they should be dealt with. But both sides should do their bit. I am referring to the conflicting parties.
Lionel Barber: Mr President, does that same argument apply to Venezuela? In other words, you are not prepared to see a transition in Venezuela and you are absolutely committed to President Maduro.
Vladimir Putin: Oh, and it seemed we had started so well. Please do not take offence to what I am going to say next. You won’t, will you? We were off to such a terrific start, talking seriously, and now you have moved back to the stereotype views on Russia.
We have no nothing to do with what is happening in Venezuela, if you know what I mean.
Lionel Barber: What are those advisors doing then in Caracas?
Vladimir Putin: I will say this now, if you just let me finish. There is no problem with that.
Back under [President] Chavez we sold weapons to Venezuela, without any limits and problems. We did this absolutely legally just as it is done all around the world and as every country does, including the United States, the UK, China and France. We did this too – we sold weapons to Venezuela.
We signed contracts, which say what we have to do when it comes to servicing this military equipment, that we must train local specialists, ensure that this equipment is maintained in combat readiness, and so on. We provide maintenance services for this equipment. I have already said this many times, including to our American partners: there are no Russian troops there. Do you understand? Yes, there are Russian specialists and instructors there. Yes, they are working there. Only recently, I believe it was a week ago, a group of our advisers and specialists left the country. But they can return.
We have an agreement that our aircraft fly there from time to time to take part in exercises. And this is it. Are we regulating the rebels’ actions as some of our partners are doing, or the actions of President Maduro? He is the president, why should we control his actions? He is in control. Whether he is doing well or not, this is another matter altogether. We do not make any judgments.
I believe that many things could have been done differently there when it comes to the economy. But we do not meddle in things; it is none of our business. We have invested billions of dollars there, mostly in the oil sector. So what? Other countries are doing the same as well.
It looks like everything is preserved only by Russian weapons. This is not true. It has nothing in common with reality. Where are the self-proclaimed presidents and opposition leaders? Some of them have taken refuge in foreign embassies and others are in hiding. What do we have to do with this? This problem should be sorted out by the Venezuelan people themselves. This is all.
Lionel Barber: I was just applying your theory and your experience of seeing what happened in Libya and Iraq to Venezuela. And therefore, logically, you would say, “We are committed to Mr Maduro because we do not want to see regime change from outside.” Is that the Russian position? Or might you be willing to say, “We will support Guaido because we have important oil interests in Venezuela”?
Vladimir Putin: We are prepared for any developments in any country, including Venezuela, if they are taking place in accordance with internal rules and the country’s legislation, its Constitution, and in line with the people’s will.
I do not think that Libyan or Iraqi statehood would have been wrecked if there had been no intervention there. It would not have happened in Libya, the situation was absolutely different there. Indeed, Gaddafi wrote his books there, set forth his theories, and so on, which did not meet specific standards, and his practical work did not meet European or American perceptions of democracy.
Incidentally, the President of France said recently that the American democratic model differs greatly from the European model. So there are no common democratic standards. And do you, well, not you, but our Western partners want a region such as Libya to have the same democratic standards as Europe and the United States? The region has only monarchies or countries with a system similar to the one that existed in Libya.
But I am sure that, as a historian, you will agree with me at heart. I do not know whether you will publicly agree with this or not, but it is impossible to impose current and viable French or Swiss democratic standards on North African residents who have never lived in conditions of French or Swiss democratic institutions. Impossible, isn’t it? And they tried to impose something like that on them. Or they tried to impose something that they had never known or even heard of. All this led to conflict and inter-tribal discord. In fact, a war continues in Libya.
So why should we do the same in Venezuela? Do we want to revert to gunboat diplomacy? What do we need it for? Is it necessary to humiliate Latin American nations so much in the modern world and impose forms of government or leaders from the outside?
By the way, we worked with President Chavez because he was president. We did not work with President Chavez as an individual, but we worked with Venezuela. That is why we channelled investments in the oil sector.
And where did we plan to deliver Venezuelan oil while investing in the oil sector? As you know, Venezuela has unique oil that is mostly delivered to US refineries. What is so bad about that? We wanted the Venezuelan oil and gas sector to operate steadily, predictably and confidently and to make deliveries to those US refineries. I do not understand what is so wrong with this.
First, they faced economic problems, followed by domestic political problems. Let them sort things out by themselves, and these leaders will come to power by democratic means. But when a person enters a square, raises his eyes to the sky and proclaims himself president? Let us do the same in Japan, the United States or Germany. What will happen? Do you understand that this will cause chaos all over the world? It is impossible to disagree with this. There will be pure chaos. How could they act like this? But no, they started supporting that person from the very outset.
He may be a very good person. He may be just wonderful, and his plans are good. But is it enough that he entered a square and proclaimed himself president? Is the entire world supposed to support him as president? We should tell him to take part in elections and win them, and then we would work with him as the state leader.
Lionel Barber: Let us talk about another democracy in Europe, my own country. You are going to have a meeting with Mrs May, which is going to be one of her last meetings before she steps down as Prime Minister. Do you think that there is a possibility of some improvement in Anglo-Russian relations and that we can move on from some of these issues that are obviously of great sensitivity, like the Skripal affair? Or do you think that we are going to stay in a deep freeze for the next three or five years?
Vladimir Putin: Listen,all this fuss about spies and counter-spies, it is not worth serious interstate relations. This spy story, as we say, it is not worth five kopecks. Or even five pounds, for that matter. And the issues concerning interstate relations, they are measured in billions and the fate of millions of people. How can we compare one with the other?
The list of accusations and allegations against one another could go on and on. They say, “You poisoned the Skripals.” Firstly, this must be proved.
Secondly, the average person listens and says, “Who are these Skripals?” And it turns out that Skripal was engaged in espionage against us [Russia]. So this person asks the next question, “Why did you spy on us using Skripal? Maybe you should not have done that?” You know, these questions are infinite. We need to just leave it alone and let security agencies deal with it.
But we know that businesses in the United Kingdom (by the way, I had a meeting with our British colleagues in this same room), they want to work with us, they are working with us and intend to continue doing so. And we support this intent.
I think that Mrs May, despite her resignation, could not help but be concerned that these spy scandals made our relations reach a deadlock so we could not develop our ties normally and support business people, who are doing what? They do not only earn money, this is what is on the outside. They create jobs and added value, plus they provide revenue at all levels of the tax system of their countries. This is a serious and multifaceted job, with the same risks you mentioned, including risks related to business operations. And if we add an unpredictable political situation, they will not be able to work at all.
I think that both Russia and the United Kingdom are interested in fully restoring our relations. At least I hope that a few preliminary steps will be made. I think it would be easier for Mrs May, maybe, because she is leaving and is free to do what she thinks is right, important and necessary and not to bother about some domestic political consequences.
Lionel Barber: Some people might say that a human life is worth more than five pennies. But do you believe, Mr President that whatever happened…
Vladimir Putin: Did anybody die?
Lionel Barber: Oh yes. The gentleman who had a drug problem and he died after touching the Novichok in the car park. I mean somebody did that because of the perfume. It was more than one person that died, not the Skripals. I am just…
Vladimir Putin: And you think this is absolutely Russia’s fault?
Lionel Barber: I did not say that. I said somebody died.
Vladimir Putin: You did not say that, but if it has nothing to do with Russia… Yes, a man died, and that is a tragedy, I agree. But what do we have to do with it?
Lionel Barber: Let me just ask this and I really want to talk about the Russian economy. Do you believe that what happened in Salisbury sent an unambiguous message to anyone who is thinking of betraying the Russian state that it is fair game?
Vladimir Putin: As a matter of fact, treason is the gravest crime possible and traitors must be punished. I am not saying that the Salisbury incident is the way to do it. Not at all. But traitors must be punished.
This gentleman, Skripal, had already been punished. He was arrested, sentenced and then served time in prison. He received his punishment. For that matter, he was off the radar. Why would anybody be interested in him? He got punished. He was detained, arrested, sentenced and then spent five years in prison. Then he was released and that was it.
As concerns treason, of course, it must be punishable. It is the most despicable crime that one can imagine.
Lionel Barber: The Russian economy. You spoke the other day about decline in the real wages in the Russian workforce and Russian growth has been less than expected. But at the same time, Mr President, you have been accumulating foreign exchange reserves and international reserves at some 460 billion. What are you saving for? What is the purpose? Can’t you use some of this money to ease up on the fiscal side?
Vladimir Putin: Let me correct a few very small details. Real wages are not in decline in Russia. On the contrary, they are starting to pick up. It is the real household disposable income that is falling.
Wages and income are two slightly different things. Income is determined by many parameters, including loan servicing costs. People in Russia take out a lot of consumer loans and interest payments are counted towards expenses, which drags down real income indicators. Also, the shadow economy is undergoing legalisation. A substantial part of self-employed people – I believe, 100,000 or 200,000, have already legalised their business. This, too, affects real incomes of the population, disposable incomes.
This tendency has persisted for the past four years. Last year we recorded a small increase of 0.1 percent. It is not enough. It is still within the margin of error. But it is one of the serious problems that we need to deal with and we are dealing with it.
Real wages started to grow recently. Last year there was an 8.5-percent increase. This year, the growth rate of real wages has significantly decreased due to a whole range of circumstances. I mean that last year we saw a recovery growth and there are some other factors involved. However, it continues. And we really expect that it will have an effect on real household disposable incomes.
Even more so because lately we have adopted a number of measures to speed up the growth of retirement pensions. Last year the inflation rate was 4.3 percent and, based on these results, in the beginning of this year pensions were adjusted for inflation by 7.05 percent. And we set ourselves a goal, a task – which, I am certain, will be achieved – to adjust pensions by a percentage that is above the inflation rate.
Now, real incomes were also affected because we had to increase VAT from 18 to 20 percent, which affected people’s purchasing power because the inflation rate exceeded 5 percent.
In other words, we expected that the negative impact of the VAT increase would be short-term, which is exactly what happened. Fortunately, it worked out and our calculations proved right. Now the inflation rate is going down, the macroeconomic situation is improving; investment is rising slightly. We can see that the economy has overcome those difficulties that were caused by internal and external shocks. The external shocks were related to restrictions and slumping prices on our traditional export products. The economy has stabilised.
The macroeconomic situation in the country is stable. It is not accidental and all rating agencies registered it. The three major agencies raised our investment rating. Economic growth last year was 2.3 percent. We do not think it was enough but we will, of course, work on speeding up the pace. The growth rate in industrial production was 2.9 percent and even higher, up to 13 percent in some industries (light industry, processing and garment industries and several others). Therefore, overall, our economy is stable.
But the most important task we need to achieve is to change the structure of the economy and secure a substantial growth of labour productivity through modern technologies, Artificial Intelligence, robotics and so on. This is exactly why we increased VAT, to raise budget funds for performing a certain part of this job that is the state’s responsibility, in order to create conditions for private investment. Let us take transport and other infrastructure development. Hardly anybody besides the state is involved in it. There are other factors related to education and healthcare. A person who has health problems or has no training cannot be efficient in the modern economy. The list goes on.
We really hope that by starting this work on key development areas, we will be able to increase labour productivity and use this basis for ensuring an increase in the incomes and prosperity of our people.
As concerns the reserves, you are not exactly correct here, either. We have over 500 billion in gold and foreign currency reserves, rather than 460 billion. But the understanding is that we need to create a safety net that would let us feel confident and use the interest on our existing resources. If we have 7 percent more, we can spend those 7 percent.
This is what we plan for the next year and there is a high probability that we will succeed. Do not think that this money is just sitting on the shelf. No, it creates certain guarantees for Russia’s economic stability in the midterm.
Lionel Barber: The Central Bank has done a very good job in helping to secure macroeconomic stability even if some of the oligarchs complain about banks being closed.
Vladimir Putin: You know, first of all, we do not have oligarchs anymore. Oligarchs are those who use their proximity to the authorities to receive super profits. We have large companies, private ones, or with government participation. But I do not know of any large companies that get preferential treatment from being close to the authorities, these are practically non-existent.
As for the Central Bank, yes, it is engaged in a gradual improvement of our financial system: inefficient and small-capacity companies, as well as semi-criminal financial organisations are leaving the market, and this is large-scale and complicated work.
It is not about oligarchs or large companies; the thing is that it affects, unfortunately, the interests of the depositor, the average person. We have relevant regulatory acts that minimise people’s financial losses and create a certain safety net for them. But each case should be considered individually, of course.
In general, the work of the Central Bank, in my opinion, deserves support. It is related to both the improvement of the financial system and the calibrated policy regarding the key interest rate.
Lionel Barber: Mr President, I would like to go back to President Xi and China. As you know, he has pursued a rigorous anticorruption campaign in order to clean up the party, maintain the legitimacy and strengthen the party. He has also read the history of the Soviet Union, where Mr Gorbachev essentially abandoned the party and helped to destroy the country – the Soviet Union. Do you think that Mr Xi is right in his approach that the party is absolutely crucial? And what lessons do you draw for Russia? If I can just add, you said something interesting a few years ago about the breakup of the Soviet Union being the greatest geopolitical tragedy of the 20th century.
Vladimir Putin: These two issues are not connected. As for the tragedy related to the dissolution of the Soviet Union, this is something obvious. I meant, first of all, the humanitarian aspect of it. It appears that 25 million ethnic Russians were living abroad when they learned from the television and radio that the Soviet Union had ceased to exist. Nobody asked their opinion. The decision was simply made.
You know, these are issues of democracy. Was there an opinion poll, a referendum? Most (over 70 percent) of the citizens of the USSR spoke in favour of retaining it. Then the decision was made to dissolve the USSR, but nobody asked the people, and 25 million ethnic Russians found themselves living outside the Russian Federation. Listen, is this not a tragedy? A huge one! And family relations? Jobs? Travel? It was nothing but a disaster.
I was surprised to see the later comments on what I said, in particular, in the Western media. They should try to live through seeing their father, brother or any other close relative finding themselves living in a different country, where a whole new life has started. I assure you.
As for the party and the party state building in China, this is for the Chinese people to decide; we do not interfere. Today’s Russia has its own principles and rules of life, and China with its 1.35 billion people has its own. You try to rule a country with such a population. This is not Luxembourg, with all due respect to this wonderful country. Therefore, it is necessary to give the Chinese people the opportunity to decide how to organise their lives.
Lionel Barber: Again a big picture question. I talked at the beginning of our conversation about fragmentation. Another phenomenon today is that there is a popular backlash against elites and against the establishment and you have seen that – Brexit in Britain. Perhaps you were speaking about Trump’s America. You have seen it with the AFD in Germany; you have seen it in Turkey; and you have seen it in the Arab world. How long do you think that Russia can remain immune to this global movement of backlash against the establishment?
Vladimir Putin: You should look at the realities in each particular case. Of course, there are some trends, but they are only general. In each particular case, when looking at the situation and how it unfolds, you should take into account the history of the given country, its traditions and realities.
How long will Russia remain a stable country? The longer the better. Because very many other things and its position in the world depend on stability, on internal political stability. Ultimately, the wellbeing of the people depends, possibly primarily, on stability.
One of the reasons, the internal reason for the Soviet Union’s collapse was that life was difficult for the people, whose take-home wages were very small. The shops were empty, and the people lost the intrinsic desire to preserve the state.
They thought that it could not get worse no matter what happened. It turned out that life became worse for very many people, especially at the beginning of the 1990s when the social protection and healthcare systems collapsed and industry was crumbling. It could be ineffective, but at least people had jobs. After the collapse, they lost them. Therefore, you should look at each particular case separately.
What is happening in the West? What is the reason for the Trump phenomenon, as you said, in the United States? What is happening in Europe as well? The ruling elites have broken away from the people. The obvious problem is the gap between the interests of the elites and the overwhelming majority of the people.
Of course, we must always bear this in mind. One of the things we must do in Russia is never to forget that the purpose of the operation and existence of any government is to create a stable, normal, safe and predictable life for the people and to work towards a better future.
There is also the so-called liberal idea, which has outlived its purpose. Our Western partners have admitted that some elements of the liberal idea, such as multiculturalism, are no longer tenable.
When the migration problem came to a head, many people admitted that the policy of multiculturalism is not effective and that the interests of the core population should be considered. Although those who have run into difficulties because of political problems in their home countries need our assistance as well. That is great, but what about the interests of their own population when the number of migrants heading to Western Europe is not just a handful of people but thousands or hundreds of thousands?
Lionel Barber: Did Angela Merkel make a mistake?
Vladimir Putin: Cardinal mistake. One can criticise Trump for his intention to build a wall between Mexico and the United States. It could be going too far. Yes, maybe so. I am not arguing about this point. But he had to do something about the huge inflow of migrants and narcotics.
Nobody is doing anything. They say this is bad and that is bad as well. Tell me, what is good then? What should be done? Nobody has proposed anything. I do not mean that a wall must be built or tariffs raised by 5 percent annually in the economic relations with Mexico. This is not what I am saying, yet something must be done. He is at least looking for a solution.
What am I driving at? Those who are concerned about this, ordinary Americans, they look at this and say, Good for him, at least he is doing something, suggesting ideas and looking for a solution.
As for the liberal idea, its proponents are not doing anything. They say that all is well, that everything is as it should be. But is it? They are sitting in their cosy offices, while those who are facing the problem every day in Texas or Florida are not happy, they will soon have problems of their own. Does anyone think about them?
The same is happening in Europe. I discussed this with many of my colleagues, but nobody has the answer. The say they cannot pursue a hard-line policy for various reasons. Why exactly? Just because. We have the law, they say. Well, then change the law!
We have quite a few problems of our own in this sphere as well. We have open borders with the former Soviet republics, but their people at least speak Russian. Do you see what I mean? And besides, we in Russia have taken steps to streamline the situation in this sphere. We are now working in the countries from which the migrants come, teaching Russian at their schools, and we are also working with them here. We have toughened the legislation to show that migrants must respect the laws, customs and culture of the country.
In other words, the situation is not simple in Russia either, but we have started working to improve it. Whereas the liberal idea presupposes that nothing needs to be done. The migrants can kill, plunder and rape with impunity because their rights as migrants must be protected. What rights are these? Every crime must have its punishment.
So, the liberal idea has become obsolete. It has come into conflict with the interests of the overwhelming majority of the population. Or take the traditional values. I am not trying to insult anyone, because we have been condemned for our alleged homophobia as it is. But we have no problems with LGBT persons. God forbid, let them live as they wish. But some things do appear excessive to us.
They claim now that children can play five or six gender roles. I cannot even say exactly what genders these are, I have no notion. Let everyone be happy, we have no problem with that. But this must not be allowed to overshadow the culture, traditions and traditional family values of millions of people making up the core population.
Lionel Barber: Does that include – this is very important, like you say – the end of this liberal idea, because – what else did you say – uncontrolled immigration, open borders, definitely, as you say, diversity as an organizing principle in society? What else do you think is just finished over in terms of the liberal idea? And would you say – if I could just add – that religion therefore must play an important role in terms of national culture and cohesiveness?
Vladimir Putin: It should play its current role.It [religion] cannot be pushed out of this cultural space. We should not abuse anything.
Russia is an Orthodox Christian nation, and there have always been problems between Orthodox Christianity and the Catholic world. This is exactly why I will now say a few words about Catholics. Are there any problems there? Yes, there are, but they cannot be over-exaggerated and used for destroying the Roman Catholic Church itself. This is what cannot be done.
Sometimes, I get the feeling that these liberal circles are beginning to use certain elements and problems of the Catholic Church as a tool for destroying the Church itself. This is what I consider to be incorrect and dangerous.
All right, have we forgotten that all of us live in a world based on Biblical values? Even atheists and everyone else live in this world. We do not have to think about this every day, attend church and pray, thereby showing that we are devout Christians or Muslims or Jews. However, deep inside, there must be some fundamental human rules and moral values. In this sense, traditional values are more stable and more important for millions of people than this liberal idea, which, in my opinion, is really ceasing to exist.
Lionel Barber: So religion, religion is not the opium of the masses?
Vladimir Putin: No, it is not. But I get the impression that you are detached from religion because it is already 12.45 am Moscow Time, and you continue to torture me. As we say here, there is no fear of God in you, is there? (Laughter)
Lionel Barber: This is history. I have waited a long time for this. I have got one last question. And thank you for your – go on please.
Vladimir Putin: Please, go ahead.
Henry Foy: Mr President, would you say – I was reflecting on what you just said: some of the themes you were referring to would echo in people such as Steve Bannon, and Mr Trump himself, and the groups in Europe who have come to power. Do you think if the end of the liberal idea is over, is now the time of the ‘illiberals’? And do you see more and more allies growing around the world to your way of seeing the human existence at the moment?
Vladimir Putin: You know, it seems to me that purely liberal or purely traditional ideas have never existed. Probably, they did once exist in the history of humankind, but everything very quickly ends in a deadlock if there is no diversity. Everything starts to become extreme one way or another.
Various ideas and various opinions should have a chance to exist and manifest themselves, but at the same time interests of the general public, those millions of people and their lives, should never be forgotten. This is something that should not be overlooked.
Then, it seems to me, we would be able to avoid major political upheavals and troubles. This applies to the liberal idea as well. It does not mean (I think, this is ceasing to be a dominating factor) that it must be immediately destroyed. This point of view, this position should also be treated with respect.
They cannot simply dictate anything to anyone just like they have been attempting to do over the recent decades. Diktat can be seen everywhere: both in the media and in real life. It is deemed unbecoming even to mention some topics. But why?
For this reason, I am not a fan of quickly shutting, tying, closing, disbanding everything, arresting everybody or dispersing everybody. Of course, not. The liberal idea cannot be destroyed either; it has the right to exist and it should even be supported in some things. But you should not think that it has the right to be the absolute dominating factor. That is the point.
Please.
Lionel Barber: You really are on the same page as Donald Trump. Mr President, you have been in power for almost 20 years.
Vladimir Putin: For eighteen years.
Lionel Barber: You have seen many world leaders. Who do you most admire?
Vladimir Putin: Peter the Great.
Lionel Barber: But he is dead.
Vladimir Putin: He will live as long as his cause is alive just as the cause of each of us. (Laughter). We will live until our cause is alive.
If you mean any present-day leaders from different countries and states, of the persons that I could communicate with, I was most seriously impressed by former President of France Mr Chirac. He is a true intellectual, a real professor, a very level-headed man as well as very interesting. When he was President, he had his own opinion on every issue, he knew how to defend it and he always respected his partners’ opinions.
In modern-day history, taking a broader view, there are many good and very interesting people.
Lionel Barber: Peter the Great, the creator of the Greater Russia. Need I say any more? My last question, Mr President. Great leaders always prepare succession. Lee Kuan Yew prepared succession. So please share with us what would the process be by which your successor will be chosen.
Vladimir Putin: I can tell you without exaggeration that I have always been thinking about this, since 2000. The situation changes and certain demands on people change, too. In the end, and I will say this without theatrics or exaggeration, in the end the decision must be made by the people of Russia. No matter what and how the current leader does, no matter who or how he represents, it is the voter that has the final word, the citizen of the Russian Federation.
Lionel Barber: So the choice will be approved by the Russian people in a vote? Or through the Duma?
Vladimir Putin: Why through the Duma? By means of direct secret ballot, universal direct secret ballot. Of course, it is different from what you have in Great Britain. We are a democratic country. (Laughter)
In your country, one leader has left, and the second leader, who is for all intents and purposes the top figure in the state, is not elected by a direct vote of the people, but by the ruling party.
It is different in Russia, as we are a democratic country. If our top officials leave for some reason, because they want to retire from politics like Boris Yeltsin, or because their term ends, we hold an election through universal direct secret ballot.
The same will happen in this case. Of course, the current leader always supports someone, and this support can be substantive if the person supported has the respect and trust of the people, but in the end, the choice is always made by the Russian people.
Lionel Barber: I cannot resist pointing out that you did take over as president before the election.
Vladimir Putin: Yes, this is true. So what? I was acting president, and in order to be elected and become the head of state, I had to take part in an election, which I did.
I am grateful to the Russian people for their trust back then, and after that, in the following elections. It is a great honour to be the leader of Russia.
Lionel Barber: Mr President, thank you for spending time with the Financial Times in Moscow, in the Kremlin.
Vladimir Putin: Thank you for your interest in the events in Russia and your interest in what Russia thinks about the current international affairs. And thank you for our interesting conversation today. I believe it was really interesting.
April 23, 2020
When will Americans start to wake up and realize what is happening? At the end of last week, President Trump announced that the U.S. would be imposing a 10 percent tariff on 300 billion dollars worth of Chinese imports, and that marked a dramatic escalation in our trade war with China. This move by Trump came as a total shock to Chinese officials, and global financial markets were thrown into a state of turmoil. Since that announcement, we have been waiting for the other shoe to drop, because we knew that the Chinese would retaliate. But honestly, very few of the experts expected something like this. On Monday, China announced that it is going to 
